TODAY marks the beginning of health care coverage under the
Affordable Care Act’s new insurance exchanges, for which two million Americans
have signed up. Now that the individual mandate is officially here, let me begin
with an admission: Obamacare is awful.
That is the dirty little secret many liberals have avoided saying out loud for
fear of aiding the president’s enemies, at a time when the ideal of universal
health care needed all the support it could get. Unfortunately, this meant that
instead of blaming companies like Novartis, which charges leukemia patients
$90,000 annually for the drug Gleevec, or health insurance chief executives like
Stephen Hemsley of UnitedHealth Group, who made nearly $102 million in 2009, for
the sky-high price of American health care, the president’s Democratic
supporters bought into the myth that it was all those people going to get free
colonoscopies and chemotherapy for the fun of it.
I believe Obamacare’s rocky start — clueless planning, a lousy website,
insurance companies raising rates, and the president’s telling people they could
keep their coverage when, in fact, not all could — is a result of one fatal
flaw: The Affordable Care Act is a pro-insurance-industry plan implemented by a
president who knew in his heart that a single-payer, Medicare-for-all model was
the true way to go. When right-wing critics “expose” the fact that President
Obama endorsed a single-payer system before 2004, they’re actually telling the
truth.
What we now call Obamacare was conceived at the Heritage Foundation, a
conservative think tank, and birthed in Massachusetts by Mitt Romney, then the
governor. The president took Romneycare, a program designed to keep the private
insurance industry intact, and just improved some of its provisions. In effect,
the president was simply trying to put lipstick on the dog in the carrier on top
of Mitt Romney’s car. And we knew it.
By 2017, we will be funneling over $100 billion annually to private insurance
companies. You can be sure they’ll use some of that to try to privatize
Medicare.
For many people, the “affordable” part of the Affordable Care Act risks being a
cruel joke. The cheapest plan available to a 60-year-old couple making $65,000 a
year in Hartford, Conn., will cost $11,800 in annual premiums. And their
deductible will be $12,600. If both become seriously ill, they might have to pay
almost $25,000 in a single year. (Pre-Obamacare, they could have bought
insurance that was cheaper but much worse, potentially with unlimited
out-of-pocket costs.)
And yet — I would be remiss if I didn’t say this — Obamacare is a godsend. My
friend Donna Smith, who was forced to move into her daughter’s spare room at age
52 because health problems bankrupted her and her husband, Larry, now has cancer
again. As she undergoes treatment, at least she won’t be in terror of losing
coverage and becoming uninsurable. Under Obamacare, her premium has been cut in
half, to $456 per month.
Let’s not take a victory lap yet, but build on what there is to get what we
deserve: universal quality health care.
Those who live in red states need the benefit of Medicaid expansion. It may have
seemed like smart politics in the short term for Republican governors to grab
the opportunity offered by the Supreme Court rulings that made Medicaid
expansion optional for states, but it was long-term stupid: If those 20 states
hold out, they will eventually lose an estimated total of $20 billion in federal
funds per year — money that would be going to hospitals and treatment.
In blue states, let’s lobby for a public option on the insurance exchange — a
health plan run by the state government, rather than a private insurer. In
Massachusetts, State Senator James B. Eldridge is trying to pass a law that
would set one up. Some counties in California are also trying it. Montana came
up with another creative solution. Gov. Brian Schweitzer, a Democrat who just
completed two terms, set up several health clinics to treat state workers, with
no co-pays and no deductibles. The doctors there are salaried employees of the
state of Montana; their only goal is their patients’ health. (If this sounds too
much like big government to you, you might like to know that Google, Cisco and
Pepsi do exactly the same.)
All eyes are on Vermont’s plan for a single-payer system, starting in 2017. If
it flies, it will change everything, with many states sure to follow suit by
setting up their own versions. That’s why corporate money will soon flood into
Vermont to crush it. The legislators who’ll go to the mat for this will need all
the support they can get: If you live east of the Mississippi, look up the bus
schedule to Montpelier.
So let’s get started. Obamacare can’t be fixed by its namesake. It’s up to us to
make it happen.
WASHINGTON — Millions of Americans will begin receiving health
insurance coverage under the Affordable Care Act on Wednesday after years of
contention and a rollout hobbled by delays and technical problems. The
decisively new moment in the effort to overhaul the country’s health care system
will test the law’s central premise: that extending coverage to far more
Americans will improve the nation’s health and help many avoid crippling medical
bills.
Starting Wednesday, health insurance companies can no longer deny coverage to
people with pre-existing conditions and cannot charge higher premiums to women
than to men for the same coverage. In most cases, insurers must provide a
standard set of benefits prescribed by federal law and regulations. And they
cannot set dollar limits on what they spend on “essential health benefits” for a
policyholder.
Though this is a milestone for the law, it is unlikely to end the constant
partisan battles that began even before its passage nearly four years ago. Late
Tuesday, Justice Sonia Sotomayor temporarily blocked the Obama administration
from forcing some religious-affiliated groups to provide coverage of birth
control or face penalties.
Doctors, hospitals and pharmacists say consumers could initially experience some
delays and difficulties as they try to use their new insurance.
“I feel a huge sense of relief,” said Katie R. Norvell, 33, a music therapist in
St. Louis, who has been uninsured for three and a half years and has a
pre-existing gynecological condition, endometriosis. She signed up Dec. 22 for a
midlevel silver plan offered by Coventry Health Care, owned by Aetna, and has
already begun making doctor’s appointments.
“With coverage,” she said, “I can be my best self. Health insurance won’t
control my job choices.”
A series of last-minute changes in rules and deadlines for people to sign up and
pay premiums have left less time for insurers to activate coverage and issue
identification cards, adding to the uncertainty caused by the troubled rollout
of the health exchange.
“There will be a lot of confusion,” said Brian D. Caswell, a former president of
the Kansas Pharmacists Association, who owns a drugstore in rural Baxter
Springs. “Many people will get insurance cards, but will not have a clue what’s
covered, what’s not covered and what they are supposed to pay.”
Others may find their insurance companies have no record of their enrollment
because the information was not sent by the online marketplaces where they
signed up for coverage. Some of the newly insured may have trouble finding
doctors who accept their health plans, many of which are restricting the number
of providers in their networks to hold down premium costs.
And as newly insured consumers sort through details of their coverage, others
will find that they are no longer insured by their old plans, which were
canceled or discontinued because they did not comply with coverage requirements
of the law. Of several million who received cancellation notices, most should be
able to obtain other coverage, the Obama administration says.
Toby Mitchell, a self-employed recruiter in Napa, Calif., said she considered
forgoing insurance when Kaiser Permanente canceled her longtime plan because it
did not meet the requirements of the new law. But in the end, Ms. Mitchell, 60,
decided to buy a bronze plan. Her monthly premiums will now be $575, compared
with $288 on her old plan.
“I was really shocked,” she said. “It’s just painful because there are other
things I’d rather do with that money, especially when it’s hard to see the value
is there for me personally.”
Kathleen Sebelius, the secretary of health and human services, said Tuesday that
more than 2.1 million people had selected private health plans, about half of
them through the federal insurance exchange and half in marketplaces run by
states. In addition, hundreds of thousands of Americans have enrolled in
Medicaid, the government health insurance program for low-income people, which
about half the states have decided to expand under the law.
Federal officials said they did not know how many subscribers were replacing
insurance policies canceled because they did not meet coverage standards.
Subscribers will be entitled to coverage starting Wednesday if they pay the
first month’s premium by the due date, Jan. 10 for many insurers.
Ana Yngelmo, a 37-year-old immigration lawyer in Kearny, N.J., said she would
use her new insurance to start seeing a primary care doctor and to get her first
mammogram. Ms. Yngelmo, who said she had been uninsured for 16 months, chose a
platinum plan with generous coverage and no deductible. She qualified for a
tax-credit subsidy that will lower her monthly premium to $350 — still
expensive, she said, but worth it for peace of mind.
“For me, insurance is about those tragic situations where you need some terrible
surgery or get cancer,” said Ms. Yngelmo, who recently started her own law
practice. “I just want to make sure that in those situations, I can go to
whichever doctor I want and it will be covered.”
In some states, doctors are preparing for an influx of newly insured patients.
Dr. Michael J. Pramenko, a family doctor who is executive director of Primary
Care Partners in Grand Junction, Colo., said his group had opened a satellite
clinic, added several doctors and extended office hours in the expectation that
“we will be seeing more patients.”
Cynthia Taueg, a vice president of the St. John Providence Health System in
Warren, Mich., near Detroit, said she expected a gradual increase in patients
because “a majority of the uninsured in our service area will be eligible for
Medicaid” or for subsidized private insurance through the exchange.
Scott Keefer, a vice president of Blue Cross and Blue Shield of Minnesota,
voiced a concern expressed by many insurers: Some consumers will go to doctors,
hospitals and drugstores believing they have enrolled in a health plan, only to
find that the company has no record of them.
That is what happened in January 2006 when a prescription drug benefit was added
to Medicare. Many low-income people left pharmacies empty-handed after being
told they would be responsible for co-payments of $100, $250 or more.
Pharmacists extended credit to some customers. To help their residents, states
paid drug claims that should have been paid by Medicare.
The Affordable Care Act is far more complicated, as it relies on a larger number
of providers to deliver a much wider array of benefits.
Since the federal exchange opened Oct. 1, officials have grappled with problems
in the quality of enrollment data. Insurers said the government initially
provided them incorrect or incomplete information on some enrollees, and no
information at all about some who enrolled online.
Insurers and government officials are taking steps to reduce confusion. Aetna,
for example, has posted information on its website answering questions likely to
bedevil consumers in the next few weeks. The insurance exchanges in California
and Connecticut are about to run advertisements explaining the Jan. 10 premium
deadline.
Peter V. Lee, the executive director of California’s insurance exchange, said
that while logistical problems would surely pop up, they would matter less and
less as people started using their benefits.
But John G. Lee, an insurance agent in Fredericksburg, Va., said that health
insurance was a complicated product and that people did not always understand
what they were buying online. He said he worried that consumers would be upset
when they discovered that certain medicines were not covered by their plans, or
that their doctors were excluded from the approved providers.
William Hannah of Cleveland, Ga., who has been uninsured for about 20 years,
said he was looking forward to using his new coverage to see a specialist for
lower back problems and numbness in his limbs. But Mr. Hannah said he had
canceled the first plan he signed up for, from Blue Cross and Blue Shield of
Georgia, after realizing it would not pay for treatment at the medical center
closest to his home. He switched to a silver plan from Alliant Health Plans and
qualified for a tax subsidy that will lower his premium costs to $56 a month.
“It’s very affordable to me, thanks to the tax credit,” said Mr. Hannah, 63, who
said he had retired early to care for his ailing mother. “On the other hand,
there’s the limitation of what the insurance companies are actually paying for
and what institutions they are paying for.”
November 2, 2013
The New York Times
By NICHOLAS D. KRISTOF
THE biggest health care crisis in America right now is not the
inexcusably messy rollout of Obamacare.
No, far more serious is the kind of catastrophe facing people like Richard
Streeter, 47, a truck driver and recreational vehicle repairman in Eugene, Ore.
His problem isn’t Obamacare, but a tumor in his colon that may kill him because
Obamacare didn’t come quite soon enough.
Streeter had health insurance for decades, but beginning in 2008 his employer no
longer offered it as an option. He says he tried to buy individual health
insurance but, as a lifelong smoker in his late 40s, couldn’t find anything
affordable — so he took a terrible chance and did without.
At the beginning of this year, Streeter began to notice blood in his bowel
movements and discomfort in his rectum. Because he didn’t have health insurance,
he put off going to the doctor and reassured himself it was just irritation from
sitting too many hours.
“I thought it was driving a truck and being on your keister all day,” he told
me. Finally, the pain became excruciating, and he went to a cut-rate clinic
where a doctor, without examining him, suggested it might be hemorrhoids.
By September, Streeter couldn’t stand the pain any longer. He went to another
doctor, who suggested a colonoscopy. The cheapest provider he could find was Dr.
J. Scott Gibson, a softhearted gastroenterologist who told him that if he didn’t
have insurance he would do it for $300 down and $300 more whenever he had the
money.
Streeter made the 100-mile drive to Dr. Gibson’s office in McMinnville, Ore. —
and received devastating news. Dr. Gibson had found advanced colon cancer.
“It was heartbreaking to see the pain on his face,” Dr. Gibson told me. “It got
me very angry with people who insist that Obamacare is a train wreck, when the
real train wreck is what people are experiencing every day because they can’t
afford care.”
Dr. Gibson says that Streeter is the second patient he has had this year who put
off getting medical attention because of lack of health insurance and now has
advanced colon cancer.
So, to those Republicans protesting Obamacare: You’re right that there are
appalling problems with the website, but they will be fixed. Likewise, you’re
right that President Obama misled voters when he said that everyone could keep
their insurance plan because that’s now manifestly not true (although they will
be able to get new and better plans, sometimes for less money).
But how about showing empathy also for a far larger and more desperate group:
The nearly 50 million Americans without insurance who play health care Russian
roulette as a result. FamiliesUSA, a health care advocacy group that supports
Obamacare, estimated last year that an American dies every 20 minutes for lack
of insurance.
It has been a year since my college roommate, Scott Androes, died of prostate
cancer, in part because he didn’t have insurance and thus didn’t see a doctor
promptly. Scott fully acknowledged that he had made a terrible mistake in
economizing on insurance, but, in a civilized country, is this a mistake that
people should die from?
“Website problems are a nuisance,” Dr. Gibson said. “Life and death is when you
need care and can’t afford to get it.”
The Institute of Medicine and the National Research Council this year ranked the
United States health care system last or near last in several categories among
17 countries studied. The Commonwealth Fund put the United States dead last of
seven industrialized countries in health care performance. And Bloomberg
journalists ranked the United States health care system No. 46 in efficiency
worldwide, behind Romania and Iran.
The reason is simple: While some Americans get superb care, tens of millions
without insurance get marginal care. That’s one reason life expectancy is
relatively low in America, and child mortality is twice as high as in some
European countries. Now that’s a scandal.
Yet about half the states are refusing to expand Medicaid to cover more
uninsured people — because they don’t trust Obamacare and want it to fail. The
result will be more catastrophes like Streeter’s.
“I am tired of being the messenger of death,” said Dr. Gibson. “Sometimes it’s
unavoidable. But when people come in who might have been saved if they could
have afforded care early on, then to have to tell them that they have a
potentially fatal illness — I’m very tired of that.”
Streeter met with a radiologist on Thursday and is bracing for an arduous and
impoverishing battle with the cancer. There’s just one bright spot: He signed up
for health care insurance under Obamacare, to take effect on Jan. 1.
For him, the tragedy isn’t that the Obamacare rollout has been full of glitches,
but that it may have come too late to save his life.
October 2, 2013
The New York Times
By SABRINA TAVERNISE
and ROBERT GEBELOFF
A sweeping national effort to extend health coverage to
millions of Americans will leave out two-thirds of the poor blacks and single
mothers and more than half of the low-wage workers who do not have insurance,
the very kinds of people that the program was intended to help, according to an
analysis of census data by The New York Times.
Because they live in states largely controlled by Republicans that have declined
to participate in a vast expansion of Medicaid, the medical insurance program
for the poor, they are among the eight million Americans who are impoverished,
uninsured and ineligible for help. The federal government will pay for the
expansion through 2016 and no less than 90 percent of costs in later years.
Those excluded will be stranded without insurance, stuck between people with
slightly higher incomes who will qualify for federal subsidies on the new health
exchanges that went live this week, and those who are poor enough to qualify for
Medicaid in its current form, which has income ceilings as low as $11 a day in
some states.
People shopping for insurance on the health exchanges are already discovering
this bitter twist.
“How can somebody in poverty not be eligible for subsidies?” an unemployed
health care worker in Virginia asked through tears. The woman, who identified
herself only as Robin L. because she does not want potential employers to know
she is down on her luck, thought she had run into a computer problem when she
went online Tuesday and learned she would not qualify.
At 55, she has high blood pressure, and she had been waiting for the law to take
effect so she could get coverage. Before she lost her job and her house and had
to move in with her brother in Virginia, she lived in Maryland, a state that is
expanding Medicaid. “Would I go back there?” she asked. “It might involve me
living in my car. I don’t know. I might consider it.”
The 26 states that have rejected the Medicaid expansion are home to about half
of the country’s population, but about 68 percent of poor, uninsured blacks and
single mothers. About 60 percent of the country’s uninsured working poor are in
those states. Among those excluded are about 435,000 cashiers, 341,000 cooks and
253,000 nurses’ aides.
“The irony is that these states that are rejecting Medicaid expansion — many of
them Southern — are the very places where the concentration of poverty and lack
of health insurance are the most acute,” said Dr. H. Jack Geiger, a founder of
the community health center model. “It is their populations that have the
highest burden of illness and costs to the entire health care system.”
The disproportionate impact on poor blacks introduces the prickly issue of race
into the already politically charged atmosphere around the health care law. Race
was rarely, if ever, mentioned in the state-level debates about the Medicaid
expansion. But the issue courses just below the surface, civil rights leaders
say, pointing to the pattern of exclusion.
Every state in the Deep South, with the exception of Arkansas, has rejected the
expansion. Opponents of the expansion say they are against it on exclusively
economic grounds, and that the demographics of the South — with its large share
of poor blacks — make it easy to say race is an issue when it is not.
In Mississippi, Republican leaders note that a large share of people in the
state are on Medicaid already, and that, with an expansion, about a third of the
state would have been insured through the program. Even supporters of the health
law say that eventually covering 10 percent of that cost would have been onerous
for a predominantly rural state with a modest tax base.
“Any additional cost in Medicaid is going to be too much,” said State Senator
Chris McDaniel, a Republican, who opposes expansion.
The law was written to require all Americans to have health coverage. For lower
and middle-income earners, there are subsidies on the new health exchanges to
help them afford insurance. An expanded Medicaid program was intended to cover
the poorest. In all, about 30 million uninsured Americans were to have become
eligible for financial help.
But the Supreme Court’s ruling on the health care law last year, while upholding
it, allowed states to choose whether to expand Medicaid. Those that opted not to
leave about eight million uninsured people who live in poverty ($19,530 for a
family of three) without any assistance at all.
Poor people excluded from the Medicaid expansion will not be subject to fines
for lacking coverage. In all, about 14 million eligible Americans are uninsured
and living in poverty, the Times analysis found.
The federal government provided the tally of how many states were not expanding
Medicaid for the first time on Tuesday. It included states like New Hampshire,
Ohio, Pennsylvania and Tennessee that might still decide to expand Medicaid
before coverage takes effect in January. If those states go forward, the number
would change, but the trends that emerged in the analysis would be similar.
Mississippi has the largest percentage of poor and uninsured people in the
country — 13 percent. Willie Charles Carter, an unemployed 53-year-old whose
most recent job was as a maintenance worker at a public school, has had problems
with his leg since surgery last year.
His income is below Mississippi’s ceiling for Medicaid — which is about $3,000 a
year — but he has no dependent children, so he does not qualify. And his income
is too low to make him eligible for subsidies on the federal health exchange.
“You got to be almost dead before you can get Medicaid in Mississippi,” he said.
He does not know what he will do when the clinic where he goes for medical care,
the Good Samaritan Health Center in Greenville, closes next month because of
lack of funding.
“I’m scared all the time,” he said. “I just walk around here with faith in God
to take care of me.”
The states that did not expand Medicaid have less generous safety nets: For
adults with children, the median income limit for Medicaid is just under half of
the federal poverty level — or about $5,600 a year for an individual — while in
states that are expanding, it is above the poverty line, or about $12,200,
according to the Kaiser Family Foundation. There is little or no coverage of
childless adults in the states not expanding, Kaiser said.
The New York Times analysis excluded immigrants in the country illegally and
those foreign-born residents who would not be eligible for benefits under
Medicaid expansion. It included people who are uninsured even though they
qualify for Medicaid in its current form.
Blacks are disproportionately affected, largely because more of them are poor
and living in Southern states. In all, 6 out of 10 blacks live in the states not
expanding Medicaid. In Mississippi, 56 percent of all poor and uninsured adults
are black, though they account for just 38 percent of the population.
Dr. Aaron Shirley, a physician who has worked for better health care for blacks
in Mississippi, said that the history of segregation and violence against blacks
still informs the way people see one another, particularly in the South, making
some whites reluctant to support programs that they believe benefit blacks.
That is compounded by the country’s rapidly changing demographics, Dr. Geiger
said, in which minorities will eventually become a majority, a pattern that has
produced a profound cultural unease, particularly when it has collided with
economic insecurity.
Dr. Shirley said: “If you look at the history of Mississippi, politicians have
used race to oppose minimum wage, Head Start, all these social programs. It’s a
tactic that appeals to people who would rather suffer themselves than see a
black person benefit.”
Opponents of the expansion bristled at the suggestion that race had anything to
do with their position. State Senator Giles Ward of Mississippi, a Republican,
called the idea that race was a factor “preposterous,” and said that with the
demographics of the South — large shares of poor people and, in particular, poor
blacks — “you can argue pretty much any way you want.”
The decision not to expand Medicaid will also hit the working poor. Claretha
Briscoe earns just under $11,000 a year making fried chicken and other fast food
at a convenience store in Hollandale, Miss., too much to qualify for Medicaid
but not enough to get subsidies on the new health exchange. She had a heart
attack in 2002 that a local hospital treated as part of its charity care
program.
“I skip months on my blood pressure pills,” said Ms. Briscoe, 48, who visited
the Good Samaritan Health Center last week because she was having chest pains.
“I buy them when I can afford them.”
About half of poor and uninsured Hispanics live in states that are expanding
Medicaid. But Texas, which has a large Hispanic population, rejected the
expansion. Gladys Arbila, a housekeeper in Houston who earns $17,000 a year and
supports two children, is under the poverty line and therefore not eligible for
new subsidies. But she makes too much to qualify for Medicaid under the state’s
rules. She recently spent 36 hours waiting in the emergency room for a searing
pain in her back.
“We came to this country, and we are legal and we work really hard,” said Ms.
Arbila, 45, who immigrated to the United States 12 years ago, and whose son is a
soldier in Afghanistan. “Why we don’t have the same opportunities as the
others?”
December
16, 2011
The New York Times
By ROBERT PEAR
WASHINGTON
— In a major surprise on the politically charged new health care law, the Obama
administration said Friday that it would not define a single uniform set of
“essential health benefits” that must be provided by insurers for tens of
millions of Americans. Instead, it will allow each state to specify the benefits
within broad categories.
The move would allow significant variations in benefits from state to state,
much like the current differences in state Medicaid programs and the Children’s
Health Insurance Program.
By giving states the discretion to specify essential benefits, the Obama
administration sought to deflect one of the most powerful arguments made by
Republican critics of President Obama’s health care overhaul — that it was
imposing a rigid, bureaucrat-controlled health system on Americans and
threatening the quality of care. Opponents say that the federal government is
forcing a one-size-fits-all standard for health insurance and usurping state
authority to regulate the industry.
This criticism has inspired legal challenges to the new law — with the Supreme
Court set to decide next year whether the government can require Americans to
buy health insurance — and helps explain why public opinion of the law remains
deeply divided.
The law is looming as a central issue in the 2012 presidential race, with
Republican presidential candidates being evaluated on the strength of their
opposition to it. The announcement by the administration follows its decision
this year to jettison a program created in the law to provide long-term care
insurance, a move that disappointed liberal backers of the program championed by
the late Senator Edward M. Kennedy.
The action Friday prompted questions among supporters of the new health care
law. Prof. Timothy S. Jost, an expert on health law at Washington and Lee
University, said, “The new bulletin perpetuates uncertainty about what benefits
an insurer will be required to cover under the Affordable Care Act.” From the
consumer’s point of view, Professor Jost added, “I wish the Department of Health
and Human Services had signaled that there would be more uniformity and less
flexibility.”
Chris Jacobs, a health policy analyst for Senate Republicans, said the new
policy “gives states the flexibility to impose more benefit mandates, not
fewer,” and would lead to higher insurance premiums, contrary to what Mr. Obama
promised in the 2008 campaign.
The new law lists 10 categories of “essential health benefits” that must be
provided by insurance offered in the individual and small-group markets,
starting in January 2014. These include preventive care, emergency services,
maternity care, hospital and doctors’ services, and prescription drugs.
Kathleen Sebelius, the secretary of health and human services, had been expected
to provide details of what services and benefits must be provided in each
category. Instead, in an insurance bulletin issued Friday, Ms. Sebelius said the
federal government would respect the states’ role, giving them “the flexibility
to design coverage options that meet their unique needs.”
Under this approach, each state would designate an existing health insurance
plan as a benchmark. The benefits provided by that plan would be deemed
essential, and all insurers would have to provide benefits of the same or
greater value. Plans could modify coverage within a benefit category so long as
they did not reduce the value of coverage.
Each state would choose one of the following health insurance plans as a
benchmark:
¶ One of the three largest small-group plans in the state.
¶ One of the three largest health plans for state employees.
¶ One of the three largest national health insurance options for federal
employees.
¶ The largest health maintenance organization operating in the state’s
commercial insurance market.
While working on health care legislation in 2009 and 2010, Congress spent many
hours debating how to balance the goals of comprehensive benefits and affordable
coverage.
Sherry A. Glied, an assistant secretary of health and human services, said the
administration’s approach “builds off the experience of today’s marketplace and
will minimize disruption to it.”
Steven B. Larsen, deputy administrator of the federal Centers for Medicare and
Medicaid Services, said, “The state is always in control of what the essential
benefits package is in that state.”
In recent months, federal health officials have taken a number of steps that
could help inoculate Mr. Obama against charges that he was foisting a rigid,
inflexible model of health care on the nation.
Several states have received temporary waivers from tough new federal standards
that require insurers to spend more of each premium dollar for the benefit of
consumers. Federal officials have also provided temporary exemptions from some
provisions of the law for some employers and labor unions offering bare-bones
coverage.
The new law says that the scope of essential health benefits must be “equal to
the scope of benefits provided under a typical employer plan.” But the law
itself specifically requires some benefits not widely available in
employer-sponsored health plans, like “habilitative services” for people with
conditions like autism or cerebral palsy.
Under the new law, each state is supposed to have an insurance exchange or
marketplace where consumers can compare options and buy insurance. Health plans
must offer the essential benefits, regardless of whether the coverage is sold
inside or outside the exchange.
The government will offer subsidies to help low-income people buy insurance
through exchanges. The subsidies will help cover the cost of essential benefits.
States can require insurers to provide additional benefits, but states will have
to pay much of the extra cost.
The law also says that the definition of essential benefits must not
“discriminate against individuals because of their age, disability or expected
length of life.”
Sara
Rosenbaum, a professor of health law and policy
at George
Washington University,
said the new
bulletin “does not offer any guidance
September
27, 2011
The New York Times
By REED ABELSON
The cost
of health insurance for many Americans this year climbed more sharply than in
previous years, outstripping any growth in workers’ wages and adding more
uncertainty about the pace of rising medical costs.
A new study by the Kaiser Family Foundation, a nonprofit research group that
tracks employer-sponsored health insurance on a yearly basis, shows that the
average annual premium for family coverage through an employer reached $15,073
in 2011, an increase of 9 percent over the previous year.
“The open question is whether that’s a one-time spike or the start of a period
of higher increases,” said Drew Altman, the chief executive of the Kaiser
foundation.
The steep increase in rates is particularly unwelcome at a time when the economy
is still sputtering and unemployment continues to hover at about 9 percent. Many
businesses cite the high cost of coverage as a factor in their decision not to
hire, and health insurance has become increasingly unaffordable for more
Americans. Over all, the cost of family coverage has about doubled since 2001,
when premiums averaged $7,061, compared with a 34 percent gain in wages over the
same period.
How much the new federal health care law pushed by President Obama is affecting
insurance rates remains a point of debate, with some analysts suggesting that
insurers have raised prices in anticipation of new rules that would, in 2012,
require them to justify any increase of more than 10 percent.
In addition to increases caused by insurers getting ahead of potential costs,
some of the law’s provisions that are already in effect -- like coverage for
adult children up to 26 years of age and prevention services like mammogram
screening -- have contributed to higher expenses for some employers.
The Kaiser survey includes both big and small companies using employer-sponsored
coverage representing about 60 percent of all insured Americans of working age.
The annual growth in premiums, according to the survey, had slowed in recent
years to 5 percent, rising just 3 percent in 2010, in part due to the lingering
effects of the recession. After years of double-digit increases, the moderation
was a welcome relief.
The unexpected increase in premiums raises questions about whether health care
costs are, in fact, stabilizing at all, as people have postponed going to the
doctor or dentist and have put off expensive procedures. “No one quite knows,”
said Mr. Altman.
Throughout this year, major health insurers have defended higher premiums — and
higher profits — saying that their expenses would rise once the economy
recovered and people believed they could again afford medical care. The
struggling economy will probably keep suppressing demand for medical care,
particularly as people pay a larger share of their own medical bills through
higher deductibles and co-payments, according to benefits consultants and
others. About three-quarters of workers now pay part of the bill when they go
see a doctor, and nearly a third have a deductible of at least $1,000 if they
have single coverage, up from just one in 10 in 2006, according Kaiser.
Although demand for care appears to be growing relatively slowly, insurers and
benefit consultants also say prices for medical care continue to climb as
prescription drug makers and hospitals charge more. “If they’re a popular brand
or anchor hospital, they’re going to negotiate a significant increase if they
can,” said Edward A. Kaplan, a benefits expert with the Segal Company, which
recently surveyed insurers about medical costs.
The question for employers and insurers is whether the lackluster economy, as
well as recent efforts by employer and insurers to better manage the medical
care of workers, will keep premiums increasing at a more moderate level. Early
responses to a survey by Mercer, a consulting firm, suggest employers are
expecting the cost of providing health benefits to go up about 5 percent next
year, according to Beth Umland, Mercer’s director of research for health and
benefits. These companies may be factoring in the more pessimistic view of the
economy, she said, where any recovery seems further off than it did a few months
ago.
Employers are reporting that their workers are using less medical care, said Ms.
Umland, but they and insurers have been slow to estimate costs that reflect the
lower demand. “It always takes a while for underwriting to catch up with
reality,” she said.
Some small business say they expect their premiums to moderate, but only because
of changes in their work force — partly caused by younger, healthier employees —
that make it less likely that the companies will incur high medical claims. “Up
until last year, we saw very hefty increases -- double digits,” said Heather
Gombos, an executive for R. M. Jones & Company and affiliated businesses in New
Britain, Conn., a group that insures about 50 of its 80 employees.
Family coverage is now running $12,000 a year, Ms. Gombos said, and she is
waiting to see what rate increases her insurer proposes for the coming year. She
thinks premiums will not rise as sharply in 2012. “What it comes down to is
we’ve had some good luck,” she said.
Some businesses say they anticipate relief from higher costs in the coming year
for a variety of reasons. At Ogilvy & Mather, the New York advertising firm, the
company believes its efforts to encourage wellness and better oversee its
employees’ health through an on-site medical clinic are paying off. "We are not
anticipating any cost increase for employer and employee," said Gerri Stone, the
senior partner who oversees the firm’s benefits strategy.
Ms. Stone acknowledged that the firm’s 3,600 employees were relatively young and
healthy, helping it avoid some of the sharp increases experienced by other
businesses. "We’ve never gone into the double digits," she said. Family coverage
runs about $16,000 a year, she said.
Insurers and benefits consultants say, however, it is difficult to predict
whether health care demand will again take off when the economy rebounds or
whether some other factor is at play. "We’ve seen a moderation in the increase
in health services, particularly in discretionary services," said Tom Richards,
an executive with Cigna. While he attributes some of the moderation to the poor
economy, he says the increase in cost-sharing by employees and programs that
more closely monitor their health could be having a more permanent impact.
The question, he said, is "what is the economy going to be and what is the new
normal."
Obama administration officials argue that new regulations are forcing insurers
to be more circumspect about raising rates. Insurers seeking to raise premiums
next year by more than the 10 percent maximum will have to publicly justify
their rate increases, and the new law requires the companies to spend at least
80 cents of every dollar they collect in premiums on medical care. If they end
up taking too much in premiums, they will have to refund the money to consumers.
But employers and others say much more still needs to be done to control overall
costs, especially when workers’ wages are essentially flat. Of the $15,073 in
average premiums paid for family coverage, Kaiser found that employees paid
$4,129 towards the cost, in addition to whatever out-of-pocket costs they
shouldered.
“We’re going to continue to have this yawning gap,” said Helen Darling, the
chief executive of the National Business Group on Health, which represents
employers that provide health coverage to their workers. Health care costs
continue to climb much faster than overall inflation, she noted.
“The health economy acts as if it’s a boom economy,” she said.
September
21, 2011
The New York Times
By KEVIN SACK
Young
adults, long the group most likely to be uninsured, are gaining health coverage
faster than expected since the 2010 health law began allowing parents to cover
them as dependents on family policies.
Three new surveys, including two released on Wednesday, show that adults under
26 made significant and unique gains in insurance coverage in 2010 and the first
half of 2011. One of them, by the Centers for Disease Control and Prevention,
estimates that in the first quarter of 2011 there were 900,000 fewer uninsured
adults in the 19-to-25 age bracket than in 2010.
This was despite deep hardship imposed by the recession, which has left young
adults unemployed at nearly double the rate of older Americans, with incomes
sliding far faster than the national average.
The Obama administration, intent on showcasing the benefits of a law that has
been pilloried by Republicans, attributes the improvement to a provision of the
Affordable Care Act that permits parents to cover dependents up to their 26th
birthdays. Until that measure took effect one year ago this week, children
typically had to roll off their parents’ family policies at 18 or 21 or when
they left college.
Some twentysomethings adopted a posture of “young invincibility,” forgoing
health insurance they could afford while gambling that they would not incur
steep medical expenses. But others, like Kylie R. Logsdon, who credits the
provision for enabling her heart transplant in July, were living with chronic or
life-threatening conditions and had no prospects for coverage.
“I honestly don’t know what we would have done,” said Ms. Logsdon, 23, of
Gerlaw, Ill., who gained coverage under her father’s policy after losing her job
as a legal secretary. “There was no way we could have afforded it. I might not
be here right now.”
Last week, the Census Bureau reported that the share of young adults without
health insurance dropped in 2010 by 2 percentage points, to 27.2 percent. That
decline meant that 502,000 fewer 18- to 24-year-olds were uninsured. Most gained
coverage through private policies, not government programs.
For every other age group, the proportion without insurance increased, as high
unemployment and contractions in employer coverage continued to take their toll.
For the first time in more than 10 years, 18- to 24-year-olds were not the least
insured group, having been overtaken by those 25 to 34.
Kathleen Sebelius, the secretary of health and human services, accentuated the
silver lining in an otherwise grim census poverty report by declaring: “The
Affordable Care Act is working.”
On Wednesday, the C.D.C. released its survey showing that the trend might have
accelerated in the first quarter of 2011. That report, the National Health
Interview Survey, which differs in methodology from the census count, estimates
that 900,000 fewer adults ages 19 to 25 were uninsured in the first quarter of
this year than in 2010. Also released Wednesday, a Gallup survey found similar
rates in the second quarter of 2011.
The Department of Health and Human Services had projected last year that 650,000
uninsured would gain coverage in 2011 because of the provision.
Although cause and effect have not been proved, government officials and health
industry analysts said they could not imagine another explanation for the
change. In the census numbers, young adults were the only age bracket with an
increasing share insured by employers (albeit presumably their parents’
employers).
“It would be hard to construe it to be anything but the Affordable Care Act,”
said Mark F. Olson, a senior actuary with Towers Watson, the human resources
consulting firm.
There have been no studies of the provision’s impact on cost. But Mr. Olson and
several insurance industry spokesmen credited it for raising enrollments and
premiums by between 1 percent and 3 percent at many firms.
“It’s a basic principle of economics that when more benefits are added to a
policy or more people are covered under that policy there are additional costs
incurred,” said Robert Zirkelbach, a spokesman for America’s Health Insurance
Plans, the industry trade group. “The cost impact is even greater to the extent
‘adverse selection’ occurs, meaning that only people who need health care
services choose to enroll in their parents’ plan.”
The dependent coverage provision allows parents to insure adult children even if
the children are married. Children are not eligible if they have an offer of
employer-based coverage.
Although the provision did not take effect until Sept. 23, many insurers
voluntarily extended their dependent coverage months earlier. A majority of
states had recently passed similar laws, but they had varying age limits and did
not apply to some large insurance plans.
Advocacy groups have worked assiduously to educate students about the new
provision. One of the groups, Young Invincibles, is running a campaign this week
on 16 college campuses under the inevitable banner of “Friends With Benefits.”
Miriam A. Brand, a senior at the University of Maryland, said it gave her
profound peace of mind to know she could remain on her father’s group insurance
policy for several years while attending graduate school or searching for a
first job, preferably in counseling. Ms. Brand, 22, has been managing Type 1
diabetes since she was 6, and she said her medications and supplies cost at
least $8,000 a year.
“I’m not like most college students,” Ms. Brand said. “I don’t have the luxury
of putting medical care to the wayside. Now I have the gift of time in finding a
job in this scary job market.”
Ms. Sebelius reinforced that point. “In a world where great inventors,
entrepreneurs and C.E.O.’s can be young or old,” she told reporters on
Wednesday, “we can’t take the chance that the next Facebook will never happen
because its creator took a desk job just to get health insurance.”
The young adults provision is one of several measures in the health law designed
as a stopgap until 2014, when the number of uninsured is expected to drop
significantly.
Providing the act is not struck down by the Supreme Court or repealed by
Congress, most Americans at that point will be required to obtain insurance.
Pre-existing condition exclusions will be eliminated for adults, Medicaid
eligibility will be expanded and government subsidies will make private coverage
more affordable for many.
Not all of the stopgap measures have proved as popular as young adult coverage.
The pre-existing condition insurance plans created under the law were projected
to cover 375,000 otherwise uninsurable people in 2010. Only 30,000 had signed up
as of July.
Because entry-level jobs frequently do not have health benefits, and individual
policies can be unaffordable on a starting salary, the rate of young adults
without coverage is nearly double the national average. A Commonwealth Fund
survey found that 45 percent of young adults reported delaying medical care
because of cost in 2010, up from 32 percent in 2001.
The
nation’s major health insurers are barreling into a third year of record
profits, enriched in recent months by a lingering recessionary mind-set among
Americans who are postponing or forgoing medical care.
The UnitedHealth Group, one of the largest commercial insurers, told analysts
that so far this year, insured hospital stays actually decreased in some
instances. In reporting its earnings last week, Cigna, another insurer, talked
about the “low level” of medical use.
Yet the companies continue to press for higher premiums, even though their
reserve coffers are flush with profits and shareholders have been rewarded with
new dividends. Many defend proposed double-digit increases in the rates they
charge, citing a need for protection against any sudden uptick in demand once
people have more money to spend on their health, as well as the rising price of
care.
Even with a halting economic recovery, doctors and others say many people are
still extremely budget-conscious, signaling the possibility of a fundamental
change in Americans’ appetite for health care.
“I am noticing my patients with insurance are more interested in costs,” said
Dr. Jim King, a family practice physician in rural Tennessee. “Gas prices are
going up, food prices are going up. They are deciding to put some of their
health care off.” A patient might decide not to drive the 50 miles necessary to
see a specialist because of the cost of gas, he said.
But Dr. King said patients were also being more thoughtful about their needs.
Fewer are asking for an MRI as soon as they have a bad headache. “People are
realizing that this is my money, even if I’m not writing a check,” he said.
For someone like Shannon Hardin of California, whose hours at a grocery store
have been erratic, there is simply no spare cash to see the doctor when she
isn’t feeling well or to get the $350 dental crowns she has been putting off
since last year. Even with insurance, she said, “I can’t afford to use it.”
Delaying care could keep utilization rates for insurers low through the rest of
the year, according to Charles Boorady, an analyst for Credit Suisse. “The big
question is whether it is going to stay weak or bounce back,” he said. “Nobody
knows.”
Significant increases in how much people have to pay for their medical care may
prevent a solid rebound. In recent years, many employers have sharply reduced
benefits, while raising deductibles and co-payments so people have to reach
deeper into their pockets.
In 2010, about 10 percent of people covered by their employer had a deductible
of at least $2,000, according to the Kaiser Family Foundation, a nonprofit
research group, compared with just 5 percent of covered workers in 2008.
Doctors, for one, say patients’ attitudes are changing. “Because it’s from
Dollar 1 to Dollar 2,000, they are being really conscious of how they spend
their money,” said Dr. James Applegate, a family physician in Grand Rapids,
Mich. For example, patients question the need for annual blood work.
High deductibles also can be daunting. David Welch, a nurse in California whose
policy has a $4,000 deductible, said he was surprised to realize he had delayed
going to the dermatologist, even though he had a history of skin cancer. Mr.
Welch, who has been a supporter of the need to overhaul insurance industry
practices for the California Nurses Association union, said he hoped his medical
training would help him determine when to go to the doctor. “I underestimated
how much that cost would affect my behavior,” he said.
Dr. Rebecca Jaffe, a family practice doctor in Wilmington, Del., said more
patients were asking for the generic alternatives to brand-name medicines,
because of hefty co-payments. “Now, all of a sudden, they want the generic, when
for years, they said they couldn’t take it,” she said.
The insurers, which base what they charge in premiums largely on what they
expect to pay out in future claims, say they still expect higher demand for care
later this year. “I think there’s a real concern about a bounce-back, a rebound,
in utilization,” said Dr. Lonny Reisman, the chief medical officer for Aetna.
Because they say they expect costs to rebound, insurers have not been shy about
asking for higher rates. In Oregon, for example, Regence BlueCross BlueShield, a
nonprofit insurer that is the state’s largest, is asking for a 22 percent
increase for policies sold to individuals. In California, regulators have been
resisting requests from insurers to raise rates by double digits.
Some observers wonder if the insurers are simply raising premiums in advance of
the full force of the health care law in 2014. The insurers’ recent prosperity —
big insurance companies have reported first-quarter earnings that beat analysts
expectations by an average of 30 percent — may make it difficult for anyone,
politicians and industry executives alike, to argue that the industry has been
hurt by the federal health care law. Insurers were able to raise premiums to
cover the cost of the law’s early provisions, like insuring adult children up to
age 26, and federal and state regulators have largely proved to be
accommodating.
But 2014 and 2015 are likely to be far more challenging, as insurers are forced
to adjust to the law’s greatest changes, like providing coverage to everyone
regardless of whether they have an expensive pre-existing condition. “I think
they’re going to go through a winter,” said Paul H. Keckley, executive director
of the Deloitte Center for Health Solutions, a research unit of the consulting
firm Deloitte.
And while the slowing down of demand is good for insurers, at least in the short
term, the concern is that patients may be tempted to skip important tests like
colonoscopies or mammograms. The new health care law will eventually prevent
most policies from charging patients for certain kinds of preventive care, but
some plans still require someone to pay $500 toward a colonoscopy.
In recent times, insurers have prospered by pricing policies above costs, said
Robert Laszewski, a former health insurance executive who is now a consultant in
Alexandria, Va. The industry goes through underwriting cycles where the
companies are better able to predict costs and make room for profits. “They’re
benefiting from a very positive underwriting cycle,” he said.
“Maybe managed care is finally working,” he said. “Maybe this is the new
normal.”
Still, he emphasized, health care costs, even if they are rising at 6 percent or
7 percent a year, are increasing at a much faster pace than overall inflation.
“We haven’t solved the problem,” Mr. Laszewski said.
April 16, 2010
The New York Times
By DAVID M. HERSZENHORN
WASHINGTON — They were the human faces of the nation’s wrenching, yearlong
health care debate.
Natoma Canfield of Medina, Ohio, sent a letter to President Obama about no
longer being able to afford her health coverage, and he read it aloud to a group
of insurance executives at the White House. Then Ms. Canfield learned she had
leukemia, helping Mr. Obama illustrate the life-and-death stakes of the often
mind-numbing policy fight.
Marcelas Owens, an 11-year-old boy from Seattle, whose mother could not get some
treatment for lack of insurance and died at age 27 from pulmonary hypertension,
met Senator Patty Murray, Democrat of Washington, at a rally and ended up by the
president’s side at the bill-signing ceremony. “I don’t want any other kids to
go through the pain our family has gone through,” Marcelas said.
And Molly Secours, a filmmaker from Nashville, who battled uterine cancer,
nearly lost her home because of medical bills — even though she had health
insurance. Told that she would need a radical hysterectomy, chemotherapy and
radiation treatment, Ms. Secours said, “I was consumed with the fear that I’ll
have to declare bankruptcy.”
But if their stories helped the Democrats pass the health care overhaul, a more
complicated question is: What will the health care law do for them?
Revisiting their cases illustrates both the enormous potential benefits of the
new law, which seeks to insure some 32 million people, and also how the
complexity of the health system will continue to pose a formidable challenge for
patients and health care providers in the months and years ahead.
Of the cast of Americans who made appearances in the health care debate, Ms.
Canfield, who is undergoing chemotherapy and preparing for a bone marrow
transplant at the Cleveland Clinic, may have had the biggest role.
Her story led Mr. Obama to hold a rally in Ohio, not far from her home, which
helped secure the vote of Representative Dennis J. Kucinich, a Democrat who had
opposed the bill. Then, Ms. Canfield’s congressman, Representative John
Boccieri, a freshman Democrat, cited her in announcing that he, too, would
support the bill.
As it turns out, Ms. Canfield’s grave illness means that her time as one of the
roughly 50 million uninsured Americans was brief. In recent days, she was
approved for Social Security disability benefits and Medicaid, the federal-state
insurance program for low-income people.
“She is no longer able to work,” said her sister, Connie Anderson. “She has kind
of dropped down into a different category.”
Supporters of the legislation say that proves one of their main points — the
existing system provides little help until catastrophe strikes and, even then,
it entails a maze of bureaucracy.
But for some critics, the Cleveland Clinic’s quick reassurance that Ms. Canfield
need not worry about losing her home to medical costs showed that Mr. Obama
exaggerated her case. On Fox News, Sean Hannity accused Mr. Obama of lying about
Ms. Canfield’s situation.
Ms. Canfield got a break. Her local hospital, Medina General, was taken over
last year by the Cleveland Clinic, a prominent hospital system with a
sophisticated patient-support structure.
In interviews, Ms. Canfield and her sister credited the hospital with helping
secure government aid. Leukemia is on Social Security’s list of “compassionate
allowances” for an expedited disability ruling. Were she not disabled, Ms.
Canfield could not qualify for Medicaid in Ohio under current rules even though
she earned well below the federal poverty limit.
That will change as a result of the new law, which will expand Medicaid in 2014.
Between now and then, Ohio residents may benefit from the creation of a
high-risk insurance pool, either at the state or national level. While other
states already have such programs, Ohio does not.
But while the bill provides $5 billion to create or expand such programs, it is
not clear how they will work. Premiums are often expensive, and payment rates
for providers have not been set. That makes it impossible for a hospital to know
if it would be paid more by a high-risk policy or by the state’s existing
Hospital Care Assurance Program, which reimburses for care of the uninsured.
In the current system, Lyman Sornberger, the executive director of patient
financial services at the Cleveland Clinic, said that Ms. Canfield had good
reason to worry about being forced to sell her home to pay medical bills.
“Facilities or health care systems have an option to decide what their charity
care is,” Mr. Sornberger said. “They could put a lien against her home. They
could harm her credit. They could ask her to sell all of her assets and sell her
home and pay that bill off to that health care system before they agree to give
her any charity.”
Even with Medicaid paying the hospital bills, Ms. Canfield’s sister said she was
worried about how she would pay her basic expenses, like property taxes and
utility bills. Her disability payments do not begin until July, and even then
will not cover all her expenses, Ms. Anderson said.
In the case of Marcelas Owens’s mother, Tiffany Owens, it is unclear that the
health care legislation would have prevented her from falling into a gap in
coverage that prompted her to forgo treatment and may have contributed to her
death.
Ms. Owens briefly had private insurance through her restaurant management job.
But in October 2006, when she could no longer work because she was sick, she
lost both her job and her benefits.
She applied for Medicaid but was rejected because she had earned too much
earlier in the year. She was told to reapply in January, but by then she was
hospitalized. Six months later, she was dead.
“There was that lapse of time where the sickness was still progressing and there
was nothing she could do until she could go back and reapply again,” said Gina
Owens, her mother. “It’s just crazy that people fall through the cracks.”
It is not clear if the new health care law will help when a person’s employment,
insurance and health status change so rapidly.
Beginning in 2014, low-income Americans who do not qualify for Medicaid could
get subsidies to help buy private insurance. But a new system could have
pitfalls.
For Marcelas himself, the most immediate benefit of the new law may be a
provision barring states from cutting Medicaid rolls. Even when his mother was
alive, Marcelas and his two sisters were on Medicaid.
Under the new law, primary care doctors will be paid higher rates to treat
Medicaid patients for at least two years. The bill will also provide billions of
dollars in additional aid to community health centers, like the Seattle Indian
Health Board, where Marcelas gets his pediatric care.
In Nashville, Molly Secours thought she had the system figured out. She had
health insurance from Blue Cross, a house and a film company. But after uterine
cancer left her with huge bills, she nearly lost her home.
Congress came to the rescue, not with legislation but in the form of
Representative Jim Cooper, Democrat of Tennessee, who helped her negotiate a new
mortgage. Ms. Secours joined Speaker Nancy Pelosi at a news conference at the
Capitol in July.
She is still paying off some bills to Baptist Hospital, but her home is secure.
As someone with a pre-existing medical condition, Ms. Secours, under the new
law, is assured of being able to find coverage. And as someone who buys her
policy on the individual market, she may find better insurance or at least more
options.
“People like me who have a major diagnosis aren’t going to get turned down
because they had cancer,” she said.
Ms. Secours said she hoped to one day be able to take advantage of tax credits
that the new health care law will give to small businesses to help them provide
insurance to employees. “A couple of years from now I might be able to hire
people and offer them something,” she said.
March 21, 2010
The New York Times
By TARA SIEGEL BERNARD
American consumers, who spent a year watching Congress scratch and claw over
sweeping health care legislation, can now try to figure out what the overhaul
would mean for them.
The uninsured are clearly the biggest beneficiaries of the legislation, which
would extend the health care safety net for the lowest-income Americans.
The legislation is meant to provide coverage for as many as 32 million people
who have been shut out of the market — whether because insurers deem them too
sick or because they cannot afford ever-rising insurance premiums.
For people already covered by a large employer — most Americans, in other words
— the effect would not be as significant. And yet, just about everyone might
benefit from tighter insurance regulations.
“We think it’s a big step forward,” said Bill Vaughan, a policy analyst at
Consumers Union. “It’s going to provide a peace of mind that many Americans who
really want or need health insurance will always be able to get a quality
product at a reasonable price regardless of their health or financial
situation.”
There would be costs to consumers, too. Affluent families would be required to
pay additional taxes. Most Americans would be required to have health insurance
and face federal penalties if they do not buy it. And it is still unclear what
effect, if any, the legislation would have on rising out-of-pocket medical costs
and premiums.
But there is no question that the legislation should benefit consumers in
various ways. Beginning in 2014, for example, many employers — those with 50 or
more workers — could face federal fines for not providing insurance coverage.
Several of the other changes would take effect much sooner.
Six months after the legislation is enacted, many plans would be prohibited from
placing lifetime limits on medical coverage, and they could not cancel the
policies of people who fall ill. Children with pre-existing conditions could not
be denied coverage.
And dependent children up to age 26 would be eligible for coverage under their
parents’ plans — instead of the current state-by-state rules that often cut off
coverage for children at 18 or 19.
And within three months of the law’s taking effect, people who have been locked
out of the insurance market because of a pre-existing condition would be
eligible for subsidized coverage through a new high-risk insurance program.
That special coverage would continue until the legislation’s engine kicks into a
higher gear in 2014, when coverage would be extended to a wider part of the
population through Medicaid and new state-run insurance exchanges.
Those exchanges, or marketplaces, are meant to provide much more competitive,
consumer-friendly online shopping centers of private insurance for people who
are not able to obtain coverage through an employer.
In 2014, people with pre-existing conditions could no longer be denied
insurance, all lifetime and annual limits on coverage would be eliminated and
new policies would be required to meet higher benefit standards.
Even sooner, in 2013, affluent families with annual income above $250,000 would
be required to pay an additional 3.8 percent tax on their investment income,
while contributing more to the Medicare program from their payroll taxes. And
eventually, the most expensive insurance policies would be subject to a new tax.
Here is a look at some of the main ways the health care overhaul might affect
household budgets.
The Uninsured
Although most Americans who do not obtain health insurance would face a federal
penalty starting in 2014, many experts question how strict the enforcement of
that penalty would actually be.
The first year, consumers who did not have insurance would owe $95, or 1 percent
of income, whichever is greater. But the penalty would subsequently rise,
reaching $695, or 2 percent of income.
Families who fall below the income-tax filing thresholds would not owe anything.
Nor would people who cannot find a policy that costs less than 8 percent of
their income, said Sara R. Collins, a vice president at the Commonwealth Fund,
an independent nonprofit research group.
EXPANDED MEDICAID More lower-income individuals under the age of 65 would be
covered by Medicaid, the federal health insurance plan for the poor. Under the
new rules, households with income up to 133 percent of the federal poverty
level, or about $29,327 for a family of four, would be eligible.
EXCHANGES AND SUBSIDIES Most other uninsured people would be required to buy
insurance through one of the new state-run insurance exchanges. People with
incomes of more than 133 percent of the poverty level but less than 400 percent
(that’s $29,327 to $88,200 for a family of four) would be eligible for premium
subsidies through the exchanges.
Premiums would also be capped at a percentage of income, ranging from 3 percent
of income to as much as 9.5 percent.
EMPLOYMENT FLEXIBILITY The exchanges would also help people who lose their jobs,
quit or decide to start their own businesses.
“If you lose your employer-related insurance, you will be able to move
seamlessly into the exchange,” said Timothy Stoltzfus Jost, a professor at the
Washington and Lee University School of Law.
Moreover, people of any age who cannot find a plan that costs less than 8
percent of their income would be allowed to buy a catastrophic policy otherwise
intended for people under age 30.
Those With Insurance
EMPLOYER COVERAGE People who receive coverage through large employers would be
unlikely to see any drastic changes, nor should premiums or coverage be
affected. But almost everyone would benefit from new regulations, like the ban
on pre-existing conditions that would apply to all policies come 2014.
There might even be cases where people would be eligible to buy insurance
through an exchange instead of through their employer, Professor Jost said:
those who must pay more than 9.5 percent of their income for premiums, or those
whose plans do not cover more than 60 percent of the cost their benefits.
CHANGES IN MEDICARE One of the biggest changes involves the Medicare
prescription drug program. Its unpopular “doughnut hole” — a big, expensive gap
in coverage that affects millions — would be eliminated by 2020. Starting
immediately, consumers who hit the gap would receive a $250 rebate. In 2011,
they would receive a 50 percent discount on brand name drugs.
HIGH-COST INSURANCE Starting in 2018, employers that offer workers pricier plans
— or those with total premiums of $10,200 or more for singles and $27,500 for
families — would be subject to a 40 percent tax on the excess premium, said C.
Clinton Stretch, managing principal of tax policy at Deloitte. Retirees and
workers in high-risk professions like firefighting would have higher thresholds
($11,850 for singles, or $30,950 for families), pegged to inflation.
Although the taxes would be levied on the insurer, experts expect the assessment
to be passed on to the consumer in the form of higher premiums or reduced
benefits.
March 21, 2010
The New York Times
By ROBERT PEAR
and DAVID M. HERSZENHORN
WASHINGTON — House Democrats approved a far-reaching overhaul of the nation’s
health system on Sunday, voting over unanimous Republican opposition to provide
medical coverage to tens of millions of uninsured Americans after an epic
political battle that could define the differences between the parties for
years.
With the 219-to-212 vote, the House gave final approval to legislation passed by
the Senate on Christmas Eve. Thirty-four Democrats joined Republicans in voting
against the bill. The vote sent the measure to President Obama, whose yearlong
push for the legislation has been the centerpiece of his agenda and a test of
his political power.
After approving the bill, the House adopted a package of changes to it by a vote
of 220 to 211. That package — agreed to in negotiations among House and Senate
Democrats and the White House — now goes to the Senate for action as soon as
this week. It would be the final step in a bitter legislative fight that has
highlighted the nation’s deep partisan and ideological divisions.
On a sun-splashed day outside the Capitol, protesters, urged on by House
Republicans, chanted “Kill the bill” and waved yellow flags declaring “Don’t
Tread on Me.” They carried signs saying “Doctors, Not Dictators.”
Inside, Democrats hailed the votes as a historic advance in social justice,
comparable to the establishment of Medicare and Social Security. They said the
bill would also put pressure on rising health care costs and rein in federal
budget deficits.
“This is the Civil Rights Act of the 21st century,” said Representative James E.
Clyburn of South Carolina, the No. 3 Democrat in the House.
Mr. Obama celebrated the House action in remarks at the White House.
“We pushed back on the undue influence of special interests,” Mr. Obama said.
“We didn’t give in to mistrust or to cynicism or to fear. Instead, we proved
that we are still a people capable of doing big things.”
“This isn’t radical reform,” he added, “but it is major reform.”
After a year of combat and weeks of legislative brinksmanship, House Democrats
and the White House clinched their victory only hours before the voting started
on Sunday. They agreed to a deal with opponents of abortion rights within their
party to reiterate in an executive order that federal money provided by the bill
could not be used for abortions, securing for Democrats the final handful of
votes they needed to assure passage.
Winding up the debate, Speaker Nancy Pelosi said: “After a year of debate and
hearing the calls of millions of Americans, we have come to this historic
moment. Today we have the opportunity to complete the great unfinished business
of our society and pass health insurance reform for all Americans that is a
right and not a privilege.”
The House Republican leader, Representative John A. Boehner of Ohio, said
lawmakers were defying the wishes of their constituents. “The American people
are angry,” Mr. Boehner said. “This body moves forward against their will. Shame
on us.”
Republicans said the plan would saddle the nation with unaffordable levels of
debt, leave states with expensive new obligations, weaken Medicare and give the
government a huge new role in the health care system.
The debate on the legislation set up a bitter midterm campaign season, with
Republicans promising an effort to repeal the legislation, challenge its
constitutionality or block its provisions in the states.
Representative Paul D. Ryan, Republican of Wisconsin, denounced the bill as “a
fiscal Frankenstein.” Representative Lincoln Diaz-Balart, Republican of Florida,
called it “a decisive step in the weakening of the United States.”
Representative Virginia Foxx, Republican of North Carolina, said it was “one of
the most offensive pieces of social engineering legislation in the history of
the United States.”
But Representative Marcy Kaptur, Democrat of Ohio, said the bill heralded “a new
day in America.” Representative Doris Matsui, Democrat of California, said it
would “improve the quality of life for millions of American families.”
The health care bill would require most Americans to have health insurance,
would add 16 million people to the Medicaid rolls and would subsidize private
coverage for low- and middle-income people, at a cost to the government of $938
billion over 10 years, the Congressional Budget Office said.
The bill would require many employers to offer coverage to employees or pay a
penalty. Each state would set up a marketplace, or exchange, where consumers
without such coverage could shop for insurance meeting federal standards.
The budget office estimates that the bill would provide coverage to 32 million
uninsured people, but still leave 23 million uninsured in 2019. One-third of
those remaining uninsured would be illegal immigrants.
The new costs, according to the budget office, would be more than offset by
savings in Medicare and by new taxes and fees, including a tax on high-cost
employer-sponsored health plans and a tax on the investment income of the most
affluent Americans.
Cost estimates by the budget office, showing that the bill would reduce federal
budget deficits by $143 billion in the next 10 years, persuaded some fiscally
conservative Democrats to vote for the bill.
Democrats said Americans would embrace the bill when they saw its benefits,
including some provisions that take effect later this year.
Health insurers, for example, could not deny coverage to children with medical
problems or suddenly drop coverage for people who become ill. Insurers must
allow children to stay on their parents’ policies until they turn 26. Small
businesses could obtain tax credits to help them buy insurance.
The Democratic effort to secure the 216 votes needed for passage of the
legislation came together only after last-minute negotiations involving the
White House, the House leadership and a group of Democratic opponents of
abortion rights, led by Representative Bart Stupak of Michigan. On Sunday
afternoon, members of the group announced that they would support the
legislation after Mr. Obama promised to issue an executive order to “ensure that
federal funds are not used for abortion services.”
Mr. Stupak described the order as a significant guarantee that would “protect
the sanctity of life in health care reform.” But supporters of abortion rights —
and some opponents — said the order merely reaffirmed what was in the bill.
The vote to pass the Senate version of the bill means that it will become the
law of the land as soon as Mr. Obama signs it, regardless of when — or even
whether — the Senate acts on the package of changes the House also passed.
In his remarks, shortly before midnight in the East Room, Mr. Obama urged the
Senate to complete the final pieces of the legislation. “Some have predicted
another siege of parliamentary maneuvering in order to delay it,” he said. “I
hope that’s not the case.”
He continued, “It’s time to bring this debate to a close and begin the hard work
of implementing this reform properly on behalf of the American people.”
Mr. Obama watched the roll call with Vice President Joseph R. Biden Jr. in the
Roosevelt Room in the White House.
The House galleries were full, and the floor was unusually crowded, for the
historic debate on health care.
Working together, Mr. Obama and Ms. Pelosi revived the legislation when it
appeared dead after Democrats lost their 60th vote in the Senate and with it
their ability to shut off Republican filibusters.
Republicans said they would use the outcome to bludgeon Democrats in this year’s
Congressional elections. The White House is planning an intensive effort to
convince people of the bill’s benefits. But if Democrats suffer substantial
losses in November, Mr. Obama could be stymied on other issues.
The campaign for a health care overhaul began as a way to help the uninsured.
But it gained momentum when middle-class families with health insurance flooded
Congress with their grievances. They complained of soaring premiums. They said
their insurance had been canceled when they got sick.
“It’s not just the uninsured,” said Representative Jim McGovern, Democrat of
Massachusetts. “We also have to worry about people with insurance who find, for
crazy reasons, that they are somehow going to be denied coverage.”
In the end, groups like the United States Chamber of Commerce and the National
Federation of Independent Business tried to stop the bill, saying it would
increase the cost of doing business. But other groups, including the American
Medical Association and AARP, backed it, as did the pharmaceutical industry.
Lawmakers agreed that Sunday’s debate was historic, but they were poles apart in
assessing the legislation.
Representative Rodney Alexander, Republican of Louisiana, said, “You cannot
expect to expand coverage to millions of individuals and to curb costs at the
same time.”
Republicans said the picture painted by the budget office was too rosy, because
the new taxes and fees would start immediately, while the major costs would not
show up for four years.
Moreover, Republicans said Democrats would pay a price for defying public
opinion on the bill.
“Are you so arrogant that you know what’s best for the American people?”
Representative Paul Broun, Republican of Georgia, asked the Democrats. “Are you
so ignorant to be oblivious to the wishes of the American people?”
Lawmakers spoke with deep conviction in explaining their votes.
“Health care is not only a civil right, it’s a moral issue,” said Representative
Patrick J. Kennedy, Democrat of Rhode Island, who invoked the memory of his
father, Senator Edward M. Kennedy, a Massachusetts Democrat and a lifelong
champion of health care for all.
After the legislation passed, Mr. Obama sought to place the day in perspective.
“In the end what this day represents is another stone firmly laid in the
foundation of the American dream,” the president said. “Tonight, we answered the
call of history as so many generations of Americans have before us. When faced
with crisis, we did not shrink from our challenges. We overcame them. We did not
avoid our responsibilities, we embraced it. We did not fear our future, we
shaped it.”
WASHINGTON — The Senate voted Thursday to reinvent the
nation’s health care system, passing a bill to guarantee access to health
insurance for tens of millions of Americans and to rein in health costs.
The 60-to-39 party-line vote, starting at 7:05 a.m. on the 25th straight day of
debate on the legislation, brings Democrats closer to a goal they have pursued
for decades and brings President Obama a step closer to success in his signature
domestic initiative. When the roll was called, with Vice President Joseph R.
Biden Jr. presiding, it was the first time the Senate had gathered for a vote on
Christmas Eve since 1895.
If the bill becomes law, it would be a milestone in social policy, comparable to
the creation of Social Security in 1935 and Medicare in 1965. But unlike those
programs, the initiative lacks bipartisan support. Only one Republican supported
a broadly similar bill that the House approved last month 220 to 215, and no
Republicans backed the Senate version.
After the vote, lawmakers and Mr. Obama wasted no time leaving for their holiday
break, well aware that their return to Washington would mean plunging into
negotiations to reconcile the measures passed by the two chambers.
If a deal can be struck, as seems likely, the resulting law would vastly expand
the role and responsibilities of the federal government. It would, as lawmakers
said repeatedly in the debate, touch the lives of nearly all Americans.
The bill would require most Americans to have health insurance, would add 15
million people to the Medicaid rolls and would subsidize private coverage for
low- and middle-income people, at a cost to the government of $871 billion over
10 years, according to the Congressional Budget Office.
The budget office estimates that the bill would provide coverage to 31 million
uninsured people, but still leave 23 million uninsured in 2019. One-third of
those remaining uninsured would be illegal immigrants.
Mr. Obama hailed the Senate action. “We are now incredibly close to making
health insurance reform a reality,” he said, before leaving the White House to
celebrate Christmas in Hawaii.
The president, who endorsed the Senate and House bills, said he would be deeply
involved in trying to help the two chambers work out their differences. But it
is unclear how specific he will be — if, for example, he will push for one type
of tax over another or try to concoct a compromise on insurance coverage for
abortion.
Senator Olympia J. Snowe of Maine, a moderate Republican who has spent years
working with Democrats on health care and other issues, said she was “extremely
disappointed” with the bill’s evolution in recent weeks. After Senate Democrats
locked up 60 votes within their caucus, she said, “there was zero opportunity to
amend the bill or modify it, and Democrats had no incentive to reach across the
aisle.”
Like many Republicans, Ms. Snowe was troubled by new taxes and fees in the bill,
which she said could have “a dampening effect on job creation and job
preservation.” The bill would increase the Medicare payroll tax on high-income
people and levy a new excise tax on high-premium insurance policies, as one way
to control costs.
When the roll was called Thursday morning, the mood was solemn as senators
called out “aye” or “no.” Senator Robert C. Byrd, the 92-year-old Democrat from
West Virginia, deviated slightly from the protocol.
“This is for my friend Ted Kennedy,” Mr. Byrd said. “Aye!”
Senator Kennedy of Massachusetts, a longtime champion of universal health care,
died of brain cancer in August at age 77.
Senator Jim Bunning, Republican of Kentucky, did not vote.
The fight on Capitol Hill prefigures a larger political battle that is likely to
play out in the elections of 2010 and 2012, as Democrats try to persuade a
skeptical public of the bill’s merits, while Republicans warn that it will drive
up costs for those who already have insurance.
“Our members are leaving happy and upbeat,” said the Senate Republican leader,
Mitch McConnell of Kentucky. “The public is on our side. This fight is not
over.”
After struggling for years to expand health insurance in modest, incremental
ways, Democrats decided this year that they could not let another opportunity
slip away. As usual, lawmakers were deluged with appeals from lobbyists for
health care interests who have stymied similar ambitious efforts in the past.
But this year was different.
Lawmakers listened to countless stories of hardship told by constituents who had
been denied insurance, lost coverage when they got sick or seen their premiums
soar. Hostility to the insurance industry was a theme throughout the Senate
debate.
Senator Sherrod Brown, Democrat of Ohio, said insurance companies were often
“just one step ahead of the sheriff.” Senator Dianne Feinstein, Democrat of
California, said the industry “lacks a moral compass.” And Senator Sheldon
Whitehouse, Democrat of Rhode Island, said the business model of the industry
“deserves a stake through its cold and greedy heart.”
The bill would establish strict federal standards for an industry that, since
its inception, has been regulated mainly by the states. Under it, insurers could
not deny coverage because of a person’s medical condition; could not charge
higher premiums because of a person’s sex or health status; and could not
rescind coverage when a person became sick or disabled. The government would, in
effect, limit insurers’ profits by requiring them to spend at least 80 to 85
cents of every premium dollar on health care.
The specificity of federal standards is illustrated by one section of the bill,
which requires insurers to issue a benefits summary that “does not exceed four
pages in length and does not include print smaller than 12-point font.”
Another force propelling health legislation through the Senate was the
Democrats’ view that it was a moral imperative and an economic necessity.
“The health insurance policies of America, what we have right now is a moral
disgrace,” said Senator Tom Harkin, Democrat of Iowa. “We are called upon to
right a great injustice, a great wrong that has been put upon the American
people.”
Costs of the bill would, according to the Congressional Budget Office, be more
than offset by new taxes and fees and by savings in Medicare. The bill would
squeeze nearly a half-trillion dollars from Medicare over the next 10 years,
mainly by reducing the growth of payments to hospitals, nursing homes, Medicare
Advantage plans and other providers.
Republicans asserted that the cuts would hurt Medicare beneficiaries. But AARP,
the lobby for older Americans, and the American Medical Association ran an
advertisement urging senators to pass the bill, under which Medicare would cover
more of the cost for prescription drugs and preventive health services.
Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group,
said the bill appeared to be unstoppable. But she added: “We are not sure it
will be workable. It could disrupt existing coverage for families, seniors and
small businesses, particularly between now and when the legislation is fully
implemented in 2014.”
One of the major goals of health care reform is to cover the vast numbers of
uninsured. But how vast, really, is that pool of people? Who are they? And how
important is it to cover all or most of them?
Critics play down the seriousness of the problem by pointing out that the ranks
of the uninsured include many people who have chosen to forgo coverage or are
only temporarily uninsured: workers who could afford to pay but decline their
employers’ coverage; the self-employed who choose not to pay for more expensive
individual coverage; healthy young people who prefer not to buy insurance they
may never need; people who are changing jobs; poor people who are eligible for
Medicaid but have failed to enroll. And then there are the illegal immigrants, a
favorite target of critics.
All that is true, to some degree. But the implication — that lack of insurance
is no big deal and surely not worth spending a trillion dollars to fix — is not.
No matter how you slice the numbers, there are tens of millions of people
without insurance, often for extended periods, and there is good evidence that
lack of insurance is harmful to their health.
Scores of well-designed studies have shown that uninsured people are more likely
than insured people to die prematurely, to have their cancers diagnosed too
late, or to die from heart failure, a heart attack, a stroke or a severe injury.
The Institute of Medicine estimated in 2004 that perhaps 18,000 deaths a year
among adults could be attributed to lack of insurance.
The oft-voiced suggestion that the uninsured can always go to an emergency room
also badly misunderstands what is happening. By the time they do go, many of
these people are much sicker than they would have been had insurance given them
access to routine and preventive care. Emergency rooms are costly, and if
uninsured patients cannot pay for their care, the hospital or the government
ends up footing the bill.
•
So how many uninsured people are out there, facing those risks? The most
frequently cited estimate, 45.7 million in 2007, comes from an annual census
survey. That number was down slightly from the year before, but given the
financial crisis, it is almost certainly rising again.
Some or even many of those people may have only temporarily lost or given up
coverage, but even that exposes them to medical and financial risk. And many
millions go without insurance for extended periods.
The Agency for Healthcare Research and Quality in the Department of Health and
Human Services estimates that 28 million people were uninsured for all of 2005
and 2006 and that 18.5 million of them were uninsured for at least four straight
years. That does not sound like a “temporary” problem, and the picture today is
almost certainly bleaker.
Various analyses have tried to decipher just who the uninsured are. These are
the main conclusions, with the caveat that there is overlap in these numbers:
THE WORKING POOR The Kaiser Family Foundation estimates that about two-thirds of
the uninsured — 30 million people — earn less than twice the poverty level, or
about $44,000 for a family of four. It also estimates that more than 80 percent
of the uninsured come from families with full-time or part-time workers. They
often cannot get coverage at work or find it too expensive to buy. They surely
deserve a helping hand.
THE BETTER OFF About nine million uninsured people, according to census data,
come from households with incomes of $75,000 or more. Critics say that is plenty
of money for them to buy their own insurance. But many of these people live in
“households” that are groups of low-wage roommates or extended families living
together. Their combined incomes may reach $75,000, but they cannot pool their
resources to buy an insurance policy to cover the whole group.
Still, about 4.7 million uninsured people live in families that earn four times
the poverty level — or $88,000 for a family of four — the dividing line that
many experts use to define who can afford to buy their own insurance.
Those people who could afford coverage but choose not to buy it ought to be
compelled to join the system to lessen the possibility that a serious accident
or illness might turn them into charity cases and to help subsidize the coverage
of poorer and sicker Americans.
YOUNG ADULTS Some 13 million young adults between the ages of 19 and 29 lack
coverage. These are not, for the most part, healthy young professionals making a
sensible decision to pay their own minimal medical bills rather than buy
insurance that they are unlikely to need. The Kaiser foundation estimates that
only 10 percent are college graduates, and only 5 percent have incomes above
$60,000 a year, while half have family incomes below $16,000 a year. Many of
these younger people would be helped by reform bills that would provide
subsidized coverage for the poor and an exchange where individuals can buy
cheaper insurance than is now available.
ALREADY ELIGIBLE Some 11 million of the poorest people, mostly low-income
children and their parents, are thought to be eligible for public insurance
programs but have failed to enroll, either because they do not know they are
eligible or are intimidated by the application process. When such people arrive
at an emergency room, they are usually enrolled in Medicaid, but meanwhile they
have lost out on routine care that could have kept them out of the emergency
room. They will presumably be scooped up by the mandate under reform bills that
everyone obtain health insurance.
THE UNDERINSURED The Commonwealth Fund estimates that 25 million Americans who
had health insurance in 2007 had woefully inadequate policies with high
deductibles and restrictions that stuck them with large amounts of uncovered
expenses. Many postponed needed treatments or went into debt to pay medical
bills.
NON-CITIZENS Some 9.7 million of the uninsured are not citizens; of those, more
than six million may be illegal immigrants, according to informed estimates.
None of the pending bills would cover them.
If nothing is done to slow current trends, the number of people in this country
without insurance or with inadequate coverage will continue to spiral upward.
That would be a personal tragedy for many and a moral disgrace for the nation.
It is also by no means cost-free. Any nation as rich as ours ought to guarantee
health coverage for all of its residents.
Health insurance is supposed to offer protection — both medically and
financially. But as it turns out, an estimated three-quarters of people who are
pushed into personal bankruptcy by medical problems actually had insurance when
they got sick or were injured.
And so, even as Washington tries to cover the tens of millions of Americans
without medical insurance, many health policy experts say simply giving everyone
an insurance card will not be enough to fix what is wrong with the system.
Too many other people already have coverage so meager that a medical crisis
means financial calamity.
One of them is Lawrence Yurdin, a 64-year-old computer security specialist.
Although the brochure on his Aetna policy seemed to indicate it covered up to
$150,000 a year in hospital care, the fine print excluded nearly all of the
treatment he received at an Austin, Tex., hospital.
He and his wife, Claire, filed for bankruptcy last December, as his unpaid
medical bills approached $200,000.
In the House and Senate, lawmakers are grappling with the details of legislation
that would set minimum standards for insurance coverage and place caps on
out-of-pocket expenses. And fear of the high price tag could prompt lawmakers to
settle for less than comprehensive coverage for some Americans.
But patient advocates argue it is crucial for the final legislation to guarantee
a base level of coverage, if people like Mr. Yurdin are to be protected from
financial ruin. They also call for a new layer of federal rules to correct the
current state-by-state regulatory patchwork that allows some insurance companies
to sell relatively worthless policies.
“Underinsurance is the great hidden risk of the American health care system,”
said Elizabeth Warren, a Harvard law professor who has analyzed medical
bankruptcies. “People do not realize they are one diagnosis away from financial
collapse.”
Last week, a former Cigna executive warned at a Senate hearing on health
insurance that lawmakers should be careful about the role they gave private
insurers in any new system, saying the companies were too prone to “confuse
their customers and dump the sick.”
“The number of uninsured people has increased as more have fallen victim to
deceptive marketing practices and bought what essentially is fake insurance,”
Wendell Potter, the former Cigna executive, testified.
Mr. Yurdin learned the hard way.
At St. David’s Medical Center in Austin, where he went for two separate heart
procedures last year, the hospital’s admitting office looked at Mr. Yurdin’s
coverage and talked to Aetna. St. David’s estimated that his share of the
payments would be only a few thousand dollars per procedure.
He and the hospital say they were surprised to eventually learn that the
$150,000 hospital coverage in the Aetna policy was mainly for room and board.
Coverage was capped at $10,000 for “other hospital services,” which turned out
to include nearly all routine hospital care — the expenses incurred in the
operating room, for example, and the cost of any medication he received.
In other words, Aetna would have paid for Mr. Yurdin to stay in the hospital for
more than five months — as long as he did not need an operation or any lab tests
or drugs while he was there.
Aetna contends that it repeatedly informed Mr. Yurdin and the hospital of the
restrictions in policy, which is known in the industry as a limited-benefit
plan.
The company says such policies offer value by covering some hospital expenses,
like surgeons’ fees or a stay in the intensive care unit. Aetna also says all of
its policyholders receive significant discounts on the overall cost of hospital
care. But Aetna also acknowledges that a limited-benefit plan was inappropriate
in Mr. Yurdin’s case because his age and condition — an irregular heartbeat —
made him likely to require more comprehensive coverage.
“Limited benefits aren’t right for everyone, and it clearly wasn’t right for Mr.
Yurdin,” said Cynthia B. Michener, an Aetna spokeswoman.
Charles E. Grassley, the ranking Republican on the Senate Finance Committee,
which is taking a lead on health legislation, says Congress needs to make
“meaningful” insurance coverage more affordable and accessible. But “until that
happens,” he said, “any presentation of limited-benefit plans ought to be
completely straightforward, and not misleading in any way.”
Insurers like Aetna generally defend limited-benefit policies as a byproduct of
the nation’s flawed health care system, which they say makes it too expensive to
adequately insure someone like Mr. Yurdin.
If everyone in the country were required to have insurance, the industry says —
a mandate that Congress is contemplating — the costs and risks of insurance
would be spread over a large enough pool of people to let insurers provide full,
affordable coverage even to people with pre-existing medical conditions.
Mr. Yurdin worked at TEKsystems, which employs people for short periods as
contractors for other companies. TEKsystems says it does not pay for the
contract workers’ health benefits, but it does enable them to purchase
individual policies with limited benefits so they have at least some coverage.
“There’s no way we make this sound like regular coverage,” said Neil Mann, an
executive vice president at Allegis Group, which owns TEKsystems.
Although Mr. Mann acknowledged that the plan Mr. Yurdin purchased excluded
routine hospital care, he said he thought it still provided value to employees
who wanted “peace of mind.”
True peace of mind, however, comes with a much higher price tag. When Mr. Yurdin
no longer qualified for the Aetna coverage after he left TEKsystems and his
eligibility eventually ended, his only option was a special state plan in Texas
for people who are at high risk for expensive medical care. He has been paying
more than $1,000 a month for comprehensive coverage, compared with the roughly
$250 a month he was paying for the Aetna plan.
But as of Wednesday, his future insurance problems are largely solved: he
qualifies for
because he turns 65.
Many insurers, as part of the Congressional overhaul of their business, say they
expect the demand for limited-benefit policies to fall. “Until the nation
achieves the universal coverage that we strongly support, some individuals will
want to be able to choose limited indemnity products, but with comprehensive
health reform we think that need should diminish,” said Simon Stevens, an
executive at UnitedHealth.
UnitedHealth drew criticism last year for selling policies with sharply limited
coverage through AARP, the advocacy group for older people. One of the plans
capped reimbursement for an operation at $5,000, for example, although many
procedures cost at least several times that amount. After Senator Grassley began
investigating its sales practices, UnitedHealth agreed to stop offering the
limited AARP plans.
Mr. Yurdin and his wife say it was not clear that he was liable for tens of
thousands of dollars in hospital bills until after he had the first two of what
would eventually be four operations. St. David’s says it tried to persuade them
to apply for charity care, under which the hospital would absorb much, or all,
of the unpaid bills.
But the couple says a lawyer advised them to turn to bankruptcy as the way to be
certain they would not be left with too much debt. “I knew we were getting way,
way over our heads,” Mrs. Yurdin said.
While Aetna disputes the Yurdins’ and the hospital’s version of events, it also
says it has tried to clarify the language it uses to describe the coverage. In
its most recent brochure, the fine print describing the limits to “other”
hospital services now defines what they are in a footnote on the same page and
warns that the excluded expenses could be “significant.”
Senator John D. Rockefeller IV, Democrat of West Virginia, who is also on the
Finance Committee, has introduced legislation that would require insurers to be
more clear about what they do — and do not — cover. He says he advocates such a
change, even if Congress cannot agree to a more sweeping overhaul of the health
insurance industry.
But advocates for broad changes to the health care system say Congress can
succeed only by making sure health reform goes beyond giving every American a
buyer-beware insurance card. One such person is Len Nichols, a health economist
for the New America Foundation.
“Conceptually,” he said, “insurance means normal people should not go bankrupt
from serious medical conditions.”
As increasing numbers of the unemployed and uninsured turn to
the nation’s emergency rooms as a medical last resort, doctors warn that the
centers — many already overburdened — could have even more trouble handling the
heart attacks, broken bones and other traumas that define their core mission.
Even before the recession became evident, many emergency rooms around the
country were already overcrowded, with dangerously long waits for some patients
and the frequent need to redirect ambulances to other hospitals.
“We have no capacity now,” said Dr. Angela F. Gardner, the president-elect of
the American College of Emergency Physicians, which represents 27,000 emergency
doctors. “There’s no way we have room for any more people to come to the table.”
In a report to be released Tuesday, her group warns that the nation’s system of
emergency rooms is in “serious condition.” Dr. Gardner argues that any public
discussion of overhauling the current health system must include the nation’s
emergency departments.
The number of patients coming to emergency departments has been steadily
increasing. Helping push up that volume have been the growing ranks of the
uninsured, because emergency rooms are legally obliged to see all patients who
enter their doors, regardless of their ability to pay. But even insured patients
who have no quick access to regular doctors are also showing up — among them
older people, who represent the fastest growing population of emergency room
visitors.
So far, there are no firm figures on the recent influx. But even two years ago,
when a government survey found that the annual volume of visits to emergency
departments had reached 120 million — a third higher than a decade earlier —
doctors considered many emergency rooms overburdened.
Now the recession, whose full impact is yet to be seen, threatens to make
conditions even worse, emergency doctors say. Hospitals are absorbing increasing
amounts in unpaid medical bills, and some are already experiencing much higher
numbers of patients without insurance.
For example, Denver Health, a public hospital system, had a 19 percent increase
in emergency visits by uninsured patients in November — to 3,325, up from 2,792
a year earlier.
“Virtually every time I work a nine-hour shift, I encounter a couple of patients
who have never been here before because they’ve just lost their insurance,” said
Dr. Vincent J. Markovchick, the director of the hospital’s emergency medical
services.
They include patients like Matthew Armijo, 29, who was laid off from his client
services job at a technology company in August and could continue his health
insurance only through October. He showed up at Denver Health’s urgent care
center, a part of the emergency department, suffering from increasing abdominal
pain. Mr. Armijo said he went there because he would not have to pay anything.
Denver Health expects the amount of care it delivers for which it will never be
paid to grow to more than $300 million this year, compared with $276 million in
2007.
Some patients are people who have delayed seeking medical care as long as they
can, like those who arrive during an asthma attack after deferring treatment.
“I am definitely seeing patients coming in presenting worse in their illness
because they are further along,” said Dr. Katherine A. Bakes, the director of
the program’s emergency services for children.
Other doctors around the country also report treating people who seem to have no
other option. One emergency room doctor in Iowa, Dr. Thomas E. Benzoni, said he
recently saw a mother come in with her two children for what he thought was
routine care. When he asked her why she had not gone to her family doctor, she
said she did not have health insurance.
“I don’t know what else she was supposed to do,” Dr. Benzoni said.
The increase is not affecting all emergency rooms. Some emergency physicians, in
fact, said there had actually been a recent decline in visits. A report by the
American Hospital Association for July, August and September found a slight
overall decrease in hospital traffic, including emergency visits, as some people
apparently sought to avoid spending money on anything they did not deem
absolutely essential.
But as the recession continues, many officials of the college of emergency
doctors predict it is only a matter of time until the rising number of uninsured
and the delays in getting primary care create a crisis.
“I think we’re seeing the tip,” said Dr. Nicholas J. Jouriles, the group’s
current president. Patients, he said, will have no choice but to come to the
emergency department when they have no money or insurance. “They will get turned
away elsewhere,” he said.
One of the doctors’ major concerns is the long waits by patients requiring a
hospital bed. The doctors group, surveying its members last year, learned of at
least 200 deaths related to the practice of “boarding” — in which patients on
stretchers line the corridors until they can be moved into a bed.
“Crowding is a national public health problem,” said Dr. Jesse M. Pines, an
emergency physician in Philadelphia.
Patients forced to wait for hours on end for a bed clearly suffer.
“It was pure hell,” recalled Robert Roth, whose 90-year-old mother, Kato, last
year spent 36 hours at the emergency department of a Queens hospital, near her
home in Jackson Heights, waiting for a room after going to the emergency room in
the middle of the night. Mrs. Roth, who had a recent series of falls, said she
had been hearing music in her ears, and both her son and the doctor he called
were worried about a possible stroke.
After the first five hours of waiting, she became increasingly disoriented and
delusional. Mr. Roth was unable to stay with her during the entire wait. After
he left and returned, he said, the hospital staff told him they had no idea
where she was. She turned up in an empty room off the emergency department, and
her physical and mental condition had clearly deteriorated, Mr. Roth said. She
believed that she had been kidnapped.
When she had to go several weeks later to another emergency department in
Manhattan, she endured a 20-hour wait for a room, again becoming disoriented
after several hours, forcing her to be sedated.
The emergency staffs “just seemed overwhelmed, overwhelmed,” said Mr. Roth, who
wondered why emergency departments could not handle the elderly in a special
fashion.
Dr. Ann S. O’Malley is a physician and senior researcher for the Center for
Studying Health System Change, a nonprofit group in Washington that has studied
emergency services in different communities. While some hospitals have taken
steps to reduce crowding and move patients more efficiently from the emergency
department into rooms, Dr. O’Malley said, others have responded by expanding
their facilities — attracting more patients.
“Emergency departments,” she said, “are a kind of barometer of the general
health of the rest of the system.”
Dr. Eric J. Lavonas, an emergency physician in Denver, said: “The nation’s
emergency rooms are the end of the line. We will strain and stretch and bulge
under the weight.”
Dr. Gardner, of the emergency doctors’ group, said the question now is whether
the emergency room safety net will break — how often people with heart attacks
will not be able to get care in time to be saved. Her group’s report, she said,
is meant to alert people to the precarious nature of the system.
“What they don’t understand,” she said, “is that the system is fundamentally
flawed and will fail.”
