Mass Revisited

[Welcome Kaiser Network readers!]

It has been a while since we looked at the Massachusetts experiment to provide universal health care, so we decided to take a closer look. We were prompted, at least in part, by the fact that the folks in Washington who think money grows on trees seem to be eyeing the Mass plan as a model of efficiency and something that should spread to the other 49 states.

While the plan may not have driven off the Chappaquiddick bridge . . . yet . . . it is certainly in need of some retooling.

According to Cato (no, not the O.J. house guest):

Massachusetts has significantly reduced the number of people in the state who lack health insurance. However, it has not achieved, nor does it expect to reach, universal coverage. (The best estimates suggest that more than 200,000 state residents remain uninsured). And, significantly, roughly 60 percent of newly insured state residents are receiving subsidized coverage, suggesting that the increase in insurance coverage has more to do with increased subsidies (the state now provides subsidies for those earning up to 300 percent of the poverty level or $66,150 for a family of four) than with the mandate.

The cost of those subsidies in the face of predictably rising health care costs has led to program costs far higher than originally predicted. Spending for the Commonwealth Care subsidized program has doubled, from $630 million in 2007 to an estimated $1.3 billion for 2009.

I have no idea about the standard of living in MA, but $66,150 for a family of four is probably not at poverty levels. The Kaiser Foundation reports the median income for 2005 - 2007 for Mass was $58,286 vs. $49.901 for the country. So you can earn 14% above the state median income and still qualify for taxpayer assisted health insurance.

And let's not overlook the doubling in spending for this program in two years time. Can you say government bailout?

Now the state is turning to a variety of gimmicks to try to hold down costs, including possibly cutting payments to physicians and hospitals by 3-5 percent. However, the (NY) Times quotes health reform experts who have studied the Massachusetts system as warning “the state and federal governments may need to place actual limits on health spending, which could lead to rationing of care.”

Gimmicks.

Good word.

Rationing of health care.

Not a good word.

But what about that NYT reference?

They report the bill to offer universal health care was passed "with Paul Revere speed" and that then Governor Mitt Romney "made an expedient choice, deferring until another day any serious effort to control the state’s runaway health costs."

Deferring issues on cost until another day.

Somehow this sounds very familiar.

The day of reckoning has arrived. Threatened first by rapid early enrollment in its new subsidized insurance program and now by a withering economy, the state’s pioneering overhaul has entered a second, more challenging phase.

Thanks to new taxes and fees imposed last year, the health plan’s jittery finances have stabilized for the moment. But government and industry officials agree that the plan will not be sustainable over the next 5 to 10 years if they do not take significant steps to arrest the growth of health spending.

The plan will not be sustainable.

Then what?

Once entitlements are put in place no politician wants to take them back. When is the last time you heard of government cutting out an entitlement program?

Mass has this great idea for controlling health care costs. They want to change the way docs & hospitals are comped.

They want a new payment method that rewards prevention and the effective control of chronic disease, instead of the current system, which pays according to the quantity of care provided.

Who determines what is "effective control"? Most chronic illness is preventable with lifestyle changes, so why penalize the medical provider for a lack of self discipline on the part of the patient?

Massachusetts has more doctors per capita than any state, Boston is home to some of the country’s most expensive academic medical centers, and a new state law requires comprehensive benefits like prescription drug and mental health coverage.

Mental health parity.

So in the midst of expanding services and a health care budget that doubles every two years they opt to increase benefits.

Mass not only requires all residents to have health insurance or pay a fine ($1,068) but also requires insurance carriers to accept anyone regardless of health.

Think of it like you would a bank that will issue a mortgage to anyone, regardless of credit or their ability to pay back the loan.

In its first full year of operation, Commonwealth Care drew higher enrollment than anticipated, and the state found itself facing an inaugural budget gap. Mr. Patrick and the legislature filled it by assessing insurers and hospitals, raising the penalty on noncompliant businesses, increasing premiums and co-payments for consumers, and raising the state tobacco tax.

Oops!

There was another issue as well, as we reported before. The Big Squeeze means more patients for the doctors.

That's the good news.

The bad news is, longer waits to see the doc.

Let's see. Free or almost free health care. Increased demand. More difficult to see a doc.

Can't figure out why no one saw that coming.

Blue Cross and Blue Shield of Massachusetts, the state’s largest insurer, recently devised an innovative model that pays doctors a flat fee per patient, with adjustments for age, gender and health status, and then adds bonus payments for high standards of care.

Novel. Has some promise. Tracks the HMO model where providers are paid a capitated fee rather than fee for service.

Some health policy experts argue that changes in payment practices will not be enough to slow the growth in spending, even when combined with other cost-cutting strategies. To truly change course, they say, the state and federal governments may need to place actual limits on health spending, which could lead to rationing of care.

“Really controlling costs requires just stopping spending,” said Stuart H. Altman, a professor of health policy at Brandeis University.

Stop spending.

Yeah, that works too.

Health Care Reform

With much fanfare, Washington teleprompter's will be lauding the virtue's of health care reform and how it will save trillions; but what does that mean for those wanting to buy health insurance in Georgia (or any other place)?

Let's look at what is promised and how it will impact you, if at all. According to the Washington Post, here is how it shakes out.

leading groups in the health-care industry have offered to squeeze $2 trillion in savings from projected increases over the next decade

The groups aim to achieve the proposed savings by using new efficiencies to trim the rise in health-care costs by 1.5 percent a year

If you could trim your health care costs by 1.5% per year, how much would you save?

If you spend $5,000 per year on health insurance premiums + unreimbursed health care you would save $75 per year. If you spend $10,000 per year on health insurance premiums + unreimbursed health care you save $150.

So why does this sound like the campaign promises of tax cuts for 95% of Americans? How is that extra $33 per month in take home pay working for you?

For sure, saving anything is better than nothing at all but what do these trillion dollar savings really mean?

The White House projects that the savings after five years under the proposal would mean about $2,500 a year in lower health-care bills for a family of four. Within 10 years, the savings would "virtually eliminate" the nation's budget deficit.

Sure sounds good. Color me skeptical but this is coming from the same guy who promised to get a "shelter" dog for his kids.

And what about that stimulus package? The one that was supposed to create or save 4,000,000 jobs? Last time I checked there are still 500,000+ new jobs lost every month.

The trade groups making the pledge represent a broad spectrum of health-care interests, including the American Medical Association, the Pharmaceutical Research and Manufacturers of America, the American Hospital Association, America's Health Insurance Plans, and the Service Employees International Union.

"We are developing consensus proposals to reduce the rate of increase in future health and insurance costs through changes made in all sectors of the health system," the groups wrote to the president. "We are committed to taking action in private-public partnership to create a more stable and sustainable health care system."

The groups declined to elaborate on their proposal yesterday, saying they wanted to meet with Obama before doing so.

We have a plan, but we can't tell you what it is. At least not until we meet with the president.

"As restructuring takes hold and the population's health improves over the coming decade, we will do our part to achieve your administration's goal of decreasing by 1.5 percentage points the annual health care spending growth rate," the groups wrote.

As the nation's health improves . . .

According to the CDC, 60% of Americans are overweight or obese.

Research has shown that as weight increases to reach the levels referred to as "overweight" and "obesity,"* the risks for the following conditions also increases:1

Coronary heart disease
Type 2 diabetes
Cancers (endometrial, breast, and colon)
Hypertension (high blood pressure)
Dyslipidemia (for example, high total cholesterol or high levels of triglycerides)
Stroke
Liver and Gallbladder disease
Sleep apnea and respiratory problems
Osteoarthritis (a degeneration of cartilage and its underlying bone within a joint)
Gynecological problems (abnormal menses, infertility)
*Overweight is defined as a body mass index (BMI) of 25 or higher; obesity is defined as a BMI of 30 or higher.

Is Washington going to put us on a diet? Sure the prez is a skinny guy, but he is also a smoker and tobacco use does nothing to promote a healthy lifestyle. This sounds like just another stupid government trick.

Sorry, but to me this just seems like more political rhetoric.

MassCare OK

Bob tipped me to a new transparency tool available to Massachusetts' health care consumers. It's called My Health Care Options, and it's an online resource to help folks find health care providers based on location, cost and outcomes.

Pretty cool:

You input your zip code (or city, etc), and then choose to search for hospitals, physicians, or a number of other providers. Once selected, you can also specify what kind of service to research: an operation, baby delivery, MRI or whatever. Based on preference, the results can be sorted by price, or how many ICU beds are available, or a host of other criteria.

There's even consumer ratings (how well they were treated, etc); kind of like "user reviews" at Amazon and the like.

It seems pretty user-friendly, too: you don't have to know CPT codes or other medical jargon, just the service or procedure's name (e.g. "angioplasty" or "Cesarean Section").

And the site will "bottom line" it for you, as well: while there are no actual dollar figures (which seems to me to be a requirement sadly missing here), there are comparative ratings to give you an idea of who's more expensive, and who's less. It may be that, since this seems to be a relatively new service, the actual costs haven't been included yet, but will be down the road. Let's hope so, and soon.

The service itself is provided by the Massachusetts Health Care Quality and Cost Council, which was set up as part of the original Mass Care program. Frankly, this may the best thing to come out of that endeavor.

Dead Wrong

From personal experience, I can attest that seeing a loved one die from an incurable illness is no picnic. And the ethics of "end-of-life care" are beyond the purview of this blog. But I am also a big believer in choice, and in honesty when being presented different options.

One of my major issues with ObamaCare© is the implementation of death panels; when one's choices become delegated to nameless, faceless, unaccountable bureaucrats, then one ceases to actually have any choice. But it's more insidious than just "passing the bill:" it's also the willing complicity of our mass media in perpetrating that fraud.

To wit:

"The doctors finally let Rosaria Vandenberg go home ... That precious time at home could have come sooner if the family had known how to talk about alternatives to aggressive treatment."

Agreed. One of the major benefits of consumer-centric health care is the removal of that "wall" between patient and provider, empowering the consumer of health care to understand the plethora and impact of various choices.

But that's not the purpose of the Yahoo piece. This is:

"Americans increasingly are treated to death, spending more time in hospitals in their final days, trying last-ditch treatments that often buy only weeks of time, and racking up bills that have made medical care a leading cause of bankruptcies."

That's sleight of hand that would make Houdini blush. The fact is, we spend more because medical care costs more. The sleight of hand comes from the easy - and entirely deceptive - segue into a discussion of the economics of that care. Once it becomes "all about the money," then the moral choice is no longer relevant. And when it's about a bureaucrat deciding whether or not your 32 year old wife may even have the choice of these treatments, then it's even worse.

And let's dispense - again - with the long-since-debunked canard about "medical care [as] a leading cause of bankruptcies." This has never been true, yet it's the 'go-to justification' for everything from withholding treatment to passing ObamaCare© itself. It's also another way to inject economics into a debate about life and death. Are financial considerations relevant? Of course they are, but they are not the deal-maker or -breaker here.

At least not yet.

Mass Cuts

The Massachusetts experiment in mandating health insurance for everyone is running into problems.

Commonwealth Care is not even three years old and if it were a person, would suffer from morbid obesity. Originally pegged to cost taxpayers $245 million it has grown like Kudzu to $1.3 billion.

Time to put CC on a diet.

In fact, according to Boston.com a proposed $115 million in cuts are under consideration right now.

Wait!

The proposed cuts are 12% of the current years budget but almost HALF of the projected first year budget when CC was conceived.

How can that be?

It seems the housing inspired recession has hit Massachusetts in the wallet. So how do they propose dealing with this shortfall?

The largest share of the savings will come from slowing enrollment.

Slowing enrollment.

Sounds like rationing to me.

Savings will also come from eliminating dental coverage for the poorest residents enrolled in Commonwealth Care,

Cutting benefits. Yep, that's one way to save money.

Also hanging in the balance is the health insurance status of 28,000 legal immigrants whose Commonwealth Care coverage was dropped in the budget lawmakers approved for the fiscal year that begins July 1.

Cutting access to LEGAL immigrants. That's an interesting twist.

The progress of the Massachusetts healthcare initiative is being closely watched in Washington, where Congress is crafting national legislation to extend coverage to more Americans. The Massachusetts law, cited as one model in the national debate, requires nearly everyone to have health insurance or pay a tax penalty.

It doesn't seem to me like the folks in DC are paying much attention. Rather, they are going full steam ahead with a model that has already hit an iceberg and is taking on water.

Leaders of Health Care for All, one of the state’s largest consumer groups, said the changes will be especially hard on residents whose first language is not English and who have difficulty understanding the complex enrollment paperwork.

Complex government red tape? No way.

While the group’s leaders are resigned to that cut, they said they will continue to lobby the governor to restore coverage for legal immigrants. Lawmakers said they cut this class of legal immigrants because they do not qualify for matching federal subsidies.

Mass can't pay for the plan by themselves. They need Washington to pick funds from the national money tree to pay for this program.

Much of the rest of the $115 million in savings, $32 million, comes from slowing payments to the managed-care health insurance companies that won bids to offer insurance through the Commonwealth Care program. Regulators said that by slowing enrollment growth, the companies would receive less money than they had banked on when they submitted their bids earlier this year.

Slow pay to the carriers providing coverage. Yeah, that's a good way to make sure the carriers stay in the game.

Wonder what would happen if the carriers decide to pick up their ball & bat and go home?

Change you can believe in.

Yes you can.

Not What it Seems

Bob posted about a woman who was charged for “asking too many questions.”  The article in question is about a woman, Susan Krantz, a registered nurse who was confused by her bill. The article's title - "Questions can trigger split charge" - is misleading, as no one is charged for asking too many questions.  What happened in her case is that she went in for a wellness visit and then asked the doctor about a problem, a sore hip.  At that point the visit went from a regular wellness visit to a sick visit or as the article points out, “an “acute care” matter.”

By current policy, there is no charge, referred to as co-pay or out of pocket expense, on an annual wellness visit.  What is misunderstood is that once a person brings up an acute care issue, such as an injury or illness, or if in the course of the exam the physician discovers an acute care issue, such as a lump or other malady, and then the appointment becomes a sick visit and is billed accordingly.  This billing is subjected to a deductible and co pay, which is the patient’s responsibility.  CMS defines a wellness visit as:

As of 2012, the annual wellness visit benefit includes the following services:

■ Routine measurements, such as your height, weight, blood pressure, and body mass index (BMI);
■ Review of your individual medical and family history;
■ Review of the medications, supplements, and vitamins that you are currently taking;
■ Discussion of the care you are currently receiving from other health care providers;
■ Review of your functional ability and level of safety (for example, your risk of falling at home), including any cognitive impairment, as well as a screening for depression;
■ Discussion of personalized health advice that takes into account your risk factors and specific health conditions or needs, including weight loss, physical activity, smoking cessation, fall prevention, and nutrition;
■ Discussion of referrals to other appropriate health education or preventive counseling services that may help you minimize or treat potential health risks;

This list does not include care for acute problems, such as the sore hip brought up by Ms. Krantz.

The article states, “In a written statement, the medical provider said that “the insurance company may require that patients pay or make a co-pay for services beyond the ‘preventive’ part of the appointment.”  The moral of this story is that in the end the patient is responsible for the consequences of any medical appointment with a medical provider, so be prepared.

Et Tu, Ken?

"Republican gubernatorial candidate J. Kenneth Blackwell on Thursday unveiled a five-point plan for overhauling Ohio's health care system that would require all Ohioans to have health insurance."

Gee, where have we seen this before?

In fairness, it doesn't look as draconian as the Mass plan (for example, those currently covered under an employer-sponsored group plan would keep that coverage). Because state law requires ER's to treat even the uninsured, that's their first (and often last) stop. Emergency care, though, is the most expensive care in the current system, which further drives up the cost of health care delivery.

As one of our astute commenters has noted, however, "the symptom is not the problem. The problem is the high total cost of health care." He concludes "that tinkering with insurance mechanisms does nothing to address the underlying cost of health care." It's not clear that this initiative will do much (if anything) to address that issue.

Of course, funding for this new program is still "nebulous" (from the Latin nebu, meaning "ripped from" and elous meaning "taxpayers wallets"). We'll keep an eye on this, and let our readers know whether or not it gains any traction here in the Buckeye State.

Mass Gov. Patrick Flip-Flops

[Welcome New York Times readers!]

Gov. Deval Patrick is playing peek-a-boo with immigrants in the Bay State.

You know the game.

"Where's health insurance?"

"Where's health insurance?"

"Boo! There it is."

State-subsidized health insurance for 31,000 legal immigrants here will no longer cover dental, hospice or skilled-nursing care under a scaled-back plan that Gov. Deval Patrick announced Monday.

Mr. Patrick said his administration had struggled to find a solution “that preserves the promise of health care reform” after the state legislature cut most of the $130 million it had previously allotted immigrants, to help close a budget deficit. Although their health benefits will be sharply curtailed in some cases, Mr. Patrick portrayed the new program as a victory, saying the services that the affected group tends to use the most will still be covered.

Only a politician could make cutting benefits sound like he is doing you a favor.

It is important to note these are LEGAL immigrants. Foreign nationals here on certain types of visa's are required to have proof of health insurance. Why are the citizens of Massachusetts paying taxes to cover immigrants health insurance?

Mr. Patrick described the new coverage as comprehensive and said it could be a model for less expensive state-subsidized benefits as health care costs continue to rise. Under the 1996 federal law that overhauled the nation’s welfare system, the 31,000 affected immigrants do not qualify for Medicaid or other federal aid. Massachusetts is one of the few states — others are California, New York and Pennsylvania — that provide at least some health coverage for such immigrants.

They don't qualify for Medicaid? Wanna bet?

I am sure Georgia is not alone in covering immigrants, legal or otherwise, who don't have health insurance but have babies in our hospitals and Medicaid picks up the tab.

I see Ca-lee-forn-ya is on the list of those providing health coverage for immigrants. Are they still handing out IOU's and Arnie bucks to pay their bills?

Because of its three-year-old law requiring universal health coverage, Massachusetts has the country’s lowest percentage of uninsured residents: 2.6 percent, compared with a national average of 15 percent.

That's nice, but . . .

All of the affected immigrants will be covered under the new plan by Dec. 1, Mr. Patrick said; in the meantime they will have to rely on hospitals that provide free emergency care to the poor.

Seems like a step back to me.

Isn't Gov. Patrick the same one who wants to change the law, the one imposed when Republican Gov. Romney was in office, to allow him to appoint an interim U.S. Senator to replace Sen. Kennedy?

"Massachusetts needs two voices in the United States Senate at any time but particularly now with the gravity of the issues," Patrick said.

Republicans charge that the Democrats are trying to make a political power play. In 2004, the Democratically controlled Legislature took the power to fill a vacant Senate away from then-governor Mitt Romney, because lawmakers did not want him to have the chance, in the event Senator John F. Kerry won the presidency, to fill his seat with a Republican.

So it is OK to take the power of appointment away from a Republican governor and then restore the law under a Democratic governor . . . but only if it serves to benefit you.

And let's not overlook the fact that MA can't fund the cost of their white elephant health care plan so they want the rest of the U.S. taxpayers to help them pay for it.

Eva Millona, executive director of the Massachusetts Immigrant and Refugee Advocacy Coalition, said she was worried about immigrants’ having to find new primary care doctors at a time when the state is suffering from a shortage of such providers. She also said that the new coverage would in some cases require a much higher co-payment — $50 instead of between $1 and $3 — for non-generic prescription drugs, and that enrollment would be capped at the 31,000 current enrollees.

$1 copay's for brand name drugs.

And they don't have a clue why the plan is running out of money.

What are they smoking in Massachusetts?

Mass Confusion

Kaiser Foundation has released new reports about the Massachusetts experiment in universal health coverage. The Bay State is held up as a model for Obamacare so it is only fitting to see what they have done as a precursor to what is in store for the other 49 states.

The expanded health care program was enacted in 2006 under then governor Mitt Romney. Among the provisions in the legislation are the following.

Requiring people age 19 and older to purchase health insurance coverage if “affordable coverage” is available. This is known as the “individual mandate.”

• Expanding MassHealth (the Massachusetts Medicaid program) to cover children with incomes up to 300 percent of the Federal Poverty Level (FPL).

• Creating a new subsidized health insurance program, Commonwealth Care, for adults with incomes up to 300 percent of FPL who do not have access to other insurance.

• Creating the Commonwealth Health Insurance Connector Authority (the Connector) to set policy and facilitate access to insurance for state residents.

The Connector:

• Sets affordability standards that specify the amount that people can afford to spend on health insurance premiums. People for whom insurance is deemed unaffordable are exempted from tax penalties for not having insurance.

• Sets Minimum Creditable Coverage (MCC) standards for insurance plans to satisfy the individual mandate.

• Sets rules for the Commonwealth Care plans and negotiates contracts with health plans that provide services to enrollees.

• Approves non-subsidized health plans, called Commonwealth Choice plans, which are available to people who do not qualify for the subsidized plans and want to purchase insurance in the non-group market.

• Converting the Uncompensated Care Pool to the Health Safety Net (HSN), which reimburses hospitals and community health centers (CHCs) for a portion of the uncompensated care they provide. The HSN helps subsidize the costs for uninsured individuals not eligible for other programs and for people who are underinsured

Nice, but what does this mean in plain English?

In summary, if you are over age 18 you are required to buy "affordable" health insurance or pay a fine. The state determines what is affordable and what is not, as well as setting minimum benefit levels for policies sold in the state.

The state also has a new level of bureaucracy to oversee all of this, including reviewing available plans and pricing.

So what is affordable?

What they are saying is, if you are an individual earning $32,000 per year the most you should pay for health insurance is $116 per month. A family earning $55,000 shouldn't pay more than $364 per month.

These are certainly generous and would meet almost anyone's definition of affordable.

Unfortunately the state of Massachusetts has made it almost impossible for anyone to find affordable health insurance in Massachusetts.

These are very nice benefits to have, but also very expensive. Add in the provision that prohibits medical underwriting and the result is premiums that are twice what you would pay for health insurance in Atlanta.

Using a popular online quoting service to search plans and rates in Boston turned up only 8 plans available. Premiums for a family of 4 with two adults age 40 ranged from $1082 to $1580 per month.

Using the same demographics in Atlanta turned up over 150 plans ranging in price from $195 to $1082.

I will tell you, the doctors and hospitals in Atlanta don't charge any less for their services than those in Boston, so the premium difference can only be chalked up to the mandated benefit levels in Massachusetts.

The Massachusetts model has been praised because they have reduced the number of uninsured from 6% to 3% in less than 3 years. That is admirable, but at what cost to the individuals and most importantly, the taxpayers.

Recently Massachusetts announced they would not be able to cover legal immigrants under the taxpayer subsidized plan because they ran out of money. In the interim, those covered under this plan were encouraged to use free clinics and charitable hospitals.

Commonwealth Care, the taxpayer subsidized "public option" is also bleeding profusely. One can only surmise that, not only do members of Congress fail to read legislation before signing it, they don't even bother to see if their gold standard is working.

Smaller cars, bigger health insurance, Poppa Washington.

Another Winger Disses MassCare and Obamacare

President Present has cut a new commercial, ostensibly to help Martha Coakley retain the vacant "Massachusettes" (sorry, but that's how she spells it) senate seat for her party. One of the issues he addresses is, of course, ObamaCare, and how Ms Coakley represents a key vote for its enactment.

Oh, that "winger?" I meant "lifelong Democrat." Posted in the comments section of that Politico story is this little gem:

"I am a lifelong Democrat that will vote for Brown on Tuesday. My main reason is the universal health care plan that is said to be similar to the Massachusetts plan. Under Massachusetts universal health care, I have seen my care and that of my adult children decline during the past year. My daugher has a serious chronic condition and must wait 6 months to see a specialist - she never had to wait more than 4 weeks before the universal health care plan. I have seen my own insurance premiums go up nearly 50%. My son has been assigned a primary care physician who is located three towns away from where he lives and who has a backlog of several weeks. I don't like the plan working through the Congress because there are too many mandates and I believe the cost will be prohibitive. I also believe it analogous to the Mass plan that has given my family poor and deteriorating service. I believe that the federal plan should go back to the drawing board. There should be no denial of coverage because of pre-existing conditions, but there should be fewer other mandates and no one should be mandated to have health insurance. I also think that there is much too much new spending by the federal government. New initiatives used to cost millions, then billions, and now trillions. I don't believe these initiatives are well planned nor efficient. I voted for President Obama -- I thought he was more centrist than he seems to be now. I will be voting for Brown precisely for the reasons that the President outlines as the reasons to vote for Coakley. I am not alone among Democrats in Massachusetts who will vote for Brown -- that is why the polls are so close in this election. - Ben from Boston"

Now, can we guarantee with 100% credibility that "Ben" really is a "lifelong Democrat," or that he even really exists? Nope.

But he's certainly more credible than, say, Jonathan Gruber.

Mass Casualties

The Massachusetts attempt at universal health coverage (AKA RomneyCare) has, at least according to some, achieved the goal with almost 100% of Mass citizens (and even non-citizens) obtaining health insurance.

But just barely 5 years into the program already they are trying to figure out how to reduce the cost of health care in an attempt to make health insurance more affordable.

Stateline reports the following.

Massachusetts spends 40 percent of its budget on health care and median-income families are expected to spend one-third of their paychecks on health care by 2016.

That's going to leave a mark.

So how do they propose to address this issue?

It’s important to move to a more cost-effective payment model, he says, but the savings won’t get passed along to consumers unless the state restrains the fees doctors and hospitals are able to negotiate. “Everyone has a big stake in making this work,” Berenson adds. “If it doesn’t, the whole thing could fall apart.”

So simple. Just pay health care providers less money.

Yeah, that will work.

Just like it is working in Wisconsin. Workers there have no problem taking one for the team since means saving taxpayer money.

MVNHS© circling the drain?

Earlier this month, we noted the financial difficulties facing the Much Vaunted National Health Service©, and observed that if you're a government-run health care system and you're going broke, that's a problem. But it's not the only problem - lack of self-awareness is also strong:

"Yet oddly, rationing is not entirely dead. It is alive and well and making a comeback in our “precious” National Health Service." [emphasis added]

Just now noticing that, Jeremy? Had you been a regular IB reader, you'd have seen examples for years. Better late than never, one supposes. And he does, in fact, make an extraordinarily brilliant point:

"In a tax-funded health care system, the normal, self-limiting rules of supply and demand don’t apply."

Which is exactly right, and we're already seeing signs of it here, with only a partially government run health care scheme:

"A majority of new enrollees are considered high risk, meaning insurers will have to spend more money on people in poor health and requiring expensive  care."

Mr Warner goes on to point out three "new elements" that have entered the picture: mass communication, an aging society, and ever-growing, ever-changing tech. Notice the elephant in the room that he doesn't mention?

[Hat Tip: FoIB Peter K]

Mass Oversight

The folks in Massachusetts are at it again in an attempt to control the health care beast. No longer is a CON (Certificate of Need) enough to warrant expansion of a medical facility. In an effort to bring down health care costs the state secretary of HHS will ration care in order to rein in the "medical arms race".

A more rigorous examination could affect the “determination of need’’ applications filed with the Department of Public Health when health care providers propose to open or expand buildings, add medical equipment, or change ownership — all of which require state approval.

"We need new medical equipment."

"No, you don't. Denied!"

That was easy.

Apparently the folks in the big house in Boston don't understand the concept of competition. For starters, hospitals and clinics don't have money to burn. They won't invest in new plant and equipment unless they have reason to believe there will be a return on their investment.

In other words, there will be sufficient need, and demand, for the new services. If not, they won't make the investment.

Of course government doesn't have to make those kind of calculations so ROI is a foreign term to them.

Mass Lessons

Those who ignore the past are doomed to repeat it . . . but only if you are paying attention. The folks who crafted the Obamacare health insurance scheme thought it would be a good idea to copy a small scale version that was introduced in Massachusetts not even 4 years ago.

Romneycare is a mere toddler but is already looking like an old man.

The folks at CNN are reporting there are lessons to be learned from the past.

As the news article reports, Obamacare and Romneycare share similarities. Both expand Medicaid roles. Both provide taxpayer subsidies to those who buy health insurance in the open market and both require citizens to buy health insurance. Both plans required health insurance companies to add expensive new benefits. Obamacare and Romneycare require health insurance companies to issue coverage to anyone, regardless of existing medical conditions.

These are all viewed as features, not flaws.

But what have the residents of Massachusetts experienced since the introduction of Romneycare?

Lesson 1: The Massachusetts plan does not control costs.

When Massachusetts launched its reform program in 2006, it already had the highest medical costs in the nation. Today, the burden is still rising far faster than wages or inflation, from those already lofty levels. A report from that state attorney general in March--remember, this is a Democratic administration--asked rhetorically "Can we expect the existing health care market in Massachusetts to successfully contain health-care costs?" The report concluded, "To date, the answer is an unequivocal 'no.'"

Likewise, neither does Obamacare control the driving force behind rising premiums. The only "cost control" is the decision to penalize doctors who treat Medicare patients by paying them less.

Lesson 2: Community rating, guaranteed issue and mandated benefits swell costs.

How did costs in Massachusetts get so big to begin with? A major reason is the adoption of guaranteed issue and community rating in the mid-1990s. The new federal bill would expand those rules to the entire nation.

If it didn't work in a state with a population of 6.5 million why would anyone expect it to work for 340 million people?

Crickets chirping . . .

Lesson 4: The exchanges reward people for working less and earning less.

Data is lacking on how damaging these perverse incentives are in practice. But it's clear in Massachusetts that low-to-medium earning families often suffer financially if they get a raise, work overtime, move to a higher paying job -- or if a spouse rejoins the workforce. For example, a family earning $33,000 pays no premium at all under Commonwealth Care. But if their pay goes to $46,000, they're obligated to contribute about $2,400. That's an effective tax rate of 18.5% on that $13,000 raise. A pay increase of $44,000 to $46,000 is mostly erased by higher premiums alone.

The law of unintended consequences.

If you provide incentives that encourage laziness you should not be surprised at the outcome.

By penalizing achievers with a higher tax burden the system is basically encouraging people to work and earn less.

Lesson 5: The generous plans and added mandates give employers an incentive to drop health insurance.

In charting the future of healthcare costs, the biggest danger by far is that companies will drop their coverage. It's also the one that's the most difficult to handicap, both for Massachusetts and the entire nation. The problem is simple: If employers stop paying for health care, employees will flood into the government-subsidized programs, enormously raising the cost to already fragile budgets.

Is any of this resonating?

If you like the plan you have you can keep it. That is, unless the government does something stupid like making it less expensive for employers to pay a fine rather than provide health insurance.

Washington reminds me of Star Trek.

"No signs of intelligent life here. Beam me up Scotty!"

Health Care Reform and the 100 MPG Car

Obamacare is like mandating a 100 MPG car yet no one is crying foul.

Much has been made about the gray panther death squads, queue's for medical services and some even talk about higher taxes but almost no one is addressing the most cost prohibitive portions of HR 3200 and health care reform. Let's look at it like this.

If the government decided we need auto reform and passed a law affecting all cars sold in America as well as existing ones on the road, if they follow the health care reform blueprint, the outcome would look something like this.

All cars sold in 2013 and later must get at least 100 MPG and go 20,000 miles between oil changes. Older cars that do not meet this standard may be kept until you need a repair. At that time you must destroy the old car and buy a newer car that meets the 100 MPG standard. Anyone who does not have a car will be fined. Anyone who tries to repair an older car will be fined and forced to turn in their old car and purchase a newer model. Anyone driving an older car in 2015 or later that does not meet the MPG standard will be fined and forced to turn in their old car and must replace it with a newer car.

How does this grab you?

Of course the new cars will have a much higher price tag due to emission standards and MPG requirements. New cars will cost roughly 2x to 3x the price of new cars currently on the road.

Not surprisingly, the health insurance mandates in HR 3200 will have a similar impact yet no one is even batting an eye.

Everyone cheers when they hear that health insurance companies will no longer be able to charge a higher rate or refuse coverage if you have a pre-existing condition, but almost no one is bothering to ask . . . at what price?

The "guaranteed issue" (no underwriting for pre-ex conditions) roughly DOUBLES the premium.

Gulp!

How is this making health insurance affordable for everyone?

Here is a partial list of NEW, mandated benefits if HR 3200 is passed without modification.

In addition to guaranteed issue, the new plans (all of them) will be required to cover maternity, rehab treatment and mental health services will no longer be restricted. If you have psychological issues, a drug or alcohol problem are are addicted to sex, you will be able to get unlimited treatment under the Obamacare plans.

Community rating means everyone your age in your "community" pays essentially the same rate. No longer will females pay more than males for health insurance. The most your health insurance carrier can charge you is double the lowest price for someone your age.

That means a 40 year old female who is a non-smoking gym rat will pay the same as a 40 year old chain smoking male with a beer gut with high blood pressure and the closest thing to exercise is hunting for the TV remote.

How is this working for you so far?

Don't believe me? Look at Subtitle B, "Standards Guaranteeing Access to Affordable Coverage."

Section 116, "Ensuring Value and Lower Premiums" is a joke. Their idea on how to accomplish this is to mandate loss ratio's for health insurance companies.

Heads up! Carriers already have mandated loss ratio's at the state level. If the carrier has better than expected loss ratio's they are either forced to reduce rates or may not be granted a rate increase.

Of course nothing in the current system or the proposed one guarantees a profit.

How much do you think a car that get's 100 MPG at a minimum will cost?

Take that wag and apply it to this health insurance proposal. There is nothing affordable about a car that gets 100 MPG and goes 20,000 miles between oil changes. Similarly, there is nothing affordable about health insurance that covers everyone for everything as HR 3200 proposes.

Yet no one is batting an eye.

It is time to ask the tough questions of the folks in Obamington who are proposing this mess. Here is a start.

How much will guarantee issue (no pre-ex underwriting) add to my premiums?

How much will it increase my premiums to cover maternity, and children from birth to age 21 (including all immunizations, vision, dental and hearing)?

How much will my premiums increase to cover any mental health issues, including addiction, on an unlimited basis?

How much will my premiums increase to cover any and all preventive care, including annual exams, pap, mammography, PSA, colorectal cancer screening, cardio blood testing, ultrasound for aortic aneurysm, bone mass density and more, all at no charge to the patient?

My guess is, your senators & congressmen nor the President can give you a figure for any of these. They don't have to give a dollar amount, just ask for a percentage increase.

Hold their feet to the fire. Make them answer. Don't let them off.

Until these people are held accountable for their actions they will continue to ramrod through changes that will only serve to make health insurance LESS affordable.

Smaller cars, bigger health insurance, Poppa Washington.

Nancy (with the laughing face)?

Not exactly. It’s Nancy (with a straight face) Pelosi: “The more the public knows about what we’re doing, the more they support it … “

Nancy, Nancy, Nancy. You ignorant slut.

The more people know about you and what you are doing in Congress, the LESS we support it.

Why d’ya think more people don't have happy-talk faces like yours (aside from the botox, I mean)? Why d’ya think this Congress – YOUR Congress – has the lowest popular support in memory? When have you ever thought about the people and not about yourself first (fixing your husband’s business taxes; stamping your foot until you got a bigger carbon-footprint airplane?)

Here are a few much more substantial reasons we the people don’t support you:

1.You rushed the enormous TARP spending bill thru the House, that neither you nor any other House Member read. You called it essential to America's economic recovery. You said that the House did not have time to debate it. Because if time were taken in debate, it would be too late. Over a thousand "earmarks" and unknown billions of dollars were discovered to be targeted to Democrat-connected political groups not honest job creation. It’s also a fact that 3/4 of the TARP spending in the first 4 months went to Medicaid and State fiscal stabilization funds – in other words, most of the money was used to shore up state budgets, not to create jobs. That is not the the “stimulus” you promised. Was this intentional misrepresentation, or just ignorant of you? Lucky for you, there’s a good argument for ignorant - because Nancy Pelosi, you never read the Bill.

2. You are now trying to rush the cap-and-trade bill thru the House. You say this Bill is essential to fight a holy war against global warming, and that Congress must pass it without delay – or debate. Obama himself, we now know, said cap-and-trade would cause energy prices in the U.S. to “skyrocket.” And energy costs affect just about everything else in the economy. Just as we are struggling to get thru a very deep economic recession, the Congress and the administration are intent on raising consumer costs. That infuriates the public you claim “supports it”. Intentionally or ignorantly you misrepresent this bill as essential for America, even though it is transparently a sell-out of American consumer interests. Lucky for you there’s a good argument for ignorantly - because Nancy Pelosi, you never read the Bill.

3. You falsely accused the CIA of concealing information from you about Iraqi prisoner interrogations. You lied about this because you were afraid the political winds were shifting. When the CIA proved they had briefed you all along, you accused them of lying. And when you could not prove that the CIA had lied, you changed the subject and the media covered for you. Everyone understands the truth that you had been fully briefed all along. Nancy Pelosi, you bet the public was too dumb to understand. Thank heavens for the internet.

4. What else? Oh, you’re at it again, pushing a huge and unexplored mass of health care legislation thru the House. You say it's “essential” (where have we heard that before?). You say Congress must pass it right away. (where have we heard that story before?) You say this Bill will reduce health care spending by so much, it will save our economy. Then you say this health care bill is being "misrepresented" by "evil” and “immoral” insurance companies and their minions. But you don’t say the Congressional Budget Office is “evil” or “immoral” for disclosing that the Bill will not only produce no savings, it will ADD TO the cost of our healthcare and TAKE AWAY our choices. But . . . hey, how could you possibly know if anyone were misrepresenting the Bill? Nancy Pelosi, you haven’t read it.

So Nancy, this pretty much explains why you are less popular than George Bush. The more the public knows about what you're doing, the more we know that you are not the change we can believe in.

Mass Health: Update

A while back, Bob reported on the new Massachusetts health insurance program. Well, some new details have come out, and (as usual) we're on the case:

■ Mass businesses can avoid the $295 fine...er, uh, "fee" if at least 25% of their full-time workers are enrolled in their health plan, or if the company contributes at least 33% of the premium cost. That's actually a lower percentage than what most employers pay now [ed: oops!].

■ On the other hand, employers won't be allowed to count employees receiving health insurance from other sources (e.g. through their spouse's employer or government programs).

■ And, the "fee" requirement applies to businesses with more than 10 full-time workers.

■ Massachusetts' Division of Health Care Finance and Policy is projecting that the "fee" will affect about 8% of the state's 35,000 eligible companies (which represents less than 2% of all Massachusetts' employers). They're hoping to raise about $26 million, which they plan to use to subsidize health insurance for low-income individuals.

Under this new proposal, employers would have to inform the state about whether their workers were offered employer-sponsored health insurance and whether each employee accepted or declined. Workers who decline the employer's offer and don't have alternative coverage will be required to file a form acknowledging responsibility for medical care. It's not clear whether this will relieve the employer of the $295 "fee."

Post This, Obamacare!

Retiree's of 3M, makers of Post-It Notes and Scotch tape will see their retiree health insurance go away courtesy of Obamacare. As more companies weigh the cost of providing health insurance against the predicted rise in health insurance premiums and additional government reporting requirements, dropping health insurance becomes a foregone conclusion.

When it is less expensive and less painful to drop health insurance benefits than it is to maintain, companies large and small, as well as individuals, will make the obvious choice.

Problem is, the drafters of Obamacrap anticipated most people who get health insurance through their employer would continue to do so.

Given that almost no one in Washington, from Obama on down through the Cabinet and Congress have no clue how the business world works, it is not surprising that they did not anticipate the backlash of resistance to more government interference in the private sector.

"Health care options in the market under the health care reform law became better," said spokeswoman Jackie Berry, adding that taking retirees off the 3M group plan would save money for both 3M and retirees.

The move is part of a longer-term trend by employers to get a grip on the ballooning costs of retiree benefits. Most employers already have done away with the rich pension plans of the past and switched to 401(k) plans, under which they limit their exposure to future costs.

When ERISA imposed new rules on retirement plans in 1974 almost no one in government anticipated the mass cancellation of traditional retirement plans that followed. 

Just like Obamacrap, the idea behind ERISA was to impose "consumer protection" rules on businesses that offered retirement plans. Employers dropped defined benefit plans like a hot potato in the years immediately after ERISA and never looked back. The PBGC which was created to provide insurance for underfunded retirement plans has struggled ever since to cover benefits from terminated retirement plans that were underfunded.

The recent recession would have most likely torpedoed the PBGC if not for the fact very few publicly traded companies offer traditional retirement plans.

3M may be one of the first large employers to take this step in response to health reform, but it's not likely to be the last.

"I suspect they're ahead of the game in terms of arriving at this decision," said Henry Van Dellen, who heads the health and benefits practice at Aon Consulting. "Practically speaking, this likely will happen with a lot of employers."

Will Obamacrap transform employer group health insurance into a sequel to ERISA?

If Obamacrap is not repealed or gutted you can count on it.

WMD's

No reason to get sidetracked by the truth. PresBO has declared war on health care.

According to POTUS, the insurance industry is using WMD's (weapons of mass disintegration), also known as health insurance policies, that self destruct when you need them most.

In his speech to Congress he alleged

"More and more Americans pay their premiums, only to discover that their insurance company has dropped their coverage when they get sick, or won't pay the full cost of care. It happens every day."

Those bastards!

To highlight abusive practices, Mr. Obama referred to an Illinois man who "lost his coverage in the middle of chemotherapy because his insurer found he hadn't reported gallstones that he didn't even know about." The president continued: "They delayed his treatment, and he died because of it."

Actually, the carrier is not in a position to administer, advise or delay treatment. That is clearly a patient-doctor decision.

The deceased's sister testified that the insurer reinstated her brother's coverage following intervention by the Illinois Attorney General's Office. She testified that her brother received a prescribed stem-cell transplant within the desired three- to four-week "window of opportunity" from "one of the most renowned doctors in the whole world on the specific routine," that the procedure "was extremely successful," and that "it extended his life nearly three and a half years."

Well yeah, but he still died so PresBO did get that right at least.

The president's second example was a Texas woman "about to get a double mastectomy when her insurance company canceled her policy because she forgot to declare a case of acne." He said that "By the time she had her insurance reinstated, her breast cancer more than doubled in size."

Canceled because of failure to disclose acne? Give me a break, Barry.

The woman's testimony at the June 16 hearing confirms that her surgery was delayed several months. It also suggests that the dermatologist's chart may have described her skin condition as precancerous, that the insurer also took issue with an apparent failure to disclose an earlier problem with an irregular heartbeat, and that she knowingly underreported her weight on the application.

Irregular heartbeat, depending on the nature and treatment, can be an automatic decline on the front end. Missing your weight by a few pounds is common. We don't know how much her weight was understated, but it seems to be enough to make it an issue to the carrier.

In other words, there seems to be evidence of fraud on the application. No reason to let that become an issue, right? I mean, we let mortgage fraud go on for years and that wasn't an issue.

Later in his speech, the president used Alabama to buttress his call for a government insurer to enhance competition in health insurance. He asserted that 90% of the Alabama health-insurance market is controlled by one insurer, and that high market concentration "makes it easier for insurance companies to treat their customers badly—by cherry-picking the healthiest individuals and trying to drop the sickest; by overcharging small businesses who have no leverage; and by jacking up rates."

This one is a real whopper.

In fact, the Birmingham News reported immediately following the speech that the state's largest health insurer, the nonprofit Blue Cross and Blue Shield of Alabama, has about a 75% market share. A representative of the company indicated that its "profit" averaged only 0.6% of premiums the past decade, and that its administrative expense ratio is 7% of premiums, the fourth lowest among 39 Blue Cross and Blue Shield plans nationwide.

Similarly, a Dec. 31, 2007, report by the Alabama Department of Insurance indicates that the insurer's ratio of medical-claim costs to premiums for the year was 92%, with an administrative expense ratio (including claims settlement expenses) of 7.5%. Its net income, including investment income, was equivalent to 2% of premiums in that year.

In addition to these consumer friendly numbers, a survey in Consumer Reports this month reported that Blue Cross and Blue Shield of Alabama ranked second nationally in customer satisfaction among 41 preferred provider organization health plans. The insurer's apparent efficiency may explain its dominance, as opposed to a lack of competition—especially since there are no obvious barriers to entry or expansion in Alabama faced by large national health insurers such as United Healthcare and Aetna.

Similarly, Wal-Mart dominates many markets where they operate, AND they earn a lot of profit. When is Congress going to address this inequity?

I know, don't encourage them.

Mass Idiocy

Health insurance plans offered by Massachusetts to residents ages 19 to 26 under the state's health insurance law leave young adults vulnerable to high medical bills because of annual limits and caps on outpatient care and surgeons' fees

Out of pocket on the small stuff, cover the mid-level claims, no cover on the big stuff.

Sounds like donut hole insurance.

Something in the middle, nothing on the ends.

Most of the young adult plans cap annual coverage at $50,000 to $100,000.

A car accident can blow through $50,000 in a matter of days.

State officials say the caps on the student and young adult plans allow insurers to "balance affordability and coverage for what is typically a healthy population," according to the Globe.

Typically healthy as fine as long as you have typical medical expenses.

The Commonwealth Health Insurance Connector has authorized the caps for young adults to lower premiums while banning caps for other age groups with a higher risk for serious illnesses.

True, the risk of serious illness is much greater with age, but then ask Andrew Speaker (age 31) about serious illness. The total bill for his care is estimated at $250,000 - $350,000.

And what about accidents? Have they fixed that dangerous bridge at Chappaquiddick?