A Less Than Honest Policy

By BOB HERBERT, NY Times, December 29, 2009

There is a middle-class tax time bomb ticking in the Senate’s version of President Obama’s effort to reform health care.

The bill that passed the Senate with such fanfare on Christmas Eve would impose a confiscatory 40 percent excise tax on so-called Cadillac health plans, which are popularly viewed as over-the-top plans held only by the very wealthy. In fact, it’s a tax that in a few years will hammer millions of middle-class policyholders, forcing them to scale back their access to medical care.

Which is exactly what the tax is designed to do.

The tax would kick in on plans exceeding $23,000 annually for family coverage and $8,500 for individuals, starting in 2013. In the first year it would affect relatively few people in the middle class. But because of the steadily rising costs of health care in the U.S., more and more plans would reach the taxation threshold each year.

Within three years of its implementation, according to the Congressional Budget Office, the tax would apply to nearly 20 percent of all workers with employer-provided health coverage in the country, affecting some 31 million people. Within six years, according to Congress’s Joint Committee on Taxation, the tax would reach a fifth of all households earning between $50,000 and $75,000 annually. Those families can hardly be considered very wealthy.

Proponents say the tax will raise nearly $150 billion over 10 years, but there’s a catch. It’s not expected to raise this money directly. The dirty little secret behind this onerous tax is that no one expects very many people to pay it. The idea is that rather than fork over 40 percent in taxes on the amount by which policies exceed the threshold, employers (and individuals who purchase health insurance on their own) will have little choice but to ratchet down the quality of their health plans.

These lower-value plans would have higher out-of-pocket costs, thus increasing the very things that are so maddening to so many policyholders right now: higher and higher co-payments, soaring deductibles and so forth. Some of the benefits of higher-end policies can be expected in many cases to go by the boards: dental and vision care, for example, and expensive mental health coverage.

Proponents say this is a terrific way to hold down health care costs. If policyholders have to pay more out of their own pockets, they will be more careful — that is to say, more reluctant — to access health services. On the other hand, people with very serious illnesses will be saddled with much higher out-of-pocket costs. And a reluctance to seek treatment for something that might seem relatively minor at first could well have terrible (and terribly expensive) consequences in the long run.

If even the plan’s proponents do not expect policyholders to pay the tax, how will it raise $150 billion in a decade? Great question.

We all remember learning in school about the suspension of disbelief. This part of the Senate’s health benefits taxation scheme requires a monumental suspension of disbelief. According to the Joint Committee on Taxation, less than 18 percent of the revenue will come from the tax itself. The rest of the $150 billion, more than 82 percent of it, will come from the income taxes paid by workers who have been given pay raises by employers who will have voluntarily handed over the money they saved by offering their employees less valuable health insurance plans.

Can you believe it?

I asked Richard Trumka, president of the A.F.L.-C.I.O., about this. (Labor unions are outraged at the very thought of a health benefits tax.) I had to wait for him to stop laughing to get his answer. “If you believe that,” he said, “I have some oceanfront property in southwestern Pennsylvania that I will sell you at a great price.”

A survey of business executives by Mercer, a human resources consulting firm, found that only 16 percent of respondents said they would convert the savings from a reduction in health benefits into higher wages for employees. Yet proponents of the tax are holding steadfast to the belief that nearly all would do so.

“In the real world, companies cut costs and they pocket the money,” said Larry Cohen, president of the Communications Workers of America and a leader of the opposition to the tax. “Executives tell the shareholders: ‘Hey, higher profits without any revenue growth. Great!’ ”

The tax on health benefits is being sold to the public dishonestly as something that will affect only the rich, and it makes a mockery of President Obama’s repeated pledge that if you like the health coverage you have now, you can keep it.

Those who believe this is a good idea should at least have the courage to be straight about it with the American people.

The Lost Weekend

By GAIL COLLINS

The Senate is going to be in session all weekend, debating the big health care bill and arguing about which direction the cost-curve is heading. This is a positive development on two counts. It keeps senators off the streets while providing much-needed employment in the chart-making sector of our economy.

Or we could just lock them in a basement until they’re done squabbling. Either way is good, but the basement option would have the advantage of covering some of the less-active debaters with an attractive coat of mildew. In any case, I guarantee you that the number of normal Americans who will pay attention can be numbered in the low single digits.

So as a public service to the nonlistening audience, let me give you a summary of the important action so far:

ROUND ONE Republicans: Let’s get rid of all the Medicare savings in the bill. Think of the seniors!

Democrats: Yettaruttayetta.

ROUND TWO Mammograms! Everybody loves them. Can’t have enough.

ROUND THREE Republicans: Let’s get rid of part of the Medicare savings in the bill. Think of the seniors!

Democrats: Ruttayettarutta.

Is that perfectly clear? Good. Now we will return to our regularly scheduled conversation. Did you see that hot reality show “Hoarders” on A&E the other night? What about that lady who hoarded her dead cats? If “Hoarders” gets superpopular, do you think lots of people will start putting dead cats in their living room just so they can get on TV and be famous? Maybe somebody will try to bring dead cats to a state dinner at the White House! Does the Secret Service have a plan to avert this?

Sorry. I’ll behave. Back to the health care bill.

The Republicans are the fiscal conservatives in Congress, at least in the years when they aren’t actually in power. They were never going to rally around an expensive new government program that fails to provide a single new market for corn-based products.

But you would expect them to try to push the whole project in the most economical direction possible.

For instance, the bill would establish an independent commission on Medicare payment rates. This is a very big deal and you are going to have to take my word that health care economists fall over with excitement when it comes up.

But the Senate Democrats’ current version of the bill would only allow the panel experts to act when Medicare spending rises at a faster rate than other health care spending. Since health care spending has been going through the roof, we’re talking about waiting until Medicare spending goes through the ozone layer.

Obviously, this is an area where the Republicans would want to swing into action. And they did. They prepared an amendment eliminating the Medicare panel entirely.

In fact, G.O.P. senators appear to have amendments aimed at wiping out virtually all the cost-cutting the Democrats have put in the bill, including productivity adjustments and incentives for innovation in health care delivery.

If they can’t kill the bill completely, Republicans who are not from Maine seem intent on raising its price tag. While terrifying senior citizens in a cynical attempt to influence their vote in the next election cycle. Although I’m sure Senator Tom Coburn of Oklahoma just misspoke when he said: “I have a message for you: You’re going to die sooner."

On Friday, much of the debate was directed at Medicare Advantage. This is a program that flourished during the privatization craze. And like many attempts to save money by shoehorning private businesses into government programs, it wound up costing a ton. The Medicare Advantage policyholders cost the government 14 percent more than regular Medicare recipients, although they do often get extra benefits, sometimes including free Band-Aids or gym memberships.

Now let us be fair. There are some good services in the Advantage mix, and gym memberships are in and of themselves a fine thing. But you would think the political party that eviscerated the Clinton stimulus plan over an appropriation for late-night basketball programs would really be ticked at the idea that we’re providing a 14 percent subsidy to some Medicare recipients so they can have access to Stairmasters.

Au contraire. In fact, on Thursday Senator Orrin Hatch proposed an amendment that would eliminate the entire $120 billion in Medicare Advantage savings from the bill.

There is no sane explanation for all this other than crass political calculation. On Thursday, Senator Michael Bennet, a Colorado Democrat who’s up for election next year, introduced an amendment specifically promising that Medicare recipients would not lose any of their current guaranteed benefits. It passed 100 to 0. Meanwhile, Colorado voters were getting robocalls from John McCain warning that the health care bill was going to cut their “vital Medicare coverage.”

Now, about those dead cats.

The Republican Health Plan

Note From Greetings:

No or reduced coverate. Most of the uninsured still uninsured. Ability of insurance companies to cross state lines. INability of states to regulate something the federal government might have. Gee.. um.. what's not to like? (They've had this plan around for years. Why not make it public before? Perhaps to avoid criticism?)

NY Times Editorial, November 6, 2009

House Republican leaders have produced their own health care reform bill. Here is the first thing you need to know: It would do almost nothing to reduce the scandalously high number of Americans who have no insurance. And it makes only a token stab at slowing the relentlessly rising costs of medical care.

Despite that, the Republicans are pitching their bill as far more affordable than the Democrats’ approach. And you are sure to hear a lot in coming days about how it could reduce health insurance premiums. How it compares in that respect with the Democratic proposal is not yet clear. But a lot of the Republicans’ savings on premiums come from reduced coverage. Pay less and get less.

The good news is that this bill has no chance of passing. The bad news is that unless the White House and Congressional Democrats push back with the hard facts, the Republicans could use it to spread false hope of a “cheaper” alternative to scuttle real health care reform.

There’s no question that the Republicans’ bill is cheaper because it does so little to help the uninsured. According to the Congressional Budget Office, it would provide $61 billion over 10 years to expand coverage, compared with more than $1 trillion in the Democrats’ bill.

That paltry effort, the budget office estimates, would extend coverage to a few million people who would otherwise be uninsured in 2019, leaving 52 million citizens and legal residents below Medicare age without coverage or about 17 percent of that population, right where it is today. This is a dismaying abdication of responsibility.

The Republican bill is an amalgam of market-oriented and state-based reforms that conservatives have long proposed, including enhancement of tax-sheltered accounts to help pay premiums and allowing people to buy insurance in other states that might permit skimpier benefits than their home state.

It has some good provisions, such as prohibiting insurers from imposing annual or lifetime caps on what they will pay and automatic enrollment of workers in employer-sponsored group coverage. But it would not prevent insurers from denying coverage or charging higher premiums based on pre-existing conditions.

The Republicans have been railing that the Democratic reforms will do little to slow the rapid rise in medical costs. But neither party has a solution. The Republican bill would cap malpractice awards — a clear infringement of the rights of injured patients. It would get lesser savings by requiring electronic transactions for administrative tasks and opening an approval process for generic biological medicines. The Democratic bills would use both of those for savings and initiate an array of pilot projects to try to find solutions.

The Republican bill’s main emphasis is on reducing the cost of health insurance premiums, a real concern. Compared with current trends, the Congressional Budget Office estimates that under the Republican bill, the average premium would drop by 7 to 10 percent for employees enrolled in group plans at small businesses and by 5 to 8 percent for people who buy their own policies. At large employers, where most Americans get group coverage, the average premium might drop by a modest 0 to 3 percent.

Part of the premium reduction was attributed to savings in the cost of medical services. But much was attributed to shrinking the services covered. The Democrats plan to set minimum benefit requirements to protect people from skimpy policies that leave them without adequate protection when they need it.

The budget office is planning to estimate how the far more complex Democratic bills would affect premiums. Americans need to know that so they can make a full comparison. But there should be no illusions here. The “affordable” Republican health care reform isn’t health care reform. from Greetings:

Senate Confirms Surgeon General

Note From Greetings: The Republicans in Congress obstructed confirming the Surgeon General for the first 10 months of Obama's administration. Now there are 23 childrens' deaths last week attributed to H1N1..more than died from the flu in ALL of last year. One possibly in the town near here)... and NOW they decide they can approve... Dr. Benjamin. I guess they don't want to be blamed for not having someone in charge during the deaths of all those kids... except that they're responsible for it. They could have confirmed her long ago, and she could have been on the case.

By Kate Phillips, NY Times, October 29, 2009

After much agitation earlier in the day, the Senate voted to confirm Dr. Regina Benjamin as the nation’s surgeon general on Thursday night amid a national emergency over the swine flu outbreak.

The Senate approved her on a voice vote. On Thursday morning, Senate Majority Leader Harry Reid, Democrat of Nevada, had taken to the floor to complain that her nomination, along with others, had been held up. Republicans had stalled her confirmation over another issue, the so-called gag order imposed on insurance companies about whether they could inform Medicare beneficiaries about possible cuts to their benefits in the health care bills being negotiated in the House and Senate. The administration has since retreated on that issue.

With her nomination stalled, the Department of Health and Human Services had named Dr. Donald Weaver to be the acting surgeon general.

Dr. Benjamin is well known as the founder of the Bayou La Batre Rural Health Clinic in Bayou La Batre, Ala., and for keeping that clinic running during two hurricanes.

Health insurers protecting their own paychecks?

I'm startled that any portion of a CEO salary can be subsidized by tax payer dollars, let alone having a debate about whether or not to reduce it by $500k.

Mike Madden, Salon.com, October 16, 2009

WASHINGTON -- You can change the regulations, order them to stop dropping patients from the rolls, even mess with health insurance companies' profit margins. Just don't try to cut the pay of their top executives.

That, at least, seems to be the point of some recent objections reportedly raised by Karen Ignagni, the CEO of America's Health Insurance Plans, to the healthcare reform bill the Senate Finance Committee approved this week. Time's Michael Scherer reports on a phone call between Ignagni, Nancy-Ann DeParle, the White House's top healthcare official, and a senior Senate Finance staffer a few weeks ago. DeParle tells Scherer the health insurance lobbying group was particularly nonplussed by provisions in the legislation that would lower the amount of executive pay that insurance firms can deduct from their taxable corporate income. A Senate source gave Salon the same account of the call.

The insurers had been on board, shakily, with healthcare reform plans all year, but broke with the White House and Democrats in Congress earlier this week by issuing a widely mocked study saying the proposals would actually raise costs. (The accounting firm that wrote the study, PriceWaterhouseCoopers, later put out a statement distancing itself from its own work.)

Might an industry that makes money by refusing to pay for its customers' healthcare have been driven to the split by a more personal form of greed? The provision on pay was added to the legislation by Sen. Blanche Lincoln, D-Ark., during the Finance panel's debate in the last few weeks. It would lower, from $1 million to $500,000, the amount of executive salary that can be written off as a business expense. The effect would be either to raise taxes on insurance companies, by as much as $60 million a year over the next decade, or -- worse! -- force them to cut pay for their executives to avoid the tax hike. A Lincoln aide said "she didn't think it was right" to require millions of Americans to buy health insurance, providing the insurance companies with new revenue, and also continue to give tax breaks for high salaries at the firms.

Ignagni tells Scherer she never raised the issue of executive compensation, in any form, with DeParle. "I'm very sure about having no discussions about executive compensation," she says. "I'm not saying that they are lying. I'm saying that maybe they are mistaken in confusing me with some other person in our industry. But I very clear about what I raised and what I didn't." That doesn't mean, of course, that she's happy about the potential pay cut for her association's members.

White House and Senate staffers will work through the weekend trying to merge the Finance Committee's bill with a more liberal one passed earlier in the year by the Senate Health, Education, Labor and Pensions Committee. Now that the insurers have decided to oppose reform, though, don't expect the merged bill to go particularly easy on them -- or on their executives' paychecks.

― Mike Madden

Protect Insurance Companies

Protect Insurance Companies PSA from Will Ferrell

Blue Double Cross

By PAUL KRUGMAN, NY Times

That didn’t take long. Less than two weeks have passed since much of the medical-industrial complex made a big show of working with President Obama on health care reform — and the double-crossing is already well under way. Indeed, it’s now clear that even as they met with the president, pretending to be cooperative, insurers were gearing up to play the same destructive role they did the last time health reform was on the agenda.

So here’s the question: Will Mr. Obama gloss over the reality of what’s happening, and try to preserve the appearance of cooperation? Or will he honor his own pledge, made back during the campaign, to go on the offensive against special interests if they stand in the way of reform?

The story so far: on May 11 the White House called a news conference to announce that major players in health care, including the American Hospital Association and the lobbying group America’s Health Insurance Plans, had come together to support a national effort to control health care costs.

The fact sheet on the meeting, one has to say, was classic Obama in its message of post-partisanship and, um, hope. “For too long, politics and point-scoring have prevented our country from tackling this growing crisis,” it said, adding, “The American people are eager to put the old Washington ways behind them.”

But just three days later the hospital association insisted that it had not, in fact, promised what the president said it had promised — that it had made no commitment to the administration’s goal of reducing the rate at which health care costs are rising by 1.5 percentage points a year. And the head of the insurance lobby said that the idea was merely to “ramp up” savings, whatever that means.

Meanwhile, the insurance industry is busily lobbying Congress to block one crucial element of health care reform, the public option — that is, offering Americans the right to buy insurance directly from the government as well as from private insurance companies. And at least some insurers are gearing up for a major smear campaign.

On Monday, just a week after the White House photo-op, The Washington Post reported that Blue Cross Blue Shield of North Carolina was preparing to run a series of ads attacking the public option. The planning for this ad campaign must have begun quite some time ago.

The Post has the storyboards for the ads, and they read just like the infamous Harry and Louise ads that helped kill health care reform in 1993. Troubled Americans are shown being denied their choice of doctor, or forced to wait months for appointments, by faceless government bureaucrats. It’s a scary image that might make some sense if private health insurance — which these days comes primarily via HMOs — offered all of us free choice of doctors, with no wait for medical procedures. But my health plan isn’t like that. Is yours?

“We can do a lot better than a government-run health care system,” says a voice-over in one of the ads. To which the obvious response is, if that’s true, why don’t you? Why deny Americans the chance to reject government insurance if it’s really that bad?

For none of the reform proposals currently on the table would force people into a government-run insurance plan. At most they would offer Americans the choice of buying into such a plan.

And the goal of the insurers is to deny Americans that choice. They fear that many people would prefer a government plan to dealing with private insurance companies that, in the real world as opposed to the world of their ads, are more bureaucratic than any government agency, routinely deny clients their choice of doctor, and often refuse to pay for care.

Which brings us back to Mr. Obama.

Back during the Democratic primary campaign, Mr. Obama argued that the Clintons had failed in their 1993 attempt to reform health care because they had been insufficiently inclusive. He promised instead to gather all the stakeholders, including the insurance companies, around a “big table.” And that May 11 event was, of course, intended precisely to show this big-table strategy in action.

But what if interest groups showed up at the big table, then blocked reform? Back then, Mr. Obama assured voters that he would get tough: “If those insurance companies and drug companies start trying to run ads with Harry and Louise, I’ll run my own ads as president. I’ll get on television and say ‘Harry and Louise are lying.’ ”

The question now is whether he really meant it.

The medical-industrial complex has called the president’s bluff. It polished its image by showing up at the big table and promising cooperation, then promptly went back to doing all it can to block real change. The insurers and the drug companies are, in effect, betting that Mr. Obama will be afraid to call them out on their duplicity.

It’s up to Mr. Obama to prove them wrong.

It’s Not Just the Uninsured

I see this all too often, firsthand. (Note from Greetings)

By BOB HERBERT, NY Times OpEd, November 17, 2007

Sandra Hightower never thought of herself as particularly political. She worked, and much of her free time revolved around her daughter, Brittney, a fiercely outgoing teenager with a passion for cheerleading at her high school in Nacogdoches, Tex.

But “after getting slapped in the face with reality,” Ms. Hightower said she’s ready to go to Washington herself if that would help get Congress to do something about the health insurance crisis that is responsible for so much unnecessary suffering and death in the U.S.

The tedious, hair-splitting debates over health care that we’re getting from the presidential candidates — those who talk about health care at all — seem out of sync with the enormity of the problem. For families without the protection of health insurance, the devastating combination of serious illness and imminent financial ruin can be absolutely mind-numbing, stunning in its tragic intensity.

For Sandra Hightower, the nightmare began in the summer of 2005 when Brittney had to have a cyst on an ovary removed. More cysts developed and in early 2006 doctors found that Brittney had cancer. She underwent surgery in Houston and the prognosis, according to Ms. Hightower, was good. “Everything was fine,” she said. “All results came back clear.”

Ms. Hightower did not think at the time that she would take too much of a financial hit because she had health insurance at her job, and the policy covered Brittney.

“All I had on my mind was Brittney,” she said.

The cancer recurred three or four months later and more surgery was required, followed by chemotherapy. The 15-year-old who loved to dance, and who wasn’t sure whether she wanted to be a model or a pediatric nurse, was now having to battle for her life like a warrior in combat.

The next round of bad news came in a double dose. One night, after coming home from school, Brittney suddenly found that she couldn’t walk. The cancer had attacked her spinal cord. As the doctors geared up to treat this new disaster, Ms. Hightower received word that her insurance policy had maxed out. The company would not pay for any further treatment.

Ms. Hightower was aghast: “I said, ‘What do you mean? It was supposed to be a $3 million policy.’ ”

She hadn’t understood that there was an annual limit of $75,000 on benefits. “It was just devastating when they told me that,” she said.

Most of the debate about access to health care has centered on people without insurance. But there are cases like this one all over the country in which individuals are working and paying for coverage that, perversely, kicks out when a devastating illness kicks in.

Americans with inadequate health coverage — the underinsured — are a major component of the national health care crisis. Like the uninsured, they can be denied desperately needed treatment for financial reasons; they often suffer financial ruin; and in many cases they die unnecessarily.

“This is a very significant problem,” said Daniel Smith, president of the American Cancer Society’s Cancer Action Network. “We want to help educate Americans more broadly about the idea that while they think they might be insured, when they’re diagnosed with something as devastating as cancer their policies may not give them the coverage they need.”

Sandra Hightower became almost frantic with the combined tasks of caring for her daughter and trying to figure out how to pay for the increasingly expensive treatments.

“Her back surgery, with the reconstruction and all that, was over three hundred and some thousand dollars,” she said. “I had to start doing fund-raisers, bake sales. And the community kicked in, my community here in Nacogdoches. Definitely the high school. And people donated to a benefit fund at the bank.”

After several months, Brittney was declared eligible for federal disability benefits, which enabled her to qualify for Medicaid. “But we still owed for everything before that,” said Ms. Hightower.

Brittney fought like crazy to survive, her mother said. But in the end, she didn’t make it. She died, at age 16, on June 5.

“I see her everywhere,” said Ms. Hightower, who still owes thousands of dollars in medical bills. “When I go to the grocery store, I see her favorite food. I go shopping, and I see the perfect little outfit that she would love.

“I’m so lost right now. And I feel like I failed my baby because I couldn’t bring in all the help she needed.”