Oregon Senator Ron Wyden’s health plan is announced with a flourish and a call with a gaggle of bloggers. Best quick explanation is by Ezra
The bill is a replacement of employer-based health care with the purchase of individual insurance via regional pools, which look very like Clinton-style regional health alliances–except they’re now called “health help agencies”. No underwriting, guaranteed issue, community rating and an individual mandate with subsidies up to 400% of poverty and a minimum benefits package equivalent to the BCBS plan in the FEBHP. All very similar to Enthoven circa 1984
From the call. Some notes…
Wyden said that the Hillary bill was too big in 1994 and you can’t expect the Senate to consider a bill that has to be moved around in a wheelbarrow. His is “only” 160 odd pages.
Maggie Mahar asked if the plans just wouldn’t pay the providers for the cheapo plan way way less to the things they provide for the more expensive plans. Wyden says that there’ll be a “floor of decency,” and that all those commercial plans will pay a better rate than Medicare—so he sees the end of Medicaid and second class health care citizens. No global budgets, because the plan would reduce costs also be a slightly barer plans than some employers provide now. Cost reductions would come from increased competition as people trade down to less rich plans, and through reduced administrative costs—he has a Lewin report to prove it (something else that smacks of 1993!)
Max Sawicky asked whether relying on consumer choice and market competition to hold costs down will work. Here’s what Wyden said. From the first paycheck, employees will see the added health benefits in their paycheck right now, and they’d be required to go out and purchase the basic package. (It would be a wash from tax standpoint for now, as they’d get a new deduction). After the first two years, there’s no longer a requirement that employers would have to pay the salary “increase” but employers would keep the wages up because otherwise the good workers would leave. But after that every employer would be required to make a payment based on their size—and that tax would total more than $100bn) a year. He was asked if that looks like an extra tax which penalizes the employers who were already good citizens and were providing rich insurance already. His response was that overall employers will pay less because in the first two years, the employers will not pay for the growth in health care costs over those two years, they’d just pay the cash amount they were paying in Year Zero. (That does presumably mean that any cost increases will be paid by consumers). Employer wins on day 1 because they don’t pay the increase. Then in 2 years they pay the tax. …..but they haven’t quite figured out that transition for the employers that had very rich benefits. How do you have real consumer choice? How do you make a market? Right now we don’t have one—he thinks his transition will help it.
I asked, so if that works, how are you going to get the provider and supplier industry to not object with extreme prejudice? After all, if we’re going to spend less money they’ll be less industry income! His argument is that primary care docs are going to get a boost in reimbursement; there also be a boost in chronic care preventative spending (although to be honest I missed the details). The doctors will also be bought off with malpractice reforms and all doctors will get paid commercial rates for all patients. He didn’t mention anything about the rest of the industry beyond primary care docs. So I think that he knows he’s in for a big fight! And of course if the plans actually do compete on not increasing costs to consumers in years 1 & 2 with a fixed benefit package, by definition less money will be flowing providers’ way.
Wyden ends by saying that elected officials have been way too timid, and nothing much has happened about health care for far too long. He wants a specific bill to force the debate so that Presidential candidates will have to engage in the debate. And that I suspect is the point, although I fear that he’s 4 years too soon. (And of course given the condition of S. Dakota Dem Senator Tim Johnson, there may not even be a Democratically elected Senate to introduce the bill into!)
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Senator Wyden has the best plan. The Republicans need to get past the simple NO keep everything as it is. Row or get out of the boat.
Useful infomation. I learned something today…. Keep the good work. Very impressive.
I like the Wyden plan. In fact, I will no longer vote for any candidate for national office, regardless of party, who does not unequivocally support the Wyden Health Care plan. If no candidate for a specific office supports the Wyden Plan, I will write in “Ron Wyden of Oregon” on the ballot.
When the public is fed up with this piece meal approach to healthcare, we will vote in politicans that will work on an improved universal(single payer system that covers all).We must take the insurance industry out of the healthcare business.They are parasites that do nothing to benefit the quality of healthcare.A great deal of anti-universal healthcare propoganda is put out by talk radio “shock jocks”, but if their listening audience would really start to look at the statistics of the system,they would understand a complete overhaul is needed.Their is no way out except universal coverage for all. We cannot continue to allow some clerk sitting in an insurance company office make medical decisions.That should be between you and your doctor.
Scott wrote: “The 63 days without coverage clause is ONLY if you are going to group to group coverage. Here is the rule of thumb; Ind to Group – Prex’d, Ind to Ind – Prex’d, Group to Group depends on the 63 day rule – coverage before 63 days – NO Prex’d, coverage after 63 days – Prex’d and the only exception to that is if you had COBERA because COBERA qualiyies for “proof of creditable coverage”.
I don’t know what else to say, but what I am telling you is a fact.”
Scott, just so we beat this dead horse into glue, please either a) comment on how your interpretation squares with info found at this section of DOL’s website:
http://www.dol.gov/ebsa/FAQs/faq_compliance_hipaa.html
OR
document the sources you’re using for your interpretation.
Thanks in advance.
oh, and it’s COBRA, rather than COB*ER*A.
Jay,
Good point. I’m not licensed in every state. Here, just about every carrier I can name covers everything up to a lifetime maximum or 2M, 3M, and 5M. I’ve seen policies with annual limits on them, but they are much higher than that ($25,000 for example).
On the other hand, even those carriers on group and individual plans can alter the rules for certain things. I have a small group where the owner of the company takes a self injected shot twice a week at $700 per week. The carrier not only limits his total amount of medication in a given period of time, they also limit his annual benefit for the prescription.
ok everyone’s right lets move on. Jay is the brightest one of us with is last sentence.
“That’s going to happen sometimes. The risk pool will occasionally have a bad year. Depending on your carrier, they may go by zipcode, or county lines. Exactly how yours is divided up, I can not tell you.
All in all, individual policies are STILL much better than group for several reasons. First, if you qualify to get in, you’re in. And you are now part of a much larger and healthier group. That’s why the rates are so much less expensive. Second, you own the policy. You can take it with you. No COBRA worries. Third, even when they go up 25% or more, that’s still a huge savings. Would you rather go up 25% on 200 a month or 400 a month? ”
Tim, this simply isn’t true. It may be done this way in your state, but not all states require community rating. In many states, your rate will be set after you have been medically underwritten. (or will be reset, after the insurer has a year of claims history on you) HIPAA allows you to buy non underwritten coverage, but, if it’s even available, It is almost always either a) incredibly expensive, or b) has very limited benefits.
For example, in Washington state, I could buy an individual policy. However, my coverage would be limited to $2500/year for prescription drugs. Since I take a drug that costs more than this a month, that’s obviously not going to work.
In California, where I used to live, insurers were required to offer a “full” benefits HIPAA eligible (non underwritten) policy. Buying one of these, however, cost over $600/month (and this was two years ago). Now, for me, that was still a good deal, but a lot of people wouldn’t see it that way.
Sorry about that. Yeah I meant Tim.
“John wrote: “Scott, I agree we are speakign about two different things.”
Scott, FWIW I think it was “Tim” not “John”.
John wrote: “Scott, I agree we are speakign about two different things. But as Quigley pointed out, as long as you don’t go more than 63 days without coverage, you can’t be pre x’d. ”
This is the last time I am going to attempt to explain this. The 63 days without coverage clause is ONLY if you are going to group to group coverage. Here is the rule of thumb; Ind to Group – Prex’d, Ind to Ind – Prex’d, Group to Group depends on the 63 day rule – coverage before 63 days – NO Prex’d, coverage after 63 days – Prex’d and the only exception to that is if you had COBERA because COBERA qualiyies for “proof of creditable coverage”.
I don’t know what else to say, but what I am telling you is a fact.
Peter, you asked
“How do you handle your company budget if it gets “exhausted”.
We have accumulated a substantial contingency reserve plus we explicitly over-budget by 5% per year. That margin not only reduces the likelihood of an operating deficit for the year, but it reduces the size of any such deficit if one emerges, and when there is a budget surplus, it’s put into the contingency reserve. We keep the reserve at about 6 months worth of claims. Finally we purchase stop-loss isurance against the possibility of a truly catastrophic claim. Earlier this year we had a preemie who survived 54 days for whom we paid out almost $1.5 million. BTW, I have managed in both corporate and government settings, and I will tell you that dealing with a budget shortfall was much more dire in the government setting. I don’t know about Canada and that is why I asked. You seem to have taken my question as an accusation but there is no need for such defensiveness. I’m just looking for information.
“This forces better utilization”
“Better” meaning “more effective”? I take it this means that having limited dollars forces substitution of some treatments for others – same principle as substituting generic medications for brand-names – correct? I also take it this means there may be patients, conditions, or other circumstances when certain types of treatment are just not permitted – also correct?
“healthcare in Canada is viewed by the government as an expense not an income generator”
Seems to me the US government looks at health care the same way. Kinda hard to consider a shortfall in Medicare funding that amounts to trillions of dollars anything but an expense.
“they do it for about 1/2 our costs and are as healthy or better with about the same culture.”
From one of my earlier posts: What we need to learn from them is how they can deliver health care that is widely seen as roughly equivalent to the U.S in quality, but at roughly half the cost. The rest is immaterial.
You are the only poster that has come even close to a responsive answer – you have mentioned government price controls, global provider budgets, enforcement of uniform effective-care criteria, and controls on physician and other health care workers’ incomes.
“your comparison of politics here and there”
But I did not do that. In response to your comment “Patients have control through the political process to affect health policy and budgets.” I simply remarked “Yes, I imagine about the same amount of patient control thru the political process as in the US.
I made no comment on any other aspect of Canadian politics.
“you complain you cannot control costs in your own organization, and the healthcare industry as a whole is not controlling costs, and the government has no business controlling costs – where would you have us go?”
You got that almost right. I have never said the government has no business controlling costs. Since the medical industry has shown neither interest nor ability to control its own costs, they invite someone else to do it for them. Therefore government controls may become necessary. The insurance industry has not succeeded in doing this – and doctors daily rally their patients against insurance companies who try. I have no objection to governmental controls, provided that on balance they work significantly better than what we have now. Sure I’m skeptical – shouldn’t everyone be skeptical of ceding more power to the government, especially over health care? But I do not have an agenda on that one way or the other. I’m interested in what will work best.
John, you speak as though creating budgets through government is somehow worse than creating budgets in corporations. How do you handle your company budget if it gets “exhausted”. You also seem to assume that patients are turned away if a hospital runs over it’s budget. Not so. There are contingencies and day to day management like any corporation would have. Taxes have been raised to cover increasing costs but also there is a continuing process to look for savings like any company would. One of the biggest differences is the amount of high tech equipment. Canada has less of it. Not one on every corner as here. This forces better utilization and doctors and hospitals do not show income when using the equipment only expenses. See that’s the other major difference in approach, healthcare in Canada is viewed by the government as an expense not an income generator. Very different from a standpoint of cost management. There have been issues on wait times and recently Ontario’s ads about wait times were questioned as not accurate, so it’s not perfect, but they do it for about 1/2 our costs and are as healthy or better with about the same culture. There is also a continuing battle over dollars from Ottawa. Of course the provinces always want more and they did not get what they wanted from the feds in the last budget. But for a “socialist” :>) system it works much better at cost containment.
As to your comparison of politics here and there, Canada has much less money and bribery in the system. As well Canadians have much less tolerance for corruption. The last Liberal government was brought down due in large part to a political kick back scheme in Quebec. Because healthcare is such a big issue provincial governments also pay attention to what’s going on. Two things patients don’t have a problem with is trying to deal with insurance companies and bankruptcy due to medical bills. Paperwork is also far less.
Scott, I agree we are speakign about two different things. But as Quigley pointed out, as long as you don’t go more than 63 days without coverage, you can’t be pre x’d.
The biggest difference between individual and group plans is automatic issue. You can get into a group, no problems, but some things may be pre X’d if you have any lack of coverage for more than 63 days. The individual policies can do the same ( some even rider things out altogether ), but you have to qualify to get the policy ( get into the pool ).
Either way, as long as someone dosn’t go anymore than 63 days without coverage, there are no problems with pre x.
Wyden’s plan is a little off by guaranteeing policies for individuals and community rating. This is, in effect, what we have already – individual health insurance. Those that don’t qualify, there are already HIPAA plans and State subsidized plans for them.
The key is this – get individual policies while you can. Once you are seriously unhealthy or have a high risk, you can’t get into the pool.
Peter that is very interesting.
“By setting budgets (limited resources) and holding hospitals accountable for those budgets the whole system works hard to best spend limited dollars”
How do the provinces handle it when the budget is exhausted? Has theat ever happened? If so, does Ottawa kick in extra funds? Do the provinces have additional funds set aside for suvh contingencies?
“Patients have control through the political process to affect health policy and budgets.”
Yes, I imagine about the same amount of patient control thru the political process as in the US.
“(Perhaps you would expand on that a little? Controls on what exactly? Physician incomes? Salaries of health care workers? Number of visits to the doctor per year?)”
John, yes, yes, no. I can speak for how Canada does it. The Federal Government controls general national healthcare policy and transfers dollars to the provinces. The provinces have their own healthcare budgets and direct their own provincial policy within national policy. The provinces set their own budgets for hospitals and negotiate fees to docs. By setting budgets (limited resources) and holding hospitals accountable for those budgets the whole system works hard to best spend limited dollars. The province also controls how many hospitals and where. A number of years ago it closed hospitals and rolled those services over to other hospitals to get better utilization. Patients have control through the political process to affect health policy and budgets.
I won’t further debate fiscal policy for now (we’ll just have to disagree)only to say I also don’t think that we can be taxed into prosperity (that was a mischaracterization) but we can redirect taxes to good policy and better uses.
Ask Americans if they would rather fight an endless war in the middle east OR have affordable healthcare. One last point is your comparison to an individual borrowing and the government borrowing. One has limited income the other prints money.
As for you stating insurance companies have no business controlling health costs, and you complain you cannot control costs in your own organization, and the healthcare industry as a whole is not controlling costs, and the government has no business controlling costs – where would you have us go?
“Scott by having a 105 plan in place and giving the employees a tax free allowance the 105 plan is an erisa plan policed by the DOL. Would you rather have a house where you own the land too or would you rather lease the land. Same scenario with individual vs group. I believe Paul Zane Pilzer wrote about this in his book.”
Again, I am commenting on the plan put forward by Senator Ron Wyden. 105 plans, are issued through an employer to an employee. So yes 105 plans are covered under ERISA. But the “plan” put forward by Senator Ron Wyden states: guarantees you private health care coverage that doesn’t go away, even if you change jobs, lose your job, retire, go to school, or become too sick to work. Again, these are private plans.
“John could you expand on that”
Here goes. It’s more words, I hope it’s clear.
Just as for any professional or business, health care providers have costs and they have revenues. Just as for any professional or business, the costs and revenues are different streams of money. Of course, the providers try to set their fees so that their revenues exceed costs by enough to pay administrative expenses and leave something for the provider. That’s the same pricing objective as any business – for profit or not for profit. Another way to look at it is that the health care cost is the independent variable, and the revenues are the dependent variable. There is nothing revolutionary about any of this.
The total cost of health care is the providers’ cost to supply all services required by their patients, plus what they retain for their own income. This total cost will be the same whether the patients and their insurance companies pay all of it, or most of it, or none of it. It will be the same whether or not any of it is shifted away from patients who cannot pay, to patients who can pay. It will be the same whether providers end up with a net gain, or a net loss. And it will be the same regardless what providers bill their patients for it.
Scott by having a 105 plan in place and giving the employees a tax free allowance the 105 plan is an erisa plan policed by the DOL. Would you rather have a house where you own the land too or would you rather lease the land. Same scenario with individual vs group. I believe Paul Zane Pilzer wrote about this in his book.
Quigley
“Health care costs differ from the revenues that pay for them and health care costs are not affected by those revenues”
John could you expand on that.
“Everyone wants to know why healthcare costs are so high and out of control. The biggest reason is because NO ONE wants to pay for it!”
Scott, I think this doesn’t quite work. Health care costs differ from the revenues that pay for them and health care costs are not affected by those revenues (except in the sense that high reimbursement can induce more utilization and vice-versa). The cost-shifting that certainly goes on increases the amounts some people are charged – and that sure is cost to them. But cost-shifting does not increase overall system costs, it only shifts them around, hence the term.
Tim, I think we are talking about two different things here. First, HIPAA is a Federal Regulation not a State issue. When I am speaking about creditable coverage I am talking about it in the context of pre-existing conditions (regarding the plan that Senator Ron Wyden is putting forward). Your right that having an individual health plan is medical coverage and the expense can be deducted from your taxes. I am not talking about whether or not individual health plans are valid medical coverage or not. I apologize for assuming that you knew what “proof of creditable coverage” is, when concerning a pre-existing conditions.
Part of Senator Ron Wyden’s plan was to provide individual health plans to everyone. One of my concerns was pre-existing conditions that people have because individual health plans do not have the same protections as group health plans. But as one of the posters pointed out, under Senator Ron Wyden’s plan there would be no pre-existing exclusions and or waiting periods. So in effect, part of the HIPPA regulation language would have to be rewritten or done away with altogether. Which brings up another concern, ERISA. Employer sponsored health plans (self funded or not) fall under ERISA regulations which grant the beneficiary (as well as the dependants) certain rights, as well as regulations that the insurance company has to follow when determining benefits. Now ERISA does not govern individual health plans and therefore the consumer would lose those protections and be forced to rely on State regulations which are a joke. I fear that allowing everyone to have individual health plans as a gateway for massive consumer abuse when insurance companies are determining benefits. There is already abuse of the system and there are protections in place.
Everyone wants to know why healthcare costs are so high and out of control. The biggest reason is because NO ONE wants to pay for it! In fact Medicare wants to LOWER physician reimbursement. So guess what? Costs will go up. On top of that, guess where all these insurance companies base their fee schedules off of. Yup you guessed it, the Medicare fee schedule. So if Medicare lowers theirs, the rats will follow. I believe of the people who have filed bankruptcy because of medical costs, 70% of them had insurance (I could be wrong but I know it’s around there). WOW! What are you really paying for?
I don’t even think you realize how shielded the average consumer is to healthcare costs. If every single provider was out of network, and consumers along with insurance companies had to bear the full 100% cost, there would be riots in the streets. The healthcare crisis is NOTHING compared to what it could be.
Scott what are you talking about if a person has coverage for a year without a gap of 63 days no pre-existing unless the individual carrier riders something out which you would have to agree with to take the policy.
Scott, you are talking about certain states that have that wording as a qualification for their HIPAA plans… that’s it. Also, many individual plans will either have on their list bill paperwork, or RIGHT ON THE APP, that the employer can not pay for any of it.
They are in violation of Section 105 of the IRS Tax Code. If you want to argue with the IRS, go right ahead. I can post this three time if you’d like too. ( My browser/IP service made that happen last time. sorry for the triple post ).
Honestly, Scott, individual health plans ARE creditable coverage. I will write that and sign it. Will you do the same for your clients? If you do, send me a copy. I’d like for my tax attorney to have a good laugh this afternoon.
Peter, you said
“I see the fact that insurers do not control costs as a big part of the problem. You would think that would be part of their job”
Would I think a part of GM’s job is to control the cost of refining gasoline? Would I think a part of Microsoft’s job is to control the cost of generating electricity? No. And no.
“I think a solution lies with funding healthcare through the tax system and with a government that will control costs”
Well, that was fast. You don’t really think the job of controlling health care costs belongs with insurance companies, or is a big part of the problem after all, do you? You believe the job belongs with the government wielding cost controls. (Perhaps you would expand on that a little? Controls on what exactly? Physician incomes? Salaries of health care workers? Number of visits to the doctor per year?)
“Sure when you borrow money and pump that into the system driving activity more money will come in.”
Got that right. But, Peter. Do you actually think tax rate reductions are equivalent to borrowing? A reduction in tax rates is in no way “borrowing”. And it’s not “splitting hairs” to distinguish between these different things – any more than it is splitting hairs to distinguish between tax rates and tax revenue, or between lightning and a lightning bug.
Borrowing so that more money will come in, simply describes an investment strategy. It works. It’s been used since before Adam Smith. It’s more or less the investment strategy that anyone who buys a house relies on.
But, a reduction in tax rates is not borrowing. When people get to keep more of their own money, the government has neither lent to them nor borrowed from them. Sure enough, just as you say, with more money circulating in the economy, the economy actually expands and “more [tax] money will come in”. Kennedy knew it. Reagan knew it. Any economist knows it – even Paul Krugman. It’s not a big secret or even a big mystery. And then Congress will overspend it.
“But is that an honest and sustainable way to run the economy or is it just smoke and mirrors?”
Yes. It’s an honest and sustainable way to run the economy. I know, I know, you think we can be taxed into prosperity. We will not agree on that.
“Well it’s already being done . . . government run insurance with government cost controls”
Yes, Peter I know that. I did not ask what other countries are doing, I asked how they are doing it. As noted above, I appreciate your answer – government cost controls. Most people try to talk around that. You don’t. I do appreciate it.
Well I got blasted by Tim for saying that Individual plans are not proof of creditable coverage (post that comment enough?). Well Timmy, HIPAA defines creditable coverage as: “Your last health care coverage must have been under an employer sponsored group health plan, which includes COBRA continuation coverage, for at least 18 months. This prior 18-month coverage is referred to as “creditable coverage.” ” Lets say that again, “must have been under an employer sponsored group health plan” So if you went from an Individual plan that you are paying out of your own pocket to a group plan or to another Individual plan, the Individual plan WILL NOT qualify as creditable coverage, period.
Peter,
Everything you just said about taxes is already in place.
John F, I get tired of hearing how insurance is not the problem, docs are not the problem, hospitals are not the problem. It’s hard to believe we have a problem. It’s also interesting that your company self insures but still has little control on costs. Is that why you say insurance is not the problem? I see the fact that insurers do not control costs as a big part of the problem. You would think that would be part of their job, but they just keep passing on cost increases because they can, and not controling them with a whole bunch of paperwork for everyone thrown in.
I read Barry’s comments with interest and think his ideas have merit. I just don’t think they go far enough and will not make that much of a difference in spiraling upward costs. I think he has good ideas within a solution, not a solution.
I was also not advocating that businesses fund healthcare for their employees and agree that will not control costs. As I have said before I think a solution lies with funding healthcare through the tax system and with a government that will control costs because so far “this” system defies any cost control. But I am not convinced this government will control costs given the bribery operating in the system. We will not solve many of these problems until we get the money out of politics as much as possible.
As to, “No one has cut taxes in this country . The present administration cut tax rates, not taxes. Tax revenues dramatically increased after tax rates were reduced.” Splitting hairs? Sure when you borrow money and pump that into the system driving activity more money will come in. But is that an honest and sustainable way to run the economy or is it just smoke and mirrors?
And finally, “What we need to learn from them is how they can deliver health care that is widely seen as roughly equivalent to the U.S in quality, but at roughly half the cost.” Well it’s already being done by single pay government run insurance with government cost controls financed through the tax system. Not perfect and always requires work and adjustments to the system but does controls costs better than the U.S. system, as you agree, is the problem.
John,
If you would like to debate on health insurance anytime anywhere, my tax attorney and I will gladly entertain any questions any Americans have and I will put any amount of money on it that we would show them a way to save more money and have better benefits than anyone in this country.
I am sick and tired of insurance agents running their mouths and being so tough behind the scenes but when put into the lime light they wilt every time. Just look at the articles that have been written about my organization and you will understand our commitment to saving America and small brokers from being forced into following what the big time insurance executives and their precious bonuses think.
Sounds to me that you might have executive itis and you may need a cure real quick.
By the way any company that self insures more than 10k a family with todays health savings rates ought to get their consultants head checked.
Love,
Quigley
John what the heck are you talking about? The owner can see how many times all his employees went to the doctor or ER or Urgent Care. The strategy Tim is talking about allows for the owner to set up plans under a high deductible plan or give a tax free allowance to individuals to buy it on their own or go on spouses plans or medicare or Hippa and put in a Merp to pay for items not covered on these plans. Only saves people 50-60% on premium probably wouldn’t make sense to buy my book? “How To Beat The High Cost of Health Care” Call me if you have questions 513-677-6262.
Quigley
“another beautiful benefit of what our TPA does for the clients is SHOW them what their claims looked like”
Tim, that is an advantage of using a TPA, but is not a function of TPA vs insurance company. It’s a function of the nature of the contract. If the contract is a group insurance policy the insurer owns the data. If the contract is ASO, the plan sponsor owns the data. So in an ASO arrangement, the plan sponsor has much less restricted access to its own data.
The major restriction that remains is that plan sponsor ownership of the data in an ASO contract does not relieve the TPA of its duty under HIPAA to protect member privacy. So the TPA still cannot legally share certain individually-identifiable data. (it would be most unwise for the employer to look at such individual data anyway).
Peter,
I completely understand your concern. Bully for you for getting out of the game.
The other thing that most people don’t realize, is that as a small employer, you have absolutely no rights when it comes to seeing your “experience”, or claims history. You can ask, but you’ll never see it. Why? They don’t have to show you.
With individual, I am working on an answer for your question. One of my partners spent fourteen years at Anthem doing trends and statistics. She may be able to shed some light on this.
That said, another beautiful benefit of what our TPA does for the clients is SHOW them what their claims looked like for the previous year. That way, we can make any changes to their plan that make sense, and you have factual data to argue with the carrier who makes 50 cents on the dollar in a bad year.
“John I take it that you are one of the wonks.”
No. I manage the life & health insurance plans for a very large organization (over 20,000 employees). I am interested in practicalities, not the pleasures of academic debate or wonkish infighting. Any time I hear practical ways to reduce the costs my company bears – I listen. Otherwise, it’s parlor talk.
“Maybe you could boil this all down for us so that we may see the way clear.”
No, I couldn’t. But I have pretty good judgement about practical vs. impractical. One of the main obstacles in our so-called health care “debate” is that so many people focus on “insurance” as if that were the problem. I know enough to see that ain’t the problem. The health plan I manage is self-funded. We don’t have insurance and don’t pay insurance premiums. Yet our costs rise every year like a law of nature. Why? Because the cost of health care goes up every year. If heath care were not expensive, health insurance would not be expensive. If the cost of health care were not rising, the cost of health insurance would not be rising. There are far too many pundits and politicians chasing after a solution to the “insurance” problem but the high cost of insurance is only a symptom of the deeper problem of health care costs. I ‘m pretty sure that focusing on the symptom and ignoring the deeper problem is no way to treat a disease. However, I don’t know how to treat this disease any more than you do. That is what the experts claim as their territory – and they haven’t come up with solutions, either. BTW, you could do much worse than to read and think about Barry Carol’s remarks, they are always thoughtful and practical.
“Of course other countries have found a way which could give us direction, but Americans don’t need advice from outsiders.”
What we need to learn from them is how they can deliver health care that is widely seen as roughly equivalent to the U.S in quality, but at roughly half the cost. The rest is immaterial.
“If businesses that don’t provide health coverage had to pay enough wages to cover an individuals premiums your day to day costs would be higher, you would be poorer.”
Nonsense. Your idea would fund all the inefficiencies in our present system. That is no solution. In THIS country, today, few who are “uninsured” are denied health care for lack of funds. I am paying for that, so are you, and so is every taxpayer. The uninsured may well be unable to purchase private insurance. But most do receive necessary health care. This is one of the reasons I think it may be possible to rationalize the funding of health care under some kind of universal coverage, because we are paying for a great deal of “uninsured” care anyway. But “coverage” won’t address the deeper problem of health care costs. So I resist the notion that the cost of “insurance” is the problem. The cost of health care is the problem. I am also skeptical that the federal government is the best and only operational mechanism for any universal plan.
“But hey, we can cut taxes and fund healthcare”
No one has cut taxes in this country. The present administration cut tax rates, not taxes. That’s an important difference. As Mark Twain said, there’s a world of difference between “lightning” and “lightning bug”. Tax revenues dramatically increased after tax rates were reduced. Same thing happened in the 1980’s. Of course, Congress promptly outspends the fresh income, because any Congress will tend to outspend any given amount of money, any time, and regardless of political party.
The amount of administrative overhead in Medicaid alone is staggering. They have to put every person through an income qualification process that must be updated monthly. One of the ways Senator Wyden’s plan reduces costs is by eliminating redundant processes and streamlining the way hospitals are paid for their services. Currently, hospitals have to put together detailed cost reports and submit them to try to get money from their respective state and the federal government, in a program called “Disproportionate Share Spending”. It’s about $20 Billion the government gives out at the end of the year to help prop up safety net hospitals.
In addition, we already pay for healthcare for the uninsured, we just do it in the most complicated, expensive, effort-intensive way possible. Hospitals have to treat uninsureds if they’re in an emergent situation, the uninsured doesn’t pay, the hospital either eats the costs, or (more likely) passes them on to the insurers who pass them on to the employers who pass them on to you and me in the form of lower raises. Hospitals can also pay for their uninsured through the aforementioned Disproportionate Share payments, which involve a ton of administrative overhead.
Wyden’s plan does all income qualifications through the IRS. A very efficient way of doing it, if you ask me, because they are the most skilled at determining people’s incomes already. Also, I believe the money paid for health insurance goes to the IRS, so people are paying for health insurance whether they want to or not, in the form of taxes. They might as well select a plan while they’re at it. That eliminates the concern about healthy people opting not to get covered, leaving a sicker risk pool behind.
Those are some rebuttals to some of the points listed so far in the comments section. There are a bunch of other complains that similarly seem to be coming from people who haven’t put any effort into understanding what the bill says, as the responses are clearly laid out.
As a final point, if you had any clue how much money is wasted in the healthcare industry just by moving paper around, you would understand why it is credible that this plan would save $1.4 Trillion over ten years with few plans to address utilization issues.
“Would you rather go up 25% on 200 a month or 400 a month?”
Tim, when I got that 38% increase, on the highest of my monthly premiums, I went back to see what kind of rate increases I was averaging. I have since deleted it as I dropped all insurance after that increase (you see I’m one of the healthy ones with resources) and the incredible aggravation of fighting with BC for 6 months to pay the claim. But my memory is that my rate increases averaged 10% to 15% COMPOUNDED. It didn’t make any difference if the rate increase was on a low premium year or a high premium year it was just on the last premium year. No one examined BC’s books to see if they just wanted more or they were bad mangers or they had more claims. Secrecy is everything.
Quotes from John Fembup;
“I think that information may well out there, but competing with all the bad information and advocacy that is also out there, good information is just part of the noise.”
John I take it that you are one of the wonks. Maybe you could boil this all down for us so that we may see the way clear. You are right that there is a lot of noise, both good and bad, but given this country has never attempted healthcare reform before in a meaningful way I think many of the questions/noise/comments are well founded and asking for fairness and proof of direction. Of course other countries have found a way which could give us direction, but Americans don’t need advice from outsiders.
“H.L Mencken is supposed to have said that the trouble with a democracy is that when the public figures out they can vote themselves the treasury, you have chaos.”
No the public hasn’t figured it out yet, or at least the voting public, but congress has sure figured out how to vote themselves the treasury.
“I’ll pretend I like it as long as the government pretends not to increase my taxes to pay for free health care.”
It’s going to be free for some people. But you know, the low wage crowd puts money in your pocket every day. If businesses that don’t provide health coverage had to pay enough wages to cover an individuals premiums your day to day costs would be higher, you would be poorer. That would be pay-as-you go without using the tax system. Would you prefer that? Defining achievment as the act of climbing the ladder while stepping on the person below you does not lift all boats. But hey, we can cut taxes and fund healthcare, just ask the Bush administration about their borrow and spend policy. Hell if we can cut taxes and fund a war we can do the same for healthcare.
The solution for health insurance is in Loveland, Oh. in the land of love http://www.totalbenefitsplanning.com
I can easily envision ways healthcare utilization could be materially reduced. Here are at least three ways it could happen from a doctor’s perspective.
1. Under malpractice reform that included replacing the jury system with special health courts, doctors come to perceive that any medical dispute they are involved in will receive a fair and objective hearing. Glib trial lawyers will not be able to manipulate juries. Many of those tests doctors ordered under the old system just to protect against litigation can now be safely (from both a medical and litigation perspective) skipped. Of course, that may mean less revenue for labs, imaging centers, etc., but that is not the doctors’ problem.
2. Interoperable electronic records make it easy for doctors to see what tests have already been ordered by other docs treating the patient and what drugs have been prescribed. With that knowledge, duplicate testing is eliminated and potential adverse drug interactions (and associated care) are avoided. Of course, that may mean less revenue for hospitals, but that is not the doctors’ problem.
3. If all or most people execute living wills and medical powers of attorney, doctors will know what care the patient wants and doesn’t want in end of life situations when direct communication is no longer possible. Again, that may mean less revenue for hospitals, but that is not the doctors’ problem.
Doctors drive virtually all healthcare spending one way or another even though only about 20%-25% of the spending goes to doctors as fees for service. With proper reforms in place, including the three described above, doctors could easily drive utilization significantly lower without affecting their own incomes.
//I’ll pretend I like it as long as the government pretends not to increase my taxes to pay for free health care.//
And I’ll pretend not to breathe when you catch tuberculosis during a down-and-out phase of your life, but you’re still wandering about because you need to keep trying to find work to support yourself.
Peter, some of my individuals went up 22 percent last year from MMO, but they ALL did. They all went up the same rate.
That’s going to happen sometimes. The risk pool will occasionally have a bad year. Depending on your carrier, they may go by zipcode, or county lines. Exactly how yours is divided up, I can not tell you.
All in all, individual policies are STILL much better than group for several reasons. First, if you qualify to get in, you’re in. And you are now part of a much larger and healthier group. That’s why the rates are so much less expensive. Second, you own the policy. You can take it with you. No COBRA worries. Third, even when they go up 25% or more, that’s still a huge savings. Would you rather go up 25% on 200 a month or 400 a month?
“Unbeleivable, the amount of bad information out there.”
Remarkable for sure and also disappointing, but not really unbelievable. One reason is that this is an extraordinarily complex subject. But we are not truly being helped by the many different experts, pundits, and other thought-leaders, each with their own ideas, analyses, and egos, each advocating their own solutions, and most of them trying their darndest to discredit any and all other differing ideas. We are also not helped by a public debate that continually descends into the weeds of wonkish detail – because the public still does not have accurate information and needs education on the basic problems, tradeoffs, and policy options and an honest appraisal of their costs vs their benefits. I think that information may well out there, but competing with all the bad information and advocacy that is also out there, good information is just part of the noise.
H.L Mencken is supposed to have said that the trouble with a democracy is that when the public figures out they can vote themselves the treasury, you have chaos.
If Wyden’s plan, for example, promises to pay peoples’ bills and manages to disguise the true costs, well, maybe that’s good enough. I’ll pretend I like it as long as the government pretends not to increase my taxes to pay for free health care.
“You will NOT be priced out of the market, as there is no “group of one”.
Tim, how would you know if you’re not being targeted as an individual based on you’re claims? When my Blue Cross rate went up 38% in one year (after my first claim which took 6 mths for BC to pay) I tried to get an explanation from BC through the state insurance commission. BC did not provide any credible or believable information to back up the rate increase. Neither could they be forced to provide any by the commission. See that’s the problem, there’s no accountablility or transparancy by the insurance industry.
So many good points and truths brought up here.
“Fixing” the health care problems seems nearly impossible,
because those that have to worry about it, don’t have enough money to change the system.
This new bill is a joke.
Sure, we can all point out flaws and criticize
in many ways, but if WE want something done, how do we
go about doing it? Why aren’t there people talking, forming a giant network to get something done?
Tom,
Also incorrect. As an “individual”,you are part of a county ot zipcode based pool with that carrier. Hence, you always want to get in the largest pool, ie the carrier with the largest bunch of individual policies in the county. You will NOT be priced out of the market, as there is no “group of one”.
Unbeleivable, the amount of bad information out there.
Sorry — using the word “term” in two different senses is confusing. I should say “you’ll be offered coverage next year at a price…”
t
> THEY CAN NOT CANCEL YOU FOR HAVING CLAIMS.
True enough. But when your term expires (usually one year) you’ll be offered terms based on the claim history of your group of one.
So if you’re sick, you’ll be priced out of the market but not technically canceled. This is the trouble with term health insurance, which is what we all have until we’re medicare-eligible.
t
Scott,
You are incorrect in regard to creditable coverage. Individual plans ARE creditable coverage. Not mini meds… but INDIVIDUAL INSURANCE. Just like you could log onto Anthem right now and get a quote for it… it is creditable coverage. You have to qualify to get in, but it is equal to group insurance, if not better. I’m not sure where you got that information, but it is incorrect. I have an individual plan now. If I were to go to work for someone else tomorrow, my individual plan counts towards prior coverage. In fact, my plan is better than many group plans. Why? I OWN IT. I TAKE IT WITH ME WHEREVER I GO.
Furthermore, Indiviual plans are guranteed reissue as long as you make the payments. THEY CAN NOT CANCEL YOU FOR HAVING CLAIMS. That is a completely ignorant and ridiculous thing to say.
Scott,
You are incorrect in regard to creditable coverage. Individual plans ARE creditable coverage. Not mini meds… but INDIVIDUAL INSURANCE. Just like you could log onto Anthem right now and get a quote for it… it is creditbal coverage. You have to qualify ti get in, but it is equal to group insurance, if not better. I’m not sure where you got that information, but it is incorrect. I have an individual plan now. If I were to go to work for someone else tomorrow, my individual plan counts towards prior coverage. In fact, my plan is better than many group plans. Why? I OWN IT. I TAKE IT WITH ME WHEREVER I GO.
Furthermore, Indiviual plans are guranteed reissue as long as you make the payments. THEY CAN NOT CANCEL YOU FOR HAVING CLAIMS. That is a completely ignorant and ridiculous thing to say.
Scott,
You are incorrect in regard to creditable coverage. Individual plans ARE creditable coverage. Not mini meds… but INDIVIDUAL INSURANCE. Just like you could log onto Anthem right now and get a quote for it… it is creditbal coverage. You have to qualify ti get in, but it is equal to group insurance, if not better. I’m not sure where you got that information, but it is incorrect. I have an individual plan now. If I were to go to work for someone else tomorrow, my individual plan counts towards prior coverage. In fact, my plan is better than many group plans. Why? I OWN IT. I TAKE IT WITH ME WHEREVER I GO.
I have a couple questions: first, how does the government get non-corrupt ratings? Didn’t CA decide to save money by letting health care providers essentially rate themselves through their own industry organization?
Also, will the patient be protected from smoke and mirrors? A couple of months ago I decided to go to a “family doctor” instead of the emergency room for what was pretty much an emergency. I suffered from the delay in care, but I thought it was the right thing to do since I had found I qualified for a local health subsidy that made the doctor visit $25 (more than a charity visit to the ER…but still, I was being a good citizen). A few weeks after I was treated for the problem, I started to get bills for $90, which I can’t afford. I don’t think this is balance billing: I think the real cost was just hidden from me so I wouldn’t go to the ER instead. As a health care consumer, I want to know exactly what I have to pay.
Also, I bet the insta-raise aspect turns into job market chaos. Instead of low pay employers raising wages, high pay employers will rely on the deliberately-maintained “tight” job market to do “take backs” and get rid of the higher pay employees and hire new ones who will be grateful for other sorts of benefit offerings.
First I’m dubious of any legislation that is titled by a politician’s press agent, “Healthy Americans Act”. Why not just title it, “Access to Affordable Heathcare Act”, too lofty a goal with too much pressure to achieve the goal? Second I also am dubious of any organization that calls itself, “Stand Tall for America”. Just another, “You’re either with us or against us.” We now know where that got us.
From Kari’s link:
“saves $1.48 trillion over 10 years through tough cost containment”
Only mention of cost control is,
“Health plans would compete on the basis of price.”
Again, not going to happen unless insurance companies start to reduce provider billings. The insurance industry has a great capacity, like most industries, to look the same and compete on anything other than price.
And just how are insurance companies going to attract providers when they say, “Yes we are going to reduce your reimbursements.” And where’s the, “TOUGH”?
“National health spending, projected to be $2.3 trillion in 2007, would actually decline by
$4.5 billion despite the expansion in private coverage, due to savings in administration($29.8) and increased price competition for insurance ($54.9)”
Reduction in “administration”? Looks like more to me if you add it all together. Assumptions, assumptions.
I also looked at the co-pay and cost chart. So how is a low income person going to avoid a co-pay? Part of the barrier to primary care is co-pay requirements. Better have a national health identity card for presentation unless you want the subsidized insured to have to apply for refund – more administration. And will docs and hospitals be able to also bill for their co-pays on top of the plan’s?
“Catastrophic benefits – 100% payment level begins after you pay $4,000 out-of-pocket in coinsurance, co-payment and deductible expenses.”
“Premiums – Single $357 Married (Joint filers with
no dependents)$714”
Wow! looks like the plan I just gave up. The premium is 30% higher than I was paying and 100% higher than what my wife’s employer pays for her group coverage. Where are all these “competitive and administrative” savings, especially when you consider that more people are going to be premium payers? Has Senator Ron Wyden also looked at the savings rate for Middle America to determine who has the kind of cash laying around to pay the catastrophic co-pays and deductibles? And what if a family can’t pay – take their house? That’s how the State of NC does it through the AG’s office when a patient can’t pay the not-for-profit state hospital.
Scott wrote Furthermore, individual plans do not qualify as proof of creditable coverage so there would be problem with pre-existing. Also, some if not most individual policies will drop you like a hot cake when the claims payments start exceeding your premium payments (I don’t care how large the pool is).
Actually, Scott, the proposal from Senator Wyden actually says that all insurance companies have to take all comers — no excluding people or raising their rates based on pre-existing conditions. They also can’t drop you just because you make claims.
[Full disclosure – I’m the netroots organizer for Senator Wyden. I invite everyone to c’mon down to Stand Tall for America to learn more and get involved. I speak only for myself, and any errors are my own. Thanks!]
Provider income probably has to come later. Unless he wnats to pull a Governator and mobilize every single interest group against him at the same time.
“Still no plan to control costs (it seems) except I guess so called competition by insurance carriers.”
Isn’t it interesting that so many people leave it to insurance carriers to compete on control of health care costs?
Sorta like asking General Motors to compete on gasoline refining costs or asking Microsoft to compete on electricity generation costs.
Senator Wyden talks big but he wimps out like everybody else when it comes to reducing providers incomes. Matt correctly identified the front lines in this war – money and power. I say let the warfare begin, and let Senator Wyden sit on the front row!
Ditto to Peter’s comments.
Individual plans are not protected by ERISA regulations. And as Peter pointed out, insurance companies are way too tight with State agencies. Furthermore, individual plans do not qualify as proof of creditable coverage so there would be problem with pre-existing. Also, some if not most individual policies will drop you like a hot cake when the claims payments start exceeding your premium payments (I don’t care how large the pool is).
“would begin by dissolving all employer-based insurance.”
Good.
“The HHA’s will have a menu of private insurance plans, all of which must provide coverage equal to or better than the Blue Cross Blue Shield Standard Plan used by Congress.”
Not convinced all these choices will help. Too much administration costs and too much complexity. Will it be as easy as Med PartD? Possible two/three tier healthcare delivery. Will docs have to accept any patient with any insurance or could they cherry pick?
“All plans will be community rated by the state, meaning an end to adverse selection and preexisting condition problems.”
Good, we’re all in the same pool.
Single pay government insurance getting closer and closer – maybe. Still no plan to control costs (it seems) except I guess so called competition by insurence carriers. Believe that when I see it as they are pretty tight with state insurance commissioners. Still too much room for bribery.
And as Matt said, Dick Cheney’s tie break vote may kill anything presented that will look like reform.