Tag: Health insurance

Will Health Insurance Reform Reach Those Who Really Need It?

Dec 1, 2011• 10

By Preeti Vissa

Issues that affect our lives don’t happen in a vacuum. Everything affects everything else, and there’s no area where that’s truer than health and access to care. So I’m going to take a slight detour from the financial and economic issues I write about most of the time to say a bit about the Affordable Care Act, which marks a historic expansion of access to health care.

Thanks to the law, an estimated 32 million previously uninsured Americans will be able to purchase health insurance in 2014. But right now there are real questions about whether this historic expansion of coverage will reach those Americans who need it most.

My colleagues on The Greenlining Institute‘s health team have been looking into this, and just published their findings in the form of a new report. They focused on the new Health Benefit Exchanges, which will allow consumers to compare the price, quality, and benefits of competing health insurance plans. Maybe most important, Americans will be able to purchase coverage through their state’s Exchange with federal subsidies that will help low and middle-income families cover the cost.

The bottom line is that getting the word out about these new options may be more complicated than it seems, and state Exchanges should get communities involved in the process sooner rather than later.

Current plans call for Web portals to serve as the main route through which consumers will access the Exchanges, but these websites won’t be able to do the job by themselves. States will need to pursue a variety of outreach and enrollment strategies, strategies that must be based on the populations they must reach.

The Constitution Is Not a Turkey

Nov 26, 2011• 79

By DAVID DRANOVE

I think the world of Jon Gruber, the MIT economist who helped design both the Massachusetts Health Plan and the Health Insurance Exchange provisions of President Obama’s Affordable Care Act. So I was more than a bit dismayed to read this quote from Jon: “I’m frustrated that the future of the American health care system rests in the hands of one or two of these unelected people who might make the decision based on political grounds.” The “unelected people” that Jon is referring to are justices of the Supreme Court. Jon almost seems surprised that the Supreme Court has a say in the matter.

The Health Insurance Exchange is an idea that economists have floated for more than three decades and thanks to his hard work, that idea has become a reality in Massachusetts and perhaps the rest of the nation, provided that the Supreme Court doesn’t block this fine bit of economics. Unfortunately for supporters of the exchange (including myself) the health insurance purchase mandate – an essential element of any economically viable exchange – might be unconstitutional. God forbid that the U.S. Constitution might interfere with beautiful economic theories.

There is a solution. I am almost too modest to say it but I proposed this idea in my book Code Red long before Barack Obama put his hand on the bible to be sworn in as Regulator-in-Chief. The beauty of the solution is that it respects, nay, was inspired by Jon’s work in Massachusetts, and is constitutional to boot! The solution is in its own way conservative, because it does not mandate a single approach to health reform. Congress should have given each state a block grant conditional on expanding health insurance coverage. The states could have chosen how to proceed. The U.S. Constitution might prohibit a federal mandate to purchase insurance, but it says nothing about what the states may do.

Some states might have chosen to adopt their own versions of the Massachusetts Health Plan. A few states may have centralized insurance, creating their own versions of single payer systems. Others may have given individuals vouchers and encouraged the growth of private insurance exchanges. This would be the closest to a free market solution, keeping the government out of it, except as a vehicle for transferring wealth. Perhaps all of these ideas would have been better than the status quo. Perhaps states could have learned from each other. Even Jon Gruber might have learned something new! Through this experimentation, we could have rapidly expanded health insurance coverage and also put lots of theories to the test. I still think this is a terrific idea. But in 2009 when politicians and economists huddled together to write the Affordable Care Act, no one invited me to the party. Alas. Continue reading…

What Difference Does Health Insurance Make?

Nov 7, 2011• 61

By John Goodman

Almost everyone thinks we should insure the uninsured. I don’t recall even a single dissenter. Yet it is precisely when everyone agrees on something that thinking begins to get very sloppy. So let me be the devil’s advocate and challenge the idea.

Why do we want to insure the uninsured? Forget about the costs, for a moment. Are there any benefits? What are they? I can think of four candidates. If people are insured:

They may get more health care.
They may get better care.
They will enjoy protection from the financial effects of catastrophic illness.
They will be less likely to be free riders on the charity of others.

The first three items are “it’s for his own good” benefits and, frankly, the case for them is pretty lame — especially in the context of RomneyCare and ObamaCare. If you expand the demand for health care but do nothing to increase supply, people in the aggregate will not be able to get more care. One person’s gain in care will be offset by someone else’s loss. (At least that tends to be the case, when the principal currency patients use to pay for care is time and not money.) Since the costs of non-price rationing will rise in the process, the whole exercise must make society as a whole worse off.

The same objection applies to the idea of “better care.” Better care for one person must be obtained at someone else’s expense, if the supply of medical resources is unchanged.

[I suppose you could make an additional argument: If we insure the uninsured, they will have a better chance of getting a “fair share” of health care. In other words, care will be distributed more equally. While that argument makes sense in the abstract, it doesn’t work if you segregate the previously uninsured into plans that pay providers below-market rates — as both RomneyCare and ObamaCare do — and cause them be pushed to the rear of the waiting lines. See below.]

Another Unpleasant Surprise from Obamacare

Nov 4, 2011• 8

By Diana Furchtgott-Roth

Whatever the disadvantages of the new health care law, Obamacare proponents appeared to be on solid ground when they said that it would extend affordable health insurance to millions of Americans.

No longer.

At the hearing of the health subcommittee of the House Committee on Oversight and Government Reform, Cornell University economics professor Richard Burkhauser showed that in 2014, millions of low-income Americans may be unable to get subsidized health insurance through the new health care exchanges.

It’s true that under Obamacare, firms with more than 49 workers have to offer affordable health insurance coverage to full-time employees or pay a penalty. But the coverage only has to be for an individual policy, not a family policy.

And what most people don’t know is that if a worker receives coverage for a single person from his employer, his family will not be able to get subsidized health insurance coverage under the exchange.

This is because, if one member of a family receives employer-sponsored health insurance, other members of the family cannot receive subsidized coverage under the exchange.

Other family members would have to purchase full-price health insurance, which would be prohibitively expensive for those at low incomes, those who are supposed to be protected.

Obamacare Exchange Opposite of Free Market

Oct 25, 2011• 3

By Jack McHugh

As described here last week, the latest tack of Republican Obamacare “exchange” proponents is to characterize their “MIHealth Marketplace” as a positive good rather than a least-bad option among several bad choices.

They are even using labels like “conservative” and “free-market” to describe the entity whose main role will be to administer the billions of dollars of insurance subsidies the federal Patient Protection Act distributes.

The boosters are also trotting out the old canard that the exchange is merely a “Travelocity and Orbitz” for health insurance.

Those claims and labels were badly dented in a recent hearing of the House Health Policy Committee, where staffers from one of the corporations hoping to profit from exchange contracts presented a “Mandated State Exchange Functions” flow-chart.

If a health insurance “Travelocity and Orbitz” is all these politicians really want, they’re in luck, because such websites already exist. Better yet, they really are “free-market” services provided by private companies, with no role in administering Obamacare — go to www.ehealthinsurance.com or www.getinsured.com to see examples.

Preparing for the Exchanges

Sep 22, 2011• 1

By John R. Graham

What is the biggest waste of effort in American health care today?

I’d suggest it is the hustle and bustle to establish PPACA’s Health Benefits Exchanges. The health insurers’ trade association, AHIP, has an entire educational series on “preparing for exchanges.” The likelihood of exchanges being up and running by January 2014 is vanishingly close to zero. Indeed, they may not exist at all except in very few states – whether or not President Obama wins re-election.

Last January, I wrote in The Health Care Blog that states should not collaborate with the federal government in establishing exchanges. Almost all states have taken this course. Recent days have brought forward new evidence that exchanges are facing even bigger problems than previously understood. The New York Times reports that Republican state senators are blocking a bill that would allow the state to establish an exchange and claim federal handouts to get it up and running. (A few weeks previously, Kansas governor Brownback actually sent a $31.5 million federal PPACA grant back to D.C.).

If they can’t get a PPACA exchange up and running in New York, of all places, where the heck will they? Only 13 states have passed pro-exchange legislation (and some of these bills don’t do much more than establish study groups).

Health Exchanges — A New Approach

Sep 16, 2011• 7

By BILL KRAMER

Why don’t we think about the Exchanges as a place for people to choose their health care, not just their health insurance?

As the Exchanges are being designed, we have a great opportunity to rethink how to help people choose a physician for their care, but our current mindset may get in the way of developing innovative approaches.

Under the Affordable Care Act, each state is expected to establish “health benefit exchanges” for individuals and small employers in order to “facilitate the purchase of qualified health plans.” This is consistent with the concept of health insurance exchanges that has been developed over many decades. In this model – used by many large employers as well as existing exchanges such as CBIA’s Health Connections and the Massachusetts Health Connector – the individual consumer or employee is given a choice among several health insurers.

The consumers are given information about the quality, patient satisfaction, and provider networks of each insurer to help them choose the one that best meets their needs, and healthy competition among the health insurers is expected to drive improved value for consumers. The consumer makes this choice upon initial enrollment and annually thereafter. Once the consumer has chosen an insurer, the second step is to choose a provider from the list of providers with which the insurers has contracts. It is seen as a two-step process: (1) choose an insurer, and (2) choose a provider.Continue reading…

Yes, The Federal Exchanges Can Offer Premium Tax Credits

Sep 12, 2011• 24

By TIMOTHY STOLTZFUS JOST

Whatever else the Affordable Care Act may accomplish, it has provided endless entertainment for law professors.

The latest ACA kerfuffle involves the discovery by critics of the ACA of an ACA drafting error that would seem to deprive millions of uninsured Americans of tax credits to purchase health insurance and invalidate regulations recently proposed by HHS and the Treasury Department. The mistake is found in section 1401 of the ACA, which creates a new section 36B of the IRC. Two subsections of 36B ((b)(2)(A) and (c)(2)(A)(i)) suggest that premium tax credit eligibility under the ACA depends on the applicant being enrolled in a qualified health plan “through an Exchange established by the State under section 1311.” This would in turn suggest that individuals enrolled in a qualified health plan through a federal exchange established under section 1321(c) would not be eligible for premium tax credits, contrary to the recent proposed regulations.

That this is a drafting error is obvious to anyone who understands the ACA. Section 1311 of the ACA requests the states to establish American Health Benefit Exchanges and sets out the duties of the exchanges. Section 1321 of the ACA, however, provides that if a state elects not to establish and exchange or fails to do so, HHS must “establish and operate” an exchange in such a state and “take such actions as are necessary to implement” the other requirements of title I of the ACA, which includes section 1401. There is no coherent policy reason why Congress would have refused premium tax credits to the citizens of states that ended up with a federal exchange. None of the CBO reports scoring the ACA suggest that premium tax credits would only be available though 1311 state exchanges and not through 1321 federal exchanges. It is, finally, highly unlikely that the House, whose bill included only a federal exchange, would have approved a bill that only provided tax credits through state exchanges but not through the federal exchange.Continue reading…

Health Plan Nutritional Facts

Sep 9, 2011• 4

By TRUDY LIEBERMAN

It’s official now. The government has proposed that descriptions of health insurance policies will resemble those nutritional labels on canned and packaged foods—the ones you look at to find out how much sodium there is in Birds Eye peas versus the A&P brand. Instead of getting the scoop on salt or sugar, shoppers will learn what they have to pay out-of-pocket for various medical services. They’ll also get some general information, like what services are not covered, and how much they’ll have to pay for maternity and diabetes care and breast cancer treatment, all organized in a standard format designed for easy comparison shopping. Insurers will have to translate common insurance jargon into plain English.

The health reform law requires these “Coverage Fact Label” disclosures, and tasked the National Association of Insurance Commissioners (NAIC) with creating them. The NAIC released some samples a few weeks ago. Theoretically, consumers armed with this information will choose wisely, and as free-market advocates say, their choices will regulate prices that insurers will charge. If consumers choose the low-cost plans, then prices will come down and policies with the best benefits will flourish.

Defining Quality in the Health Insurance Industry

Jun 8, 2011• 19

By VIPAN NIKORE, MD

My patient, whom I’ll call Jane, had a neurologic disorder that prevented her from emptying her bladder properly. She required a permanent urinary foley catheter to help her urinate. Jane landed back at the hospital with yet another urinary tract infection – her third in one month. She had pus draining from her catheter and was infected with a multi-drug resistant strain of the bacteria Proteus. Our lab ran tests (sensitivities) to determine which antibiotics would be required to eradicate the infection, and it turned out the only oral drug that could destroy the infection was fosfomycin. Giving her fosfomycin would allow her to avoid intravenous antibiotics and be treated at home. This would prevent a lengthy expensive hospital stay. Thank goodness for fosfomycin, I thought.

One problem though: The insurance company wouldn’t pay for her 3 day fosfomycin prescription. It took several calls by our case manager and senior resident physician before, finally, the insurance company agreed to pay. And even then the insurance company decided to place a restriction on her purchasing of fosfomycin — they only allowed her to purchase only one dosage at a time. Did I mention that her neurological disorder prevented her from walking? Yes, a lady from a low-income area of Cleveland who cannot walk was required to find her way to the pharmacy three times in order to eradicate a dangerous infection. Was this just cruel, or was I missing something here?

We had to delay discharge two days, which was troublesome for Jane. Plus, the cost for two more nights in the hospital negated any savings that the insurance company gained by refusing to pay for her medicine. The time lost by our team members on the phone arguing with insurance companies easily could have been spent providing care to other patients. I’m struggling to find the winner in this equation!