RE: Today’s Boston Globe column by Bob Kuttner: “A Health Law with Holes.”
Here’s a real life parable. A major new law passes to expand affordable health insurance coverage to a large swath of uncovered folks. Within two years, the costs are skyrocketing far beyond initial projections. And as people look closer and closer at the benefit package, the holes look bigger and bigger – deductibles, cost sharing, benefit limitations.
Quick – what law am I talking about? Chapter 58 — MA Health Reform?
Nope.
1965 – Medicare. By 1967, ballooning costs hugely beyond projections, paltry benefits, gaping cost sharing. Pretty soon nearly every senior is getting private supplemental coverage for the holes; only the “poor” and “near poor” get help with the gaping gaps.
As Morpheus might say: “Welcome to the real world … of health care policy and politics.”
Let’s deconstruct a few of Bob K’s comments:
“…the program’s costs are outstripping its projections by … $400 million next year.” Yes, total health reform program costs are rising a net $400 million in FY09. It’s higher than anticipated, and not that much so. For example, the original legislative conference committee financial projection for Commonwealth Care was $400M this year and $725M next year. Instead, its going from about $600M this year to about $860M in FY09. Costs are going up, and most – not all – were anticipated.
“President Bush has mandated cuts in state aid … Going forward, Massachusetts will bear more of the program’s costs.” Does Bob K. know something about Massachusetts’ negotiations with the federal government that the Patrick Administration doesn’t know? It’s going to be a difficult negotiation for a new waiver, yet the Bush Administration has not asked any state to go backwards on coverage in an 1115 waiver renegotiation. It’s possible, for sure, but still hasn’t happened yet.
“If the law has charged delinquent employers the actual cost of decent insurance – more like $5,000 a year – the state would have adequate funds for the uninsured.” Well, maybe. Because if the state did that, it would have prompted a business community wide challenge to the law as a violation of the federal ERISA statute. Implementation would most likely have been held back, and the likelihood of surviving a challenge would be less than … the likelihood of securing a federal 1115 waiver. Meanwhile, the funds would not be there, and implementation would be postponed for lack of funding.
“If your employer offers lousy coverage, or sticks you with most of the premiums, you must still buy the plan, or some other plan, or the state penalizes you.” Not quite. If your employer offers coverage and you would have to pay more than the Connector affordability schedule, then you are not penalized. Absolutely true, here’s a big hole, you don’t have coverage. But you don’t have a penalty.
“Universal social insurance signals government help. A mandate signals government coercion.” And universal social insurance signals a mandate as well. And you might like the bargain and you might not. Last March, I visited Israel and learned their system. You pay high taxes for a basic benefit with lots and lots of coverage gaps and the high cost sharing. People who can afford it all buy supplemental coverage. And it’s “universal social insurance.”
It’s all how you design it. Just look at Medicare.
We’ve always acknowledged that chapter 58 isn’t universal, and that there are still many holes to be filled. The ACT!! Coalition hasn’t gone away. Instead, we’ve been working to fill those holes. Last spring we had some major successes, and more are coming. Challenges? Of course. But that’s no reason to label it a failure.
John McDonough
And while that coverage may be more affordable today, that’s because the Republican controlled Congress chose to pour money into the “private, for profit” insurance industry to subsidize these plans far above the cost of traditional fee-for-service Medicare. Democrats have already indicated their intention to chop down those subsidies as soon as they can (ie, when Bush is gone).
John -
My cost numbers are NOT from the subsidized private-for-profit Medicare.
My cost numbers (and my personal costs) are for the plain old regular Medicare.
Your Choice plans are NOT even close on cost to the regular Medicare.
Obviously you are unaware that Medicare Advantage Plans actually cost the beneficiary MORE than does regular Medicare and a Medigap.
The point is NOT what someone would have said about Medicare 35 years ago. The point is that CHoice is far more costly than regular Medicare. Thus comparing Choice to Medicare is inane.
Pingback: A Healthy Blog » Correction to the Media: $400 Million Isn’t The Number. It’s $156 Million.
John,
The problem with Chapter 58 is not that it isn’t perfect. The problem is that it is so glaringly imperfect. I know that you and many others see the law as an acceptable compromise. I, and many others, see it as a total capitulation to special interests. Chapter 58 does not truly reform the health care system; instead it expands and perpetuates the same costly and inefficient maze of private insurance that has led us into this sorry morass. The individual mandate is clearly government coercion! It makes us all either hostages of the insurance industry or criminal scofflaws. Where is the incentive to lower costs when products are compulsory? No incentive exists, since the burden can simply be shifted onto the hapless consumer. Please don’t talk to us about waivers and exemptions. The affordability guidelines that ignore the out of pocket costs associated with these plans are sheer fancy. Few have applied for exemptions from the mandate because the process is so intrusive and arbitrary. Many consider the game an exercise in futility. Besides, citizens in a democracy ought not to have to beg their government for mercy! The biggest problem with Chapter 58 is that it is an impediment to real progress. It has taken a large group of previously uninsured individuals and transformed them into a large group of underinsured individuals; folks who will delay care as long as they possibly can, and likely end up bankrupt in the event of serious illness. The state may be able to prop up this scheme in the near term, but within a few years we will be back where we started, or, more likely, worse off.
AnnS, AnnS … I stand by my point. Bob Kuttner could have written the very same column about Medicare in 1967 — exploding costs, glaring holes (eg: no drug coverage for nearly 40 years), huge deductibles. Only affordable because the vast majority of Americans buy supplemental coverage on top to fill the holes.
And while that coverage may be more affordable today, that’s because the Republican controlled Congress chose to pour money into the “private, for profit” insurance industry to subsidize these plans far above the cost of traditional fee-for-service Medicare. Democrats have already indicated their intention to chop down those subsidies as soon as they can (ie, when Bush is gone).
When the standard of measurement is unattainable perfection, every plan and any plan falls woefully short.
John McDonough
Note to AnnS from AnnM – I would be grateful if we could communicate directly by email at ann@defendhealth.org
If anyone else wants to be in contact with me by email, that’s good, too. There’s a growing amount of grassroots activism happening across the state aimed at educating residents and elected officials more accurately about the state’s new health insurance law and engaging them to make needed changes.
Thank you.
P.S. to Meg at Community Partners – I am sure your boss Michael DeChiara can do a good job of explaining what Bob Kuttner means in his line from the 1/28/08 Globe OpEd (I’d be happy to talk w/you too, call me at the Alliance if you’d like):
“…an individual mandate absent comprehensive reform…makes a social failure the problem of the individual.”
“…an individual mandate absent comprehensive reform…makes a social failure the problem of the individual.”
Could you also deconstruct this comment? Where are we with the Quality and Cost Council? How’s the “admin cost” debate going?
Thanks!
John, John….comparing the Medicare B premiums with the outrageous cost of Commonwealth Choice Plans, particularly for those over 40/45 or with families is sheer sophistry.
Medicare B premiums are now $96.40. Part A is at no charge if you have worked enough quarters.
The co-insurance requirements are:
(1) Part A Hospitalization deductible and copays:
(a) $1,024 deductible and no coinsurance for days 1–60 each benefit
period
(b) $256 per day for days 61–90 each benefit period
(c) $512 per “lifetime reserve day” after day 90 each benefit
period (up to 60 days over your lifetime)
(2) Part B copays and deductible are
(a) Deductible $135
(b) 20% of medical service and 50% of mental health services.
This is much less money than the cost of the Choice plans premiums (whopping $350 + for anyone over 50), deductible ($2000 no matter what the services are, and copays (up to 30%.)
There IS no comparison -excpet by someone attempting to make a facetious argument.
At 54, I have Medicare and a Medigap policy after a disabling injury. Total premium bill is per month $131 ($96 Medicare and $35 Medigap) and then I pay the $135 deductible. That’s it for the year.
I couldn’t afford your ‘Choice’ plans on a bet!