Why It Matters: A Strong Public Plan, Medicare Rates, and Affordability

Let’s start from the end. You want health reform. Republicans say they want it. The insurance industry wants it. People who pay individually for health insurance want it - they can’t afford coverage. People with insurance want it – they too often have their claims denied – 1 in 5. 44,000 people die every year because they are uninsured. Medicare is going broke because prices are going up outside of the Medicare system, and lots of families are going bankrupt for the same reason.

To put the middle in the middle: Getting there means finding 218 members of the House of Representatives, plus 51 Senators, to convince the White House they will vote for reform.

Keeping it there after it passes means we all need to be able to afford it, and still get the care we need.

Here is the part to nail down this week: A strong public option, that pays Medicare rates and uses Medicare providers, is the only way to make the plan affordable.

There are 2 parts to making insurance affordable. The first part is limiting how much we pay providers – hospitals, doctors, drug companies. Basing payments on Medicare rates is the key here.

The second part is making sure these limits get passed back to you, in the form of lower insurance company premiums.

We need a strong public option for both.

The Congressional Budget Office says using Medicare rates saves $110 billion over 10 years, $85 billion more than a public option that doesn’t use Medicare rates.

Medicare already establishes payment rates to hospitals and doctors on behalf of 40 million Americans. These rates are accepted by all hospitals and most doctors, but aren’t susceptible to the hyper-inflation that has driven prices in the private sector over the last 10 years. Adding millions of enrollees to this system will help put the brake on payment rates.

So if the public plan limits payments to providers, how will that translate into lower premiums? The public plan won’t pay profits or bonuses, and will benefit from lower overhead than private plans. All the savings go right back to you, in the form of lower premiums.

Private insurance companies on the other hand can charge whatever they want, even if they are paying providers less. They have to charge higher premiums, to pay their shareholders and executives. This is true even if they paid less to hospitals and doctors – they have no reason to pass those savings on to you, in the form of lower premiums, and every reason to just do what they always do: hold onto the money themselves. Unless, of course, they have to compete with a public plan.

A public plan will charge lower rates, be affordable for people who need care, and set a standard on prices that both providers and insurance companies will have to compete with.

Will doctors still treat you if you are on the public plan, even if it pays less than private plans? For those who think Medicare rates are too low, the version of the public option linked to Medicare rates gives plenty of flexibility. First, we’re not talking about today’s Medicare rates. The bill will require changes in rates to address regional differences, including adjustments for rural areas, and ways to promote quality. Second, it provides an extra 5% (Medicare +5) for individual providers. Third, it allows any provider to opt out – and the decision can be made (and reversed) each year. Finally, it gives the HHS Secretary authority to go higher than Medicare rates if necessary to attract doctors, hospitals and other providers based on local conditions.

Why not negotiate the rates the new public plan will pay providers? Simple: They'll be higher. That's why providers and insurance companies want them. A new plan, with new enrollees, needs to build on the strongest platform we have. That's improved Medicare rates, with a cap of 5% extra. (Even a public plan with negotiated rates saves $25 billion more than relying solely on private insurers.)

Again: A public plan will charge lower rates, be affordable for people who need care, and set a standard on prices that both providers and insurance companies will have to compete with.

So here we are with the beginning for this week:

We need a public plan.
That pays Medicare rates plus 5%.
And includes Medicare providers.

Pass it on to 218 of your friends in the House, and 51 Senators.

A Town Hall Meeting That Worked: Sta. Clara, CA

I was heartened by Rep. Mike Honda's civil, orderly town hall meeting at Santa Clara University at 1 pm in Sunday. There were about 400 advocates for health reform, including a strong public option, and about a dozen or so opponents. At about 12:45, they showed a videotape of 3 local residents with health care stories, interspersed with facts about the number and percent of people in the country and the district who are suffering from lack of coverage, health-related bankruptcies, etc. I saw 2 of the people from the video in the crowd. They included: A retired county worker with an uninsured son; a woman whose grown son could not get coverage, having developed juvenile diabetes early in life; a man who identified himself as a Republican, and whose wife had a serious chronic condition that would never be covered if he lost his job and insurance.

Rep. Honda opened the meeting with a welcome, and a request for mutual respect. He called on constituents to submit written questions on index cards, including name and address; questions from constituents were chosen at random; he then invited the constituents to stand and pose their questions. Reflecting the crowd, most of the questioners spoke in favor of a strong public option, or a single payer. A few were opposed. We cheered every time he responded that he supported a strong public option, and had no plans to compromise on that; the dozen booed. We cheered for a brave young Latina who works in reproductive rights, and said that coverage for abortion was important to her; the dozen booed. (The cheers and boo's took a few seconds, then stopped; we all respected Rep. Honda's request for respect.) A few times Mike pointed out that the present system of private insurance had had quite a bit of time to work, if it was going to, and that too many people were hurting financially and physically (he gave details); it was time for a change. We all cheered. No one booed. The final 2 questioners asked how we could afford the President's health proposal, since similar socialistic systems like Great Britain are facing financial shortfalls. Mike said there is a way to do it, and we would. He promised to respond in writing to the remaining questions. That was it.

Outside an older man approached a younger fellow giving out water and wearing a pro-reform button. Tell me one government program that works! he demanded. Medicare, was the response. End of conversation.

Obama's Health Care Speech: Ominous Warnings in NY Times

What will Obama say on Wednesday about health reform? Today's New York Times could be an ominous early warning. Expanding public sector clout is at the heart of any meaningful proposal to control health care costs, and to expand coverage. Over the past year, the Times has published a lot on the potential for a strong public option to get us there, and also given unusually wide visibility to a sure-fire solution, single payer. Today's edition is a reverse road map to defeat.

The editorial calls on the President to "stand tough for a large and comprehensive plan," and "point out the cynicism of Republican opponents who are late-blooming advocates of deficit reduction," having passed passed "tax cuts for wealthy Americans that will cost more than $1.7 trillion over 10 years."

What is his wiggle room? Go for insurance reforms, and hold strong for a public plan, but, "if he decides to bargain it away later, he should insist, minimally, that a strong public plan be introduced if private insurers fail to hold costs down in the future." To echo Barney Frank, on what planet have the editors been spending most of their time? Apparently it will now be up to the public that voted for change to demand it.

It gets worse. The editorial goes on to bemoan that neither party has a "sure-fire solution to rein in medical inflation" while improving quality of care. Well, sure we do, and the Times has coeverd it. The news pages report on deliberations with former Clinton-era advisors, recounting the errors of failing to pass health reform, once having opened the door, and pointing out candidate Obama's relatively moderate positions on universal coverage.

It's time to take stock. It's been a bad summer. Opponents of reform, and of the Administration, have had one clear goal: Stop it. They've had the expansive coffers of the insurance industry to draw upon. Advocates have been taken aback at the teabaggers' vitriol, unhinged demeanor, and outright threats.

The union movement and other organizations that have led reform movements in the past have been weakened by decades of economic globalization and at least 8 years of vicious political attacks. In the face of shockingly hard times for many, we in the public appear to be struggling but stunned. And yes, there's been some internecine squabbling among reform factions.

But we have resources, and we should have leadership. The President and his team showed us they know how to run a great ad campaign. They likely calculated that they couldn't eliminate the insurance industry in one fell swoop; and they lost a great legislative strategist in Ted Kennedy. But isn't there a Plan B? The Congressional Progressive Caucus has done a great job of describing what a strong public option should be: open to all from day one, building on Medicare's reimbursement rates and provider base. They have had constraints in articulating and conveying these views to the public. There must be a way to support the President while using their considerable clout to mobilize support for the reform they know we need.

Health care can be a wonky issue. It can also shake us up and build alliances. If we need to pass something let’s make it a step forward, for policy and politics.

Between now and Wednesday, we need to tell the White House we expect to hear a call to arms. We knew all along that voting for President would not be the last thing we had to do to achieve social change. Hopefully, it was at least the first.

Sen. Feinstein: Time to Lead on Health Reform!

Sen. Feinstein has issued, at long last, a thoughtful statement on health reform. There is much to applaud, but there is too much unresolved. She makes the case that this is a vital issue for our state. We should demand clearer leadership on her part.

She rightly notes that California stands to benefit from reducing our high percentage of uninsured, and must protect our extensive system of public hospitals and safety net clinics. She recognizes that most Californians want relief both from the health insurance
industry’s exorbitant premiums and from its unfair practices. She demands that private insurance companies limit spending on administration and profits to no more than ten percent of revenues – a critical issue, and a level even better than the House’s bill. She supports offering the option of a public insurance plan.

However, while criticizing current proposals for not going far enough to assure that health care will be affordable, she opposes the necessary subsidies on abstract grounds of deficit control. She takes the opportunity for an unjustified swipe at entitlements generally, reviving the call for a commission to review not only Medicare, which is threatened by runaway costs in the private system that it cannot control, but also Social Security, a perfectly solvent system that requires well known tweaks to survive with no difficulty.

Finally, she bows to the possibility that a nonprofit coop could take the place of a public plan, in providing an effective and competitive counterpoint to private insurance. This concept has no legs, as everyone knows but the small-state senators whose judgment she questions.

Sen. Feinstein does not serve on the Senate Finance Committee, which has yet to offer a bill. But the people of our state desperately need reform, and we’ve fought for it actively. We have twice passed single payer legislation, the gold standard for effective reform. It is time for Sen. Feinstein to join the majority of the state’s Congressional delegation in unequivocal support for a bill that includes a meaningful public plan option, available to everyone, and that finally makes health care affordable. She’s halfway there. She should complete her deliberations by the time the Senate reconvenes next week.

thugs and health policy

Missing the point: Facing down the gangs disrupting her Town Hall on health reform last week with cries against the "government takeover," HHS Secretary Kathleen Sebelius responded, "But this isn't a single payer plan!"

Single payer advocates, recognizing that our gold standard cannot pass this year, taunt supporters of a public plan for saying that our gold standard cannot pass this year.

Meanwhile, the economic stagnation that gripped the poor in the 1990s and never let up is nipping at the heels of the middle class. The financial and housing meltdowns are taking place at a time when countervailing forces to corporate power are hard to find. Private sector unionization rates hover at about 7.6% (the public sector is over 40%; 16 million of America's 130 million wage workers belong to a union).

The public may be favorably disposed toward a public health plan, but probably fewer than 100 can describe how it would work, when it would start (2013), or what it would mean to them personally (would likely help). Meanwhile, right wing blogs and the Republican party are succeeding in whipping up fury on an issue even wonks think of as arcane. Let's assume most of these people are operatives, as were the Bush v. Gore mobs in 2000. The point is, they have organized, well-funded leaders, with a stake in the direction of this wobbly nation and our increasingly ethereal economy.

Maybe we need to rethink the conversation we need to be thinking about.

HEALTH INDUSTRY SCRAMBLES ~ REPUBLICANS: “THROW THEM UNDER THE BUS”

The health care industry is playing its final card. Even the Republican Party is ready to "throw the health insurance industry under the bus," according to strategist Frank Luntz – while taking every opportunity to block all reform proposals.

To avert genuine cost control, they are promising to voluntarily hold down prices, per a letter from the America’s Health Insurance Plans, the Pharmaceutical Research and Manufacturers of America; as well as the AMA, the Hospital Association, the Advanced Medical Technology Association, and the Service Employees International Union. Voluntary efforts have been effective in the past at staving off real health reform, but each time have failed to truly reduce costs.

To avoid the political fight of imposing genuine cost control, the Administration may accept the offer. Advocating health reform as a measure to help save the failing economy, it has suggested reducing costs by transforming how health care is delivered. An array of sensible and important proposals, from increasing primary care and incentives to improve quality, to addressing the social and economic causes of illness, are on the table. These proposals are well and good. Our fragmented, profit-driven system means that Americans spend more for using fewer health care services, and get worse health outcomes, compared with other countries. Improving care will help some people.

But the Congressional Budget Office has testified that it will not give much credit to these proposals for savings on costs. CBO and the health care industry know what would work, and it's the third rail of the current debate: In every other country, the government takes responsibility for assuring that health care is affordable and available. Since they know individuals can't bargain over prices when they're sick, the government does it for them, by setting limits on total health care spending, and prices.We're mustering the political will. The question is, will Congress propose a plan like Medicare, that can ensure the government can play its role, and hold down costs while assuring universal coverage? Let's look for robust proposals that can secure the transformation of the health system that policymakers are promising.

Online also at http://www.huffingtonpost.com/ellen-r-shaffer/health-industry-scramble_b_201882.html