Healthcare

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On Health Care, Justice Will Prevail – NYTimes.com

Today I finally read the actual text of the Op-Ed piece by Laurence H. Tribe in the New York Times. As part of his justification for the Individual Mandate he actually makes the case that the health care law is little different from Social Security. Based on this association it is very small step for a person to conclude that Laurence expects the new health care law to look and act just like Social Security. Although Laurence may be comfortable with associating health care to Social Security, this is the last thing many people want to hear as health care reform. Social Security has the well deserved reputation of an entitlement that has been remarkably impervious to cost control. The idea of PPACA becoming another entitlement like Social Security is not only politically unacceptable but it extinguishes all hope of reining in rising health care costs.

For the system to work, all individuals ”” healthy and sick, risk-prone and risk-averse ”” must participate to the extent of their economic ability.

In this regard, the health care law is little different from Social Security.

On Health Care, Justice Will Prevail – NYTimes.com

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Uncompensated Care Background

 

A recent study by Hadley and others, which used that analytic approach, examined a sample of medical claims for uninsured individuals and projected that they would receive about $28 billion in uncompensated care in 2008. That study also examined reports by doctors and hospitals and derived a higher estimate: Their gross costs of providing uncompensated care would be about $43 billion in 2008, of which $8 billion would come from doctors and $35 billion would come from hospitals. But as the study noted, at least a portion of those costs could be offset by added payments under Medicare and Medicaid to hospitals that treat a disproportionate share of low-income patients (and by similar dedicated payments made under other federal and state programs). Another recent study found that, as a group, office-based physicians roughly "broke even" when treating uninsured patients because some of those patients paid more than the doctors would have received for treating a privately insured patient.

Introduction and Background from the CBO document, Key Issues in Analyzing Major Health Insurance Proposals.

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Alternatives To Mandating Insurance? Maybe : NPR

My actual health care costs outside of health insurance and dental for the last ten years is around $200. For my adult working life, thirty years, the cost is not much more. It stands to reason that I have been a very, very profitable customer for the insurance companies when they could have me. Considering my medical history the logical course of action for me is to seek out the lowest cost health care  plans. The insurance companies benefit because I am a “good” customer. I financially benefit by pocketing the difference. I also benefit by the knowledge that this scheme will work only if I remain healthy. This is what I call being a savvy health consumer. As a cost efficient consumer I am in a very small way lowering the per capita health care spending in America.

The problem I have with the health insurance company position as expressed below is that the underlying health care cost issue they are looking at is unrelated to my group health insurance requirements. They ceased operation as a health insurance company in the traditional sense and are now acting primarily as an agent collecting taxes to be used for unrelated health care services. An odd result of this philosophy is that by removing financial incentives, it turns me into a passive health consumer. What incentive is there for me to question a health care professional over a drug or treatment if my connection with health care costs becomes so remote? On one hand our health care reform wants the people to become more conscious of their health and the corresponding health care costs. On the other hand they are removing one of the few incentives that are out there for active involvement. I am not sure how we are going to reduce costs with passive health consumers.

Another drawback is that the individual mandate does not appear to have lowered health care costs. At least I have not seen lowered health care costs show up when I compare Massachusetts insurance premiums to Ohio premiums.

Mostly, Court says, states could be given more power to ensure that insurance companies can’t impose premium increases that are unjustifiably large.

"The easiest way to get more people into the health insurance pool is to make health insurance more affordable," he says.

The insurance industry says that’s not a good solution because premiums merely reflect underlying health care costs.

Alternatives To Mandating Insurance? Maybe : NPR

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‘If States Could Speak’: The GOP’s ‘Third Front’ Against Obamacare

I was wondering when someone would do something like this. I think many states will opt to not expand state Medicaid programs due to lack of funds. When it comes to laying off police officers or cutting Medicaid, Medicaid loses. The Individual Mandate and the federal mandate to determine what qualifies as an ”˜acceptable’ health-insurance plan are tools for raising costs for healthy people. Basically it makes healthy living a sin tax.

Sens. Lindsey Graham (R., S.C.) and John Barrasso (R., Wyo.) introduced legislation Tuesday that would do considerable damage to the Democratic health-care law by allowing states to ”˜opt out’ of its key provisions.

The State Health Care Choice Act would let state governments choose whether or not to participate in various aspects of Obamacare, including: the individual mandate forcing citizens to purchase health insurance or pay a fine, the employer mandate forcing businesses to provide health insurance or pay a fine, the mandated expansion of state Medicaid programs and the federal mandate determining what qualifies as an ”˜acceptable’ health-insurance plan.

”˜If States Could Speak’: The GOP’s ”˜Third Front’ Against Obamacare – By Andrew Stiles – The Corner – National Review Online

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Things that make me go hmm… Mass media ignores Obama health suit story

Last night my wife and I were discussing the decision by a judge in Florida that the Affordable Care Act was unconstitutional. My wife thought he ruled that only the Individual Mandate was overturned while I maintained that the entire bill was being overturned since there was no severability clause. Since it was dinner time and the news was on the television, we decided to let television news programs decide our debate. We watched the local news, ABC news, and the National Business Report(PBS). No one mentioned the decision. It is an interesting choice by mass media.

Fla. judge in Obama health suit has own med story – Yahoo! News

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Health Care Cost Reform and Minimum Creditable Coverage

If we continue my line of reasoning in “Is the individual mandate necessary for health care reform?” to its logical conclusion, the individual mandate does not have either a positive or negative impact on health care costs. Whether the mandate is at the state or national level, it appears to be a freedom we have sacrificed for no apparent reason. The battle to put cost reduction into health care reform will inevitably center around how to put a little of Adam Smith’s invisible hand into the reform.

A good place to start is make sure the the United State’s “minimum creditable coverage” is flexible enough to allow these plans to be used. I suspect that this provision in Massachusetts is primary culprit causing the healthy people to overpay for their health insurance. Removing these excess funds would probably encourage a healthy re-evaluation of health care spending in Massachusetts. Massachusetts looks like it has a spending problem.

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Is the individual mandate necessary for health care reform?

Most of the recent debate about the individual mandate centers around the constitutionality of the mandate. A more interesting question is whether the mandate works. The answer to this question is different if you are an economist or an average person. The economist or policy maker will be happy if the mandate causes:

to cause the individual insurance market risk pool to become more favorable (include more relatively healthy individuals than it otherwise would).

The average person just wants to know if the individual mandate saves them money. The idea of the individual mandate was that by adding more people to the insurance pool, health costs will go down for everyone and health care will become more efficient. Since everyone would have insurance there would be less emergency room visits and better preventative care. Several logical conclusions should be expected from implementing the individual mandate:

  1. Lower Health Care Costs – Health insurance rates will go down for everyone.
  2. Improved Health Care Efficiency – Health care cost increases should be less than the average for the country.
  3. Improved Health Care Competitiveness – Health care costs in individual mandate states should be less than in other states or countries.

Yesterday I decided to compare the health insurance costs between Ohio and Massachusetts. I entered my demographic data into the Health Connector for Massachusetts, www.mahealthconnector.org, and the lowest Bronze plan available would cost me $1,296 per month. In Ohio I looked up a comparable plans on www.ehealthinsurance.com. This site provides the same features as a Health Connector but does not need a government subsidy. The lowest plan on ehealthinsurance.com would cost me $305 per month. In fact there were 15 plans available for less than $400 and 55 plans for less than $600. Here is the screenshot of my insurance options at the Massachusetts Health Connector.

Massachusetts Health Connector quote

Here is the screenshot of insurance options at eHealthInsurance.com.

eHealthInsurance.com quote

As a healthy person I would pay an extra is $991 per month or $11,892 per year for my health insurance in Massachusetts. If you multiply $12,000 by every  healthy people added to the insurance pool, Massachusetts should not any problem lowering health insurance costs. The lower insurance costs in Massachusetts didn’t happen. The expected cost benefits from reduced emergency room visits and preventative care do not appear on the bottom line either. The Massachusetts insurance prices are so far off we have to conclude that something other than the individual mandate are the dominant drivers for health care costs and those problems are not being addressed. Since Massachusetts health insurance costs are not competitive with Ohio, the logical conclusion for the average person is that the Massachusetts health care system is broken and future health care systems built along the lines of the Massachusetts system are doomed to failure, too. To paraphrase Albert Einstein, replacing a broken health care system with a more expensive, broken health care system and expecting different results, is a sign of insanity.

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Obamacare: When Obama LIKES Imposing Higher Costs on ‘The Poor’

My biggest complaint with this new restriction on Health Savings Accounts is that it is a blatant attempt to make Health Savings Accounts less desirable by arbitrarily removing benefits. The combination of Health Savings Accounts with a high deductible health insurance represent a low cost competitor to ObamaCare. The primary political objective of ObamaCare was to limit health care alternatives and force everyone into one common but high cost comprehensive health care plan. The key to building support for the high cost health care plan is to hide the costs of the comprehensive plan and make the low cost plans less attractive. The government health plan had to be comprehensive to be acceptable to unions and large corporations. High health care costs have made some businesses uncompetitive and one solution is transfer their health care responsibilities to the government. Under this scenario control of the health care system is the primary objective. Controlling spiraling health care costs is a secondary consideration. Once control of the health care system is attained, then the government could force lower prices at will. It is hoped that the health care czars will be smart, benevolent dictators. The downside is that the proposed health care system could be an inefficient bureaucracy like Medicare or something much worse. Currently this particular scenario has such a dim political future that many large organizations have asked for exemptions from ObamaCare. With this deadly embrace of the status quo, the owners of these luxury health care plans having particularly dim future at controlling their spiraling health care costs and ultimately their product costs. If an individual believes that a low cost plan health plan is better for them, why should they be forced to bail out the high cost plans of unions and big businesses?

Health Savings Accounts and high deductible plans are nasty reminders to the people who wrote ObamaCare that if you have to pay for your health care, a lot of people will choose the basic health care plan over the high cost, comprehensive plans offered by large corporations and unions. Any one who has compared the COBRA health insurance offered  by your former employer with those offered by the major insurance companies would come to the conclusion that corporate health insurance is way overpriced and the first step to control your health costs is to take personal responsibility for your health care and cut out the unnecessary benefits. Under this system your good health results in money in your pocket. This issue exposes some core conflicts within ObamaCare. Who do we trust with our health care decisions, the individual or the government? Will the independent thinker ever be comfortable with the group think of ObamaCare? Can a country as ethnically, culturally diverse as the United States ever adopt the Swedish "homogeneous" view of health care or is this a fool’s errand in the process of creating a health care plan tailored for America?

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Occam’s Razor meets the Patient Protection and Affordable Act(ACA)

One of the more interesting gambits that played out in the health care debate was the ardent support for the Patient Protection and Affordable Care Act (ACA) by unions and large companies. Despite the fact that these organizations are particularly at risk from rising health care costs, the focus of the debate centered around the issue of expanding health care to the uninsured rather than reducing health care costs. Although the health care reform act is extraordinarily complex with many different cost containment ideas, the dominant idea is that we can lower health care costs by compelling all people to purchase health insurance. The crux of the argument is that by adding a few more health insurance customers the health care cost problem will magically go away.

I have a simple theory about controlling the rising health care costs. Although it is possible that a portion of the rising health care costs can be attributed to the uninsured, the majority of the health care costs for many years has been paid for by unions, large companies, and governments. Since these groups are the largest payers into the system, it follows that the actions and inactions by these organizations are the most likely causes of the increasing health care costs. Since they have the "gold" they are the group with most leverage to make rules to control costs. Although the health care reform act does attempt to reform this issue by taxing high cost plans and placing a cap on the tax benefit of employer-based health care insurance, these reforms have largely been offset by exemptions and delayed implementation.

The Patient Protection and Affordable Care Act (ACA) is a complex and controversial bill. There is no disagreement that this bill expands health care but the way we pay for the increased health care services is ambiguous. The polls in 2010 show that the average man and woman are skeptical that the cost containment ideas included in the bill will work. The elderly think the bill takes money away from them to expand services to the poor. The courts are skeptical that compelling an individual to purchase health insurance is constitutional. We are left with a bill that has a lot of ideas we may agree with in theory but not in practice. Maybe we need to heed to advice of  Occam’s razor and replace this complex bill with a set of smaller, simpler bills that will stand up to the scrutiny of a town hall meeting.

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Delicious Irony

While Congress and most of the nation was caught in the melodrama of whether or not to extend the tax cuts this week, another drama was playing out. Politifact chose to announce, PolitiFact’s Lie of the Year: ‘A government takeover of health care’, at the same time Judge Roger Vinson was hearing the case just down the road in Pensacola in which 20 states are challenging the constitutionality of ObamaCare’s mandate that individuals buy health insurance. I suspect that there were lawyers in that court arguing that the biggest lie of the year was the belief that the individual mandate was constitutional. To be fair to Politifact they chose to argue that the government take over of health care was the biggest lie. They are correct that Obamacare does not take over hospitals or provide a public option but once again their choice of this lie over some other whoppers is puzzling. I seem to remember that Social Security was sold to the American people as insurance. It did not take the American people too long to figure out that it was not insurance. Then it was described as a trust plan and that explanation didn’t work with the people either. It is interesting to note that the facts and lies about the Social Security plan really didn’t matter in the overall debate as long as we were wealthy enough to push the responsibility to pay for Social Security benefits to the next generation. In 2010  the American people panicked about the deficit and the likelihood that Obamacare would cost a lot more that advertised. Paul Krugman and others didn’t help the situation when they argued that  the solution to spiraling health costs was to go to a single payer system. According to him the key to Obamacare was to create the entitlement. Following the path blazed by Social Security the health care entitlement would evolve into a single payer government system when the original version of Obamacare threatened to bankrupt the country. Unfortunately for him the real risk as perceived by the American people is that both the original version of Obamacare and its replacement might be overcome with fraud and inefficiency. Why would anyone think that this new federal agency will be any more efficient an organization than Medicaid, the Post Office, or Amtrak? The likely scenario is that it will fail like TennCare did in Tennessee. When TennCare threatened to bankrupt the state, Tennessee chose to dramatically cut back on TennCare. For the American people this is a sorry plan to fix spiraling health care costs. They wanted a plan to control spiraling health care costs and the got a plan to dramatically expand free or heavily subsidized health care coverage. So although Politifact may have been technically correct about the government take over of health care, the American people saw a more important lie playing out in the health care debate. Considering how they voted last November it looks like they were far more concerned with the lies that Obamacare would keep their health insurance costs from rising and would not increase the budget deficit. Maybe the people are not as dumb as some journalists and former elected officials would like to believe.