The individual market makeover: mend it, end it, or both?

Wednesday, September 17, 2008

Last week, I attended a conference with fellow state-based health consumer advocates and now-notorious "community organizers," and was impressed by the range in activity around the country.

Even as we see what is likely at the federal level next year with a new President and reconfigured Congress, state legislators and advocates are not waiting around: they are actively pursuing health reforms, from Albany to Harrisburg, from Augusta to Springfield, from Trenton to Salem.

Much of that advocacy has traditionally focused on expanding public coverage programs like Medicaid and SCHIP. Yet I spoke on a panel on private coverage--which states are currently in charge of regulating--and that leads us to the current policy debate in DC and elsewhere.

There's big divide in health policy: One mainstream, proven way is to provide for subsidized group coverage, whether through an employer (how most get coverage now), a public program (how nearly a third get coverage), or even a universal single-payer system.

Another theory is to switch people into a more functional individual market. For example, President Bush (and now, Senator McCain as a candidate) would shift tax policy to discourage employers from providing coverage, and rather encourage people to buy coverage on their own. These proposals are obviously flawed, because they don't even attempt to fix the most glaring problem in the individual market: that insurers can deny patients for "pre-existing conditions" which would amazingly (and ironically, if it wasn't so sad) leave the sick out of their health coverage.

But there are more reasoned, thought-through proposals that at least try to take an individual market approach seriously, that recognize the flaws of the individual market, but seek to remake the market as they expand it. This includes relatively progressive legislators at the state and federal level, including Senator Ron Wyden of Oregon, who has an ambitious proposal, and Governor Schwarzenegger, based on his original proposal in January 2007. These efforts include significant regulation of the insurance industry and changing the way they do business. To be serious, they at least include guaranteed issue--that insurers must take all patients, regardless of health status--and some form of community rating--restricting variation in what is charged between patients.

My take? I still remain skeptical. As the least efficient, most expensive way to get coverage, the individual market seems a poor platform from which to rebuild a health system. Individual consumers simply don't have the group purchasing power of large employers or public programs, and are simply at the mercy of the big insurers. It's confusing and complex, and hard to compare and to sign-up for coverage.

When debating health reform last year in California, Health Access detailed a chart of what would be consumer advocates would want "Beyond Guaranteed Issue," from subsidies to standards, minimum benefits to easy enrollment, rate regulation to medical loss ratios. The chart looks at what regulations exist in California and Massachusetts--where more still needs to be done.

Some of the real problems and provisions to address them included in the negotiated agreement of AB x1 1, and also discussed this year in SB1522 (Steinberg), to standardize the individual market. What we learned in this debate even makes me more alarmed, that consumers are getting a raw deal, paying premiums without proper protections in place.

Some of the bills that were passed this year, from AB1945 (De La Torre) to AB2 (Dymally) deal with other issues in the individual market, from rescissions to what happens after people are denied for "pre-existing conditions." But there's so much more to do.

My overall takeaway is that I would focus efforts at reform on expanding group coverage, which is thankfully where Senator Obama is (and where Senators Clinton and Edwards previously were), where Jacob Hacker and other academics are, and even where Rep. Conyers and other single-payer advocates are.

In virtually all reforms, an ancillary market of individual coverage will exist (like in the current "system"), and such regulations, oversight, and consumer protections are, and will be, desperately needed. I absolutely believe that we can improve the individual market; I appreciate those with the confidence to remake it altogether. I'm not sure we can fix everything about the individual market--it requires a lot more than guaranteed issue. As a consumer advocate, I am hesistant to shift people there wholesale unless we can prove that it can work. It's one of the main policy debates of the next few months.

Labels: Federal, IndividualMandate, Insurers, YearOfReform

posted by Anthony Wright | Permalink | 1:32 AM


 

So much for a truce...

Wednesday, February 27, 2008

Jacob Hacker--soon to be at if UC-Berkeley--may have been someone who helped advise the Democratic candidates on their health care plans, but they didn't listen to his LA Times op-ed yesterday asking for a truce on the question of an "individual mandate."

They spent 16 minutes of their Ohio debate last night on the differences of their health care plans, mostly on the individual mandate. As Hacker says, it's not the central benefit of either of their health plans. Rather, it's the ability to make coverage more available, affordable, and automatic through group coverage.

In their debate, they are arguing over details that neither of their plans currently spell out.

Obama is right to take umbrage at Clinton's suggestion that his plan isn't as universal. It would certainly get to 95%+ coverage, the standard of most industrialized nations with "universal" health care. The Obama and Clinton plans are remarkably similar in how it expands coverage, especially with regard to new subsidized public program expansions, new opportunities and automatic enrollment in coverage at work, and a new public coverage option.

Obama is also right to say that the real problem is not that people don't want coverage--it's that it is not available or affordable, and the so-called "free rider" problem largely resolves itself. Only 2% of Californians are uninsured yet over the 400% of the federal poverty level, and half of them are under $60K for an individual, or $125K for a family of four.

Clinton is right to be upset at the Obama's mailers than are suspiciously similar to "Harry and Louise" ads of 15 years ago, and specifically the contention that she would require people to buy coverage, even if it wasn't "affordable." Her plan specifically would cap the amount that people would be required to pay at a percentage of their income. It doesn't say the specific percentage, so perhaps they might disagree on the definition of "affordable," but right now there's no way to know.

As a critique, Obama also mentions the Massachusetts plan, which had enforcement where people were required to pay a fine is they were uninsured, but still wouldn't get coverage. But the Clinton plan doesn't specify that type of enforcement: In California's AB x1 1, the proposal was not to have fines, but merely to automatically enroll people in coverage--and then consumers would have to pay the premium, like any other bill, but they would also have the benefit of coverage.

So how about a truce? The individual mandate proponents have a point that everybody needs to contribute to the health care system in order for it to work best. The opponents are correct that any contribution needs to be affordable, and as such scaled to income. While it would be preferable to collect these contributions through a progressive tax based on income, it could possibly be done privately through a requirement to get coverage, but then additional protections are needed: some assurances of the benefits and cost-sharing, the value of group coverage, and yes, an overall structure that provided assurances that coverage is available, adequate, affordable, and administratively simple. If the proponents say that part of the benefit of an individual mandate is to make the government more responsive and accountable to ensure that people can access coverage, then such responsiveness should be built into the proposal at the beginning.

Obama says he's willing to do a requirement for children because that infrastructure of Medi-Cal and Healthy Families/SCHIP is largely already there. Clinton promises to have that infrastructure in place before her mandate kicks in for adults. Obama said he would consider a mandate for adults.

What are they arguing about?

Labels: IndividualMandate, PresidentialCandidates

posted by Anthony Wright | Permalink | 1:29 AM


 

Moving beyond Mandates

Tuesday, February 26, 2008

Two interesting pieces in today's news on mandates.

First, California Insurance Commissioner Steve Poizner is dropping his ballot effort, which would have punished drivers without car insurance by allowing police to seize the license plates (and possibly impound) these drivers' vehicles.

Instead, he says, "One of the key problems with why people don't buy auto insurance is a lot of people who come from low-income families believe they can't afford it.'' So, he's going to focus on expanding the state's Low Cost Auto Insurance program.

BINGO.

In spite of California's mandate to obtain car insurance, approximately 14% of drivers remain uninsured, and rates continue to rise. The comments posted about this story about auto insurance refer to high costs -- not whether drivers feel like they're being put upon for being forced to buy insurance. They just want it to be affordable -- just like in health care.

This brings me to the second piece, which is "The Great Risk Shift'' author Jacob Hacker's piece in the LA Times about Obama and Clinton's bickering over to have -- or to not have -- mandates in health plans.

In fixating on mandates, they ignore the really key elements of their plan -- expanding group insurance through expanding public programs, employer-sponsored coverage, and a public insurance pool, which can negotiate for lower (read: affordable -- what Americans want) insurance premiums on the public's behalf.

Even more problematic, it is takes up energy and diverts attention away from combatting the seriously bad "YOYO" (You're On You're Own) ideas, which propose to do the opposite -- having everyone pay for their own health coverage in little silos, rather than pooling risk.

Hacker includes an individual mandate in his plan, but makes the calculation that Poizner does: the issue isn't the mandate (or some other required contribution), it's what you do to make it affordable. That's the debate for the general election.

Update: Here is Ezra Klein's take on Hacker's piece.

Labels: IndividualMandate, InTheNews, PresidentialCandidates, YearOfReform

posted by Hanh Kim Quach | Permalink | 12:02 PM


 

Failure to comply with mandate

Wednesday, January 23, 2008

Many senators are asking about what would happen to those Californians who fail to -- or are unable to -- comply with the mandate.

It's a good question and it's a concern that has spun many rumors about some faceless bureaucrat -- knocking at your door, garnishing wages, putting liens on your house.

Here's the real scoop: ABx1 1 says nothing about this kind of enforcement. Additionally, such behavior by a state agency (ie. Franchise Tax Board) would not be permitted until

• a) the Legislature approves legislation on that issue and
• b) the Legislature approves funding for enforcement, which is unlikely given the existing funding shortfall.

What ABx1 1 does say is if a person does not have coverage after 62 days, they will be told of different options where they could find coverage (public programs, the state purchasing pool). If the individual does not act, they will be automatically enrolled in the least expensive policy. The state will then recover the costs of that coverage through the Franchise Tax Board, but no additional penalties are exacted.

Labels: IndividualMandate, Kuehl, Legislation, Nunez, YearOfReform

posted by Hanh Kim Quach | Permalink | 1:33 PM


 

Reich on moving beyond mandates...

Wednesday, January 16, 2008

Robert Reich, former U.S. Secretary of Labor, and now at UC-Berkeley, makes a lot of sense: The individual mandate is the wrong thing to focus on in health reform. Those who are spending lots of time on this particular component, either promoting mandates or opposing mandates, are missing the main debate.

Read the whole article. He first makes clear: the three Democratic presidential candidates have very similar, comprehensive plans:

Mandates are a sideshow, and fighting over them risks turning away voters from the main event. In almost every important respect, all major Democratic plans are the same.

They require employers to "play or pay" -- either provide coverage to their employees or contribute to the cost of coverage. They create purchasing pools that will offer insurance to anyone who doesn't get it from an employer. They offer a public heath-insurance option. The plans preserve freedom of choice of doctors. They aim to save money through more preventive care, better management of chronic disease, and standardized information technology. All of them subsidize lower-income families. Despite some skirmishing over whose subsidies are most generous, the subsidies are about the same.

This description of the Democratic presidential candidates also mirror the pending California health reform, AB x1 1.

Reich effectively demolishes the notion that there's a major difference between Obama on one hand, and Clinton and Edwards on the other, with regard to the individual mandate:

Take a closer look and even the candidates' positions on mandates aren't all that different. John Edwards has proposed to automatically enroll people in health insurance on their tax returns, but has said this mandate won't apply until premiums are affordable. Hillary Clinton says she favors mandates, but isn't sure there should be a penalty for noncompliance. Barack Obama favors an immediate mandate for children, but doesn't include one for adults. He says he's willing to revisit the issue after making health insurance more affordable and enrollment easier, and is also considering an automatic enrollment with an opt-out for those who don't want to be included.

As a practical matter, the difference between Sen. Clinton's and Sen. Obama's approaches come down to timing and sequencing. Mrs. Clinton wants a mandate first, believing that enrolling the younger and healthier will help reduce costs for everyone else. Mr. Obama thinks forcing people to buy health insurance before it's affordable isn't realistic. He wants to lower health costs first, and is willing to consider a mandate only if necessary.

This fight is little more than a distraction, given that a mandate would matter only to a tiny portion of Americans. All major Democratic candidates and virtually all experts agree that the combination of purchasing pools, subsidies, easy enrollment and mandatory coverage of children will cover a large majority of those who currently lack insurance -- even without a mandate that adults purchase it.

Those who oppose the individual mandate and embrace Obama on that issue neglect that fact that Obama has not opposed the individual mandate; he merely wants to focus on affordability first. That's similar with the California proposal, which conditions the individual mandate on affordability, and provides for exemption if there isn't affordability.

As I have blogged before, the real issue is not the mandate--the vast majority of people want coverage--but what the proposal does to help people to get and afford the coverage in the first place.

In conclusion, Reich make the important point about the individual manaate.: "It's the least important aspect of what they're offering." The much more important issues are the expansions of public programs, the increased bargaining power of purchasing pools, the "guaranteed issue" regulation of insurers--those are the big deal. Those are the main issue, deserving of the marquee.

Labels: IndividualMandate, YearOfReform

posted by Anthony Wright | Permalink | 12:05 AM


 

More on (individual) mandates...

Tuesday, December 11, 2007

In the national debate about mandates, many are making mountains out of molehills.

To recap from earlier posts on this blog: Even though their plans are incredibly similar, Clinton and Edwards are making a big deal that Obama's plan doesn't include one element, an individual mandate, even though he has said repeatedly that he would consider including an individual mandate later.

Obama says he wants universal coverage and would accept a mandate, but first wants to focus on making coverage available and affordable. Clinton and Edwards say they will make coverage available and affordable (through largely the same mechanisms), and then place a mandate to ensure everyone is in the system.

I am in agreement with Robert Laszewski at the Health Policy and Marketplace Review, in his analysis when he says: "So, when the day is done, I don't see much real difference here."

Some, fairly progressive health policy folks, including those who support single-payer, criticize Obama for not including a mandate. This includes Jonathan Cohn at The New Republic, and Maggie Mahar of HealthBeat, in perhaps the best of the recent articles, who quotes Princeton professor Paul Starr.

“The secret power of the mandate is that it is as much a mandate on government as it is on individuals. It is a mandate on government to make coverage available and affordable. For it would be patently unacceptable to demand that people have coverage and then provide no practical way for many people to get it.”

Having the mandate as a challenge to policymakers to make coverage available and affordable is a good thing--unless the policymakers don't meet the challenge. Governor Schwarzenegger clearly came to the health reform conversation out of a belief in an individual mandate, and as a result he did some--but not all--of the things that a mandate would require. For example, his original plan only had subsidies that were limited to folks up to 250% of the federal poverty level.

Leave it to Ron Brownstein of the National Journal (formerly of the LA Times) to cut through some of the clutter. He appropriately finds the geneology of the individual mandate and recognizes the critique from both sides of the aisle (including yours truly), but he also identifies that the issue is not ideological, but practical:

Although Republicans raise mostly ideological objections to an individual mandate, Democrats express more-concrete concerns. For liberals, notes Anthony Wright, a California health care advocate, the key issue is whether the government subsidies are sufficient to ensure that uninsured families can afford the coverage that a mandate compels them to buy...

It is on this front that Hillary Clinton faces the toughest questions today. She responds to concerns about the mandate's affordability by noting that her plan (like Edwards's) would cap the share of income that individuals must contribute to premiums, with government subsidies covering the rest. But, wary of providing a target for opponents, her campaign won't say what that cap will be. Although Clinton has promised generous funding for the public subsidies, it's difficult to see how uninsured families can judge her proposal without knowing even roughly how much of their income it would require them to contribute to buying insurance.

The mandate muddle masks the real question: how much actual help does the health plan provide people?

I would much rather that the candidates were competing on the level of subsidies they were providing low- and middle-income Americans, on how much they were going to use group purchasing power to bargain down the cost of coverage and drugs, etc. That's what we should use to rate one proposal superior to another. That's how any California health reform plan should be evaluated.

People want coverage: the question is what does any plan do to help them get the coverage they want and need--and whether that is sufficient for specific populations.

Labels: IndividualMandate, InTheNews, OtherBlogs, PresidentialCandidates, Schwarzenegger, YearOfReform

posted by Anthony Wright | Permalink | 1:15 AM


 

The rhetoric of reform...

Monday, December 03, 2007

In the discussion over the individual mandate among the presidental candidates, blogger Ezra Klein, NY Times columnist Paul Krugman, and others with good liberal credentials are making the progressive case for an individual mandate, and even making it a litmus test for a serious health proposal.

ARE INDIVIDUAL MANDATES A MUST? The argument goes like this: progressives believe in social insurance, where everybody needs to participate. If there isn't a requirement that we all need to contribute to health care, you undermine the fabric of social solidarity, the concept of universality. There's something to that.

Other commentators don't see the "individual mandate" issue as the defining issue, including Matt Ygleisa at The Atlantic, Kevin Drum at the Washington Monthly, Richard Eskow at the Sentinel Effect (including an interview with Obama's health advisor), Timothy Noah at Slate, and even former Labor Secretary and UC Professor Robert Reich (and Ezra's editor at The American Prospect), albeit all for different reasons. (I also posted a reply to Ezra's first and most recent posts.)

All of these commentators seem to indicate that the Clinton (or Edwards) plans, with an individual mandate, would be far better than the status quo. In the context of a good proposal, they don't make individual mandates something to attack; but they don't believe the individual mandate is the essential dividing point between Clinton and Obama, or between a workable or progressive proposal and one that is not.


FRAMING THE QUESTION: Some have seen the individual mandate not as a liberal but as a conservative construct, and not just because of it origins with moderate Republicans like Senator Chafee in the early 1990s, and Governors Romney and Schwarzenegger more recently. Under this belief, the individual mandate enforces a more conservative point of view, that of personal responsibility.

As Health Access put forward in our critique of an individual mandate from 2006, an individual mandate implies that the issue is that people need to be required to take up coverage, rather than acknowledging and addressing the real barriers that exist for people to get they coverage they actually want. The Health Access paper was responding to previous legislative proposals, including those by former Assemblyman Keith Richman (R), which did not propose to do much to address those barriers.

This year, Governor Schwarzenegger took the implications of the individual mandate seriously, meaning putting in place significant subsidies, a minimum employer contribution, and insurance market reforms so that people had a chance to meet the mandate. And there is where the common ground has been, on providing people the help they need to get the coverage they want. Our critique has been that the Governor's plan did not provide sufficient help to many low- and moderate-income populations facing the mandate--and that's what the negotiations continue to focus on as we speak.


MAKING THE MANDATE MOOT: At the same time, Health Access, in that very same critique and elsewhere, was clear about the fact that we don't oppose the notion of individual responsibility, whether it's a payroll tax to finance a single-payer system, or a worker requirement to take-up coverage offered by an employer, as long as it is deemed affordable.

The Democratic presidential plans--by Clinton, Edwards, and Obama, with and without an individual mandate--are in that vein: they largely rely on expanding group coverage, through public programs, employers, or purchasing pools. To the extent that it exists, the individual mandate is incidental, to bring in people and automatically enroll them. Obama actually doesn't even argue against an individual mandate--he says he would consider it, but only after his plan has provided available, affordable coverage. It seems Clinton and Edwards are there as well, providing assurances to people that coverage won't be more than a certain percentage of their income.

So is an individual mandate a liberal or conservative idea? Does it matter? People want health coverage--to get the care they need, and to protect them against financial risk. If coverage is available, affordable, and automatic, then the question is moot.

The real issue is what are the policies in place to provide for coverage that is available and affordable for all Americans. That's what I hope the candidates spend more time debating.

Labels: IndividualMandate, PresidentialCandidates, YearOfReform

posted by Anthony Wright | Permalink | 1:55 PM


 

Primary fights over secondary issues...

Saturday, December 01, 2007

The Los Angeles Times reports on the debate among the Democratic presidential candidates over the so-called individual mandate. It been strange seeing this play out nationally, within the very vague terms of presidential campaign position papers… while we’ve been grappling with the nuts-and-bolts of these same issues here in Sacramento.

I'm a little confused about the fuss. The three proposals, by Edwards, Obama, and Clinton, are all very similar. Edwards and Clinton are trying to make a distinction with Obama, in that they have a individual mandate, and Obama doesn't. But Obama does not say he oppose the individual mandate--he said repeatedly that he would consider it, but his first goal is to make coverage affordable.

At the same time, Clinton and Edwards both propose to do similar things as Obama to make coverage affordable, providing certain assurances and subsidies (such as saying that premiums won’t be above a certain level of income.) So there's not much difference in terms of the help actually offered to voters: all would significantly expand public programs, bolster employer-based coverage, and offer new public insurance options for folks.

When Clinton attacks Obama for not being universal, Obama responds that their proposals aren't either, unless they are proposing onerous enforcement. All three of them rely on automatic enrollment mechanisms, especially at work, to get folks covered. All of them get pretty close to universal.

So why they are making such a deal about a relatively small items. And if they are going to spotlight their health care plans, why are they having an argument about the burdens, rather than the significant benefits, of health care reform?

Labels: IndividualMandate, PresidentialCandidates

posted by Anthony Wright | Permalink | 12:51 AM


 

Strange bedfellows

Insurance agent Alan Katz responds on his blog to my recent post about the need for an affordability standard in the context of an individual mandate. In my comments, I did mistakenly lump him in with the Governor and some insurers, who have publicly taken a hard-line "no exemptions" position. Unfortunately, they don't have blogs I can link to like Mr. Katz does.

He concurs that there's needs to be a "safety valve" for consumers--as well as in other parts of the reform package. We agree. Now only if we can get the Governor there.

I hope that this article by the AP's Laura Kurtzman on the individual mandate and affordability helps.

Labels: Affordability, IndividualMandate, YearOfReform

posted by Anthony Wright | Permalink | 12:01 AM


 

Crash test...

Monday, October 29, 2007

Today's LA Times includes a reminder that an individual mandate doesn't create universal coverage:

The Department of Insurance is unsure exactly how many of California's 23.2
million licensed drivers don't buy insurance. Estimates range from a low of 3.2
million to a high of 5.7 million.

That's a 13-25% uninsurance rate. Let's remember that auto insurance is far smaller amount of money than a health insurance policy. On the other hand, for those who make the analogy, let's also remember that you don't need to get auto insurance for your car... you just need to get it for those you crash into.

Labels: IndividualMandate, InTheNews, YearOfReform

posted by Anthony Wright | Permalink | 6:44 PM


 

Getting educated from the Commonwealth...

Sunday, October 28, 2007

So I have a love/hate relationship with Massachusetts.

I am a Bronxite who roots for the Yankees, and I'm beside myself that the Red Sox are up 3-0 in the World Series. (Go Rockies!) But I have fond memories goingt to college at Amherst, and loved the formal close of our Commencement, with the banging of a large staff and the pronouncement: "God save the Commonwealth of Massachusetts."

On health policy, I was happy that Massachusetts helped focus attention on state reforms for expanding coverage, although I remind folks that California was one percentage point away a few years earlier, in 2003, with SB2 and Prop 72.

On the actual reform plan, it's not our place to support or oppose the MA plan, but we have produced both discussion papers and fact sheets that discuss the various provisions, and to make clear the major differences between our two states.

Even so, there is lots to learn from the discussion going on in Massachusetts. Our colleagues from Health Care for All Massachusetts (not affiliated with our board member Health Care for All California) have been liveblogging the deliberations of their "Connector" board, which makes for interesting, although wonky, reading. As expected, there's things that are working, and things that aren't.

It's odd that the Governor's health proposal seems oblivious to these discussions, especially with regard to the individual mandate (whatever you think of the concept). No condition or exemption based on affordability and availability? No simplification/standardization of the individual market that we are requiring people to go into? Exempting employer-based coverage from what constitutes "minimum coverage" for the mandate?

The Governor's proposal would benefit from a closer look at the consumer protections in the Massachusetts market (Health Access prepared a chart), and learning from their deliberations of what is working and what isn't...

Labels: IndividualMandate, OtherStates, YearOfReform

posted by Anthony Wright | Permalink | 9:40 AM


 

The analogy works as well as Dan Quayle spells...

Friday, August 17, 2007

Bruce Bodaken, the CEO of Blue Shield, has been a positive voice in the debate on universal health care, even if his company's action have not always been so.

In the San Francisco Chronicle, he uses the analogy of Social Security to make the case for an "individual mandate" to buy his company's product, or those of other health insurers.

I know Social Security. I pay into into Social Security. My parents depend on Social Security. Social Security is my friend.

Blue Shield, you are no Social Security.

Social Security has a defined benefit. Blue Shield does not, and opposes defined benefits. Social Security taxes take into account my ability to pay, since they are based on a percentage of my income. Blue Shield premiums and cost sharing are not. If there are changes to Social Security costs or benefits, they are made in a democratic process. Blue Shield changes their plans' costs and benefits unilaterally, without public oversight.

The larger point is right: Everybody has a part to play to reform our health care system. Everyone should pay in, but the question is, to who? And under what conditions? Whether it is affordable?

Blue Shield suggests one political deal: if everybody is required to take up coverage, insurers should be required to cover everybody. It's an important step for Blue Shield, but the policy of "guaranteed issue" is only one of several consumer protections needed for those buying coverage as individuals, without employer or public program coverage. It doesn't have to be as good an arrangement as Social Security--even in a private pension arrangement, there's a better bargain struck between workers and the employer, especially if the workers have some collective bargaining power.

As a statewide health care consumer group, we are supportive of group coverage, where people have the power of bulk purchasing to get the best possible deal. Blue Shield's belief is not a bargain for consumers.

Labels: IndividualMandate, Insurers, YearOfReform

posted by Anthony Wright | Permalink | 4:58 PM


 

Drawing the right conclusions...

Thursday, July 19, 2007

I've been looking at the new Health Research and Educational Trust paper released this week, authored by Susan Marquis and others at RAND. The big headline, which got USA Today's attention, is that even reducing premiums for health care by 50% would reduce the uninsured by merely 3%.

Some tried to make this study about the need for an individual mandate, but I don't see anything here that suggests that. I didn't see anything in the paper that suggested that the reason people are uninsured is that they don't want coverage, and other research disputes that notion. As I read the result, a tax credit simply doesn't go far enough for the vast majority of the uninsured: it's a 50-foot rope for someone in a 100-foot hole.

Instead, the vast majority of the dollars from a tax cut or credit to those who are more affluent, including those with insurance.

What can we learn from the study? Funded by the California HealthCare Foundation, this survey of uninsured California families, is a complete and utter smackdown of President Bush and other Republican proposals that suggest that all the uninsured need is a good tax cut. Other studies, even those by business and industry groups, show that such tax credits are far less efficient than expanding public programs and other strategies for health reform.

What the study also does is indicate how people reject plans with high deductibles and other cost sharing. Even when the high deductible plans offers significantly lower premiums, they'd rather go for the higher premium, lower-deductible policies. They don't see the value in the high-deductible plans: What's the point of having health coverage that doesn't provide much coverage?

If anything, the study suggests serious issues with the Governor's proposal, which depends on these high deductible plans, since it requires individuals who aren't eligible for employer-based coverage or public programs to buy coverage in the individual market. For many of these middle-income folks who would be impacted, the only thing they would be able to afford to buy is the minimum coverage of a $5,000 deductible plan. As a result, the plan would force people to get a health care product that many don't find meaningful. For this reason, any affordability standard needs to include both premium and out-of-pocket costs.

Labels: Bush, IndividualMandate, InTheNews, Research, Underinsurance

posted by Anthony Wright | Permalink | 11:19 PM


 

We'll always have Paris...

Friday, June 29, 2007

Michael Moore's SiCKO is out today, and many health care activists are leafleting moviegoers at a theater near you. It only adds to the momentum to reform, not just now and its run in theaters, but into the next year, with DVD sales, cable TV showings, etc.

On The Daily Show with Jon Stewart earlier this week, Michael Moore complained that
he was all set to have the hour with Larry King, but then he was bumped for Paris Hilton. For those excited by the power of Moore's fame and media savvy to focus on health care issues, we learn that celebrity-driven attention can cut both ways.

That's the second or third time Paris Hilton has provided a useful lesson in health care politics recently. Earlier, her stint in jail for driving while intoxicated put a spotlight on the personal driving records of LA City Attorney Rocky Delgadillo and his wife, who didn't have car insurance, despite the fact that its mandatory. Just a reminder that a plan with an "individual mandate" isn't universal, just like mandatory care insurance isn't universal, even to a well-educated, top-ranked lawyer.

What else can Paris Hilton teach us? A visit by Paris to Paris to learn more about the French health system? An investigation to whether her family's hotel empire provides coverage to their workers? I see a health policy beat for the tabloids...

Labels: IndividualMandate, InTheNews, SiCKO

posted by Anthony Wright | Permalink | 8:33 PM


 

Don't take it from us -- here's what others say....

A bunch of interesting public opinion polls have come out recently, so I'll summarize a few of the key points from them here.

PPIC released a poll Thursday showing that 72% of Californians think the state's health care system is in need of major changes. (Take THAT Blue Cross!) Voters, however, are a little less confident that the guv and Legislature will be able to broker a deal (49%).

Another interesting point: 72% of voters support the guv's idea to require residents to have health insurance. From my previous readings, I actually thought voters weren't really hot for such a mandate....but I'm wondering if it's the WAY the question was posed that evoked that response.

The question, verbatim, was: "Would you favor or oppose a plan requiring all Californians to have health insurance, with costs shared by employers, health care providers and individuals?"

Lastly, a SURPRISING number of Californains (73%) said the US should provide health coverage to all children, even if it would require higher taxes. Hopefully Congress and Bush, who are in the process of giving the State Children's Health Insurance Program way too little money hear that.

Poll #2 out of Massachusetts: The Kaiser Family Foundation found that two-thirds of Massachusetts residents polled supported the new law, though support dropped to 57 percent when asked about the individual mandate -- which would penalize those that didn't buy coverage.

The most interesting piece of this poll to me was the part asking about affordability of the plans for people forced to buy coverage on their own without subsidies.

Scenario 1 37-year-old single adult, earning $42,000. The plan:

• Costs $259 a month
• Has a $1,500 deductible; $5,000 maximum out-of-pocket
• Allows 3 doctors visits at $25 a year (the rest would be full-price)
• After the deductible is met, 20% co-insurance
• Generic drugs $15, but brand name drugs would be 50% co-insurance.

62% of respondents said this plan was "unfair;'' 58% said it was an unreasonable amount; 62% said this person would remain vulnerable to high medical bills.

The piece about affordability is key as we in California consider what is reasonable and fair for people to pay. The governor's plan requires a $5,000 deductible and $10,000 maximum out-of-pocket for someone earning $26,000. Looking at what people think in Massachusetts, the super-majority of people would say that's unaffordable.

Labels: Affordability, ExpandingCoverage, IndividualMandate, Schwarzenegger, Underinsurance

posted by Hanh Kim Quach | Permalink | 12:02 PM


 

But will they lobby on it?

Tuesday, June 05, 2007

The National Federation of Independent Businesses (NFIB), which made significant membership gains actively opposing President Clinton's health reforms in the early 1990s, released some responses from a membership survey, which had predictably skewed questions and predictably skewed answers, with a remarkably consistent 68-70% of respondents opposed to anything: HMO consumer protections (called "mandates on small businesses"), an individual mandate, even a subsidized pool for those who can't afford coverage.

The one response that wasn't predictable:

"...on whether or not the state should require health insurers to issue policies regardless of pre-existing medical conditions: A little more than half, 54%, said, ‘Yes,' 32% said ‘No,' and 14% were undecided."

Even this crowd, responding to a less-than-friendly question, thinks that there is a bigger role for the state to oversee the insurers.

Labels: Employers, ExpandingCoverage, GuaranteedIssue, IndividualMandate, Insurers, YearOfReform

posted by Anthony Wright | Permalink | 12:20 PM


 

Contest!

Friday, June 01, 2007

In an earlier post, we discussed my appreciation that the Democratic legislative leaders were being intellectually honest that their plan was "near-universal," and not fully “universal,” even though they do dramatically expand group coverage to millions of Californians, and provide more security to millions who have it but are concerned it won’t be there for them when they need it.

Universal is the ultimate goal, but let’s be clear that it is hard to get there. The closest way is through a Medicare-like system, where enrollment is simple and required just once in a lifetime, and which is financed through taxes (based on ability to pay). Medicare comes very close, but still falls just short. At the state level, the only bill that can be called "universal" is Senator Kuehl's SB840.

This has come up on the presidential campaign trail, as some critique presidential candidate Barack Obama’s plan for *not* being universal, and while for some that means not being single-payer, for many others that means not having an individual mandate.

I disagree that an “individual mandate” gets you “universal.” Without a truly automatic enrollment and affordable coverage, the enforcement mechanism would have to be pretty punitive, and the publicly-financed subsidies very generous. And even presidential candidate John Edwards’ plan, which does include an individual mandate, has exemptions for those who aren’t able to afford it. However good it is (and I think there are many good things in it), it is not universal either.

Governor Schwarzenegger’s doesn’t have any exemptions to his individual mandate, and the enforcement remains a troubling discussion. He trumpets his proposal as universal, but it is not. The modeling suggests that about a million undocumented adults, and slices of other populations, will remain uninsured.

Yet from some reporters' point of view, his plan is supposedly more “comprehensive” than the others, yet it really doesn’t help more people. Even though roughly a half-million more people are said to be "insured" under the Governor’s plan than the Nunez or Perata plan, those people would not necessarily be better off. These are folks that are not getting coverage on the job, not eligible for public programs, yet are forced to buy individual coverage.

Without any exemption for affordability, many of these folks will be required to pay for a premium, but will only be able to afford a high-deductible product that requires them to spend thousands of dollars out of pocket before care is covered. Is it better for these people to be required to pay a premium for a product many of them won’t be able to afford to use?

So maybe we shouldn’t call these folks newly insured, because that would imply they got a benefit, as opposed to a burden. Here’s where I need your help. What should we call people who are forced to buy a plan that is more than 5% of their income? Forced to buy a high-deductible plan?

The Unafffordables?
The Burdened?
The Forced Underinsured?
TOUGHs? (Tough Option: Uninsured Greater than High-deductibles?)

Defining this group will allow for better apple-to-apples comparisons between the various plans, between the truly insured, and those who are being made to buy a product that doesn’t make sense for them. E-mail your suggestions to awright@health-access.org. I look forward to your replies.

Labels: Affordability, ExpandingCoverage, IndividualMandate, Schwarzenegger, Underinsurance, YearOfReform

posted by Anthony Wright | Permalink | 9:59 AM


 

The "hidden" reasons for reform...

Tuesday, May 29, 2007

You don't have to be a fan of the New America Foundation to take sides with it over the unabashedly conservative Hoover Institution.

Dan Walters has a questionable column in today's Sacramento Bee that gives way too much credence to a Hoover study trying to downplay the notion of a "hidden tax" in health care.

The "hidden tax" is a phrase Governor uses a lot, to talk about the amount that health premiums are higher because of the uninsured population. The New America Foundation released a study last year often cited by Schwarzenegger. Families USA had a similar conclusion in 2005 with its study documenting "the increased cost of care."

As I have previously said, I don't like the the Governor's rhetoric around a "hidden tax," he tends to blame the victim: the uninsured person who typically is not offered coverage on the job, is not eligible for public programs, and who finds that buying coverage as an individual is either unaffordable or even unavailable, because of "pre-existing conditions." This rhetoric has consequences: if the problem is that people are uninsured, rather than the barriers that lead them to be uninsured, it's no wonder that Schwarzenegger and New America Foundation both see the "individual mandate" as a solution--something we disagree with.

But it is important to acknowledge that our current fragmented health system comes with a cost, to all of us. One of the problems is the lack of fair and equitable financing, with most employers providing coverage to all their workers, but many that don't.

We all pay more when Wal-Mart and McDonald's pay less. It's the same health care system, of doctors and hospitals, and if some manage to not pay their fair share into the system, we all pick up the burden. (Let's remember, the uninsured get it worst, getting charged more than others and facing collections and bankruptcy. But there are costs that are borne in the overall system.)

In some states, they actually have an explicit fee on insurance to help fund the safety-net hospitals and providers that care for the uninsured. So employers and purchasers are able to directly see, on their bill, how much they are paying for a broken health system that leaves people uninsured.

The New America Foundation, in its analysis defending its work, actually pointed out Hoover didn't question the notion of a "hidden tax," just its size. And the New America Foundation makes a credible case that it is bigger than what Hoover estimates.

The thing that rankled me most about the Walters column was the notion that reducing the "hidden tax" was "the most appealing premise" of health care reform. Let's put aside the millions of uninsured who would get coverage, and no longer live sicker, die younger, and be one emergency away from financial ruin. Let's put aside the community, economic, and public health benefits.

It seems to me that there are other reasons why an *insured* person would want a change in our health system:

* SECURITY: Even insured people recognize that they are one job change, one divorce, or other life event, from being uninsured. Reforms could provide more security that they keep the coverage they have now (through an employer or a universal system), are more likely to have coverage at their next job, are more likely to have a safety net if they fall upon hard time, and are more likely to have coverage even if they get sick.

* AFFORDABILITY: Aside from efforts to simply shift the burden of costs onto consumers, most of the ideas to contain costs in the health care system work better when more people are in the system. Whether its information technology, or prevention, or bulk purchasing, or better planning (not to mention fair financing), the cost savings work best in a universal system, rather than our current a fragmented system where it is hard to implement these efforts. For those who are insured, we can best slow the growth in health care costs better if we deal with the uninsured issue as well.

There's no disagreement that there's a cost to the status quo. But let's recognize the other benefits of reform as well.

Labels: Affordability, CostContainment, Employers, IndividualMandate, InTheNews, Research, Sacramento, Schwarzenegger, YearOfReform

posted by Anthony Wright | Permalink | 3:56 PM


 

After the slightly off-color joke about Paris Hilton...

Thursday, May 24, 2007

Governor Schwarzenegger revisited The Tonight Show last night, where he was introduced as "easily the most popular Republican in the entire country," a phrase that has a bit more edge than Jay Leno is known for.

After suggesting that Jay Leno's proposed 60th birthday idea of having a registered nurse jump out of a bran muffin was "kinky" (will CNA respond?) and admitting to watching all of Paris Hilton's "movies," the Governor talked about health care.

Labels: GuaranteedIssue, IndividualMandate, Insurers, InTheNews, Schwarzenegger

posted by Anthony Wright | Permalink | 12:21 AM


 

The Connector vs. The Terminator

Tuesday, April 17, 2007

To inform our debate about "individual responsibility" in California, let's be clear that the only state in the nation to even try an individual mandate has last week allowed for broad "affordability" exemptions, for 20% of the uninsured. These folks are likely not offered public subsidies or affordable employer-based coverage, yet were facing the penalty of enforcement.

Under the Massachusetts plan, staying uninsured was the least worst option for these uninsured folks: the other option is to be forced to buy a coverage product that they don't have the money for, and given the deductibles and cost-sharing, may not be of particular use or value to them. Under the exemption, it's not great that they stay uninsured, but at least it meets the "first, do no harm" policy test.

I post this schedule not to endorse these standards, but to show that even proponents of the individual mandate need to recognize its problems. The Governor's proposal does not have any exemptions or considerations in this regard.


From "The Connector" in Massachusetts:

An example of what monthly premiums are deemed affordable, based on income under the recommended schedule, is set forth below. As an example, a single individual earning under $15,315 who is not eligible for Commonwealth Care because he or she is eligible for employer-sponsored insurance would not be penalized for passing up the employer-sponsored insurance offer unless it were free. At the other end of the income scale, a single individual earning between $40,001 and $50,000 would not be penalized for passing up the offer if the monthly premium were more than $300.

Singles ---------------------- Couples -------------------- Families w/Children
$0 - $15,315 ($0) ----------- $0 - $20,535 ($0) ----------$0 - $25,755 ($0)
$15,316 - $20,420 ($35) ---- $20,536 - $27,380 ($70) --- $25,756 – $34,340 ($70)
$20,421 – $25,525 ($70) ---- $27,381 - $34,225 ($140) -- $34,341 - $42,925 ($140)
$25,526 – $30,630 ($105) -- $34,225 - $41,070 ($210) -- $42,926 - $51,510 ($210)
$30,631 - $35k ($150) ------ $41,071 - $50k ($270) ----- $51,511 - $70k ($320)
$35,001 - $40k ($200) ----- $50,001 - $60k ($360) ----- $70,001 - $90k ($500)
$40,001 - $50k ($300) ----- $60,001 - $80k ($500) ----- $90,001 - $110k ($720)

Labels: Affordability, IndividualMandate, OtherStates, Schwarzenegger, Uninsured

posted by Anthony Wright | Permalink | 3:46 PM


 

Fine for insurers, fines for individuals

Wednesday, April 11, 2007

OToday, there's a story in the Los Angeles Times by Jordan Rau that talks about what the Governor's office is thinking with regard to enforcing their "individual mandate," including trying to find people though data matching and using fines and other collections techniques.

Let's be clear: there's lots of problems with the "individual mandate," starting with the premise that there's lots of folks who don't want health coverage, before you ever get to the sticky issues of enforcement. (It's also the subject of renewed crosstalk at Daniel Weintraub's Sacramento Bee health care blog.)

The enforcement issues go from deeply troubling to downright scary when the Governor's plan never acknowledges that there's some pe