The Public is Right About the Public Option

This article appeared on page A - 8 of the San Francisco Chronicle, January 6, 2010.

The insurance industry hates it because it would ding its profits. Democratic leaders fear it could kill passage of health care reform. But reports of the death of the public option have been greatly exaggerated.

Poll after poll shows that Americans want to be able to choose a public insurance plan, and for good reason. It would be tragic to lose this pillar of health care reform to cynical inside-the-Beltway political horse trading. Here's why we need the public option:

It can really deliver on the benefits. The proposed bills would outlaw common and perverse industry loopholes such as pre-existing condition exclusions, which exclude sick people from buying insurance as individuals, and rescissions, which let companies deny treatment retroactively for people they already insure. While outlawing these rules will help, private insurance plans have demonstrated that they are willing to challenge patients' rights to the grave and beyond in the interest of clinging to the premium dollar.

We've witnessed a heartbreaking parade of insured patients trooping to corporate headquarters to plead for lifesaving treatments that were denied, even though the benefits are covered in writing. In contrast, no one at the government-run Medicare program gets a bonus for turning away sick people. We need to be able to choose a plan in which the financial incentives to provide needed care line up with the proposed new laws, and that can only happen in the public sector.

It will drive down costs. Health care reform will cover millions more Americans - a great achievement. But we need to use the increased buying power of this newly covered population to control costs, a job at which private insurance companies consistently fail. Some companies can't reduce premiums because they're too small to hold leverage in negotiations with private hospital chains and big drug companies. Or if they do save a buck, they put it back in their own pockets in the form of profits and executive bonuses.

In Massachusetts, large nonprofit insurers recently testified that they had negotiated sweetheart deals that benefited certain employers and hospitals - and confidentiality agreements that kept the details secret. When the Veterans Administration negotiates lower drug prices, the savings buy more drugs for veterans, and the transactions are all transparent. We'd like to be sure that the change we voted for turns into change we save on reduced premiums, which is possible only in a public plan.

It will allow us to re-engineer how we deliver and pay for care. How? By coordinating with Medicare initiatives that will bolster quality while lowering costs, like financial incentives that promote primary care and better coordination of medications. The public plan will be most effective if it starts right away and is available to everyone - policies we can continue to fight for. But the projection that the public option would offer savings too small for too few, or would be too expensive, is off the mark.

It's democratic. Most Americans know this in our bones. The majority of the House voted for it, including many in our powerhouse delegation from California. The majority of senators expressed support for it - including committee chairs Max Baucus and Tom Harkin. We're tired of arcane rules that let minorities of one hijack the public's interest.

There will be efforts to leverage the public option for other benefits. One benefit of that debate would be if the antitrust exemption for health insurance companies were revoked so they can be regulated by the Federal Trade Commission. But we need a real institutional alternative to the present system. Americans want - and need - a public option. Don't let your representatives trade it away.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/01/05/EDNG1BDU6L.DTL#ixzz0boXMcwU1

No Excuse for Apathy

Eva Chrysanthe is my health care hero.

Back in January Senator Dianne Feinstein's staff were telling us she wasn't sure about her position on the public option because she was hearing a lot of opposition from people calling in from southern California opposing it. They seemed to be responding to talk radio shows.

A lot of people wrote articles about Dianne Feinstein's campaign contributions. She kept talking about what she was hearing from voters.

Eva networked with people inside Organizing for America and found 1200 people in the Bay Area who thought Dianne should represent us. They demonstrated, set up meetings, flooded her office with letters, petitions and emails. Dianne finally wrote a very long treatise on health reform, indicating that she was open to a public option; or maybe not. She heard about it from the voters.

Last week, Senator Feinstein was one of 30 senators to sign Sherrod Brown's statement supporting a public option. Period. Eva brought the staff a carrot cake.

Let's not get googly eyed about what we can accomplish. We're talking about a political system trying to manage an economy in deep crisis. The President, a charismatic figure who is well-informed about the health care issue on both the policy and personal levels, campaigned on expanding coverage for children.

But lookit, they're going to pass something here. How come no one knows that the public option as written doesn't start til 2013 and won't be open to most of us until years later, if ever? Are we expecting the media to do this job? The corporate owned media exist to manipulate our emotions between commercials so that we will feel sufficiently inadequate or bored to want to buy whatever the sponsors are selling, and definitely sufficiently cynical, apathetic and confused that we will not consider taking political action.

Some progressives also seem generally to think that dismissing and ridiculing the emerging proposal passes for analysis and agitation. Willingness to consider how we might influence the bill to set the stage for future progress has been compared to compromising on slavery (a great analogy, really - all they had to do in that case was stamp their feet and reframe the struggle as a fight for human rights, and by golly that was that).

Expanding Medicare to cover more people would've been a great thing to do. Max Baucus thought so. He proposed it in a Finance Committee document in January. It wasn't single payer for all, just for people over 55. Wimp. Must be due to his campaign contributions. Wonder how Baucus, the present obstacle to the public option, and the 4th poorest member of the Senate, stacks up against Sen. Rockefeller, the 4th richest:


Baucus

Cycle Source of Funds, 2009-2010, Campaign Cmte only

Individual Contributions $5,989,921 52%
PAC Contributions $4,872,291 42%
Candidate self-financing $0 0%
Other $640,654 6%

Rockefeller

Cycle Source of Funds, 2005-2010, Campaign Cmte only

Individual Contributions $3,756,635 63%
PAC Contributions $1,963,331 33%
Candidate self-financing $0 0%
Other $260,341 4%


Cycle Top vote-getting candidates Election Results
2008 Max Baucus* Amount Raised $11,602,479 Amount Spent:$9,305,359 Reelected
Bob Kelleher $0 $0
2002 Max Baucus* Amount Raised: $6,719,728 Amount Spent: $6,795,547 Reelected
Michael A. Taylor Amount Raised: Amount Spent: $1,839,020 $1,839,020


Cycle Top vote-getting candidates Election Results
2008 Jay Rockefeller* Amount Raised: $5,972,208 Amount Spent: $5,979,250 Reelected
Jay Wolfe Amount Raised: $123,862 Amount Spent:$123,720
2002 Jay Rockefeller* Amount Raised: $3,045,338 Amount Spent:$2,889,425 Reelected
Amount Raised: Jay Wolfe $136,373 Amount Spent:$136,373


Turns out they both raise most of their money out of state (Baucus 90%, Rockefeller 75%), virtually no one runs against them, and they spend most of what they raise to get re-elected. Why do they take different positions on the public option? Interesting question. In casting his vote, Baucus said that the public plan had a lot to recommend it, but it was his job to get the bill out of Committee. Sound like he's been getting calls from the White House?

It's great that people are sitting in at insurance companies. For the 3% of Americans who still thought health insurance companies had any legitimacy, aside from employees of the industry and their friends and relatives, it's probably a revelation. For the rest of us, a worthwhile way to spend time this week will be strongly suggesting to our friend in the White House, and our leaders in Congress, that they must cough up a program that is going to benefit people pretty quickly or else people will notice.

We need a strong public plan, that bases reimbursement on Medicare rates and uses Medicare providers so that it's affordable and viable. It should be a choice for each of us, in 2010. And we need an ERISA waiver for single payer states, so that they can convert to single payer without a lawsuit. For example people could cut and paste the following:

LETTER TO THE PRESIDENT, Senate Majority Leader Harry Reid, House Speaker Nancy Pelosi:

The Senate Finance Committee drama has concluded. The American public will not long remember whether or not any Republican voted for health reform. We do want to know if we'll get more affordable, reliable health care coverage, that provides relief soon. It's time to tell the President, House Speaker Pelosi and Senate Majority Leader Reid:

We need a public plan option with affordable premiums, that pays hospitals and doctors Medicare rates +5% and includes Medicare providers - and all of us want to have that choice in 2010! Put that up for a vote and we'll support you!

And the bill must include the state single payer option, proposed by Rep. Dennis Kucinich.

http://www.whitehouse.gov/CONTACT/

http://speaker.house.gov/contact/

http://reid.senate.gov/contact/index.cfm

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.

The Speech

We have our work cut out for us.

The President snapped the country back from the delusional debates of August to the more rational debate about health reform. If he has created policy space, it is an opportunity we will need to exercise until the final vote.

In rebalancing the politics of reform, he called out both elected officials and pundits who have invoked scare tactics. He also reminded us explicitly that the deficits we face today are directly attributable to Republican policies of waging an unfinanced war, and tax cuts for the super-wealthy.

We’ll know if it was effective in part if advocates for reform continue to build momentum, at town hall meetings. Will the chorus on the right become more civil? The official Republican response by Rep. Boustany was indeed a respectful disagreement. Rep. Joe Wilson of South Carolina set a different and shocking standard, accusing the President of the United States of lying about an indisputable fact.

The President made the clearest possible case for the importance of insurance reform, describing the human and financial cost of our uniquely inhumane system. The baseline proposals remain, and they would be important: eliminating pre-existing conditions and recisssions.

He offered a new benefit: A guaranteed catastrophic plan to be made available beginning in 2010.

But he proposed a public option as one of a few possible alternatives to private, for-profit insurance plans, signaling openness to a cooperative or generic nonprofit plan, and calming concerns that such a plan could lead to a single payer system. Even at best, a “robust” public option would be hard pressed to muscle out private insurance. But it must have the basics to succeed on its own terms: open to everyone as a voluntary choice right away, using the government’s power to protect the public from predatory insurance companies. As policy, that means it should start out of the gate as a nationally administered program, with the clout to intervene with drug companies and other providers. It must build on Medicare’s rates to pay providers, and use Medicare’s network of doctors and hospitals. It is time to start saying: If the private insurance industry cannot survive on terms that benefit the people who need health care, it is not the government’s role to bail them out.

It was disturbing to hear the President refer more than once to his proposals as balancing the concerns of left and right. Single payer supporters and advocates for a public plan are his base and his field team. The teabaggers and opponents of any reform are not pulling the same way. Despite his nod to Sen. McCain’s proposal for catastrophic coverage, and Republicans’ interests in medical malpractice reform, none appeared interest in voting with the President afterwards.

His discussion about our skepticism of government was important. It is understandable that many are frustrated with a government that has been unresponsive and derelict for so long. But it is a system we can influence. Mobilizing for what we want is the road to generating energetic support, and demands that our elected officials act responsibly and effectively. Resorting to demonization breeds disaffection.

The challenge is before us: to hit the air waves, the Town Hall meetings, the mail to the President and Congress to demand the change we voted for.

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.

Pickpockets and the Public Plan

Ever had your pocket picked? Chances are they charmed you, scared you, surrounded you - in short, distracted you while they grabbed your wallet. Enough said.

So let's get back to the important issue in health reform: the Public Plan. You can have health coverage that is better than what you have, that is more affordable, covers many more of us, and improves quality You need a strong public plan.

The Congressional Progressive Caucus isn't calling for a strong public plan, really. They should.

People who say a public plan can't work are wrong. They should reconsider.

A strong public plan should be open to everyone who's not on Medicare, beginning in 2010.

The House bill says it would start in 2013 - after the next presidential election - and include only a few of us - self-employed, unemployed, employees of small businesses.

The Senate is proposing to have no public plan at all - just a straight cash transfer to your friendly neighborhood insurance conglomerate. (Which is really a way of making sure nothing passes.)

Why does this matter? The public plan needs to have enough people in it so that it can do what Medicare does: influence how the rest of the system works. Bend the cost curve. Improve quality. Provide your doctor, nurse practitioner and acupuncturist with comparative effectiveness studies so you get better care on the first visit. This will scare some of the teabaggers and it apparently scares the hell out of the insurance industry.

This, however, is change we can believe in.

That plus one more thing: we need a state option for single payer, so we can take the next step towards truly universal coverage.

People are mobilizing in remarkable ways to demonstrate why we need real health reform now. Giving out free care to long lines of people in desperate need. Showing up in scrubs at Town Hall meetings. Explaining that Medicare is a government program and we like it.

We need to do one more thing: make it worth it when we win. Take a picket sign for a Real Public Plan. Tell your neighbors. Tell your member of Congress. Tell your talk shows. The insurance industry and their pickpockets do not speak for us. We need real health reform, and this is the time to fight for it.

Need some talking points? Go to www.centerforpolicyanalysis.org/id42.html

More on HR 3200: Public plan delayed, affordability uncertain

John Gilman (johnhgilman@yahoo.com) and Ellen R. Shafffer


Concerns
· State benefit mandates – to continue these mandates, state will have to pay any additional cost of affordability credits in the Exchange that are due to the mandates. With tight state budgets, states are likely to drop these benefit mandates, which will effectively reduce the scope of coverage for all state residents whether insured in or outside the Exchange.

· Delayed Implementation of Health Insurance Exchange, Public Option, and Affordability Credits and limited access once implemented.
o Exchanges do not go into effect until 2013. In that year the only employers that may insure through the Exchange are those with 10 or fewer employees. Individuals without other coverage may also enroll, but if they have been offered coverage by their employer they will not be eligible for any affordability credits.
o Beginning in 2014, any employer with 20 or fewer employees may enroll in the Exchange. Individuals without other coverage may also enroll, but if they have been offered coverage by their employer they will be eligible for affordability credits, but only if the employee’s share of premium exceeds 11% of adjusted gross income and the employee’s family income does not exceed 400% FPL.
o Beginning in 2015, and beyond, the Health Care Commissioner may, but is not required to, expand employer participation to larger employers.
· There is an individual mandate to have insurance but Affordability Credits are limited. These credits are not available unless you receive coverage through the exchange, and even then, they are not available through the exchange if you have declined coverage from your employer unless your share of premium under your employer’s plan exceeds 11% of your income.
o For those that qualify, Affordability Credits provide some protection for those with the lowest incomes, but these credits quickly phase-out and are not available for much of the middle class. Anyone with family income above 400% FPL ($43,320 for an individual; $88,200 for a family of four) is not eligible for any subsidy. The following are examples of health care costs for people buying coverage through the exchange:
§ A single person with $16,000 annual income would receive a subsidy and pay no more than a $480 per year premium (3% of income), while having a cost sharing burden of 3-5% of medical costs.
§ A couple with family income of $35,000 would receive a subsidy and pay no more than a $2450 per year premium (7% of income), while having a cost sharing burden of 15% of medical costs with an out-of-pocket family limit of $10,000 per year.
§ A family of three, with family income of $72,000 would receive a subsidy and pay no more than a $7920 per year premium (11% of income), while having a cost sharing burden of up to 30% of medical costs with an out-of-pocket family limit of $10,000 per year.
§ A family of four with family income of $90,000 would not be eligible for any premium subsidy and in addition could expect to have a cost sharing burden of up to 30% of medical costs with an out-of-pocket family limit of $10,000 per year. According to the California HealthCare Foundation, in 2008, the average total family premium for an employer sponsored PPO in California $1251/month ($15,012/year). This family would be paying over 16% of its income just for the health care premium.
· The bill permits a basic insurance plan to have high out-of-pocket expenses. Cost sharing under the basic plan can be up to 30% of medical costs, with out-of-pocket limits of $5000 per individual and $10,000 per family.
· Although the bill offers “enhanced” and “premium” plans with reduced cost sharing–it appears that everyone is entitled to the “basic” plan. The enhanced and premium plans have less cost sharing but higher premiums. Low and middle-income workers will likely not be able to buy enhanced and premium plans because they will not be able to afford the higher premiums, so they will be stuck with the basic plan and its high-cost sharing.
· Play or Pay. Employers must “play” (offer health insurance to employees) or “pay” (pay a fee to the Health Insurance Exchange Trust Fund).
o If the employer plays, the minimum employer contribution to premium (for full-time employees) is 72.5% of the premium cost for a single employee and 65% for family coverage. That means the employee with family coverage may pay 35% of the premium cost of his or her policy. (According to the California HealthCare Foundation, single employees in California pay on average 12% of premium costs, while employees with family coverage pay 24% of premium costs.)
o Employers that choose to pay must pay an amount equal to 8% of total wages (The amount is less for employers with payrolls of up to $400,000). When the employer chooses to pay, none of the amount paid by the employer is credited to his or her employees, who must obtain insurance through the exchange. Many of these employees will find themselves paying for the full cost of their insurance. See the above discussion for Affordability Credit subsidies available through the Exchange.
· State-based health insurance exchange – States, or groups of states, can form their own health insurance exchange. However, it appears that such an exchange would NOT be required to offer a public option. (See Section 208)
· State benefit mandates – to continue these mandates, state will have to pay any additional cost of affordability credits in the Exchange that are due to the mandates. With tight state budgets, states are likely to drop these benefit mandates, which will effectively reduce the scope of coverage for all state residents whether insured in or outside the Exchange.

· Essential community providers: The bill requires that only basic plans contract with essential community providers? [Page 90 - Sec 204 (b)(6)]

Good:
· Prohibits cost sharing for preventive benefits
· Establishes a minimum Medical Loss Ratio, BUT leaves exact ratio to be set by the Secretary of HHS, (effective 1/1/2011)
· Limits policy rescissions (effective 10/1/2010)
· Public Option –Provides incentives for Medicare providers to be public option providers (assures broad, diverse panel of providers)Page 122-123 – Sec 223 (b)(1) – 5% incentive to Medicare providers who also participate in Public Option]

· Medicaid improvements
o Expands coverage: Requires state Medicaid programs to cover childless adults, parents, and individuals with disabilities with incomes up to 133% FPL. Requires state Medicaid programs to cover newborns up to the first 60 days of life who do not have other coverage. These expansions will be paid 100% by federal government. BUT, these expansions do not go into effect until 2013.
o Improves primary care reimbursement: Requires state Medicaid programs to reimburse for primary care services at no less than 80% of Medicare rates in 2010, 90% in 2011, and 100% thereafter. The incremental cost of this increased reimbursement will be paid 100% by federal government.
o Establishes a five-year Medicaid Medical Home pilot program, with 90% federal matching funds for community care workers for the first two years and 75% federal matching for next three years.
o Increases pharmaceutical manufacturer rebates for brand-name drugs purchased by State Medicaid programs from 15.1% of average manufacturers’ price to 22.1%.
· Establishes the Center for Comparative Effectiveness Research


Uncertain effect
· Options for certain individuals to enroll in Medicaid or receive insurance through the Exchange (probably good)
· Eliminate SCHIP; transitions SCHIP eligibles into Exchange, but no earlier than 2013.
· 2.5% tax penalty (2.5% of modified AGI) for failure to obtain coverage, but not to exceed average premium cost; hardship exception available. (If you pass the “hardship test” your prize is not having to pay the penalty and not having health insurance.)
· Up to 50% employer tax credit for premiums paid by small employers with low wage workers
o Phases out beginning at over $20,000/ year average wage, fully at $40,000
o Phases out beginning at 11 employees; fully at 25
o Does not apply to any employee earning over $80,000
· Requires state maintenance of effort (MOE) for Medicaid and CHIP eligibility as of June 16, 2009. This assures that eligibility does not contract (good), but how able are states to do this, given their bleak budget picture.

The Good, the Bad and the Murky: Health Reform on July 14

Here’s (a partial, one-person view of) what happened:

The House released a 1,017 page reform bill, summarized in 35 pages, promising progress and peril over the next 4 years. It improves affordability of health insurance, and proposes to regulate “rescissions” and other worst practices. The public plan option is semi-strong: it’s available to anyone who gets coverage through the new Health Insurance Exchange, but it’s less affordable for people covered by an employer. And it postpones indefinitely including large employers in the Exchange, running the risk that the Exchange and the public plan will drown in high payments for people likely to need health care.
Bill and summary online: http://www.centerforpolicyanalysis.org/id41.html

More below on the new House bill.

The Senate Health, Education, Labor and Pension (HELP) Committee gamely marched through amendments to its bill. Sen. Bernie Sanders’ state single payer amendment elicits shining and shameful moments: Strong statements of support from Senators Tom Harkin (“We have a dysfunctional system”), Jeff Merkley, and Sherrod Brown. Listen To Your Staff Demerit for Barbara Mikulski (“Can’t states enact single payer anyway?” [She is reminded that states need waivers for ERISA, and transfers of federal funds.] “Oh.” She still voted No. The amendment failed, but may come up again to the full Senate.) Hero award to Kennedy chief staffer David Bowen, at the table full time, accurately describing every technical foible of the draft bill, and every amendment.

The Mainstream Media fuss about the tab. Washington Post and NYT focus on taxes on the wealthiest. Very not the point.

Preliminary Details: The House Bill: Big questions for consumers and providers are: Will it make insurance affordable and dependable?

The bill targets the worst insurance company abuses: pre-existing condition exclusions, rescissions of coverage after the fact, denial of coverage or renewal to sick people. They will have to spend most of the premiums on health care. But enforcing these rules will depend on the existence of a real alternative. Here’s the murky part.

Most employers will have to offer insurance, covering about 70% of the premium, or pay an 8% payroll tax to a Health Insurance Exchange. The Exchange offers Qualified Health Benefits Plans that meet certain rules. The Public Plan is one of the options. Anyone eligible for the Exchange can enroll in the Public Plan. (Why do I see images of Holly Hunter demanding that George Clooney prove he is “bona fide”?)

But until 2013, the Exchange is open only to individuals without coverage, and to small employers.

And after 2013, it is up to the new Health Choices Commissioner to determine whether or not larger employers will be included.

There are affordability limits on what individuals will have to pay, that are better than proposed earlier: Sliding scale subsidies for premiums up to 400% of the federal poverty limit, if premiums cost more than 11% of your adjusted gross income. There are limits on total out-of-pocket spending (premiums, co-pays, deductibles).But: Subsidies in the first 3 years are only available to those who do not have an affordable offer of employer-sponsored insurance.
So you can quit your employer's crummy plan if you don't like it, and join another plan offered thru the Exchange, as long as you can afford to do so without the affordability credits, until 2013.

Payments to providers would be tied to Medicare rates. This is a boon to cost control and affordability in the long run. (There are other benefits that keep provides in the plan.)

Drug Bust: The Health Choices Commissioner can negotiate for drug prices.

The Medicare doughnut hole will close – by 2023!!! We can do better.

Quality Improvements: Many good proposals to improve the quality of care, through Medicare and other programs. The bill would tilt reimbursement and training to primary care providers, gerontologists, and nurse midwives. Needed funds for prevention and public health.
State Options. Still to be explored; from the Summary:
Sec. 208. Optional operation of State-based health insurance exchanges. Permits states to offer their own Exchange or join with a group of states to create their own exchange in lieu of the federal Health Insurance Exchange, provided that the state(s) perform all of the duties of the federal Exchange as approved by the Health Choices Commissioner. The Commissioner has authority to terminate state exchanges if they are not meeting their obligations.

Coming up: House Committee mark-ups starting – today! Get online. Take notes. One way or the other, history is happening.

Hear Ellen on the public plan

Hear Ellen's comments on the public plan on Free Speech Radio Network on July 6: www.fsrn.org