JustCare

Tag: Public health insurance option

  • States lack power to take on health insurers and guarantee affordable health care

    States lack power to take on health insurers and guarantee affordable health care

    So far, President Biden has done little to move forward with health insurance reform at the federal level; most states lack the will and the skill to take on the health insurance industry and guarantee affordable health care to their residents.  Those few states with the skill and the will to undertake health care reform, appear to lack the power and the resources even to offer their residents the option of public health insurance. We likely will need democracy reform coupled with federal action if we are ever going to get guaranteed affordable health care coverage for all.

    So, what’s going on in the states? Julia Rock reports for the Daily Poster. Spoiler alert: Tremendous and effective pushback from the health insurance industry and its allies.

    During the last round of health reform, the public health insurance option was intended to be an alternative to private health insurance; it was to be administered directly by the government and modeled on Medicare. It has taken on every which size and shape since then. A true public option should have provider rate regulation, an unrestricted provider network and very low administrative costs. That does not appear to be the model any state is considering.

    Washington state was first to pass legislation offering residents a “public option.” But, the option is hardly “public.” It works through private insurers, offering state-administered private insurance to people and it does not require hospitals to accept the public insurance. It has enrolled less than 1 percent of the population.

    Washington is now working on a fix, requiring all hospitals that take Medicaid patients to accept people enrolled in its public plan. Will it pass? Will the hospitals accept public option patients?

    A public health insurance option was up for consideration in Colorado. Colorado would have relied on a non-profit it established to administer the public plan, which would make it less likely to focus on profit maximization and more likely to focus on good health outcomes than a for-profit insurer. The state would set provider rates and require all providers to accept them. Standardization of provider rates is needed across the country and could be valuable if the rates are set fairly. An unrestricted provider network is also important, particularly for people with complex conditions. But, again, the insurance industry lobbyists succeeded at keeping it from happening.

    As it was originally designed, Colorado would give insurers two years to voluntarily lower their premiums before implementing its public option. But, Colorado’s “public option” is not going forward. Instead, under proposed legislation, the insurers will have until 2025 to lower their premiums by 15 percent (after adjusting for medical inflation) in the individual and small group markets. If not, Colorado might regulate payment rates for these insurance plans.

    Insurers can make up for lower premiums with higher deductibles. So, it’s not clear to me that the Colorado law accomplished much of anything.

    So long as state mandates for a public option rely on private insurers, and these mandates simply define the benefits to be offered and do not define the care that is medically necessary, insurers can delay and deny care inappropriately and with little accountability. And, if the insurers are paid a capitated rate-a fixed upfront amount regardless of the cost of the care they deliver–as they are in Medicare Advantage, they have every reason to delay and deny care. That’s how they maximize profits.

    In Connecticut, United Healthcare organized its workers to fight a public option. United felt that it was wrong for the state to set lower provider rates for the public option and, in the process, make corporate health insurance less attractive.

    Nearly three in four Connecticut residents support a public option. Of course they do. It sounds like another choice, one that might cost them less. For a huge swath of the US population, even with insurance, critical health care is often unaffordable.

    All the insurers based in Connecticut have also let the governor know that they would leave the state if it passed a public option. That could be the best possible outcome for Connecticut residents needing health care. But, the state would lose jobs and taxes, two mainstays.

    New York seemed to be on the verge of offering universal coverage to residents through a government-administered public plan. The plan would have no copays, deductibles or premiums. It would be paid for through a progressive tax. But, some big unions oppose it–worried about job losses and losing their value to workers–without considering lives lost for lack of comprehensive health insurance.

    California’s legislature refused to hold a vote on single payer, state-administered health care coverage for everyone, in 2017. The Democrats had supermajorities in both houses. And, the governor was also a Democrat.

    It’s on Congress to guarantee everyone in the US affordable health care. Already tens of thousands of Americans die each year for lack of health care. Millions more suffer tremendously or face huge medical debt or bankruptcy. What will it take?

    Here’s more from Just Care:

  • Can public health insurance lower health care costs?

    Can public health insurance lower health care costs?

    With millions of Americans staying away from the doctor and hospital during this pandemic, the private health insurance industry has delivered big profits to its shareholders. At the same time, it is threatening to raise rates significantly, making it near impossible for many people to get good affordable coverage. Vice-President Biden is proposing to provide Americans with a public health insurance option–an option similar to traditional Medicare–as an alternative to private health insurance, if he is elected president. Can public health insurance lower health care costs?

    In a nutshell, public health insurance puts the public health first. Unlike private health insurance in the US, public health insurance does not have a profit incentive. It is publicly accountable. And, as with traditional Medicare, the government determines the terms of coverage–how much to pay, for what services, and when, as well as out-of-pocket costs, if any. But, these features don’t mean that a public health insurance plan can compete successfully with private health insurance and bring down health care costs.

    The choice of public health insurance, sometimes called a public option, is not likely to bring down costs for Americans unless Congress better regulates private health insurers. To bring down costs, the public option needs to compete on a level playing field with private health insurance. Here’s why and what Congress would need to do.

    Right now, private health insurers, including Medicare Advantage plans, have many ways to design their health plans to maximize profits. They can exclude top specialists from their networks in order to deter people with costly health conditions from enrolling in their plans. They can delay and deny care inappropriately to people in poor health to push them into disenrolling and switching to a different health plan. That’s called “lemon dropping.” They can require people to get prior authorizations and referrals in order to get certain care.

    Private health plans also can restrict coverage far more than traditional Medicare or another public health plan. Yes, public and private health plans might be required to offer the same benefits, such as cancer care, rehab services and hospital care. But, private health plans might pay for far fewer services and treatments than a public health plan. For example, a private health plan might not cover a certain cancer treatment or might only cover a treatment if certain conditions apply. It might pay for a very limited number of rehab services. Or, it might not pay for some emergency services.

    A health plan’s coverage rules can lead to inappropriate delays and denials of care. Still, private health insurers are allowed to establish coverage rules that are proprietary, not subject to public scrutiny. We don’t know how restrictive they are or which private insurers are the worst offenders. All we know is that many private health plans deny their members coverage for a lot of services.

    For the public health plan to lower health care costs, it would have to compete on a level playing field with private health insurance. For the playing field to be level, public and private health plans would have to follow the same coverage rules, not simply offer the same benefits. That’s how private health insurance works in other wealthy countries. The government sets the rules as to what is covered and when, and they are open to public scrutiny.

    Will the next Congress enact legislation to offer a public option and level the playing field between the public health plan and private health plans? It should. There is no evidence that allowing private health insurers to set their own coverage rules has any benefits. Their coverage rules cannot be analyzed and evaluated. Indeed, the evidence cuts the other way, with some lawsuits revealing that private health insurers can rely on coverage rules that are not in compliance with standard medical treatment protocols.

    Here’s more from Just Care:

  • Public option key to reining in health care costs

    Public option key to reining in health care costs

    Yale University Professor, Jacob Hacker, argues in a recent New York Times opinion piece that a public option is key to driving competition and reining in health care costs in the state health insurance exchanges. Premiums in the state exchanges are set to increase more than 20 percent in 2017, and these increases are unsustainable. If we add a public health insurance option, a Medicare-like health plan, we can stabilize the state exchanges and help ensure that health care is affordable.

    People who oppose the public option claim it will push private insurance plans out of business. But, we know that is not true. Traditional Medicare competes with Medicare Advantage plans successfully. In fact, it provides a benchmark on prices, helping the private commercial insurers that offer Medicare plans to keep their costs down. At the same time, traditional Medicare offers people one choice they can count on. Medicare Advantage plans enter and leave the market as they will, and their networks of doctors and hospitals are constantly changing.

    Back in 2009 and 2010 polls showed that a substantial majority of the public valued a public health insurance option. The public option, if designed like traditional Medicare, would offer people a wide network of doctors and hospitals. It can also drive health system change to improve health care quality. And, it can rein in prices. For inpatient care, Medicare rates are 53 percent of private commercial plan rates.

    Moving Congress to adopt the public option is no small feat, but it is possible. Today, 33 Senate Democrats support the public option. Moreover, Hillary Clinton has embraced it, which could spur Congressional support and action, if she is elected President. To avoid a filibuster, Hacker suggests that the public option could be adopted through the budget process–much like Republican legislation repealing the Affordable Care Act, which President Obama vetoed. Moreover, the public option would reduce the deficit by $158 billion over ten years, according to the Congressional Budget Office.

    Here’s more from Just Care:

  • Support grows for Medicare buy-in and public health insurance option

    Support grows for Medicare buy-in and public health insurance option

    Secretary Clinton is proposing a Medicare buy-in for people between 55 and 64 and a public health insurance option in the state health insurance exchanges. The public health insurance option was introduced during debates around the Affordable Care Act as a way to give people greater choice, drive competition and rein in costs in the health insurance exchanges. And, the Medicare buy-in has been considered by Congress for decades as a way to increase access to affordable care for people nearing Medicare eligibility.

    Last month, 33 Senators supported a resolution to give everyone in the U.S. the choice of a Medicare-like public health insurance option. A new Harvard-Politico poll shows that a majority of Americans support this public health insurance option. Overall, 54 percent of Americans support the public option in the state health insurance exchanges. If you break down views by party affiliation, three out of four Democrats favor a public option and 52 percent of Independents. Six out of ten Republicans oppose the public option, but 26 percent support it.

    A new report by Linda Blumberg and John Holahan of the Urban Institute looks at how best to design a Medicare buy-in and a public health insurance option. The advantage of a Medicare buy-in and/or public option is that it should drive down insurance premiums. The government has the ability to secure lower doctor and hospital rates than insurers and also has lower administrative costs. If everyone 55-64 took advantage of a Medicare buy-in, it also likely would lower costs for younger people in the commercial marketplace since older people tend to have higher health care needs, which drives up premiums.

    Commercial insurers have far less market power to rein in provider rates than the federal government. Doctor rates under Medicare tend to be 20 percent less than what private insurers pay. And, private insurers now pay about 75 percent more for hospital inpatient stays than Medicare.

    As a result, many people in and out of the state health exchanges still struggle to afford health insurance. The state exchanges offer help paying premiums to people under 400 percent of the federal poverty level, but costs can still be high for some people. Both people with incomes above 400 percent of the federal poverty level and people not in the exchanges do not get premium assistance. And 55-64 year old adults in the exchanges can be charged premiums up to three times more than younger adults.

    Questions to be considered with a Medicare buy-in:

    1. Would people 55-64 have the option of traditional Medicare, a Medicare Advantage plan or a marketplace plan? If they had to enroll in Medicare Parts A and B, it would most help to reduce premiums for people under 55; but, it could increase their costs depending upon savings achieved through Medicare’s provider rates. And, if they had to enroll in Medicare, it could split up their family coverage, if they still had children eligible for a family plan.
    2. If they had the choice of traditional Medicare, would they be guaranteed the right to buy a Medicare supplemental insurance plan to protect them against catastrophic costs? And could they buy a Medicare Part D drug plan?
    3. How would the government calculate premiums for people buying into Medicare? And, would financial assistance be available to people based on income as it is for everyone else in the state exchanges.
    4. Would people have to pay a late enrollment penalty if they did not enroll in Medicare or if they only enrolled in Part A and not in Part B during the initial enrollment period?
    5. Would commercial insurers continue to offer plans in the state exchanges if these plans were only for people under 55?

    Questions to be considered with a public health insurance option:

    1. How would the government decide what to pay doctors and hospitals in the public health insurance plan?
    2. How would the government be assured an adequate network of doctors and hospitals? The federal government could require all Medicare providers to treat people in the public option plan. But, if authority rested with the states, would they have any leverage?
    3. Where would the public option plans be available? President Obama proposed that they be available only where there is weak competition. But, should they also be available where premiums are high?
    4. Would it be able to offer lower premiums and address affordability issues in the state exchanges? In some areas, it likely would not.
    5. How would the public health insurance option affect participation of commercial insurers in the state exchanges?

    Here’s more from Just Care:

  • 33 Senators call for Medicare-like option for all Americans

    33 Senators call for Medicare-like option for all Americans

    Last Thursday, 27 United States senators called for a Medicare-like option in the state health exchanges. Senators Bernie Sanders, Jeff Merkley, Patty Murray, Dick Durbin and Chuck Schumer, along with 22 other senators introduced a resolution that complements Secretary Hillary Clinton’s proposal for a “public option”–a government plan like Medicare–that would be available to every American. Since then, six more senators have signed onto the resolution.

    The senators want to give everyone in America the choice between commercial health insurance and government health insurance, the public health insurance option. A public option would not only give people more choice, but it would drive competition in the marketplace, bringing down health care costs.

    A public option would also guarantee people the continuity of care they value. Right now, people in the state health insurance exchanges and people with employer coverage cannot rely on their commercial health plan coverage from one year to the next. Insurers enter and leave markets as they please. Recently, Aetna announced it is pulling out of many health care markets, claiming that it doesn’t view them as profitable.

    During the debates over the Affordable Care Act, the public option was introduced and ultimately quashed for lack of support in the Senate. At that time, the Congressional Budget Office estimated that it could drive down health insurance premiums as much as seven percent and reduce the deficit $68 billions over six years. But, doctors and hospitals were generally opposed to it for fear that it would bring down their reimbursement rates.

    If you support the Senators’ resolution and want a public option, click here and sign on to a petition at WeWantaPublicOption.com. The resolution currently has support from a range of advocacy organizations, including the Progressive Change Campaign Committee(PCCC), Presente.org, UltraViolet, Working Families Party, MoveOn.org, Democracy for America, Daily Kos, and the AFL-CIO.

    Here’s more from Just Care:

  • Aetna, for-profit insurers do not serve public good

    Aetna, for-profit insurers do not serve public good

    The U.S. Department of Justice is trying to block Aetna’s merger with Humana. And, Aetna, along with other for-profit insurers, are pulling out of most of the Obamacare state exchanges, claiming that they are losing too much money. We must recognize and address the reality that for-profit insurers are not in the business of serving the public good.

    Let’s be clear. Obamacare has served the for-profit insurers extraordinarily well. Aetna alone has made nearly $7 billion in profits since the launch of Obamacare in 2014, and its stock price has soared. Aetna’s stock price is more than six times higher than it was when debate began over the Affordable Care Act in 2009.

    Aetna’s contention that it’s not viable for it to continue offering coverage in the exchanges, that they are getting too many enrollees with high health care costs, rings hollow. The non-profit insurers, such as Kaiser and Blue Cross, are managing to balance risk in the state health exchanges.

    It is indeed true that the majority of people enrolling in the state exchanges are poor and in poor health and that there are not as many young, healthy people to enroll as the insurance industry would like in order to balance risk. But, it is also true that for-profit insurers feel obligated to exceed Wall Street’s expectations every quarter in order to drive up their stock prices. Any business unit that is not doing well jeopardizes their ability to do so. That motivates Aetna’s CEO to close down its line of business in the state health insurance exchanges.

    What’s disturbing and makes the case for a public health insurance option in the state exchanges is that Aetna has no obligation to the public, no obligation to continue serving sicker poorer people in the state exchanges, even when its operating earnings are growing and the federal government’s Medicare and Medicaid programs are major growth areas. Indeed, its thanks to Obamacare that Aetna has so many more Medicaid enrollees.

    The non-profit insurers are remaining in the state exchanges because they can take a long-term view. They do not need to please Wall Street every quarter. But, they alone cannot meet the needs of people in the state exchanges. In order to give people the choice of a health plan they can rely on, we need a public health insurance option like Medicare or an expansion of Medicare for people under 65.

    Here’s more from Just Care:

  • Justice Department sues to block health insurer mergers

    Justice Department sues to block health insurer mergers

    Last July, Just Care reported the merger of Anthem and Cigna and of Humana and Aetna and their potential threat to the public good.. One year later, July 2016, the Justice Department filed two separate lawsuits to block these mega-mergers, acknowledging the potential harm to people if they were to go through.

    Were these mergers to go through, we would have three super-big national health insurers instead of five very big ones. And, if history is any indicator, this market consolidation would present risks of higher health insurance premiums, lesser benefits, lower health care quality, and fewer choices for people in Medicare Advantage plans and in the state health insurance exchanges.

    David Balto, a lawyer and former antitrust attorney in the Justice Department, helped spearhead opposition to the mergers. He reports that “the mergers faced strong opposition from the Justice Department, state enforcers, and Congress, and most important from consumers since day one.  And for good reason — history tells a simple and compelling story — when insurers merge consumers lose through higher prices and deteriorating service.  We have too little competition as it is in health insurance and the DOJ action is vital to protecting the marketplace.”

    To be sure, hospital systems have become a lot larger. And, the insurers are arguing that insurance company mergers are their best hope of controlling hospital costs. But, the solution is not to let these mergers happen. It’s to give everyone Medicare or a public option that drives greater competition among hospitals and doctors.

    Medicare Advantage is its own market with special attractions. If the Aetna Humana merger happens, that new company would be the biggest provider of Medicare Advantage plans. The Medicare marketplace would have less competition in many communities, which would jeopardize the health security of older adults and people with disabilities.

    Just recently, President Obama called for a public health insurance option, a plan like Medicare, in communities without adequate competition among insurers. If the Justice Department is not successful in its lawsuits, we’d have less competition among health insurers and greater need for a public option in the state health exchanges. People in the state health insurance exchanges, like all of us, benefit from having meaningful health insurance choices.

    Here’s more from Just Care:

  • New poll shows a slight majority of public favors health care reform

    New poll shows a slight majority of public favors health care reform

    A new Kaiser Family Foundation health tracking poll surveying adults for their views on the Affordable Care Act reveals that a slight majority of the public favors health care reform today. Forty-three percent support the law and 43 percent oppose it, with 14 percent having no view.

    Views about the law diverge tremendously based on political party affiliation, gender, race and insurance status. Seventy percent of Democrats, 42 percent of Independents and only 16 percent of Republicans favor the law. By gender, a much larger percentage of women support the law, 47 percent, than men, 40 percent. And by race, White Americans favor the law far less, 36 percent, than African Americans, 64 percent, and Hispanics, 53 percent. Curiously, people with insurance are far more likely to favor the law, 47 percent, than people without insurance, 34 percent.

    In sharp contrast, by income levels, support for the law is fairly constant. Forty-five percent of people earning less than $40,000 support the law, 44 percent of people earning more than $90,000 support the law and 40 percent of people earning between $40,000 and $90,000 support the law.

    The Affordable Care Act has its benefits and weaknesses.  Its success at ensuring 16.4 million more Americans have insurance is far and away its biggest benefit.  But, people often don’t see that value until they need costly health care or they lose their employer coverage and find that they can’t find an insurer to cover them or that the coverage is unaffordable. And, the overwhelming majority of the population under 65 needs relatively little health care. The Affordable Care Act subsidizes the premium on a sliding scale for people with incomes up to four times the federal poverty level.

    The weakness of the Affordable Care Act is its exclusive reliance on private insurers to provide coverage that people need. The private insurers have never been able to rein in costs. What’s worse, the insurers make it stressful and draining to get care even when you have coverage because of all their rules and restrictions.  And, with insurance, out-of-pocket costs can be thousands of dollars, and you may struggle to get care from the doctors and hospitals you trust. A public health insurance option, like traditional Medicare, would have driven competition in the health insurance marketplace, provided greater choice at lower cost and pressured the insurers to deliver better coverage at a more affordable price.