The Huffington Post Laura Hibbard First Posted: 9/3/11 12:32 PM ET Updated: 9/3/11 01:14 PM ET
Kyle Willis, a 24-year-old man from Ohio, died on Wednesday from a tooth infection, Cincinati's WLWT reported.
According to the station, Willis' wisdom tooth began hurting two weeks ago, and dentists said it needed to be removed.
Willis, however, was a single father without health insurance, and couldn't afford the procedure.
After developing severe headaches and facial swelling, he went to the emergency room.
Although doctors recommended antibiotics and pain medication, Willis could only afford one.
Patti Collins, Willis's aunt, told WLWT what happened next.
"'The (doctors) gave him antibiotic and pain medication. But he couldn't afford to pay for the antibiotic, so he chose the pain meds, which was not what he needed,' Collins said. Doctors told Willis' family that while the pain had stopped, the infection kept spreading -- eventually attacking his brain and causing it to swell."
Willis leaves behind a 6-year-old daughter, and family members are hoping to create a fund for her future college education.
Dr. Irvin Silverstein, a dentist at the University of California told ABC news that Willis' story isn't uncommon.
"People don't realize that dental disease can cause serious illness.The problems are not just cosmetic. Many people die from dental disease. When people are unemployed or don't have insurance, where do they go? What do they do? Silverstein said. People end up dying, and these are the most treatable, preventable diseases in the world."
Four years ago, 12-year-old Demonte Drived died after his mother, Alyce, couldn't find a dentist who took Medicaid and bacteria from a tooth abscess spread to his brain.
A Kaiser Family Foundation report found that between 2007 and 2008, the number of uninsured adults rose by 1.5 million.
ABC news added that in April the same foundation also found that 33% of people skipped dental care because they could not afford it.
Rep. Hayes, I write you this open letter in response to your Circleville Herald column of 10 August “Health Care Close to Home”. I sincerely invite you to spend a shift or two with me in the emergency department to see and feel face to face the desperation of the tens of thousands of down-home Ohioans without access to healthcare. These are not slackers or persons who just wish to freeload on your tax dollars, they are our neighbors and friends, the barber who cuts your hair, the server who waits on you, the clerk in the that large store. Often they are working two jobs trying to make ends meet, while cutting back on their own medicines to save for kid’s school supplies. Come and feel the pain of real persons suffering and dying in your district having been abandoned by profitable insurance companies, whose profit margins are at record levels (“Health Insurers Make Record Profits as Many Postpone Care” New York Times 14 May 2011).
Like you, I too have problems with the Patient Protection and Affordable Care Act (PPACA), called “Obamacare” by detractors when “Romneycare” is in fact more accurate, as the PPACA is modeled after Massachusetts healthcare reform signed by Republican governor Mitt Romney in 2006. I have problems with the PPACA not because of your concern that it is a government program controlled by inaccessible far-away elected representatives, but because it keeps in place private health insurance companies controlled by even more inaccessible, often dishonest, and even farther away corporate boardrooms that I can’t even un-elect.
Dishonest a strong word? The Associated Press article of 27 July “Insurers Allegedly Provided Inaccurate Medical-Loss Ratios” notes several Florida insurance companies took advantage of lax oversight under Governor Rick Scott, falsely claiming they spent funds on children’s Medicaid when in fact they pocketed the cash. Florida Governor Rick Scott, a tea party favorite, presided as CEO of the Hospital Corporation of America/Columbia Healthcare when his company was fined one of the largest penalties ever levied by the federal government for insurance fraud. Rep. Hayes, your column implies that the PPACA removes local choices that “are best handled by the people closest to home who know the situation best.” Ask your constituents how much honest close-to-home help they received from their health insurance company.
Rep. Hayes, Ohioans health is at risk not because of too much government, but too little. We the people have failed to demand that our elected representatives appropriately oversee and regulate Wall Street traded health insurance giants that increase their bottom line by not keeping their word on the promise they offer: financial security in the face of illness. Wendell Potter, former Cigna public relations officer turned whistleblower and author of “Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR is Killing Health Care and Deceiving Americans” warns “One of the secrets to achieving these [record profits] is what the insurers euphemistically call ‘medical management’. That often translates into denied claims and denied coverage for doctor-ordered care. The fewer claims they pay and the more procedures they refuse to pay for, the more money is left over for investors to put in their pockets… … It’s to the insurer’s advantage for it to be complicated and confusing and hard to deal with insurance companies. They profit as a result of the confusion.” Private for-profit health insurance companies, these are the real death panels.
Rep. Hayes, for the sake of all Ohioans I urge you to support HB 287 the “Ohio Health Security Act” introduced by Reps. Bob Hagan and Mike Foley. HB 287 would move Ohio closer to a single payer model, shown throughout the industrialized world to be the most cost-effective and compassionate. Vermont has just passed single payer—no one in Vermont will die for lack of health insurance. The prestigious New England Journal of Medicine, September 2009, published “Health Insurance and Mortality in U.S. Adults” estimating that 45,000 Americans die yearly from lack of health insurance; this does not include those who die as a result of denied claims. Some of these deaths are your constituents.
Rep. Hayes, until we reach single payer you can save the lives of many Ohioans by reining in the worst of health insurance company abuses by supporting the PPACA. Under these reforms no Ohioan can be denied insurance for pre-existing conditions, no neighbor of ours will find their insurance taken away when their care threatens company profits. Arbitrary denials of claims by insurers will, for the first time, be subject to appeal, as will premium increases. Insurers will be forced to spend at least 80-85% of all premiums collected on direct patient care. Under the Patient Protection and Affordable Care Act more Ohioans will live, certainly the best “down home” neighborly gift we can give.
Brad Cotton, member Physicians for a National Health Program
By Robert Reich, Robert Reich's Blog, August 16, 2011
Why the new healthcare law should have been based on Medicare. (And what Democrats should have learned by now.)
Two appellate judges in Atlanta - one appointed by President Bill Clinton and one by George H.W. Bush - have just decided the Constitution doesn't allow the federal government to require individuals to buy health insurance.
The decision is a major defeat for the White House. The so-called "individual mandate" is a cornerstone of the Affordable Care Act, President Obama's 2010 healthcare reform law, scheduled to go into effect in 2014.
The whole idea of the law is to pool heath risks. Only if everyone buys insurance can insurers afford to cover people with preexisting conditions, or pay the costs of catastrophic diseases.
The issue is now headed for the Supreme Court (another appellate court has upheld the law's constitutionality) where the prognosis isn't good. The Court's Republican-appointed majority has not exactly distinguished itself by its progressive views.
Chalk up another one for the GOP, outwitting and outflanking the President and the Democrats.
Remember the health-care debate? Congressional Republicans refused to consider a single-payer system that would automatically pool risks. They wouldn't even consider giving people the option of buying into it.
The President and the Democrats caved, as they have on almost everything. They came up with a compromise that kept health care in the hands of private insurance companies.
The only way to spread the risk in such a system is to require everyone buy insurance.
Which is exactly what the two appellate judges in Atlanta object to. The Constitution, in their view, doesn't allow the federal government to compel citizens to buy something. "Congress may regulate commercial actors," they write. "But what Congress cannot do under the Commerce Clause is mandate that individuals enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die."
Most Americans seem to agree. According to polls, 60 percent of the public opposes the individual mandate. Many on the right believe it a threat to individual liberty. Many on the left object to being required to buy something from a private company.
Had the President and the Democrats stuck to their guns during the health-care debate and insisted on Medicare for all, or at least a public option, they wouldn't now be facing the possible unraveling of the new healthcare law.
After all, Social Security and Medicare - the nation's two most popular safety nets - require every working American to "buy" them. The purchase happens automatically in the form of a deduction from everyone's paychecks.
But because Social Security and Medicare are government programs they don't feel like mandatory purchases. They're more like tax payments, which is what they are - payroll taxes.
There's no question payroll taxes are constitutional, because there's no doubt that the federal government can tax people in order to finance particular public benefits.
Americans don't mind mandates in the form of payroll taxes for Social Security or Medicare. In fact, both programs are so popular even conservative Republicans were heard to shout "don't take away my Medicare!" at rallies opposed to the new health care law.
Requiring citizens to buy something from a private company is entirely different. If Congress can require citizens to buy health insurance from the private sector, reasoned the two appellate judges in Atlanta, what's to stop it from requiring citizens to buy anything else? If the law were to stand, "a future Congress similarly would be able to articulate a unique problem … compelling Americans to purchase a certain product from a private company."
Other federal judges in district courts - one in Virginia and another in Florida - have struck down the law on similar grounds. They said the federal government has no more constitutional authority requiring citizens to buy insurance than requiring them to buy broccoli or asparagus. (The Florida judge referred to broccoli; the Virginia judge to asparagus.)
Social Security and Medicare aren't broccoli or asparagus. They're as American as hot dogs and apple pie.
The Republican strategy should now be clear: Privatize anything that might otherwise be a public program financed by tax dollars. Then argue in the courts that any mandatory purchase of it is unconstitutional because it exceeds the government's authority. And rally the public against the requirement.
Remember this next time you hear Republican candidates touting Paul Ryan's plan for turning Medicare into vouchers for seniors to buy private health insurance.
So what do Obama and the Democrats do if the individual mandate in the new healthcare law gets struck down by the Supreme Court?
Immediately propose what they should have proposed right from the start - universal healthcare based on Medicare for all, financed by payroll taxes. The public will be behind them, as will the courts.
Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including "The Work of Nations," "Locked in the Cabinet," "Supercapitalism" and his latest book, "AFTERSHOCK: The Next Economy and America's Future." His 'Marketplace' commentaries can be found on publicradio.com and iTunes.
By the St. Louis Dispatch Editorial Board | Posted: Wednesday, August 10, 2011 12:00 am
If America truly is serious about dealing with its deficit problems, there's a fairly simple solution. But you're probably not going to like it: Enact a single-payer health care plan.
See, we told you weren't going to like it.
But the fact is that everyone who has studied the deficit problem has agreed that it's actually a health care problem — more specifically, the cost of providing Medicare benefits to an aging and longer-living population. The bipartisan National Commission on Fiscal Responsibility and Reform reported last December: "The Congressional Budget Office (CBO) projects if we continue on our current course, deficits will remain high throughout the rest of this decade and beyond, and debt will spiral ever higher, reaching 90 percent of GDP in 2020.
"Over the long run, as the baby boomers retire and health care costs continue to grow, the situation will become far worse. By 2025 revenue will be able to finance only interest payments, Medicare, Medicaid, and Social Security. Every other federal government activity — from national defense and homeland security to transportation and energy — will have to be paid for with borrowed money."
That being the case — and nobody argues that it isn't — there are two broad ways for the government to address its spiraling health care costs. One, shift more of those costs to recipients, by trimming benefits and/or extending eligibility ages and indexing eligibility to personal income. This is politically unpalatable, particularly to most Democrats, President Barack Obama being a conspicuous exception.
The second way for government to address its health costs is not to shift them, but to reduce them. This is what a single-payer health care system would do, largely by taking the for-profit players (insurance companies for the most part) out of the loop.
The advocacy group Physicians for a National Health Program estimates that "private insurance bureaucracy and paperwork consume one-third (31 percent) of every health care dollar. Streamlining payment through a single nonprofit payer would save more than $400 billion per year, enough to provide comprehensive, high-quality coverage for all Americans."
Once everyone is covered, the government would have the clout to bring discipline into the wild west of health care spending. It could insist that providers be paid for quality of service, not quantity. Health facilities and equipment could be managed by regional boards. Medical services could be "bundled" — rather than paying hospitals and doctors and laboratories separately, there would be fixed prices for treatments. And so on.
The Patient Protection and Affordable Care Act passed in 2009 contains many pilot programs designed to test cost-reduction strategies. Most of them won't kick in for another six to eight years, by which time health care costs will be approaching 20 percent of U.S. gross domestic product. The combined state and federal share of that will be 49 percent, up from 45 percent today.
Indeed, a study published this month in the journal Health Affairs estimates that while the Affordable Care Act will pay for itself by 2020, it won't actually "bend the cost curve," as the Obama administration had hoped. But the study, done by the Actuary Centers for Medicare and Medicaid Services, says the ACA will significantly slow the rise of health care costs to state and local governments.
But consider those two findings: In effect, they say that if reducing overall health care costs is the goal, then the ACA didn't go far enough. Thirty million more people will be insured and government costs will grow more slowly. But overall health care costs will continue to explode.
Sooner or later, a nation serious about controlling spending must take broad control of the health care system.
It surely won't be sooner. Compared to the political fight that would erupt over a single-payer plan, the congressional battle over the Affordable Care Act would seem as tame as resolution praising mom, the flag and apple pie.
The ACA was a compromise. Mr. Obama brought everyone to the table — doctors, insurance companies, drug companies, hospitals — and came away with a "best we can get" kind of bill. Many of those at the table turned around and lobbied against it or sought special favors once the bill came before Congress.
It passed by narrow margins, and Congress is decidedly more conservative now. Indeed, the new House majority has voted to repeal the ACA and challenges to its constitutionality continue to work their way toward the Supreme Court.
But now, like a baby discovering its toes, Congress has discovered the deficit. And the plain fact is that unless you want to commit political suicide and cut Medicare to the bone — as Rep. Paul Ryan's, R-Wis., budget plan would do — the best way to seriously address long-term deficits is to get control of health care costs through a single-payer plan.
In 2008, when health care costs amounted to "only" 16 percent of U.S. gross domestic product, Great Britain was spending 8.7 percent of its GDP on health care, and Canada was spending 10.4 percent. Both nations have single-payer plans. Quality of care scores in both nations are at least comparable, and in most cases, better.
Eventually, the United States will have a single-payer plan. But we'll waste a lot of money and time getting there.
New York Times, July 24, 2011
By PAUL KRUGMAN
At the time of writing, President Obama’s hoped-for “Grand Bargain” with Republicans is apparently dead. And I say good riddance. I’m no more eager than other rational people (a category that fails to include many Congressional Republicans) to see what happens if the debt limit isn’t raised. But what the president was offering to the G.O.P., especially on Medicare, was a very bad deal for America.
Specifically, according to many reports, the president offered both means-testing of Medicare benefits and a rise in the age of Medicare eligibility. The first would be bad policy; the second would be terrible policy. And it would almost surely be terrible politics, too.
The crucial thing to remember, when we talk about Medicare, is that our goal isn’t, or at least shouldn’t be, defined in terms of some arbitrary number. Our goal should be, instead, to give Americans the health care they need at a price the country can afford. And throwing Americans in their mid-60s off Medicare moves us away from that goal, not toward it.
For Medicare, with all its flaws, works better than private insurance. It has less bureaucracy and, hence, lower administrative costs than private insurers. It has been more successful in controlling costs. While Medicare expenses per beneficiary have soared over the past 40 years, they’ve risen significantly less than private insurance premiums. And since Medicare-type systems in other advanced countries have much lower costs than the uniquely privatized U.S. system, there’s good reason to believe that Medicare reform can do a lot to control costs in the future.
In that case, you may ask, why didn’t the 2010 health care reform simply extend Medicare to cover everyone? The answer, of course, is political realism. Most health reformers I know would have supported Medicare for all if they had considered it politically feasible. But given the power of the insurance lobby and the knee-jerk opposition of many politicians to any expansion of government, they settled for what they thought they could actually get: near-universal coverage through a system of regulation and subsidies.
It is, however, one thing to accept a second-best system insuring those who currently lack coverage. Throwing millions of Americans off Medicare and pushing them into the arms of private insurers is another story.
Also, did I mention that Republicans are doing all they can to undermine health care reform — they even tried to undermine it as part of the debt negotiations — and may eventually succeed? If they do, many of those losing Medicare coverage would find themselves unable to replace it.
So raising the Medicare age is a terrible idea. Means-testing — reducing benefits for wealthier Americans — isn’t equally bad, but it’s still poor policy.
It’s true that Medicare expenses could be reduced by requiring high-income Americans to pay higher premiums, higher co-payments, etc. But why not simply raise taxes on high incomes instead? This would have the great virtue of not adding another layer of bureaucracy by requiring that Medicare establish financial status before paying medical bills.
But, you may say, raising taxes would reduce incentives to work and create wealth. Well, so would means-testing: As conservative economists love to point out in other contexts — for example, when criticizing programs like food stamps — benefits that fall as your income rises in effect raise your marginal tax rate. It doesn’t matter whether the government raises your taxes by $1,000 when your income rises or cuts your benefits by the same amount; either way, it reduces the fraction of your additional earnings that you get to keep.
So what’s the difference between means-testing Medicare and raising taxes? Well, the truly rich would prefer means-testing, since they would end up sacrificing no more than the merely well-off. But everyone else should prefer a tax-based solution.
So why is the president embracing these bad policy ideas? In a forthcoming article in The New York Review of Books, the veteran journalist Elizabeth Drew suggests that members of the White House political team saw the 2010 election as a referendum on government spending and that they believe that cutting spending is the way to win next year.
If so, I would respectfully suggest that they are out of their minds. Remember death panels? The G.O.P.’s most potent political weapon last year — the weapon that caused a large swing in the votes of older Americans — was the claim that Mr. Obama was cutting Medicare. Why give Republicans a chance to do it all over again?
Of course, it’s possible that the reason the president is offering to undermine Medicare is that he genuinely believes that this would be a good idea. And that possibility, I have to say, is what really scares me.
Sunday 24 July 2011
by: Robert Reich, Robert Reich's Blog | Op-Ed
Not only is Social Security on the chopping block in order to respond to Republican extortion. So is Medicare.
But Medicare isn’t the nation’s budgetary problems. It’s the solution. The real problem is the soaring costs of health care that lie beneath Medicare. They’re costs all of us are bearing in the form of soaring premiums, co-payments, and deductibles.
Medicare offers a means of reducing these costs — if Washington would let it.
Let me explain.
Americans spend more on health care per person than any other advanced nation and get less for our money. Yearly public and private healthcare spending is $7,538 per person. That’s almost two and a half times the average of other advanced nations.
Yet the typical American lives 77.9 years – less than the average 79.4 years in other advanced nations. And we have the highest rate of infant mortality of all advanced nations.
Medical costs are soaring because our health-care system is totally screwed up. Doctors and hospitals have every incentive to spend on unnecessary tests, drugs, and procedures.
You have lower back pain? Almost 95% of such cases are best relieved through physical therapy. But doctors and hospitals routinely do expensive MRI’s, and then refer patients to orthopedic surgeons who often do even more costly surgery. Why? There’s not much money in physical therapy.
Your diabetes, asthma, or heart condition is acting up? If you go to the hospital, 20 percent of the time you’re back there within a month. You wouldn’t be nearly as likely to return if a nurse visited you at home to make sure you were taking your medications. This is common practice in other advanced countries. So why don’t nurses do home visits to Americans with acute conditions? Hospitals aren’t paid for it.
America spends $30 billion a year fixing medical errors – the worst rate among advanced countries. Why? Among other reasons because we keep patient records on computers that can’t share the data. Patient records are continuously re-written on pieces of paper, and then re-entered into different computers. That spells error.
Meanwhile, administrative costs eat up 15 to 30 percent of all healthcare spending in the United States. That’s twice the rate of most other advanced nations. Where does this money go? Mainly into collecting money: Doctors collect from hospitals and insurers, hospitals collect from insurers, insurers collect from companies or from policy holders.
A major occupational category at most hospitals is “billing clerk.” A third of nursing hours are devoted to documenting what’s happened so insurers have proof.
Trying to slow the rise in Medicare costs doesn’t deal with any of this. It will just limit the amounts seniors can spend, which means less care. As a practical matter it means more political battles, as seniors – whose clout will grow as boomers are added to the ranks – demand the limits be increased. (If you thought the demagoguery over “death panels” was bad, you ain’t seen nothin’ yet.)
Paul Ryan’s plan – to give seniors vouchers they can cash in with private for-profit insurers — would be even worse. It would funnel money into the hands of for-profit insurers, whose administrative costs are far higher than Medicare.
So what’s the answer? For starters, allow anyone at any age to join Medicare. Medicare’s administrative costs are in the range of 3 percent. That’s well below the 5 to 10 percent costs borne by large companies that self-insure. It’s even further below the administrative costs of companies in the small-group market (amounting to 25 to 27 percent of premiums). And it’s way, way lower than the administrative costs of individual insurance (40 percent). It’s even far below the 11 percent costs of private plans under Medicare Advantage, the current private-insurance option under Medicare.
In addition, allow Medicare – and its poor cousin Medicaid – to use their huge bargaining leverage to negotiate lower rates with hospitals, doctors, and pharmaceutical companies. This would help move health care from a fee-for-the-most-costly-service system into one designed to get the highest-quality outcomes most cheaply.
Estimates of how much would be saved by extending Medicare to cover the entire population range from $58 billion to $400 billion a year. More Americans would get quality health care, and the long-term budget crisis would be sharply reduced.
Let me say it again: Medicare isn’t the problem. It’s the solution.
Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including The Work of Nations, Locked in the Cabinet, Supercapitalism, and his most recent book, Aftershock.
FOR IMMEDIATE RELEASE: JUNE 29, 2011
Contact: Jordan Plottner, Legislative Aide, (614) 466-9435
Kevin Pangrace, Legislative Aide, (614) 466-3350
Reps. Hagan and Foley introduce Ohio Health Security Act
Bill would make Ohio the second state in the nation with universal healthcare
COLUMBUS- State Reps. Bob Hagan (D-Youngstown) and Mike Foley (D-Cleveland) introduced HB 287
today, the Ohio Health Security Act. This bill would provide for the administration of a universal, single-payer healthcare plan in the state of Ohio. Currently, Vermont is the only state in the United States to have implemented a universal healthcare program.
“Financing health care in this state and nation is broken. The lack of clear, comprehensive, immediate and long-term solution to the problem by policy-makers in Columbus and Washington will only worsen the problems we now face as patients, employees, employers, and doctors in the present health care system,” Rep. Hagan said. “We cannot, as a society, afford to subsidize the insurance industry with outrageous premiums that don’t actually pay for our health care, but pay for corporate bonuses and executive compensation.”
In a message from Kurt Bateman, director of the Single-Payer Action Network (SPAN), to Reps. Foley and Hagan, Mr. Bateman says of the bill “The Ohio Health Security Act is a positive remedy for the dramatic increase in Ohioans who are losing access to care and the unsustainable rise in healthcare costs that threatens access to care so many of our families, neighbors, friends and businesses.”
“The Ohio Health Security Act will bring Ohioans in line with the rest of the modern world .” Rep. Foley added, “We only have the best healthcare system in the world if everyone has equal access to it, this bill will provide for that.”
Note: A companion bill, SB 112, was introduced in the Ohio Senate by State Senator Michael Skindell in March of this year.
Bob (William Robert) Smiddie
Bob (William Robert) Smiddie, age 80, of the Harrisonville area passed away on June 20 at his home surrounded by family after a prolonged battle with cancer. He was loved and admired for his folk pottery adorned with flowers, his plays that combined imaginative humor with strong social justice messages, and his tireless political activism on behalf of those without. He was a Democratic precinct committeeman who worked well with local Republicans and never turned down a chance to have civil discourse with others on his causes for social justice. Because he believed that healthcare was a human right and should not be run for profit he has been a leading light in the Ohio Single Payer Action Network for the last ten years. No matter how difficult the odds were against his convictions, he lived with the philosophy, “Never give up.”
Besides his large number of loving friends, Smiddie’s sparkling blue eyes and delightful story-telling will be most missed by his wife, Beth Amoriya of the Harrisonville area, son Kyle Smiddie, of Newark, NJ; daughters, Laura James, her husband Alan and daughter Nora of Chicago, IL; Kellie Smiddie, her husband Kevin Corp and three children, James, Annie, and Michelle of Cleveland, OH; Angel Newberry, her husband Ray and daughter Reilly of Canal Winchester, OH; and his sister, Frances Moore of Kingston, TN.
There will be calling hours at Anderson McDaniel Funeral Home in Pomeroy on Wednesday, June 22 from 2-4 and 6-8 PM followed by burial in McMinnville, TN. A memorial service will be scheduled in Athens at a later date. At Mr. Smiddie's request, rather than flowers please make a contribution to The Remote Area Free Clinic Fund, c/o Rural Action, PO Box 157, Trimble, OH 45782.
Analyst, Center for Public Integrity; Former insurance company executive; Author
Got Health Insurance Through Your Employer? Maybe Not for Long (But Not Because of Reform)
Posted: 06/16/11 10:05 AM ET
The global consulting firm McKinsey & Company set off a firestorm when it released a report last week suggesting that 30 percent of U.S. businesses will stop offering health care benefits to their employees after most of the provisions of the Affordable Care Act go into effect in 2014.
The White House was quick to challenge the validity of the report, noting that McKinsey has so far refused to provide any details of the methodology used to reach its conclusion. All McKinsey will say is that its report was based on a survey of 1,300 employers and "other proprietary research."
White House deputy chief of staff Nancy-Ann DeParle, who previously headed the president's office of health care reform, called it an "outlier" and cited other studies predicting that that few if any employers would drop coverage because of the Affordable Health Care Act.
Congressional Republicans were just as quick to defend the McKinsey report, which they are citing as fresh evidence that the new federal law -- crafted in part to protect the employer-based system -- will have disastrous consequences.
Who's right? Well, pardon the cliché, but only time will tell. What we can say with certitude right now is that the hubbub over the McKinsey report has obscured a reality neither side is acknowledging. What is indisputably true is that the employer-based system has been crumbling for several years. And, with or without the Affordable Care Act, it's very possibly on its last legs. Repealing the law, as every GOP presidential candidate pledged to do during the debate in New Hampshire Tuesday night, would probably only hasten its complete collapse.
When I began working in the insurance industry in 1989, the vast majority of Americans -- well over two-thirds of the population -- got their coverage through employers. Just about every year since then, the percentage has been declining.
According to the Economic Policy Institute, the share of Americans with employer-sponsored health insurance declined from 64.2 percent in 2000 to 58.5 percent in 2008. Most of that decline occurred during the Bush administration, and before the most recent recession began.
The figure is undoubtedly lower today because millions of workers lost their jobs -- and along with them, their health insurance -- during the recent economic downtown. When the recession officially began in December 2007, the U.S. unemployment rate was just 5 percent. It peaked at 10.1 percent in October 2009, four months after the official end of the recession, but it is still more than 9 percent today.
Another factor in the decline of Americans with employer-sponsored coverage is that the number of businesses still offering it has also dropped precipitously in recent years. The Kaiser Family Foundation, which keeps track of health insurance trends, found that the number of firms offering coverage fell from 69 percent in 2000 to 60 percent in 2009. The erosion was even more pronounced among companies with fewer than 10 workers, falling from 57 percent to 46 percent during the same period.
According to Gallup, the situation has only gotten worse since 2009. In a November 2010 Gallup poll, just 44.8 percent of American adults reported having health insurance provided through their employer.
One of the less obvious reasons for the unraveling of the employer-based system is that an ever-increasing number of workers are taking a pass on the coverage even if their employers still offer it, according to the Employee Benefit Research Institute. Why? Because employers are requiring that their workers pay a bigger portion of the premiums, and they're making them pay more out of their own pockets in the form of higher deductibles and co-payments. Many workers simply can't afford to take on the additional financial burden.
The insurance industry has also played a leading role in the decline of the employer-based system. The reason more and more small employers are no longer offering coverage is because many of them have been "purged" by their insurance carriers. Insurers routinely "purge" employer customers they believe have become too much of a risk to profits. All it takes is one employee of a small business -- or the spouse or child of one employee -- to get critically ill for the company's insurer to jack up rates so high that the business owner has no choice but to drop coverage for everyone.
A survey conducted last month by Crain's Detroit Business of 300 Michigan small businesses found that 24 percent considered canceling their health care coverage this year, primarily because of premium increases demanded by their insurance carriers.
Behind all these numbers are real people. In the coming weeks, to take us from the abstract world of figures to the real world of American-style health insurance, I will be writing about the experiences of several small business owners who say they want to continue offering health care benefits to their employees but are finding it increasingly difficult to do so.
New York Times - June 12, 2011
By PAUL KRUGMAN
Every once in a while a politician comes up with an idea that’s so bad, so wrongheaded, that you’re almost grateful. For really bad ideas can help illustrate the extent to which policy discourse has gone off the rails.
And so it was with Senator Joseph Lieberman’s proposal, released last week, to raise the age for Medicare eligibility from 65 to 67.
Like Republicans who want to end Medicare as we know it and replace it with (grossly inadequate) insurance vouchers, Mr. Lieberman describes his proposal as a way to save Medicare. It wouldn’t actually do that. But more to the point, our goal shouldn’t be to “save Medicare,” whatever that means. It should be to ensure that Americans get the health care they need, at a cost the nation can afford.
And here’s what you need to know: Medicare actually saves money — a lot of money — compared with relying on private insurance companies. And this in turn means that pushing people out of Medicare, in addition to depriving many Americans of needed care, would almost surely end up increasing total health care costs.
The idea of Medicare as a money-saving program may seem hard to grasp. After all, hasn’t Medicare spending risen dramatically over time? Yes, it has: adjusting for overall inflation, Medicare spending per beneficiary rose more than 400 percent from 1969 to 2009.
But inflation-adjusted premiums on private health insurance rose more than 700 percent over the same period. So while it’s true that Medicare has done an inadequate job of controlling costs, the private sector has done much worse. And if we deny Medicare to 65- and 66-year-olds, we’ll be forcing them to get private insurance — if they can — that will cost much more than it would have cost to provide the same coverage through Medicare.
By the way, we have direct evidence about the higher costs of private insurance via the Medicare Advantage program, which allows Medicare beneficiaries to get their coverage through the private sector. This was supposed to save money; in fact, the program costs taxpayers substantially more per beneficiary than traditional Medicare.
And then there’s the international evidence. The United States has the most privatized health care system in the advanced world; it also has, by far, the most expensive care, without gaining any clear advantage in quality for all that spending. Health is one area in which the public sector consistently does a better job than the private sector at controlling costs.
Indeed, as the economist (and former Reagan adviser) Bruce Bartlett points out, high U.S. private spending on health care, compared with spending in other advanced countries, just about wipes out any benefit we might receive from our relatively low tax burden. So where’s the gain from pushing seniors out of an admittedly expensive system, Medicare, into even more expensive private health insurance?
Wait, it gets worse. Not every 65- or 66-year-old denied Medicare would be able to get private coverage — in fact, many would find themselves uninsured. So what would these seniors do?
Well, as the health economists Austin Frakt and Aaron Carroll document, right now Americans in their early 60s without health insurance routinely delay needed care, only to become very expensive Medicare recipients once they reach 65. This pattern would be even stronger and more destructive if Medicare eligibility were delayed. As a result, Mr. Frakt and Mr. Carroll suggest, Medicare spending might actually go up, not down, under Mr. Lieberman’s proposal.
O.K., the obvious question: If Medicare is so much better than private insurance, why didn’t the Affordable Care Act simply extend Medicare to cover everyone? The answer, of course, was interest-group politics: realistically, given the insurance industry’s power, Medicare for all wasn’t going to pass, so advocates of universal coverage, myself included, were willing to settle for half a loaf. But the fact that it seemed politically necessary to accept a second-best solution for younger Americans is no reason to start dismantling the superior system we already have for those 65 and over.
Now, none of what I have said should be taken as a reason to be complacent about rising health care costs. Both Medicare and private insurance will be unsustainable unless there are major cost-control efforts — the kinds of efforts that are actually in the Affordable Care Act, and which Republicans demagogued with cries of “death panels.”
The point, however, is that privatizing health insurance for seniors, which is what Mr. Lieberman is in effect proposing — and which is the essence of the G.O.P. plan — hurts rather than helps the cause of cost control. If we really want to hold down costs, we should be seeking to offer Medicare-type programs to as many Americans as possible.