Health Care Reform

[Dr Q]

Arizona is facing an imminent collapse of the Affordable Care Act (Obamacare).  Premiums have nearly tripled, some areas have only one insurer left, and many citizens are having to go without insurance.  Here are some questions for discussion:

1) Why is this happening in Arizona, and not other states?

2) What can be done to fix it?

3) Where does our representative Martha McSally stand on this issue?

[jman]

It's happening in Arizona, because the Republicans have done everything they can to tear it down.

The fix is single-payer, Medicare for all.

[Dr Q]

Here is an article with a map showing the states where Obamacare is in danger of collapse.   Rates in Phoenix have gone up 145% this year.
https://www.washingtonpost.com/news/get-there/wp/2016/11/01/where-obamacare-prices-are-rising-dramatically/?utm_term=.e65713942f76

Here is a map showing the huge effect that the political environment has had on the percentage of state populations remaining without health insurance.  This chart shows that it is not simply a Democrat vs Republican problem.  Red states Arkansas and Kentucky have shown the greatest reduction.

http://www.businessinsider.com/how-many-people-dont-have-insurance-under-obamacare-2015-8

[Ellen Grygotis]

My premiums under Blue Cross in Tucson have gone from $387 per month in 2015 to $926 per month this year, and the deductible has gone from $5500 to $6550.  Blue Cross is the only company left on the exchange.  I don't know how much longer I can continue paying this amount.  Medicare is 4 years away.

[Marylka Pattison]

I would never support single payer for all because it would be abused by hypochondriacs & way too expensive. Politicians should study problems in Sweden, England, & Canada. It's possible I could support some kind of catastrophic insurance (huge deductibles ... maybe over $10,000 for example) to keep Americans from devastating losses after medical expenses. Employer paid benefits should be taxed like income, & employees should be able to opt out & take the cost as income (also taxed obviously) & choose their own alternative. As it is, in this country there are too many greedy fraudster doctors diagnosing & "curing" non-existent ailments, sometimes actually injuring completely healthy patients. There are still kickbacks from pharmaceutical companies for prescribing dangerous, unnecessary drugs. Rather than calling them "kickbacks" - which they are - they're called "consulting fees". 

Here's a recent example of a fraudster doctor ... he should be in prison: http://www.wtsp.com/news/crime/report-doctor-misdiagnosed-patients-with-cancer-billed-medicare/406732159

I wouldn't be opposed some system that rewarded whistleblowers. There are several doctors serving long sentences thanks to whistleblowers. I actually think a High School computer nerd could write a program that "red-flagged" doctors who diagnosed statistically improbable numbers of different ailments. This could include false diagnoses, or overuse of treatments (C-sections, joint replacements, etc.) or overprescribing expensive or dangerous drugs. More Americans die from prescription drug overdoses than illegal drugs these days. The only case I know of where a "pill-pusher" was sentenced to a long term was the recent California doctor tried for murder: http://www.latimes.com/local/lanow/la-me-ln-doctor-prescription-drugs-murder-overdose-verdict-20151030-story.html

I think I read somewhere that she had written over 100 prescriptions a day! She wasn't a doctor ... she was a drug dealer.

Sorry I'm so wordy, but it's an issue I care about. Even though I'm old enough to get Medicare, I plan to avoid doctors if I can for the rest of my life. One thing centenarians (people over 100) have in common is that they rarely or never go to doctors & take fewer drugs in a lifetime than most American senior citizens take in a week!

[Dr Q]

Marylka raises a good point - when there is no cost to the patient, there is often abuse.  I've been on Medicare for four years now, and I haven't seen the kinds of abuse she is worried about.  I pay 20% of my medical costs, and that is enough to make me look carefully at the bills, and object to any charges that shouldn't be there.  The "abuses" I've seen are a drug company charging $4000 per month for a prescription, then returning the part the patient pays (both deductible and copay), so that only the insurance company pays the inflated price.  I've heard this is because the Bush expansion of drug coverage blocked insurance companies from negotiating drug prices.  Maybe someone else can shed light on this.  These problems are fixable.

If we move to single-payer, I suggest we do it by lowering the Medicare eligibility age in 5-year steps, testing at each level to see the effects on total cost (both private and govt) and dealing with any problems that might arise.  I have heard that in the US, we spend twice as much of our per-capita GDP on health care, and the results are better for the rich, and worse for the poor.  I don't know about Sweden, but I do have some excellent experience with the Canadian system.

[Dr Q]

The US is spending far more per person on health care than other countries.

http://www.pbs.org/newshour/rundown/health-costs-how-the-us-compares-with-other-countries/

[jman]

The people getting screwed are individuals and small businesses.  If you work for the government, or have insurance through your employer, you get favorable group rates, and no worry about pre-existing conditions.  Otherwise, you pay 2 or 3 times what everyone else pays for insurance premiums, medical bills and prescription drugs.  This is unfair.  It is also bad for the US economy to saddle small employers with this burden.  It is also immoral to allow people to die because they couldn't afford insurance.

Here is my solution:  Anyone who is unhappy with their insurance plan can sign on to whatever plan is offered to our elected representatives.

[Dr Q]

Jman, this might work, but costs for the govt plan would go up.  Insurance companies would reject anyone with the slightest risk, and those folks would end up on the govt program.  I can think of only three ways to recover those costs.  1) Raise premiums, 2) Subsidize with taxpayer $$$, 3) Limit the extent to which insurance companies can serve only the low-risk clients.  Maybe a combination of all three.

[Dr Q]

Jman, you are right about individuals and small businesses.  If it happened to me, it can happen to anyone.  For most of my career as an engineer and academic, I've been perfectly healthy, and I never worried about health insurance.  I worked for federal govt, state university, and various large corporations.  Health insurance was a small deduction from my paycheck.  I also had a backup policy through my professional organization to cover "major medical" expenses beyond what my regular policy would cover.  Then everything changed when I left the big company to pursue my own projects.  I had only my major medical policy with a $15,000 deductible.  I tried to get an individual policy and found that I couldn't because of a "pre-existing condition" colon polyps.  This is crazy, I thought.  I actually have less chance of colon cancer than average, because all it takes is regular checkups and removal of any that are getting started.  I had a friend who was an administrator at Health Net, but she couldn't do anything to change their policy.  She also cautioned me about applying to other companies.  They all share application data, and I would find myself blacklisted.  To top it all off, my major medical policy was being terminated because the healthy members were dropping out and rates for the rest of us were going sky high.  That's where I first heard the term "death spiral".

I have been on Medicare now since 2012, and once again, I no longer worry about health insurance.  That was a scary few years.  It changed my lifelong belief in free markets.  Brutal efficiency is OK if it means bankruptcy for some idiot starting yet another mattress store.  It is not OK when it means bankruptcy or even death for people who, through no fault of their own, find themselves without insurance.  It is not OK when small employers, as I am now, cannot afford health insurance for their employees.

[Dr Q]

Govt is involved in healthcare primarily because we feel a need to be charitable. We are arguing over how much charity, who should pay, and who should benefit.
The Republican plan, which is finally coming together, seems less charitable than what we have now.
https://www.nytimes.com/.../affordable-care-act-congress...

Let's re-frame this debate, not as stingy Republicans vs poor peoples "rights", but a worthy charity. We want to help, but we may not be able to give enough to satisfy everyone's needs. Agree on a number, say $100 billion that we as a nation are willing to contribute to poor people's healthcare. Then distribute that charity as fairly and efficiently as we can. Don't hide these contributions in some tricky tax credit or hidden transaction between doctors and insurance companies, but rather a direct re-imbursement to the patient. Let's say he is very poor and getting an 80% subsidy from the govt. When he goes to pay a bill, be it an insurance premium or a bill for medical care, he pays 20% of the bill, and requests that the govt pay the rest. If I were that poor person, I would be very grateful to my fellow citizens.

[Dr Q]

More details on the Republican plan to replace Obamacare:

http://www.msnbc.com/rachel-maddow-show/new-republican-health-care-blueprint-falls-far-short?cid=sm_fb_maddow

It is all cuts, except the expansion of Health Savings accounts, which will not help the poor.

[jman]

It's a feint. If they actually pass this plan, the results will be immediate, and the Republicans will get the blame, just in time for the 2018 elections.  The purpose is to get the Democrats to vote it down, while quietly blocking any simple fixes for Obamacare.  Then the R's will mount a massive propaganda campaign to blame the D's in states where Obamacare fails.

[Dr Q]

Jman, the R's will not be able to blame the D's as you expect.  There is simply too much reality in their face.  When 21 million people lose their insurance, and maybe 60 million know someone who did, no clever propaganda is going to make them vote for more of the same.  R's can ignore when Michael Moore makes a movie showing successful healthcare systems in other countries.  They won't be able to ignore successful programs in other states, including red states like Kentucky.

/obamacare-approval-poll.html

[jman]

Dr Q, don't be so confident the R's can't kill Obamacare and get away with it.  The won't do it directly with an up or down vote.  They will hide some "budget reconciliations" in a much larger bill, breaking key pieces of the ACA, and causing it to fail over the next few years, even in states like Kentucky where it is now doing well.  By making the process slow and indirect, people will get used to the pain and will be more easily distracted from the true causes of failure.

[Dr Q]

Here is a map showing winners and losers under the new Republican plan.  Upper right is young and rich.  Lower left is old and poor.

https://www.nytimes.com/interactive/2017/03/08/upshot/who-wins-and-who-loses-under-republicans-health-care-plan.html?action=click&contentCollection=The%20Upshot&module=Trending&version=Full&region=Marginalia&pgtype=article

[jman]

Trump is an idiot.  He just blurted out the real Republican plan.  Blame Obama, of course.

http://www.dailykos.com/story/2017/03/09/1641791/-Trump-Promises-Tea-Party-Groups-He-Will-Punish-America-If-TrumpCare-Fails-He-Will-Let-ACA-Fail

[Dr Q]

My dad was a doctor who hated socialized medicine. He was also very generous with his time in the charity ward. The central political question is who should pay when poor people can't afford their healthcare. When I was a kid, it was doctors like my dad. Before the ACA it was people like me who did not have group insurance. Now its the taxpayer.

[Dr Q]

There is also a separate question - how do we provide access to people who are not part of a large group, like employees at a small business, or self-employed?

As a whole, that group might be higher risk than people working for a large corporation, so everyone's rates would go up a little.

[Dr Q]

Here is an idea for fixing the ACA. The most immediate problem is rates going up due to "adverse selection". Young and healthy people would rather go without insurance, pay a small penalty, and sign up only if they get sick.

Penalties are very unpopular, and will be unfair to people who simply don't have the money to pay the premiums. Instead of penalties for people who don't have insurance, we should offer interest-free loans to people who do, and still need assistance with medical costs. With loans and subsidies together, there will be no excuse for anyone to go without insurance.

What about those who still demand the "freedom" to go without insurance? What do we do when they show up at the emergency room and can't pay for these services? Give them a regular loan, like a student loan, with interest and no escape through bankruptcy. Add a years worth of premiums they didn't pay. The loan can be repaid with surcharges on their taxes.

[Dr Q]

Here is a critique of the new healthcare bill that just passed the House:

The Trumpcare Disaster

and here is a doctor's opinion:

nytimes.com/2017/05/05/opinion/what-the-republican-health-plan-gets-right

[jman]

The Fox News Guy who wrote this "doctor's opinion" says we are being "manipulated into sharing the costs of other people’s excessive health care" and that "5 percent of Americans generate more than 50 percent of health care expenses".  This sounds like Fox Alternative Facts.  A better analogy would be "x% of homeowners generate 50% of fire insurance claims", where x is maybe 1%.  That's what insurance is for, that one in a hundred chance you will suffer a disaster.

The Fox News Guy argues our costs are too high because of excessive health care for people who are not paying enough, and these people should pay more. We should "let states create high-risk pools for patients with pre-existing conditions who had let their insurance coverage lapse, and who could then be charged premiums more in keeping with their health care needs."

If the Fox News Guy's Alternative Reality were true, we would see countries with universal healthcare like Canada and Australia having much higher per-capita costs.  In Real Reality we are spending twice as much as these "socialist" countries.

US_spends_much_more_on_health

[Dr Q]

Jman, the "Fox News Guy" also wrote in the same article:

"These risk-pool premiums can and should be subsidized by the government. A recent report from the Kaiser Family Foundation found that high-risk pools can work, but have been historically underfunded. Trumpcare should change that — though it will cost more than the House bill’s $8 billion in additional funding. Drastic cuts to Medicaid should also be reversed, which could help the bill pass the Senate."

High risk pools could work, if properly subsidized. No?  By separating the high-risk folks into separate pools, we could isolate this most troublesome issue from the rest of the healthcare debate, and move more quickly to universal, affordable insurance for everyone else.  Different pools might have different subsidies.  Babies with congenital heart disease could get full subsidy, bringing their rates down to no more than healthy babies have to pay.  Smokers might have to join a pool that excludes coverage for lung cancer and heart disease, and pay a little more for everything else.  Subsidies for mental problems, alcoholism, etc. - That is an issue Democrats & Republicans can debate and come up with a compromise, which might be different in Texas than in Massachusetts.

[jman]

Sure, high risk pools could work.  Many structures could work, if the people writing these laws would act with honesty and good faith.  You say the high-risk pools could simplify the healthcare debate and allow quick resolution of most other issues.  I say the Republicans are using them to camouflage their true intent, which is to take billions from the "moochers" and give to the rich.  Instead of straight up repealing pre-existing conditions, they can "let the states decide", and accomplish the same thing, *after* the next election.  If they really think high risk pools are the solution, do it now.  Require that states exercise their option *before* the next election.

The central issue in this debate, which the Republicans won't acknowledge in public, is whether healthcare subsidies are going to "moochers" or to people who deserve this help.  Honest people can argue either side of this issue.  It is not about saving money.  If all we wanted was a good system with lower costs, we would do like Canada or Australia, Medicare for all.

[Dr Q]

Jman, I agree with you on the need for honesty and good faith.  The corruption of our beautiful democracy is alarming.  Our long slide into mediocrity is depressing.  I also agree that Medicare for All, regardless of its problems, would save us a lot of money.

[clement...@gmail.com]

Record profits
But the claim that corporations are losing money on Obamacare ignores the record-breaking profits and compensation packages that health insurers continue to collect.

Consider UnitedHealth, the nation's largest health insurer that is leaving the marketplace next year. UnitedHealth claims that Obamacare has reduced its 2016 earnings by $850 million. While they might have $850 million less than they wanted, UntedHealth’s profits are still soaring.

In fact, UnitedHealth announced record-breaking profits in 2015, followed by an even better year this year. In July 2016, UnitedHealth celebrated revenues that quarter totalling $46.5 billion, an increase of $10 billion since the same time last year. And company filings show that UnitedHealth’s CEO Stephen J. Hemsley made over $20 million in 2015. To be fair, that is a pay cut. The previous year, in 2014, Hemsley took home $66 million in compensation.

"If you look at our Proxy, the Board lays out in extensive detail, in great detail, the thinking behind both CEO and executive compensation,” UnitedHealth executive Don Nathan tells ConsumerAffairs.

“At his request, Mr. Hemsley’s total compensation is below the median for CEOs in the Company’s peer group,” the proxy statement says, “even though the Board believes his performance has been outstanding."

In other words, Hemsley is far from being the only health insurance CEO making millions of dollars every year.

Sky-high profits
Aetna, whose CEO Mark Bertolini reported to the Securities and Exchange Commission a $27.9 million compensation in 2015, has similarly celebrated sky-high profits. “In 2015, we reported annual operating revenue of over $60.3 billion, a record for the Company,” Aetna recently told investors.

Aetna spokesman T.J. Crawford wrote a brief statement to ConsumerAffairs describing the company's losses under Obamacare: “As updated on our Q3 earnings call last week, we now expect a 2016 pretax loss in our individual products (on- and off-exchange) of approximately $350 million,” he said via email, otherwise directing questions to a company press release.

Thanks to the insurance industry’s combination of record profits in recent years and increasing premiums, people on both sides of the political aisle have criticized the Affordable Care Act as being more beneficial to the insurance industry than consumers, though politicians remain deeply divided on what a good, viable alternative would entail.

“Given this dysfunctional reality under the ACA, it’s remarkable that neither major political party has a plan to truly fix the situation,” wrote Dr. John Geyman, a professor and past president of Physicians for a National Health Program, a nonprofit advocating for a single-payer national health insurance program, in a recent column.

[Dr Q]

These figures on insurance industry profits are indeed shocking, and a strong argument against our current system.  Whatever benefit there is to competition in the insurance market seems to be overwhelmed by the advantage the industry has in manipulating our current system, through lobbyists, political contributions, price fixing, whatever.  The issue is corruption, and I don't think that will be any different with one payer or multiple payers.  In fact, it might be easier to corrupt a single payer.

We could have a multiple payer system that works as efficiently as the credit card industry.  Lot's of excess profits there, but merchants who know what they are doing can sign up with a company that works on behalf of the merchant, getting the lowest rates possible, and charges only a small monthly fee.  My "merchant services" company charges 0.2% of my total sales volume, and I get several calls a year from competitors who can't beat that price.

Imagine a healthcare industry with many insurance companies all competing to provide a set of standard contracts, regulated to eliminate all the deceptions and fine print we see now.  The essential role of the insurance companies would then be signing up groups of doctors, and striking the right compromise between cost and quality of care.  Policies might vary by 20% in cost, with the cheaper plans having fewer and less experienced doctors.  Profits to the insurance company would be 5% or less, and would be disclosed in a statement each year.