Dec 4, 2013
Health Care for All: Why We Need a New Prescription
Posted on Oct 1, 2013
By Scott Tucker
ST: When the ACA was pushed through Congress, even the limited “public option” was deliberately removed from health policy debates in congressional hearings. Dr. Margaret Flowers of PNHP and seven other health activists were arrested when they demanded an open debate. The message of career Democrats was that the ACA was the best they would give us, so we’d better be grateful. That remains puzzling to many people who know that other industrialized democracies spend less per capita on health care, do better in health outcomes, and extend health coverage for all citizens. Instead, the private insurance companies are still big winners from this reform, and millions of Americans are still losing adequate health care.
Could you summarize our national health care situation before and after ACA? Of course any statistical survey will have a margin of error, but some basic trends have been closely studied up to this date. What are some of the likely numbers of the uninsured and underinsured in the future?
DM: Regarding the national health care situation before and after ACA, there will not be much fundamental change. We will still be using the same fragmented, dysfunctional financing system, but we will be bringing more people under the umbrella. Although 48 million are uninsured now, when ACA is fully implemented, 31 million will still be left without coverage, and those with coverage are more likely to face excessive out-of-pocket costs should they need health care because of the gradual transition from traditional coverage to underinsurance, which is rapidly becoming the new norm. Not only do patients face much higher deductibles, they also are beginning to have fewer choices of health care providers because of greater use of more limited narrow networks of providers, and some employers are switching to private (non-ACA) health insurance exchanges which use defined contributions to transfer future cost increases from the employers to the employees. If we had a single payer, improved-Medicare-for-all program, underinsurance would be eliminated, and the number of uninsured would not be 48 million, it would not be 31 million, it would be zero!
ST: Health care spending is always a minefield in public policy debates. I’ll place some quotes from recent front-page articles in The New York Times side by side, and then raise a few questions. On September 18, Sheryl Gay Stolberg wrote, “Washington’s health care revolving door is spinning as fast as the new online health insurance marketplaces, a central provision of President Obama’s health law, are set to open on Oct. 1.” Stolberg went on to note, “The health care industry now spends more money on lobbying in Washington than any sector of the economy—more than $243 million last year alone, higher than the $242 million spent by financial, insurance and real estate companies, according to the Center for Responsive Politics here.”
On Sept. 23, Robert Pear wrote, “When insurance marketplaces open on Oct. 1, most of those shopping for coverage will be low- and moderate-income people for whom price is paramount. To hold down costs, insurers say, they have created smaller networks of doctors and hospitals than are typically found in commercial insurance. And those health care providers will, in many cases, be paid less than what they have been receiving from commercial insurers.”
The present system offers perverse incentives for Washington political insiders to become lobbyists, and to profit from the very pieces of legislation they moved through Congress. Insurance companies can easily mutate to profit from the new set of rules and regulations. As Pear notes, “Even though insurers will be forbidden to discriminate against people with pre-existing conditions, they could subtly discourage the enrollment of sicker patients by limiting the size of their provider networks.”
Pear quotes President Obama: “Competition and consumer choice are actually making insurance affordable.” Do we have any reason to believe that is generally true now, or will be nearer to the truth when the insurance marketplaces roll out in October?
DM: Your comments about the cozy relationship between lobbyists and the administration and Congress demonstrate why we ended up with legislation that took such good care of the insurance and pharmaceutical industries while falling so short in meeting the goals of covering everyone and providing plans that should ensure both health security and financial security for all of us.
President Obama and members of his administration have been claiming that health insurance is now more affordable because of the provisions of Obamacare. The problem with that claim is that it is health care, not health insurance, that we need to be affordable. Unfortunately, under Obamacare there are very few provisions that will reduce health care costs much whereas there are some provisions that will increase out-of-pocket spending by patients.
In claiming that competition and consumer choice are making insurance affordable, they are referring only to the price of the health insurance plan. Insurers aren’t dumb. They are going to do everything they can to keep premiums competitive. When the law was written they were there to see that the plans that most people will buy in the state exchanges will have low actuarial values—60 or 70 percent. That means that patients will have to pay 30 to 40 percent of their health care costs out-of-pocket. Typical employer group plans have actuarial values of 80 to 95 percent, so the exchange plans that most will buy are inadequate in comparison. Even for those individuals who qualify for government subsidies, the financial exposure will still be too great for too many.
One of the ways that insurers can keep the premiums competitive is to require large deductibles that must be paid before the insurance kicks in. Many will find difficulty paying these deductibles. Another method that insurers are using is to sharply limit the lists of physicians and hospitals that you can use—so-called narrow networks. Insurers save money if you have trouble finding physicians who will see you, or if they are too far away to get there.
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