Posts Tagged ‘health care’

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Consumer savings from the Affordable Care Act so far a mixed bag

December 21st, 2012

There was much fanfare in the mainstream media over news that Americans saved $1.5 billion thanks to the Affordable Care Act, according to a study by the New York-based Commonwealth Fund. Those savings came about as a result of a new ACA regulation requiring health insurance companies to spend at least 80 percent of premium dollars on actual health care. This financial measure is known as the medical loss ratio (MLR). Health insurance companies that didn’t meet the new rule had to send back the $1.5 billion in the form of rebates to consumers. On its face, this sounded like a win for consumers. However, the real effect of the new MLR rule was more mixed, the study concluded. Although consumers with health coverage in the individual market did see some benefit, for those in small and large-group plans, not so much:

Although the MLR rule, along with other market and regulatory factors, prompted reductions in administrative expenses in all three market segments, in the group markets it appears that insurers were able to retain those cost reductions in the form of increased profits, rather than passing them on to consumers in the form of reduced premiums. By contrast, both administrative costs and profits dropped in the individual market, indicating that consumers benefitted in the form of restrained premium increases. Premiums did increase somewhat, because of the growth in medical costs, but the increases were less than medical cost increases.

Los Angeles-based Consumer Watchdog, pointed to the results of the study as proof that the government needs to do more to regulate premium rate increases.

“Absent rate regulation, health insurers are gaming the health reform law to keep premiums high and increase profits. Health insurers should be required to open their books and justify their charges – including why they haven’t passed on to consumers nearly one billion dollars in savings,” said Carmen Balber, Washington DC director for Consumer Watchdog.

Unlike in some other states, California’s insurance commissioner doesn’t have the power to reject unreasonable rate hikes. Assembly Bill 52, authored by Assemblymember Mike Feuer, would give the insurance commissioner that regulatory authority. Unfortunately, the bill could never make it out of the state Senate, and Feuer decided to shelve it last year. Now that state Democrats are on their way to gaining a supermajority in both houses of the state legislature, there may be hope for a revival of AB 52.

But rate regulation isn’t a panacea. It’s great that some consumers are getting financial relief from Obamacare. However, we can do much better. California could do away with insurance rates altogether by providing health care to all residents as a public service rather than as a commodity. The savings to our state would be far greater.

Sylvia@californiaonecare.org

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Don McCanne, MD: Medi-Cal could implode

December 20th, 2012

Court ruling could cut California spending on Medi-Cal

By Maura Dolan and Chris Megerian

Los Angeles Times, December 13, 2012

A federal appeals court decided unanimously Thursday that California may cut reimbursements to doctors, pharmacies and others who serve the poor under Medi-Cal.

A three-judge panel of the 9th Circuit U.S. Court of Appeals overturned injunctions blocking the state from implementing a 2011 law that slashed Medi-Cal reimbursements by 10%. Medi-Cal, a version of Medicaid, serves low-income Californians.

The ruling could make it harder to find doctors for as many as 2 million new patients who could become eligible for Medi-Cal under President Obama’s healthcare law — a possible 25% expansion of the program. California already provides one of the lowest rates of reimbursement in the nation for medical services to the poor, and there is a shortage of doctors to serve those patients.

According to the California HealthCare Foundation, Medi-Cal patients already have difficulty finding doctors.

A foundation study published in July 2010 said 25% of physicians provided care to 80% of Medi-Cal patients.

Although 90% of physicians told the foundation they were accepting new patients, only 57% said they were taking on new Medi-Cal patients.

http://www.latimes.com/news/local/la-me-medi-cal-20121214,0,4784104,full.story

Comment:

By Don McCanne, MD

One of the major defects in the Affordable Care Act is that it perpetuates and expands the Medicaid program – a welfare program for low-income individuals. Because of political anti-welfare bias, it is vulnerable to budget cuts that would not be tolerated in a program like Medicare that benefits all of us.

California’s Medicaid program, Medi-Cal, exemplifies this problem. It has one of the lowest payment rates in the nation, not even meeting the expenses of many of the physicians still willing to see these patients.

There are already over 7 million Californians on the program, and there will be almost a million children added as California shuts down its CHIP program (Medi-Cal pays less than CHIP). There will be about 2 million more individuals added in 2014 under the provisions of the Affordable Care Act. Further, low-income Medicare patients also eligible for Medi-Cal are being transferred into Medicaid managed care plans.

In spite of California being at the bottom in Medicaid payment rates, this 9th Circuit Court of Appeals decision upholds the additional 10 percent cut enacted because of California’s budget crisis. The reduction was challenged based on the fact that federal law requires that the state ensure that Medicaid patients have access to adequate health care services, and underpayment reduces the number of willing providers. That argument was rejected by the court, though it is difficult to see how California’s physicians will be able to care for over 10 million Medi-Cal patients when they are effectively donating their services plus subsidizing their losses resulting from overhead expenses that are greater than reimbursement rates. As more physicians turn them away, the crowd out of privately insured patients will threaten the solvency of the few remaining dedicated physicians.

This underpayment has real consequences. Access to primary care is impaired, and specialized services are especially difficult to obtain since most specialists are particularly resistant to allowing these patients in their practices, no matter how great the need. Outcomes for Medicaid patients are not as favorable as for those who have Medicare or private insurance. In some studies, the outcomes are as bad as the outcomes for the uninsured.

What good is a Medi-Cal card if it won’t provide access to health care?

If we had a single improved Medicare that covered everyone, this problem wouldn’t exist. Everyone would have the level of care that we should expect from a high-performance health care system. Are there too many politicians who still believe that we should offer only inferior health care to the poor because that is all they deserve? The rhetoric of the recent elections doesn’t bode well for a more egalitarian approach.

Re-posted with permission from pnhp.org.

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Palm Desert woman gets socked with $106 rate hike for 10-mile move

December 19th, 2012

Can health insurance companies get any more brazen? Unfortunately, yes. Check out this outrageous story, from the Los Angeles Times:

Joan Swope, 62, moved recently from Cathedral City, just down the road from Palm Springs, to nearby Palm Desert.
She informed her insurer, Anthem Blue Cross, of the change of address. A few weeks later, Anthem responded with a notice stating that, because of the move, Swope’s monthly premium on her individual policy will increase to $524 from $418.

This kind of arbitrary rate increase is legal, according to the Times, because insurance companies have divided the state into rate zones based on the average cost of local doctors and hospitals. Move into another rate zone, and your premiums can go up. This just looks like another way to gouge citizens in their time of need, and stuff corporate pockets with more of people’s hard-earned money. It has absolutely nothing to do with providing good health care. If California could implement a universal, publicly-financed health system, you would never have to worry about how your premiums will be affected if you relocated. Because your premiums would be $0.

Sylvia@californiaonecare.org

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Should the right to health care be in the Constitution?

December 17th, 2012

When the Affordable Care Act was being debated within the lofty chambers of the Supreme Court earlier this year, I was unhappy that the right to health care in this country was even being debated at all. It should be a given. What right do nine unelected people in black robes have to decide whether 300 million other people should see a doctor when they get sick? I felt that the traditional doctrine of judicial review was completely inappropriate when it came to health care. But then, I thought about all the great civil rights decisions of the 20th century. Where would we be if the Supreme Court hadn’t stepped in then?

Eventually, the Supreme Court ruled (narrowly) in favor of the Obama administration and the ACA. The 5-4 majority upheld the individual mandate’s financial penalty as a tax permissible under the Constitution. The ruling really only established a right to purchase health insurance – not an inalienable right to health care. So the question is this: should the right to health care be added to the Bill of Rights? Would that have made a difference in the outcome of health reform? Had that right been established in the Constitution long ago, would we be a different country today?

The Universal Declaration of Human Rights, of which the United States is a signatory, establishes health care as a basic human right:

Article 25.

(1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

The World Health Organization’s constitution states the following:

The enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being without the distinction of race, religion, political belief, economic or social condition.The constitutions of many countries have some language establishing the right to health care or the duty of the state to provide health services.

A 2004 Cornell University study compared the constitutions of 189 countries and found that about two-thirds have some language addressing health or health care. Many establish the right to health care and/or the duty of the state to provide health services. A sampling from each region:

Brazil

Art. 196. “Health is the right of all and the duty of the State and shall be guaranteed by social and economic policies aimed at reducing the risk of illness and other maladies and by universal and equal access to all activities and services for its promotion, protection and recovery.”

Finland

“The public authorities shall guarantee for everyone, as provided in more detail by an Act, adequate social, health and medical services and promote the health of the population. Moreover, the public authorities shall support families and others responsible for providing for children so that they have the ability to ensure the well-being and personal development of the children.”

Honduras

“The right to the protection of one’s health is hereby recognized. It is everyone’s duty to participate in the promotion and preservation of individual and community health. The State shall maintain a satisfactory environment for the protection of everyone’s health.”

Iraq

“The individual has the right to security, education, health care, and social security. The Iraqi State and its governmental units, including the federal government, the regions, governorates, municipalities, and local administrations, within the limits of their resources and with due regard to other vital needs, shall strive to provide prosperity and employment opportunities to the people.”

Japan

“All people shall have the right to maintain the minimum standards of wholesome and cultured living. In all spheres of life, the State shall use its endeavors for the promotion and extension of social welfare and security, and of public health.”

Poland

“(1) Everyone has the right to health protection. (2) Equal access to health care services, financed from public funds, is assured by public authorities to citizens, irrespective of their material situation. The conditions for and scope of the provision of services are specified by law. (3) Public authorities are obligated to provide special health care to children, pregnant women, handicapped persons and persons of advanced age. (4) Public authorities are obligated to combat epidemic illnesses and prevent the negative health consequences of degradation of the environment. (5) Public authorities shall support the development of physical culture, particularly amongst children and young persons.”

South Africa

“(1) Everyone has the right to have access to—(a) health care services, including reproductive health care; (b) sufficient food and water; and (c) social security, including, if they are unable to support themselves and their dependants, appropriate social assistance. (2) The state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of each of these rights. (3) No one may be refused emergency medical treatment.”

Taiwan

“The State, in order to improve national health, shall establish extensive services for sanitation and health protection, and a system of public medical service.”

However, just because a country’s constitution establishes a right to health care doesn’t mean it always lives up to that promise. Some of the nations with the right to health care written into their constitutions don’t necessarily have advanced hospitals and/or the healthiest populations. These tend to be authoritarian regimes or Third World countries with few resources. Of the countries that don’t have the right to health care in their constitutions, some are First World nations with healthcare systems that rank among the best in the world. For example, the constitution of number one ranked France is silent on the right to health care. The same goes for Canada, whose system is seen as the preferred model for single payer advocates in the United States. The study’s authors concluded that a nation’s commitment to health care has no relation to whether or not healthcare language is in its constitution.

So is it a nation’s culture and history (coupled with enough resources) that makes the difference? Europe’s devastation after World War II set the stage for that continent’s widespread adoption of social democracy, characterized by a robust social safety net. That included a commitment to universal health care. Social democracy was seen as the alternative to the competing ideologies of fascism and communism. On the other hand, America evolved quite differently. The United States was founded on the frontier idea of individual liberty. Colonizing a vast continent where your nearest neighbor could, quite literally, be miles away from you meant the concept of self-reliance was a virtue. This concept combined with America’s historic embrace of Calvinism – the Protestant work ethic and the Christian idea of predestination (success as an indicator of being favored by God) – which gave rise to modern capitalism. America’s history of racial and class strife has also contributed to weak social solidarity. A more conservative judiciary built up over the last 40 years has favored an interpretation of the Constitution that seeks to limit government’s role in public life rather than expand human rights. Hopefully the United States will evolve into a country with a de facto universal right to health care without having to amend its founding document. But, it may have been far easier to implement if that right had been included long ago.

Sylvia@californiaonecare.org

 

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