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

“Tuve que actualizar los tiempos página para ver esta página, por alguna razón, sin embargo, la información que aquí era la pena la espera.”

Guest
Apr 3, 2012

As I understand the ACA, a family of four making $50,000 a year must spend about $3000 of their own money each year in order to receive a qualified health policy that by 2014 will cost about $15,000 a year.

In some parts of the country, families like this are living right on the edge in terms of affording gas and mortgage. The $3000 they now have to spend is not cruel punishment, granted, but the money does have to come from somewhere. $250 a month of new spending is going to hurt. In some cases they will choose to stay uninsured. And they will resent the Democrats, who of course intended to help them.

America has what is euphemistically called a ‘flexible labor market’ — weak unions, easy to get hired or fired, little or no severance pay, part time status and low wages are common.

This is not all bad. Flexible labor is probably a safety valve, in that it is better for society to have a job with no health insurance, vs. no job and no health insurance.

(The nations which do not have ‘flexible labor’ (like Germany or Sweden) also have zero or even negative population growth. They do not create new jobs and on the whole do not need to create new jobs.)

Anyways, the downside of flexible labor is that employee benefits disappear. The ACA can be seen as the government stepping in to take the role of the generous employer.

I am not opposed to that at all — the question is whether we can afford it.

All of Medicare and now the ACA implicitly depend for their financing on rising wages over time. And yet there are ominous signs that this will not happen.

Guest
Apr 2, 2012

I talk to quite a few liberals who are OK with losing the mandate. They sense that forcing people with comparatively little money to buy an expensive private policy could actually ruin the Democratic party — ironically, right at the very moment when in terms of non-white demographics the Democrats could be taking over.

If you asked every American who will benefit from the ACA to step forward and vote for it, I do not think you would get a tidal wave of votes. This is not all due to propaganda by Fox News.

Without a mandate, the answer is to keep expanding Medicare and Medicaid, with all their own budget problems.

Look at it this way:

In a free market, health insurance premiums for persons over age 50 will be about six times higher than premiums for persons under age 30 (at least males under 30, who cannot have babies.)

Now plenty of those persons over 50 do not have high incomes.

If we do nothing about this “market failure”, then we will have millions of people uninsured just at the time when they need insurance most. That is where the individual and poss the small group markets are headed if we do nothing. In this instance the libertarians are no help.

Now to prevent this, we can either invoke individual mandates, employer mandates, penalties, and the minute regulation of insurance companies, who will eventually just leave the market —

or we can let the insurance market do what it will, and just let the 50+ persons into Medicare, though not for free.

It does not make one a communist to confess that free markets cannot solve everything.

The markets for long-term care insurance are collapsing also

Private insurance is uneven everywhere. I have sold life insurance, and it is getting cheaper all the time — but millions of persons do not have it, and it is a good thing that Social Security pays death benefits if a breadwinner dies and their children are under 18.

Social insurance is.just plain necessary. We do have to keep it from gobbling budgets like Pac-Man, of course.

But honest social insurance is better than spending vast amounts of money and resources to try and reform private insurance.

Guest
Apr 2, 2012

Generally I agree with what you said. But I have two inputs to consider…

►Regarding forcing people with comparatively little money to buy an expensive private policy that is misleading. It’s true that most of those with comparatively little money may be the target population, but the impact is eased two ways. First, those at 400% of FPL (federal poverty level) and below will be subsidized by the feds. They will not have to sink to the Medicaid eligibility level. Second, the “expensive” part of what they purchase may very well be less than the high-priced policies now available to those with group plans.

(Or they may, in fact, be among those who have never participated in their employer plans and will finally be able to afford to do so. As a cafeteria manager all my career I managed mostly the working poor. Probably less than five or ten percent of eligible employees even had health insurance simply because they couldn’t afford even the plan offered by the company.)

►Your mention of long term care is totally critical to the rising costs of health care. Of all the challenges being discussed in this debate, the horrendous costs of long-term care are mostly not mentioned. The CLASS Act portion had to be tossed as being actuarily and politically unfeasible (which is unfortunate to the point of tragic) but nothing was put in its place to do something about the maintenance of old people.

As matters stand now, the protocol to get aging people into long term care is to first hospitalize them for three days,. after which they can be discharged to a skilled nursing facility for what is typically tagged “rehabilitation,” and after they have been there 99 days they are considered “custodial” and will either have to pay the difference between their “medical” care and their “custodial” care. Without long-term care insurance this expense is “out of pocket” (deep pockets, if you please at sixty or seventy grand a year) or “spend down” to Medicaid eligibility.

The long-term care scene is entirely in need of revision.
==>Rehab should mean actual rehabilitation. My observation is that once in that setting every rehab specialty on staff and a few from outside can’t wait to get at the patients, the quicker the better (before they pass on) to get the bills in quickly. I have seen occupational, psychiatric, physical and speech therapies all administered to residents who had no more need of them than I. One man, an actual rocket scientist in his working life and a member of MENSA was given daily speech therapy the whole time I was with him. This is a nutty and wasteful use of tax money.

==>The 99-day care cap for Medicare patients is totally arbitrary. I’m sure many patients benefit from actual rehabilitation and are discharged appropriately because I have seen that myself. But I have also seen that even when it is clear that the maximum allowed therapy is sometimes allowed to continue way past when it is futile, milking the system for all that is available.

The same applies to hospice providers. I was shocked when my mother was discharge from the hospital to return to her long-term care situation on hospice that there are scores of hospice providers in the metro Atlanta area. I thought “hospice” meant a change of protocol, silly me. It means an outsourced company will sign up the family and make it their business to do whatever they call themselves doing up to the four thousand dollar limit paid by Medicare. I am an enthusiastic advocate for hospice and palliative care, and I never miss a chance to evangelize about it with families I come into contact with as a senior caregiver. But I know well that it is an area that could benefit from closer scrutiny, perhaps calling for more than one opinion after some interval of time about what is needed, especially when the person is at home, well cared for by willing and able family members, or in a facility already populated by skilled medical people.

Just a couple of ideas I had to get off my chest…
Sorry for ranting.

Guest
DeterminedMD
Apr 2, 2012

Gee, like this issue is keeping us calm and collective. Hey, at least passion shows we care.

Guest
DeterminedMD
Apr 2, 2012

again, good comment above. Touche on the end there, “better than spending vast amounts of money and resources to try and reform private insurance.”

With the way Obama and his ilk are trying to take over businesses, ie see GM and Chrysler as exhibit A, maybe this was the end around to get insurance industry folks under the government thumb.

But, you don’t read that assessment from most of the posters at this site, do you?

Guest
DeterminedMD
Apr 1, 2012

Quite the threads following this week’s legal forays. It’s like watching the condemned prisoner being lead to the gallows, the rope is now around his neck, and everyone is watching both the guy holding the lever as well as the phone for the governor’s call for stay of execution.

But, we have to wait until June! And that is assuming these 9 people are not all lining at the 20 yard line ready to use 9 feet to punt the ball out of the stadium! And you thought waiting to learn who shot JR was a bitch about 30 years ago! You all know TNT is bringing the show back, wait for it, in JUNE!!!

Guest
Apr 1, 2012

6-3 to uphold.

Guest
DeterminedMD
Apr 2, 2012

what are the Vegas odds today?

Guest
Apr 1, 2012

Touché.
You don’t miss a trick, do you?

In my defense, that was in a forum of other Liberals hosted by Deborah White, an old cyber-friend from many years past. In that context my use of that bumper sticker cutie was well understood and stepped on no one’s toes. In this place I strive to be less partisan, but it’s not easy for a Yellow Dog Democrat.

Sorry for the offense. I will strive to be more careful.

Guest
Nate Ogden
Apr 1, 2012

I enjoy the back and forth, being challenged is the only way to improve.

Have a great rest of the weekend, I’m sure we’ll pick this up again soon:)

Guest
Apr 1, 2012

Don’t be so hard on yourself, Dr. D. Your concerns are both valid and ongoing. I wish I could propose a good solution, but I have figured out in my lifetime that looking to Congress or The Law to provide a remedy is only a few paces away from playing Mega-Millions, hoping for the prince to arrive or asking Santa for a mate to go with last year’s pony.

I just had the following exchange for someone in a Facebook comments thread….

[S*** said] What we need is for preexisting conditions be covered,and women and men have the same coverage and care for those that have no cobra and are out of a job
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
[John Ballard] Interesting you mention COBRA. Anyone who has had to face the double shock of losing a job and health insurance at the same time has had a costly insult added to those two other injuries by the breathtaking increase in what they then must pay to retain their insurance. This is a subject too complicated for a comments thread, but the short version has to do with another piece of congressional legislation with unfunded MANDATES. (There’s that word again.) We think of COBRA as an insurance animal, but the acronym stands for Consolidated Omnibus Budget RECONCILIATION Act, a bipartisan bur mainly Republican piece of sausage which also gives us EMTALA, a law we have come to take for granted that MANDATES that hospital emergency departments are obligated to provide medical treatment for anyone who presents with a medical problem, regardless of their ability to pay.

When I recall the furor of controversy arising from the fact that PPACA was the result of bicameral (if not bipartisan) reconciliation (which has come to mean “cramming it down our throats”) and the outrage that Congress-critters Left, Right, D and R alike love to excoriate when it involves unfunded mandates — it makes me want to hurl.

And you are correct, S***. The needs you listed are untreated bleeding sores in the system. And unfortunately, with so much of the safety net allowed to remain among the “several states” the opponents of federalism — along with climate zombies, gun nuts, anti-women and anti-immigrant extremists — the best we can hope for, even with ACA not taken off life support, is the legislative equivalent of prostheses in the aftermath of trauma.

It seems to me we have short memories, all of us, and are prone to conflate bicameral with bipartisan. It’s tempting to imagine that Congressional Reconciliation is one of those features of our system handed down by the Almighty along with Scripture (perhaps the Koran and Book of Mormon) just before He gave us the US Constitution.

But those of us who remember more of the past and study history know well how imperfect is the world in which we live. It is a mistake to think that Congress or any other representative body (and yes, that includes corporate boards and stock-holders as well — all of whom bear a fiduciary responsibility to insure the immortality of their respective investments as much as family members wish to prolong Aunt Whoever’s life long past the time when she should have met the Angel of Death).

I read once about an archaeological dig, somewhere in the Northeast I believe, that included the skeletal remains of a young man who appeared to be in his twenties, who clearly had a serious spina bifida condition. This may seem unremarkable until we remember that in a tribal environment where issues of survival (food, defense, hunting, gathering and everyday contributions to the common good) are not only expected but sometimes essential to survival — a condition of spina bifida is one that calls for a lot more in the way of contributions than a dedicated mother, or even a strong immediate family can furnish. The survival of this individual for twenty or so cold winters and hot summers, eating part of the food ration, needing special attention when moving from one campsite to another, all point to a level of social sophistication that most people don’t associate with primitive social groups.

I mention this simply to help us all remember that as a society we have advanced past that stage of civilization. I am of the opinion that if the rest of the world can figure out how to craft a baseline safety net for health care for those unable to provide their own, the US is at least equal to, if not better than that.

Having said that, Dr. D, I also admit that you are totally correct to say that we have now arrived at a developmental stage (thanks, Mr. Social Darwinist) which enables all kinds of scientific remedies for medical challenges that just a few years ago would be called “miracles.” We no longer consider organ transplants, advanced prosthesis or implanted pumps, pacemakers and defibrillators to be miracles. A few years ago I heard a guy refer to open heart surgery as “like tuning up an engine — they go in there and pull out the old plugs and wires and put in new ones and you go away running like a sewing machine!”

I might add that end-stage renal disease, as a benefit to Medicare AND MEDICAID beneficiaries is a widespread illustration already on the books for what amounts to a blank check for both beneficiaries and providers. Twice a week I see an ambulance near where I live taking an elderly neighbor to and from his dialysis appointments. Hell, he may be paying the bills himself for all I know. In this case there could be two or three generations of wealth yet to be depleted. But that is where your question and that of Bob Hertz looms.

“What is voluntary and what is inherent for society to pick up?”

I have to add to that question the issue of affordability. In the end (no pun intended) it comes down to who can pay. And as a society we must face the question of “How much can we actually afford?” The the most recent economic bubble illustrates nothing else, it shows that there is no such thing as a blank check that will not eventually be part of a fairly big economic collapse.

As I said, I wish I had an answer. But before we go for the answers, we first have to agree on what are the correct questions and get over the sloppy habit of blaming each other. We are all together in the same boat, –Democrats and Republicans, Liberals and Conservatives — and it is clear that what we have done in the past may be a step in the right direction but is far from finished.

Guest
Nate Ogden
Apr 1, 2012

I thought EMTALA can from Rep Rostenkowski, Dan, a Democrat. It was the house that introduced both EMTALA and Continuation of Coverage, both of which have been disasters

Guest
Apr 1, 2012

Nate, I’m not going to look it up. I’m sure you are correct. As I said, the reconciliation process may be bicameral but that does not assure it will be bipartisan. The final bill (COBRA) was not vetoed but signed into law by President Reagan, patron saint of the modern GOP. As such both political parties participated in its creation, including all its various unintended consequences. As I said, trying to be as neutral as possible, we have short memories, all of us, and are prone to conflate BICAMERAL with BIPARTISAN.
~~~~~~~~~~~~~~~~~~~~~~~
That said, Nate, by now I think readers at this site already know where you stand politically. And I have no doubt that new readers will figure it out very soon. Don’t you think the time is right for you to follow the good examples of a few other commenters and begin instead to argue in detail and depth in lieu of the angry bumper sticker stuff? As someone else pointed out, it’s substantive, and I might add would be a valuable contribution to lowering tensions that discussions like these are certain to generate.

You are too intelligent to keep letting your image be that of a smart-ass. I can’t speak for others, but after avoiding threads in which your name appears (or dropping off when it does) I have only recently rejoined the conversations here at THCB. I don’t want to resume that tack but whether or not I do is up to you.

Guest
Nate Ogden
Apr 1, 2012

I do frequently hear that I should be less politicial or I am to partisan. But I am only like that in responce.

“mainly Republican piece of sausage”

Could we not have avoided this if you had left this comment out?

People on the left make these off handed comments, second nature it seams, then get mad when I correct them.

I would be happy to have civil detailed discussions if those on the left would stop slapping me. Sorry I am not one to turn the other cheek in these situtions.

Stop bashing republicans for no reason and I promise not to correct those mistaken attacks.

For the record here is the bill;

H.R.3128
Latest Title: Consolidated Omnibus Budget Reconciliation Act of 1985
Sponsor: Rep Rostenkowski, Dan [IL-8] (introduced 7/31/1985)

Pete Stark was responsible for that gem continuation of coverage.

Guest
DeterminedMD
Apr 1, 2012

Agreed.

Guest
DeterminedMD
Apr 1, 2012

Bob Hertz raises a good point, what is voluntary and what is inherent for society to pick up. As the designated “Social Darwinist” at this thread by another commenter, here is an example that will instinctively raise eyebrows as much as pause, because does society have to pay for this:

A 7 year old, J.L., is blind, suffers from cerebral palsy, chronic lung disease, and a form of diabetes. Per the article about him, his care was covered by Medicaid for the early part of his life, but when his father’s income rose above the rate Medicaid sets for all, irregardless of individual circumstances (gee, like a mandate, right?!), the child became ineligible for assistance. The parents tried to get insurance but were refused repeatedly because, yes you all guessed right, because of his preexisting conditions. And because of this the parents ended up filing for bankruptcy in 2010. How lucky PPACA was passed that same year and the child now has coverage again.

Yeah, but the pro-PPACA writer of the article doesn’t tell us what are the expenses being created to keep this child alive. Can I pick a number for the sake of argument, just to illustrate my point of how many JLs can we as society support and not drain the FINITE health care system resources that PPACA is about? If you agree, let’s say $2000/mos for meds, doctor’s visits, adjunctive services and ancillary products.

OK, let’s propose there are 100,000 JLs out there, different medical issues but all with chronic care needs as pediatric patients, and so at $24K for 100K each year that is $2.4 billion a year to keep these children alive and try to access a quality of life to appreciate and enjoy their presence. OK, so where do we cut from other limited monies to allow us to enjoy keeping these kids alive with the current technology and opportunity? That is the reality of limited health care funds, which does not change with PPACA.

Look, I am not a heartless, insensitive bastard, as I have seen chronically ill kids and adults who are so fortunate they have caring parents, significant others, and other invested community members to try to help them survive what are at times a nearly unsurvivable life, but, I seem to be one of the very few who ask “when is it when”?

The other thing I read in the article, which really incenses me, is now that kids under 26 can still be covered under their parent’s insurance, is that these “children” are having children and now getting coverage for that choice? Umm, what is that message to society? “Oh, ok, I can have irresponsible sexual behavior and the consequences are still society’s responsibility, at least as much my parents’, to bail me out.” You could argue that premise is already in place, but it squarely puts the financial demand on the parents, which I would hazard to guess the law would force the parents to maintain the policy even if mom and dad appropriately said “sorry junior/juniette, we’re out of the loop per your poor choice.”

You know, I don’t like to see kids be at risk because of adults who are their guardians are so damn clueless and inattentive to having a dependent, but does legislation like this build in mechanisms to create more accountability that society needs enforced? I don’t think so.

Cookie cutter approaches are not solutions, but rules need a template, that I acknowledge. You can’t expect politicians to think about individuals, because hey, they can’t even think about their own constituents over half the time. Kill the law, have the full input of all the players involved in a re-draft, and let’s see something that is better, not perfect I agree, but better than what Democrats alone could ponder.

I other words, do the job they should have done 3 years ago in the first place!!!

Guest
Apr 1, 2012

It’s nice to see you arguing in detail and depth in lieu of the angry bumper sticker stuff. Keep it up. It’s substantive.

Guest
Apr 1, 2012

Back about 15 years ago when I started studying health care costs in earnest, I sat up all night thinking about the following question:

What part of health carer is voluntary, like buying furniture, and what part of health care is somethat that happens to you, like a fire?

I decided that most of the expensive items in health care are like a fire, in which you might have some responsibility, but not enough responsibility so that society should make you pay for all of it.

That is why I detest medical debt. By debt I do not mean owing the dentist
$100 on the last crown he put in. I mean owing a hospital $10,000 and having to beg and deal to get the cost down.

Like most Americans, I do not like haggling and find it demeaning. I find it
especiallly repulsive in what is supposed to be a gift relationship.

That is my philosophy, take it as it is. Can we find an accomodation on medical debt?

Guest
Mar 31, 2012

Apologies, I hit the send button before I finished the prior post.

I was going to say that I turn into Karl Marx on the subject of medical debt.

Which reminds me, does anyone else notice the wild generational inequality on the subject of Medicare Advantage?

We spend $20 to $30 billion a year to remove much of the curse of medical debt from senior citizens, and I am fine with that.

But under age 65, even our mandates will force younger people to buy private insurance that by design covers just 60 or 70 per cent of ther medical costs.

The fact that seniors make up our largest voting bloc leads to this very extreme seniority system in health care relief.

Guest
Nate Ogden
Mar 31, 2012

But under age 65, even our mandates will force younger people to buy private insurance that by design covers just 60 or 70 per cent of ther medical costs.

Insured patients only pay 13% of healthcare cost out of pocket, down from 50% in 1965.

This study says its even lower

http://www.american.com/archive/2010/january/the-high-cost-of-no-price

What is really perverse is what Medicare covers vs what it was suppose to cover.

Where I think you went wrong was to look at first dollar plan design, once a member pays a few thousand out of pocket insurance pays 100%. $5000 of a million dollar claim is .5%

Medicare which was suppose to cover large claims and proloned illness actually cuts off and the member is liable for everything. If not for Medicaid 19% of Medicare enrollees would be broke and headed for BK.

Guest
Peter1
Apr 1, 2012

“innocent is an interesting choice of words, they incurred bills then didn’t pay them, what could be further from innocent?”

They required needed medical care and were forced to use a rigged system.

“But under age 65, even our mandates will force younger people to buy private insurance that by design covers just 60 or 70 per cent of ther medical costs.”

Would the other 30% to 40% be incurred medical debt? Aren’t those the plans you tout as being “the insurance they want” at a price they can afford? Medical costs are not just the premiums, it’s also the piled on deductibles and co-pays which blind side patients.

Guest
Mar 31, 2012

Selling old medical debt can have a huge human cost. Patients are stunned to be sent old bills, and their credit rating can be savaged if they cannot pay them.

The gain to society from paying 7-year old bills is very minimal. The damage to relatively innocent (and often rather poor) former patient is large.

A federal government which gave AIG about $180 billion in a month can certainly pay off old medical bills for perhaps $15 billion, and it could be done tomorrow morning. Medicare could pay off these old bills, and it would be a rounding error in the federal budget.

Medical debt is barbaric. Most doctors feel the same way.

Personally I give the Canadian system a lot of slack because it eliminates most medical bills. I will tolerate a fair amount of bureaucracy and waste and waiting lists to achieve that humane goal.

Although I advocate quite a few libertarian solutions to health care, I

Guest
Nate Ogden
Mar 31, 2012

innocent is an interesting choice of words, they incurred bills then didn’t pay them, what could be further from innocent? The provider that treated them expecting payment is innocent. Other patients that pay higher bills to make up for it are innicent.

If we start paying off people’s bad debt why would anyone pay their bill? They could just wait for the government to pay it off for them.

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Peter1
Mar 31, 2012

“They did just increase their retirement age.”

No Nate they didn’t, it’s proposed in the budget, not law yet and open for change, especially when voters get wind of it.

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/the-economists/does-harper-really-need-to-raise-the-retirement-age/article2316982/

Guest
Peter1
Mar 31, 2012
Guest
Mar 31, 2012

There was a piece in Health Affairs, I think by John Holohan, which showed that hospitals do eventually recover some portion of what it costs them to treat the uninsured.

There is a special supplement in Medicare called DSH I believe, but the money has to travel through an intricate formula where we pay a little more for seniors when the seniors use a hospital that also treats younger uninsureds.

It is not honest or direct.

EMTALA was yet another unfunded mandate. If a Congressional majority wants something to happen, then that majority should have the courage to raise taxes.

John Goodman had a solid idea about ten years ago. We could impose a tax on people who are uninsured, and the revenues from that tax could go straight to the hospitals which care for them.

If you made $40,000 and were uninsured, and the tax for staying uninsured was 2%, then you would pay $800 more on April 15th, and the money would go into a fund for hospitals.

End of problem, really, at least foremergency care.

Now — That person who makes $40,000 and stays uninsured would admittedly not have coverage for office visits, drugs, and medical testing.

Is that a national crisis? It need not be. If you remove the worst instances of price gouging, an awful lot of office care does not cost more than a brake job on your car. And we have no federal program for brake jobs.

If people with no insurance could get MRI’s at their real cost of about $250 and generic drugs at their real; cost of $4 a month and most blood tests at their real cost of $35 and contraceptives at $30 a month, then a lack of health insurance would be no big deal — until you hit cancer or AIDS or a hideous injury that needs some sort of special provision.

Guest
Nate Ogden
Mar 31, 2012

As a start uninsured people with out standing medical bills should have their tax refunds confiscated. Either sign up for free Medicaid if your eligible or get insurance or the rest of the tax payors aren’t going to get stuck with your bills.

It would be very easy for hospitals to turn over uncollected debt to the IRS to withhold like they do other liabilities. Would end some of the free riding.

Guest
Mar 31, 2012

Some time ago, speaking with someone in the accounting/ claims recovery department where I worked, I learned that after a week or two they routinely tossed uncollected claims into a pile to be “written off” for accounting purposes as noncollectable. This may or may not be accurate, but it fits perfectly with the idea that today’s so-called not-for-profit model has a laundry list of ways to claim all kinds of “community benefits” by citing crap like that.

I know individual clinics and practices aren’t prone to doing that because I have once or twice received bills for services nearly a year after they were done. Somebody was combing the records to see what they could find and sure enough came up with something. I tossed the bills into the trash and heard nothing further about them.

I’ll never forget years ago when I went to work in a retirement community setting I asked one of the residents to explain how the Medicare claims and supplemental insurance worked. (This was long before I graduated to Medicare myself.) His answer was delightful — “The doctor sometimes charges a small co-pay and sends the rest to Medicare. The insurance company sometimes then sends me a bill for more money that Medicare didn’t pay. We just throw that away and sooner or later they work it out.”

I have learned since there is more to it than that, especially now that MA is kidnapping beneficiaries, sucking them into the New HMO Redux Plans.

Short answer: I seriously doubt we really want the IRS with their paws in that already messy financial quagmire.

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steve
Apr 1, 2012

In our group, most uninsured earn so little it is not worth chasing them. A bigger problem, in some ways, are those who are supposedly insured but really are not. We put people into collections at 6 months. I expect to collect about 2%-5% of that money.

Steve

Guest
steve
Apr 2, 2012

Almost all of our billing is electronic now. Same with our payments. We use a lockbox. Some smaller insurers still send checks.

Steve

Guest
Nate Ogden
Apr 2, 2012

Do you receive payment electronically from Medicare and private insurers, just Medicare or neither?

We have been trying to push electronic payment, saves 5-7 days mailing, and can’t get any signup.

Guest
steve
Apr 1, 2012

I have been president of an anesthesia group for many years. I was also self-incorporated for about 5 years.

In general, Medicare has been our fastest, most reliable payer. The private insurers were pretty bad until the clean claims law was passed. For the last 10 years, they have been better. We see little difference in collection rates between Medicare and MA, though MA pays better.

Some people have out of date insurance. A few have fake insurance info. Some people lose their jobs. Some people are out of network, and d not realize it until we send bills.

Accounts receivable more than 6 months old comes in at such a ow rate that it costs us more to work it than have a collection agency work on it, so we use one.

I have not seen what Nate describes below, but sometimes private insurers send payments directly to patients, then we have to try to get them. That doesnt always work out so well.

Steve

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Nate Ogden
Apr 1, 2012

Have you seen the healthplans that pay 100% of the contracted fee then the plan collects the employees out of pocket cost? It works for the plans if they can get deeper discounts. I assume it would work for the providers.

Hard to get the provider panel in place to start, would work best in a community healthplan but you don’t see many of those any more.

Guest
Apr 1, 2012

Thanks for your comment. I presume “our group” indicates you are connected with some provider, perhaps in some administrative capacity.
I’m curious if you have any opinion regarding Medicare Advantage versus original Medicare. Reimbursement rates, response times, co-pays, limits, whatever…
And what does it mean to be “supposedly insured”?
Does that mean counterfeit or out of date insurance cards, poor or no phone verification, fake ID or what?

Your 2%-5% range for collectibles sounds right to me.
Does that reflect what you actually collect in house or what can be brought in by peddling bad bills to collection agencies?

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Nate Ogden
Mar 31, 2012

“tossed uncollected claims into a pile to be “written off” for accounting purposes as noncollectable.”

It has changed slightly, and there are others that can speak to the exact numbers much better then I, but after a few months they consider it bad debt but they don’t toss it they sell it for pennies on the dollar. The market for this is actually sort of fascinating if your into that sort of thing.

Bad debt purchased directly from a doctors office might go for $0.30 cents on the dollar. They will try to collect then what they can’t they sell to someone else for $0.15 on the dollar. Eventually it gets to a point where it is almost worthless debt but there is even a market for that. People will buy up all the worthless debt and sit on it until someone wants to buy a house or something and has to pay the bill off.

The debt market has been very helpful to the provider community to help recapture some of that lost income.

“especially now that MA is kidnapping beneficiaries, sucking them into the New HMO Redux Plans.”

Not to jeopardize our collegial exchange but MA has actually been shown to be very beneficial to the poor. They get better care and better access to care in a more controlled financial environment. A lot of the billing and multiple policies is eliminated when Medicare and a supp is replaced with a MA plan.

Guest
Mar 31, 2012

That makes sense. Poor people who finally make it into Medicare after a lifetime of little or no medical attention must think they have gone to Heaven. I hadn’t thought of that. I can see where even the most parsimonious managed care would be an improvement.

Hmm…

I suppose Medicare Advantage is not irredeemably negative. No wonder the industry keeps peddling it even with subsidies being pinched off by ACA. I read somewhere that over a third of Medicare beneficiaries are already going with MA, likely because they are getting in with little or no premium.

My wife and I had MA the first year. Why? Premium was ZERO. Had we lived 25 mile to the South it would have been about $40 monthly. She had a hospital stay and when we looked closely we learned that with co-pays and such we came out about the same as with a traditional supplement, but had there been really high expenses we would have faced punishing costs. Consequently, given the chance we went back to traditional Medicare plus a supplement.

When it comes to Medicare, gimme that old time religion.

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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.

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.