October 29, 2015

As Fareed Zakaria sees it, the remedy for America's ailing and expensive health system is clear.

Comment by Don McCanne of PNHP: Although Fareed Zakaria has wavered in the past on what we need to do to improve the health care system in the United States, he has now come to the firm conclusion that we need single payer.

As he states, “There's absolutely no question that when we look at the ability to provide good healthcare at an affordable price, lower levels of massive inequality in healthcare outcomes or provision, a single government payer and multiple private providers is the answer. It's absolutely clear that is the only way you can achieve that goal.”

He cites the 1963 landmark article by Nobel laureate Kenneth Arrow, “Uncertainty and the Welfare Economics of Medical Care,” (link below)) explaining why health care cannot achieve a competitive equilibrium in the marketplace. In today’s terms, Arrow’s work explains why it is foolish to continue to rely on a marketplace of private health plans plus various public programs to try to manage spending in our $3 trillion health care industry.

As Nobel laureate Paul Krugman states, “health care can't be marketed like bread or TVs.”

Imagine marketing fire or police or disaster relief services like bread or TVs. Those services should be there, ready for any of us whenever we need them. The same is true for health care. That would work just fine if we made our government the single payer.

October 28, 2015

Notes on the budget from senior advocacy groups

Some hits, but dodged a number of worse bullets.

The Congressional Budget Deal & Seniors

http://www.ncpssm.org/PressRoom/NewsReleases/Release/ArticleID/1452/The-Congressional-Budget-Deal-Seniors

Reaction by NCPSSM President/CEO Max Richtman
News Release

“At the risk of damning by faint praise, the newly negotiated budget deal certainly could have been a lot worse. The good news is Democrats in Congress and the White House were able to stop a 52% premium increase from hitting millions of seniors in Medicare next year. They also negotiated a re-allocation (originally blocked by the GOP) for the Social Security disability program that prevents a massive benefit cut in 2016 for Americans with disabilities. In this current Congressional atmosphere of hostage-taking and never-ending threats to benefits, these victories are significant.

Unfortunately, seniors will still receive no cost of living adjustment in 2016 and the sequester cuts to Medicare providers will continue to pay for non-Medicare programs. It’s clear the GOP-led Congress still sees Social Security, Medicare and Medicaid as piggy banks to fund other legislative priorities and this hostage-taking, threats to benefits and crisis creation will continue. We hope Congress can get the votes to approve this budget deal so that seniors, people with disabilities and their families may finally see a temporary cease-fire in this ongoing assault on their benefits.”...Max Richtman,

NCPSSM President/CEO

Specifically, this budget agreement, if passed, would:

--Prevent a 19% cut in Social Security Disability Insurance benefits that would have occurred in late 2016
--Ensure 7 years of certainty that the Social Security Disability insurance program will pay full benefits
--Mitigate a 52% Medicare Part B premium increase for 30% of Medicare beneficiaries
--Alleviate an increase in the Part B deductible for all beneficiaries, lowering it from a projected $223 to $167
--Provide sequester relief to programs like the Older Americans Act, Low Income Home Energy Assistance Program and Social Security field offices without cutting Social Security, Medicare and Medicaid benefits.

Unfortunately, the bill would also:

--Provide NO relief to seniors who will receive no cost of living adjustment in 2016.
--Extend the Medicare provider reimbursement sequester and uses the savings to pay for unrelated programs.
--Cut Social Security spousal benefits for individuals who have voluntarily suspended their benefits by using the so-called “aggressive claiming” loophole. This benefit cut would occur next year.

###

The National Committee, a nonprofit, nonpartisan organization acts in the interests of its membership through advocacy, education, services, grassroots efforts and the leadership of the Board of Directors and professional staff. The work of the National Committee is directed toward developing better-informed citizens and voters.

Media Inquiries to:
Pamela Causey 202-216-8378/202-236-2123
Kim Wright 202-216-8414 www.ncpssm.org

Proposed Budget Seeks to Reduce Dramatic Rise in Part B Costs; Advocates Remain Concerned About Underlying Causes

October 27, 2015 - Congress is considering the Bipartisan Budget Act of 2015. This proposed budget agreement would reduce an expected spike in the Medicare Part B deductible and premiums for 2016. The premium increase, expected to be over 50% for beneficiaries who do not already have premiums taken from their Social Security, will instead be about 15%. Similarly, the Part B deductible would increase approximately $20.00 rather than the previously projected $75.00. The cost of limiting the increases will be paid for by a loan from general revenues. Medicare beneficiaries will pay back the loan over time from set increases to future premiums.

“While we have concerns about the way in which the Part B cost-sharing resolution is paid for, we are glad people who rely on Medicare can breathe a bit easier – knowing their premiums and deductible will not skyrocket next year,” said Judith Stein, founder and executive director of the Center for Medicare Advocacy.

Although relieved that Congress seems poised to address next year’s Medicare Part B cost-sharing, the Center for Medicare Advocacy remains concerned about the expenses underlying these increases. “We continue to urge law-makers to join Congressman Courtney in asking Secretary Burwell to investigate and fix the underlying reasons for the huge increase in Part B costs. Much of the increase seems to come from parallel increases in billing inpatient hospital care to Part B through the use of so-called ‘outpatient’ Observation Status.”

For more information or to speak with one of our staff, contact Center for Medicare Advocacy Communications Director Matt Shepard at mshepard@MedicareAdvocacy.org or 860-456-7790.

October 27, 2015

Thousands Who Didn’t File Tax Returns May Lose Health Care Subsidies

If you know anyone to whome this might apply, please give them a heads-up

Comment by Don McCanneof PNHP: This is just one more small but somewhat shocking example of the unnecessary administrative complexity created by the Affordable Care Act (ACA).

Based on income alone, many people are not required to file tax returns if their income falls below a certain threshold (amount varies based on taxpayer status). However, many of these low-income individuals purchase plans through the ACA insurance exchanges and qualify for premium tax credits. All individuals who receive these credits under ACA must submit Form 8962 for the premium tax credit. It must be attached to an income tax return (Form 1040, 1040A, or 1040NR), so these people are required to submit tax returns no matter how low their incomes.

The penalty for not submitting Form 8962 attached to an income tax return is the requirement to refund any premium tax credits received and a disqualification from receiving tax credits in the following year. That’s quite a penalty for people with low incomes when you consider that ACA was supposed to make health care affordable. After all, “Affordable” is in its name.

But look at Form 8962 (click on link above). Then glance through the 15 pages of instructions for filling out Form 8962 (link also above). Sophisticated taxpayers are likely to find this daunting, but think of what it would be like for many of the low-income individuals who would have difficulties with just the simplified Form 1040A tax return, not to mention this monstrosity. It makes you think that ACA means “Administrative Complexity for All.”

Since there are no premiums in a well-designed single payer system, there would be no need for premium tax credits. The entire health care system would be funded by simplified taxes based on ability to pay. The health care system would always be there for you whenever you needed it, regardless of your tax situation. Even if delinquent, the IRS could not penalize or take away your health benefits.

October 24, 2015

Kaiser Family Foundation Report on Income and Assets of Medicare Beneficiaries

The Kaiser Family Foundation recently released an issue brief that describes the income and assets of Medicare beneficiaries in 2014. It is essential to place proposals making changes to the Medicare program within the context of this data in order to understand the impact on beneficiaries. This is particularly true for proposals that shift costs onto beneficiaries. The brief also provides projected numbers for beneficiaries in 2030.

Some important findings from the report (all numbers are for 2014):

Half of all Medicare beneficiaries had incomes below $24,150
One-quarter of beneficiaries had incomes below $14,350
Five percent had incomes exceeding $93,000 (Includes one percent who had incomes exceeding $163,600)
Median per capita income:
White beneficiaries: $27,450
Black beneficiaries: $16,150
Hispanic beneficiaries: $12,800
More than half of all beneficiaries ages 85 and older lived on an income of less than $18,850
Median per capita savings:
White beneficiaries: $91,950
Black beneficiaries: $12,350
Hispanic beneficiaries: $9,800
More than half of all beneficiaries ages 85 and older have less than $30,700

The full Kaiser Family Foundation Issue Brief is available at:

http://files.kff.org/attachment/issue-brief-income-and-assets-of-medicare-beneficiaries-2014-2030

October 24, 2015

Solution to Medicare Part B Cost Increases? Look at "Outpatient" Observation Status

If Congress and the Administration truly seek ways to limit Medicare premiums and deductibles, they ought to look at CMS’s hospital Observation Status policy.

A major cause of the Part B increase is likely the parallel increase in so-called "outpatient" Observation Status, the use of which has more than doubled since 1999. The result of this misguided policy, under which inpatient-level hospital services are billed as outpatient “Observation,” is that unprecedented amounts of hospital care are being billed to Medicare Part B, rather than Part A. This was never intended by the law.

Part A is called “Hospital Insurance” in the Medicare Act. Yet, thousands of patients stay in hospitals for many days only to learn they were not admitted as inpatients. Instead, they are classified as outpatients on Observation Status. One of the myriad consequences of this policy is that Part B expenses are skyrocketing – increasing Part B premiums and deductibles and cost shifting to Medicare beneficiaries. These costs should not be included in calculating the share of Part B costs that beneficiaries must pay.

Congressman Joe Courtney (CT-2) wrote the Secretary of Health and Human services asking her to review the link between Observation Status and Part B costs. We hope this will help lead to real reform of the so-called outpatient Observation policy and Part B cost-sharing.

http://www.medicareadvocacy.org/wp-content/uploads/2015/10/Final-Letter-to-HHS-Secretary-re-Medicare-Part-B-and-MedPAC-report-10-16-2015.pdf

October 23, 2015

Hedge Funds Attack American Health Care

It ain't just Martin Shitstain.

Comment by Don McCanne of PNHP: The full Hedge Clippers article, available at the link above, provides many examples of outrageous drug price manipulation by hedge fund, private equity, or venture capital firms. These confiscatory price increases have not been for financing new drug research, rather they have been for the sole purpose of redistributing money from patients in need of these drugs to the the money managers at the very top of the income and wealth scales, further compounding our crisis of inequality.

Government intervention is imperative. It would be automatic if we enacted a single payer national health program.

October 22, 2015

U.S. Health Care Could Be More Like Denmark’s

Comment by Don McCanne of PNHP: We need to be sure that the fundamentals do not get lost in political rhetoric. The fact is that health system performance in the United States has lagged behind many other nations while our costs have soared to twice the average of wealthier nations. Bernie Sanders says that we can learn from Denmark (meaningful rhetoric). Hillary Clinton says that we are not Denmark, but we are the United States of America (dismissive rhetoric). Steffie Woolhandler says that saving lives through single-payer reform would be as American as apple pie (Yankee Doodle Dandy rhetoric).

So how about a little Yankee Doodle Dandy? James Cagney or Mickey Rooney - you choose:

Where else but in America could we choose which Yankee Doodle Dandy we prefer? And we can even choose health care for all if we were willing to give up our uniquely American health care system, as dysfunctional as it is. But that would mean adopting policies of health care justice already in use in other nations. Apple pie anyone?

October 16, 2015

A Trojan Horse In Clinton’s Pledge To “Enhance” Social Security?

https://ourfuture.org/20151015/a-trojan-horse-in-clintons-pledge-to-enhance-social-security

Lynn Stuart Parramore wrote in 2012 that she understood why “well-intentioned liberals” end up embracing Social Security policies that would treat the “vulnerable” differently from everyone else. But she warned that these schemes are “a sneak attack on vital programs meant to weaken and eventually destroy them” and “a highly effective political strategy for getting liberals and progressives to act against their own values and interests.”

Chief among her arguments are the point that Social Security benefits are not “handouts to the needy.” They are “benefits that people pay for as they work. They are also smart social insurance programs that spread risk across society in order to protect everyone at rates no private insurance scheme, with its much smaller risk pool, could touch.”

Like your insurance policy, when you file a claim the size of the check you receive is not based on your income or net worth; it’s based on the amount of coverage you purchased. Car insurance companies that paid less in claims to Mercedes owners, presumably because they are wealthier than owners of a working-class Chevy Cruze, would lose high-end customers – and eventually would collapse.

There are real threats to Social Security that Clinton could have called out in Tuesday’s debate.

There are reports this week that Senate Majority Leader Mitch McConnell wants cuts in Social Security and entitlement programs in exchange for support for increasing the debt ceiling next month. The fact that there will not be a cost-of-living increase for Social Security recipients underscores a fundamental flaw in how benefits are calculated: the particular spending patterns for seniors, particularly in health care, aren’t captured in the index used for adjusting Social Security payments. Finally, as this petition from Social Security Works warns, if Congress does not act soon, the Medicare Part B premium and deductible are expected to increase significantly for older adults and people with disabilities in 2016, and Social Security recipients won’t have the extra dollars to cover those costs.

October 14, 2015

Rethinking high deductible health insurance--patients cut care as well as costs

Comment by Don McCanne of PNHP: This is an important study. It shows that sick patients will not shop prices but rather they will forgo beneficial health care services while they are still under the deductible for their plan.

This confirms that deductibles are an inappropriate tool for reducing health care spending, since health policies should be designed to improve care rather than impair it. This puts the entire concept of consumer-directed health care under question as a means of slowing health care spending. In contrast, single payer policies control spending while benefiting patients.

This study may seem familiar to regular readers. That is because it was covered in our June 15, 2015 Quote of the Day. It was based on an article in “The Conversation” by Ben Handel, one of the co-authors of this study.

What is new is that NBER has now released the full study, and reports of it are appearing in the media. It is a concept well worth repeating. Excerpts of the Vox article by Sarah Kliff are included above in that her description is quite clear, avoiding the technical language of economists and policy wonks.

Quote of the Day, June 15, 2015:
http://www.pnhp.org/news/2015/june/deductibles-do-not-foster-price-shopping

October 13, 2015

Financial health shaky at many Obamacare insurance co-ops

Comment by Don McCanne of PNHP: During the crafting of the Affordable Care Act (ACA), there was strong support for including the option of selecting a government-run insurance program in the insurance exchanges. This “public option” was first emasculated so that it would not be an effective competitor to the private insurance firms, and then it was totally eliminated from ACA by political chicanery. That led to support for including “Consumer Operated and Oriented Plans” (co-ops) - nonprofit insurers controlled by directors elected by the enrollees - as a substitute for the public option.

The private insurers were not through. Obviously they did not want competition from a nonprofit consumer-operated system that should have significantly lower expenses than do the private insurers. Insurers require capital - both for start-up expenses and for establishing reserves from which to pay claims. Although the original intent was to provide government grants to the co-ops, these were changed to government loans which the co-ops would have to pay back (not to mention that borrowing to fund reserves is a shell game - the net reserves are zero). Adding the burden of debt service onto the backs of these co-ops basically destroyed their competitive advantage, especially at a time that they were facing high start-up costs. Further, as an extra measure, the insurers had included in ACA a rule that prohibited the co-ops from advertising. Thus the insurers saw to it that the co-ops were placed at a competitive disadvantage.

And what help did the co-ops receive from the government? First the government cut way back on the funds that were made available as loans to satisfy capital requirements. When co-ops were successful in their enrollment efforts, the government did not make further loans available to satisfy increased reserve requirements (larger member rolls require greater reserves). Then the feds reneged on their requirement to pay the co-ops losses above the risk corridor (a form of reinsurance for excessive losses by the co-ops). Finally, the feds have become hard-nosed and have begun shutting down the co-ops because of failure to maintain adequate reserves. Surprise! How were they supposed to build reserves in a year with high start-up costs, high debt service, and increased reserve requirements because of greater than expected enrollment?

It is clear that HHS, from the beginning, has been in bed with the private insurers. This experience with the co-ops is not the only example of their effort to relieve the insurers of competition from government programs. They have been supporting the private Medicare Advantage (MA) plans through administrative manipulations that offset the required reductions in overpayments to these plans. Also, they are now greatly increasing Part B premiums for about one-third of Medicare beneficiaries, especially for those with high incomes - a measure bound to diminish support for the traditional Medicare program, chasing irked beneficiaries into the private MA plans.

This unfortunate outcome for the co-ops was not exactly unanticipated. It was inevitable based on the design features dictated by the private insurers (see our Quote of the Day of July 18, 2011). What is particularly sad is that our own government has not been a reliable partner with our citizens and their organizations. They have gotten into bed with the private insurers instead.

Single payer would fix this, but we would need new public administrators.