Since one of the most controversial elements of "Obamacare" is the individual mandate, I wanted to share T.R. Reid's take on this issue:
Everyone in Japan is required to sign up with a health insurance plan. This is what's known as an "individual mandate," a concept that has sparked furious debate in the United States. But every nation relies on health insurance has that requirement - it's necessary to ensure a viable risk pool for the insurance companies - and in Japan the mandate is not controversial at all. "It's considered an element of personal responsibility, that you insure yourself against health care costs . . . And who can be against personal responsibility?"
An individual mandate to buy insurance raises a corollary question: How do you enforce the mandate? That is an issue America's policy makers have debated time and time again, with no real resolution. Japan has come up with a fairly elegant solution to this common problem. If you don't have an insurance plan, you'll be assigned to one run by your local city government. If you don't pay the premium - about 1 percent of the population fails to pay - you'll get regular dunning letters from the insurance company. But if you get sick, you're required to pay back all the premiums you have missed (up to one year's worth) before the insurance company will pay your bill. The result is that the few people who refuse to pay health insurance premiums tend to make up their arrears when they have an accident or become seriously ill. For the unemployed or those too poor to pay their premiums, local government pays the insurance premium instead, so coverage never lapses.
I also have to include, at this point that Japan spends about 8% of its GDP on health care (more than half of the U.S. 17% of GDP) and the Japanese are the most "prodigious" consumers of health care in the world, visiting a doctor an average of 14.5 times each year, and receiving more CAT scans and MRIs, and taking more prescription drugs that anyone else in the world.
Monday, December 19, 2011
Friday, December 16, 2011
The Healing of America: A Review in Parts (2)
Most shocking fact of the day:
In addition to those who have no health insurance coverage, millions of Americans have coverage so limited that they are not protected against any serious bill from a doctor or a hospital. For those Americans who are uninsured or underinsured, any bout with illness can be terrifying on two levels. In addition to the risk of disability or death due to the disease, there's the risk of financial ruin due to the medical and pharmaceutical bills. This is a uniquely American problem. When I was traveling the world on my quest, I asked the health ministry of each country how many citizens had declared bankruptcy in the past year because of medical bills. Generally the officials responded to this question with a look of astonishment, as if I had asked how many flying saucers from Mars landed in the ministry's parking lot last week. How many people go bankrupt because of medical bills? In Britain, zero. In France, zero. In Japan, Germany, the Netherlands, Canada, Switzerland: zero. In the United States, according to a joint study by Harvard Law School and Harvard Medical School, the annual figure is around 700,000.
- T.R. Reid, The Healing of America
In addition to those who have no health insurance coverage, millions of Americans have coverage so limited that they are not protected against any serious bill from a doctor or a hospital. For those Americans who are uninsured or underinsured, any bout with illness can be terrifying on two levels. In addition to the risk of disability or death due to the disease, there's the risk of financial ruin due to the medical and pharmaceutical bills. This is a uniquely American problem. When I was traveling the world on my quest, I asked the health ministry of each country how many citizens had declared bankruptcy in the past year because of medical bills. Generally the officials responded to this question with a look of astonishment, as if I had asked how many flying saucers from Mars landed in the ministry's parking lot last week. How many people go bankrupt because of medical bills? In Britain, zero. In France, zero. In Japan, Germany, the Netherlands, Canada, Switzerland: zero. In the United States, according to a joint study by Harvard Law School and Harvard Medical School, the annual figure is around 700,000.
- T.R. Reid, The Healing of America
Wednesday, December 14, 2011
The Healing of America by T.R. Reid - A Review in Several Parts
I just started reading this fascinating book today. Since I've worked on healthcare legislation, when my company's new CEO recommended it to me, I dowloaded it immediately. I wanted to share this excerpt to give you an idea of how great this book is going to be:
The thesis of this book is that we can find cost-effective ways to cover every American by borrowing ideas from foreign models of health care . . . The leaders of the health care industry and the medical profession, not to mention the political establishment, have a single all-purpose response they fall back on whenever somebody suggests that the United States might usefully study foreign health care systems: “But it’s socialized medicine.”
This is supposed to end the argument. The contention is that the United States, with its commitment to free markets and low taxes, could never rely on big-government socialism the way other countries do. Americans have learned in school that the private sector can handle things better and more efficiently than government ever could. In U.S. policy debates, the term “socialized medicine” has been a powerful political weapon – even though nobody can quite define what it means. The term was popularized by a public relations firm working for the American Medical Association in 1947 to disparage President Truman’s proposal for a national health care system. It was a label, at the dawn of the cold war, meant to suggest that anybody advocating universal access to health care must be a communist. And the phrase has retained its political power for six decades.
There are two basic flaws, though, in this argument.
1. Most national health care systems are not “socialized”. . . [M]any foreign countries provide universal health care of high quality at reasonable cost using private doctors, private hospitals, and private insurance plans. Some countries offering universal coverage have a smaller government role than the United States does. . . Even where government plays a large role, doctors’ offices are operated as private businesses.
In short, the universal health care systems in developed countries around the world are not as “socialized” as the health insurance industry and the American Medical Association want you to think.
2. “Socialized Medicine” may be a scary term, but in practice, Americans rather like government-run medicine. The U.S. Department of Veterans Affairs is one of the world’s the purest models of socialized medicine at work. In the Medicare system, covering about 44 million elderly or disable Americans, the federal government makes the rules and pays the bills. And yet both of these “socialized” health care systems are enormously popular with the people who use them and consistently rate high in surveys of patient satisfaction. During the debate over “Obamacare,” even those who complained most angrily about a “government takeover of health care” insisted that Medicare and the VA must continue to be government-run systems.
So the problem isn’t “socialism.” The real problem with those foreign healthcare systems is that they’re foreign. That offends the mind-set – sometimes referred to as American exceptionalism – that says our strong, wealthy, and enormously productive country is sui generis and doesn’t need to borrow any ideas from the rest of the world. Anybody who dares to say that other countries do something better than we do is likely to be labeled “unpatriotic” or anti-American. . .
Anyone want to read along with me?
The thesis of this book is that we can find cost-effective ways to cover every American by borrowing ideas from foreign models of health care . . . The leaders of the health care industry and the medical profession, not to mention the political establishment, have a single all-purpose response they fall back on whenever somebody suggests that the United States might usefully study foreign health care systems: “But it’s socialized medicine.”
This is supposed to end the argument. The contention is that the United States, with its commitment to free markets and low taxes, could never rely on big-government socialism the way other countries do. Americans have learned in school that the private sector can handle things better and more efficiently than government ever could. In U.S. policy debates, the term “socialized medicine” has been a powerful political weapon – even though nobody can quite define what it means. The term was popularized by a public relations firm working for the American Medical Association in 1947 to disparage President Truman’s proposal for a national health care system. It was a label, at the dawn of the cold war, meant to suggest that anybody advocating universal access to health care must be a communist. And the phrase has retained its political power for six decades.
There are two basic flaws, though, in this argument.
1. Most national health care systems are not “socialized”. . . [M]any foreign countries provide universal health care of high quality at reasonable cost using private doctors, private hospitals, and private insurance plans. Some countries offering universal coverage have a smaller government role than the United States does. . . Even where government plays a large role, doctors’ offices are operated as private businesses.
In short, the universal health care systems in developed countries around the world are not as “socialized” as the health insurance industry and the American Medical Association want you to think.
2. “Socialized Medicine” may be a scary term, but in practice, Americans rather like government-run medicine. The U.S. Department of Veterans Affairs is one of the world’s the purest models of socialized medicine at work. In the Medicare system, covering about 44 million elderly or disable Americans, the federal government makes the rules and pays the bills. And yet both of these “socialized” health care systems are enormously popular with the people who use them and consistently rate high in surveys of patient satisfaction. During the debate over “Obamacare,” even those who complained most angrily about a “government takeover of health care” insisted that Medicare and the VA must continue to be government-run systems.
So the problem isn’t “socialism.” The real problem with those foreign healthcare systems is that they’re foreign. That offends the mind-set – sometimes referred to as American exceptionalism – that says our strong, wealthy, and enormously productive country is sui generis and doesn’t need to borrow any ideas from the rest of the world. Anybody who dares to say that other countries do something better than we do is likely to be labeled “unpatriotic” or anti-American. . .
Anyone want to read along with me?
Wednesday, February 23, 2011
Revolution and the Internet
Sparked by the current live debate at the Economist.com (Internet a Force for Democracy?), I'm taking a brief digression from the Health Care Reform series to discuss the historic events in the Middle East and Africa over the last few weeks.
If you even just keep up on current events through Facebook and other social networking sites, you cannot be unaware of the wave of protests taking place in several nations.
If you even just keep up on current events through Facebook and other social networking sites, you cannot be unaware of the wave of protests taking place in several nations.
- In Tunisia, an unemployed would-be vegetable vendor set himself on fire, setting off a wave of anti-government protests, leading to the resignation and flight of President Zine al-Abidine Ben Ali (1).
- In Egypt, an 18-day revolt forced the retirement of Hosni Mubarak after a thirty-year tenure as president (2).
- In Libya, the battle for the western side of the country began as Col Muammar Qaddafi, who has led the nation since 1969, turned gunships onto Tripoli, the capital city (3). Benghazi, the largest city in the eastern part of the African nation is now under the control of the protesters. In a desperate attempt to maintain control, Qaddafi has turned the military on the people, ordering plans to unload bombs onto cities and crowds of protesters. Many of the upper level government and military officials have resigned (4).
- In Yemen, protesters also call for the resignation of President Ali Abdullah Saleh, who has held this title since 1979 (5 and 6).
- In Bahrain, the tiny, wealthy, island nation in the Persian Gulf, the Shia Majority are calling for the Sunni al-Khalifa dynasty to establish a Constitutional Monarchy (7). The crown prince has offered 1,000 Bahraini dinars ($2,660) to every family to help calm the protests. Similarly, Libya's Qaddafi doubled the salaries of all government workers to bolster their support (8).
- In Morocco, peaceful protests demanding a new constitution and calling for democratic reforms have swept the streets of Rabat, the capital city (9).
- In Iran, tens of thousands of protesters have taken to the streets, twice this week, to call for the end of the Islamic Republic's rule (10).
Beyond the Middle East and Africa, protests in China have begun, at the urging of opposition websites, in spite of heavily censored internet access (11). The referenced Wall Street Journal article reports: "The lackluster popular response, however, demonstrates how much harder it would be to organize a sustained protest movement in a country with a well-funded and organized police force, and with the world's most sophisticated Internet censorship system."
Cuban leaders are also nervous as the revolutionary winds gust across oceans, and they receive warnings that "Castro government officials that pro-Democracy organizers in Cuba and the United States were using social media, like Facebook and Twitter, to foment a political uprising in the island nation (12).
In the United States, we're testing our own democracy, protesting wage reductions for public servants, collective bargaining issues, and general class conflict in Wisconsin. Protesters received pizzas that had been ordered from Cairo as a sign of solidarity. Many of the pizzas had been ordered online (13).
Without the internet, none of us would hardly know that dictators all over the world are cracking down with violence out while they desperately cling to their hold on power amidst overwhelming civic protests. One man, whose spectacular act of self-sacrifice has sparked world-wide revolution, and we know about it, through the internet.
Tuesday, February 15, 2011
Eliminating Lifetime and Annual Limits
One of the first Affordable Care Act (ACA) reforms that will take effect is the prohibition on Lifetime and Annual Limits. In fact, incremental elimination of these Limits has already begun. For all non-grandfathered plans beginning after September 23, 2010, health insurance carriers must raise the Annual or Lifetime Limit to $750,000.00. All non-grandfathered plans beginning after September 23, 2011, must have a limit of no less than $1.25 million. All non-grandfathered plans beginning after September 23, 2012 must have a limit of no less than $2 million. Finally, all non-grandfathered plans beginning after January 1, 2014 must adhere to the complete prohibition on Lifetime and Annual Limits. According to HealthCare.gov, "A grandfathered health insurance policy is a plan that you bought for yourself or your family; that you did not receive through your employer; and that was issued on or before March 23, 2010" (1).
Prior to this prohibition, health insurance carriers could include either a lifetime or an annual limit on the amount of money they would cover for each beneficiary, or each plan. For example, a plan with a $2,000,000 annual limit (national average in 2009), would exempt the insurance carrier from paying any benefits once a beneficiary had spent $2,000,000 in covered medical costs in a plan year. Many carriers would even terminate the plan once that limit had been reached. The Employer Health Benefits Annual Survey of 2009 reports that 63% of large employer insurance plans, 52% of small employer insurance plans, and 89% of individual plans had lifetime or annual limits.
If you have a plan/policy that reaches its limit between now and January 1, 2014, and are otherwise still eligible under the plan (you've been paying your premiums, and have not knowingly and intentionally committed fraud), health insurance coverage must be provided with a notice that the lifetime limit no longer applies (2).
The catch to this reform is that after January 1, 2014 health insurance plans only have to cover what the ACA has designated as "Essential Health Benefits." These are the only benefits to which the Prohibition applies. Insurance carriers may still place an annual spending limit on coverage for non-essential medical services.
Some health insurance carriers may also be able to obtain a waiver for the Prohibition, if it will cause premiums to increase significantly, or significantly reduce the quality of care or access to medical resources.
NEXT: Understanding Essential Health Benefits in ACA
Prior to this prohibition, health insurance carriers could include either a lifetime or an annual limit on the amount of money they would cover for each beneficiary, or each plan. For example, a plan with a $2,000,000 annual limit (national average in 2009), would exempt the insurance carrier from paying any benefits once a beneficiary had spent $2,000,000 in covered medical costs in a plan year. Many carriers would even terminate the plan once that limit had been reached. The Employer Health Benefits Annual Survey of 2009 reports that 63% of large employer insurance plans, 52% of small employer insurance plans, and 89% of individual plans had lifetime or annual limits.
If you have a plan/policy that reaches its limit between now and January 1, 2014, and are otherwise still eligible under the plan (you've been paying your premiums, and have not knowingly and intentionally committed fraud), health insurance coverage must be provided with a notice that the lifetime limit no longer applies (2).
The catch to this reform is that after January 1, 2014 health insurance plans only have to cover what the ACA has designated as "Essential Health Benefits." These are the only benefits to which the Prohibition applies. Insurance carriers may still place an annual spending limit on coverage for non-essential medical services.
Some health insurance carriers may also be able to obtain a waiver for the Prohibition, if it will cause premiums to increase significantly, or significantly reduce the quality of care or access to medical resources.
NEXT: Understanding Essential Health Benefits in ACA
Wednesday, February 2, 2011
Health Care Unconstitutional?
If you're keeping up with health care reform as it makes its way to the Supreme Court, you may be wondering whether statements about it being unconstitutional are true. You're not the only person confused on this issue - even the judges reviewing the matter are split 2-2.
Recent Ruling on Health Care Law
While many Americans don't like the mandate that they must purchase commercial health insurance coverage, most people do like many of the benefits that the new health care laws provide (For a short list of these benefits, see previous entry). The problem then becomes whether we can keep the parts of the bill that we like and get rid of the mandate.
If you read the Richard Thaler article I linked in the previous entry (Adding Clarity to Health Care Reform), you already understand that in order for universal health care to be effective, we must have most of the healthy people sign up for coverage. There has to be a balance of people who pay into the pot but don't withdraw very much in order to support the people who pay in and are very sick.
Let's pause here for a minute, because a lot of us don't like the idea of paying for a stranger's health maladies. But there are lots of things we have to contribute to society for the better of the group. For example, most people are in favor of free public education. So we have agreed to make schooling mandatory for children that fall into specific age groups. Public education is expensive, and not always very effective, but we've decided that it is in our society's best interest to require kids to attend school. Most kids have to attend public school in order for it to be sustainable. Similarly, If we decide that health insurance coverage and/or access to health care is also in our society's best interest to provide to all people living in the U.S., then we also must require people to participate in the system. Just as there are choices in education, such as private and charter schools, there are real choices in the health care system. Health care choices that are not just limited to which doctor you see, but what type of plan you purchase, and if you already have a plan you like, you can keep it.
With regard to the mandate that everyone must purchase health care insurance, the problem lies with the issue that States do not want the Federal government to impose such requirements on them. To clarify, states impose mandates on citizens quite frequently, and the federal government also imposes mandates on citizens regularly (it's tax season, you feel the imposition). Even though individuals will be charged an income tax penalty if they fail to purchase health insurance, it's not the individual's rights with which the courts are most concerned. I don't want to reiterate everything Thaler argues in his article, but I do think he offers some excellent solutions. My favorite is to create an incentive for states to require universal enrollment in health insurance plans rather than simply require it. For example, if states refuse to enact the new health care reforms, they will not receive funding for federal health care programs and won't be able to provide all the good programs included in the reform. We're familiar with this model of federal incentive, and it seems to work.
As a Libertarian I tend to bristle at the thought of government imposition on one more aspect of my life. If I don't want to purchase health insurance, then I shouldn't have too. What I'm left wondering though is, "who are the people who don't want health insurance?" Is there a bastion of people who really want to pay all their medical expenses out of pocket? I can understand not being able to afford health insurance. And I can understand a healthy person not wanting to pay an exorbitant premium for services they don't think they're likely to use. But if health insurance is affordable,and if you can trust that your premiums are actually being used to cover real medical expenses (and not the President of Kaiser Permanente's country club membership), and if you know that when you file a claim it will be paid more often than not, then why not enroll?
If the mandate is the only constitutional hang-up, let's seek a more satisfying solution.
Recent Ruling on Health Care Law
While many Americans don't like the mandate that they must purchase commercial health insurance coverage, most people do like many of the benefits that the new health care laws provide (For a short list of these benefits, see previous entry). The problem then becomes whether we can keep the parts of the bill that we like and get rid of the mandate.
If you read the Richard Thaler article I linked in the previous entry (Adding Clarity to Health Care Reform), you already understand that in order for universal health care to be effective, we must have most of the healthy people sign up for coverage. There has to be a balance of people who pay into the pot but don't withdraw very much in order to support the people who pay in and are very sick.
Let's pause here for a minute, because a lot of us don't like the idea of paying for a stranger's health maladies. But there are lots of things we have to contribute to society for the better of the group. For example, most people are in favor of free public education. So we have agreed to make schooling mandatory for children that fall into specific age groups. Public education is expensive, and not always very effective, but we've decided that it is in our society's best interest to require kids to attend school. Most kids have to attend public school in order for it to be sustainable. Similarly, If we decide that health insurance coverage and/or access to health care is also in our society's best interest to provide to all people living in the U.S., then we also must require people to participate in the system. Just as there are choices in education, such as private and charter schools, there are real choices in the health care system. Health care choices that are not just limited to which doctor you see, but what type of plan you purchase, and if you already have a plan you like, you can keep it.
With regard to the mandate that everyone must purchase health care insurance, the problem lies with the issue that States do not want the Federal government to impose such requirements on them. To clarify, states impose mandates on citizens quite frequently, and the federal government also imposes mandates on citizens regularly (it's tax season, you feel the imposition). Even though individuals will be charged an income tax penalty if they fail to purchase health insurance, it's not the individual's rights with which the courts are most concerned. I don't want to reiterate everything Thaler argues in his article, but I do think he offers some excellent solutions. My favorite is to create an incentive for states to require universal enrollment in health insurance plans rather than simply require it. For example, if states refuse to enact the new health care reforms, they will not receive funding for federal health care programs and won't be able to provide all the good programs included in the reform. We're familiar with this model of federal incentive, and it seems to work.
As a Libertarian I tend to bristle at the thought of government imposition on one more aspect of my life. If I don't want to purchase health insurance, then I shouldn't have too. What I'm left wondering though is, "who are the people who don't want health insurance?" Is there a bastion of people who really want to pay all their medical expenses out of pocket? I can understand not being able to afford health insurance. And I can understand a healthy person not wanting to pay an exorbitant premium for services they don't think they're likely to use. But if health insurance is affordable,and if you can trust that your premiums are actually being used to cover real medical expenses (and not the President of Kaiser Permanente's country club membership), and if you know that when you file a claim it will be paid more often than not, then why not enroll?
If the mandate is the only constitutional hang-up, let's seek a more satisfying solution.
Tuesday, February 1, 2011
Patient Protection and Affordable Care Act
I'll refer to sections of the bill in each blog entry. Please feel free to browse and explore the document on your own. To find specific words/phrases use the Find (Ctrl-F) feature.
PPACA (Full Text PDF)
PPACA (Full Text PDF)
Health Care Reform: A Mini-Series
Since September, I've been working as an independent contractor for the Colorado Division of Insurance to help determine how the State of Colorado must amend current statutes and regulations to comply with federal health care reform. It seems to me that there is quite a bit of confusion about health care reform and what it means for the future of health insurance and health care in America. Over the next few weeks, I'm going to attempt to shed some light on this important issue for the average person. I'll work through the issues both topically and chronologically, in terms of what measures will take effect first.
As you may know, several requirements are currently in effect, as of September 23, 2010. These include:
If you just want to know what the Patient Protection and Affordable Care Act says and what it means for the average American, keep reading. I'll address each section of the Act and attempt to provide some interpretation. Whether you think health care reform should be repealed or retained, you should at least know what the bill says, most of our lawmakers do not.
Eventually we'll need to have an informed discussion of how it should be implemented. To start with, check out this article by Richard Thaler, from the New York Times with some refreshing ideas on how to make it work:
Adding Clarity to Health Care Reform
As you may know, several requirements are currently in effect, as of September 23, 2010. These include:
- Prohibition of Preexisting Condition Exclusions for those under the Age of 19;
- Extension of Dependent Health Insurance Coverage to Age 26;
- Prohibition on Lifetime and Annual Limits;
- Prohibition on Rescissions;
- Prohibition of Discrimination based on Salary;
- Standardized Appeals Process (internal and external reviews);
- Patient Protections (including coverage of Emergency Services);
- Reviews and measures to ensure consumers get value for their premiums; and
- Coverage of Preventive Health Services including Choice of Health Care Professional.
- Reviews and measures to bring down the cost of health care (effective January 1, 2011); and
- Uniform Explanations of Coverage Documents and Standardized Definition.
If you just want to know what the Patient Protection and Affordable Care Act says and what it means for the average American, keep reading. I'll address each section of the Act and attempt to provide some interpretation. Whether you think health care reform should be repealed or retained, you should at least know what the bill says, most of our lawmakers do not.
Eventually we'll need to have an informed discussion of how it should be implemented. To start with, check out this article by Richard Thaler, from the New York Times with some refreshing ideas on how to make it work:
Adding Clarity to Health Care Reform
Subscribe to:
Comments (Atom)