Public Plan Dead After Senate Committee Vote? Not by a Long Shot.

The public is proving to be a fickle bunch when it comes to their support for healthcare reform. The latest Kaiser Health Tracking Poll shows the public support for health reform ended its summer slide, reversed course and moved modestly upwards in September.

The survey showed that fifty-seven percent of Americans now believe that tackling health care reform is more important than ever — up from 53 percent in August. The proportion of Americans who think their families would be better off if health reform passes is up six percentage points (42% versus 36% in August), and the percentage who think that the country would be better off is up eight points (to 53% from 45% in August).

Changes occurring among Republicans and Independents

What’s even more interesting is the upswing in support has been driven by changes among Republicans and Independents. While these groups were markedly more pessimistic about health reform in August, their viewpoints had softened by September. While 49 percent of Republicans say their family would be worse off if health reform passes, this is down from 61 percent in August. The percentage of independents saying they would be worse off fell from 36 percent in August to 26 percent this month

While the survey seems to indicate that support for some kind of reform is growing, it also shows no sense of urgency to get it done. Forty-seven percent favors taking longer to work out a bipartisan approach to health reform, compared to 42 percent who would prefer to see Democrats move faster on their own. Meanwhile, the public continues to view the action in Washington with mixed feelings: The largest share (68%) said they were “hopeful” about reform, but 50% are “anxious” and 31% “angry.

Perhaps what is causing this “hopefulness” about healthcare reform, is that Americans continue to struggle with the affordability of health care. One third of Americans (33%) say they or someone in their household has had problems paying medical bills over the past year. That is up nine percentage points from August and represents the highest level this measure has reached in nearly a year, according to Kaiser.

A majority of Americans (56%) also say they have put off care over the last 12 months because of cost reasons, with many saying that they had relied on home remedies or over the counter drugs instead of seeing a doctor (44%), skipped dental care or other checkups (35%), or skipped a recommended medical test or treatment (28%).

Because of these coverage gaps it is not surprising that the reform component that draws the srongest support across the political spectrum is requiring that health insurance companies cover anyone who applies, even if they are sick or have a pre-existing condition. Overall, 8 in 10 people support that idea, including 67 percent of Republicans, 80 percent of independents and 88 percent of Democrats.

Discussion always comes back to who will pay?

As always, these discussions inevitably lead to the question of how to pay for this additional coverage. Two ideas now under discussion among policymakers garner initial majority support among those surveyed. Fifty-seven percent of the public say they would support “having health insurance companies pay a fee based on how much business they have” and 59 percent would support “having health insurance companies pay a tax for offering very expensive policies.” In both cases, Republicans are evenly divided while Democrats and political independents tilt in favor

What this seems to imply is that the public thinks we should all pay a little more for our insurance coverage, so more can be covered and we will. The Baucus bill now being marked-up by the Senate Finance committee includes a 40% excise tax on insurance plans that exceed $8,000 for a single and $21,000 for a family plan. While these may seem like “Cadillac” plans today, by 2013 when the tax kicks in a majority of plans will probably qualify. The Kaiser Family Foundation said that family coverage reached an average of $13,375 in 2009 — a hike of 5%, or $695 — while single coverage premiums increased by $120 to reach an average of $4,824 annually, an increase of less than 0.3%.

In another six years, plans that are projected, with inflation, to cost $25,000 a year will run $35,000 after the tax is tacked on. If these prices do not send employer plan sponsors running for the exits, they will be looking to cut back on benefits or wages, or both. So the average plan today will soon become tomorrow’s “gold plated” plan. When this happens expect a renewed cry for a public option or single payer system – the ole’ government bailout.

So while yesterday’s vote in the Senate Finance Committee to not include  a Public Option was received as a repudiation of the idea, it was really just a delaying tactic to lull the public onto the inevitable path to a single payer system.

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Twitter Application Allows Consumers to get Healthcare Cost and Medical Information.

nullHealthcare marketers and thought leaders have been struggling to find ways in which the popular new social media applications like Twitter and Face Book can be used to dramatically change medicine in the same way that they have changed how we gather our news and connect with friends.

A Nashville-based company, change:healthcare, (that’s right, all lower case) has hit on a Twitter application that allows consumers to get healthcare cost and medical information wherever they are – in the exam room, in the car, in the hospital – so they can make informed decisions and save money.

The developers say that this is just the first phase of what will be a much larger application that delivers accurate healthcare costs and information to consumers’ fingertips within 60 seconds, helping them be more informed and potentially save hundreds, if not thousands, of dollars.

Examples of how the Beta Application Works

  • You’re leaving the doctors office with a sick child. You’re anxious to get home, but need to pick up a prescription without spending a fortune. So you direct tweet @askch and in about a minute, information such as costs, locations even medical explanations can be delivered right to your PDA or phone.

  • Your physician has just diagnosed you with GERD and steps out of the room to write a prescription for Nexium. You tweet “what is GERD” to unravel any confusion about the issue. Then tweet “cost of Nexium near 37209” where you doc’s office is located and discover the average price in that zip is $255. You tweet your home zip code, 37067, and learn it costs $175 on average in that zip. No question where you’ll purchase the drug and save about $80!

“It’s not everything you need to know, but it gets you to a well-informed starting point when you want to make a smart healthcare purchase,” says Christopher Parks, co-founder and CEO of change:healthcare. “If you’re looking for information about the cost of a prescription your physician is prescribing, then we’ve got an answer. If you want to know more about the flu virus, we get you started on finding out more.

“It’s the first time ever that consumers can use an existing social media application to quickly discover – wherever they are — how they can save money on their healthcare. We already have the next iteration in beta that significantly broadens the information for consumers,” Parks said.

Twitter Instructions

* Users first need to “follow” @askch from their Twitter account.

* Then, ask questions via direct message (to keep responses confidential).

The search is most effective using a pre-defined format:

* What is [health issue];

* What is [drug name};

* Cost of [drug name] near [zip code];

* Generic for [drug name]; and

* Generic discounts for [drug name] near [zip code].

Messages should be asked as listed and without punctuation.

For those that need it, the company has developed a simple tutorial at

Online Tool Shows Government Assistance Available Under Healthcare Reform Proposals.

The Kaiser Family Foundation has come out with a nifty tool to illustrate premiums and government assistance under the types of reform proposals being considered in Congress. The online calculator works for people under age 65 who purchase coverage on their own in an Exchange or Gateway and are not covered through their employer, Medicare or Medicaid.

The tool allows the user to start with the provisions from one of several proposals and examine the impact at different income levels. Advanced settings even allow users to change assumptions to show the effect of different policy choices.

This information is intended to show how people in different circumstances would be affected by the types of reforms under consideration. However, it does not provide estimates of the impact of reform for those with employer or public coverage.

You can check it out at:

Public Smoking Bans Cut Heart Attack Rates; Cost Less than Healthcare Reform.

SmokesHere is a story that is getting considerable play in the press today. It seems that heart attack rates associated with breathing secondhand smoke dropped rapidly and continued to decrease over time after smoking was banned in public spaces.

An article appearing on the website medpage Today cited a study that found that “The number of acute myocardial infarctions dropped by an average of 17% a year after smoking bans were put into effect, compared with communities with no such smoking restrictions.”

The article goes on to say, “The decline in heart attacks continued in subsequent years, with rates dropping by about 36% within three years of smoking prohibitions taking effect.”

“Passage of strong smokefree legislation produces rapid and substantial benefits in terms of reduced acute myocardial infarctions, and these benefits grow with time,” wrote James M. Lightwood, PhD, and Stanton Glantz, PhD, of the University of California San Francisco in a meta-analysis published in the Sept. 21 issue of Circulation.

The Kansas City Star was also reporting today that David Meyers of the University of Kansas Medical Center, lead author of a second study which reached similar conclusions, said that a nationwide public smoking ban would prevent as many as 156,400 heart attacks a year.

Other countries have banned public smoking.

Meyers went on to say, “I am embarrassed that the U.S. has not passed a national smoking ban, and yet Scotland, Ireland, Italy and France did,” Meyers said. “But those countries aren’t big tobacco producers, so it was politically easier.”

Now, let’s check that list of World Health Organization’s[1] ranking of the world’s health systems. Yes, the one that lists the United States in 37th place. Listed first and second are France and Italy. The United Kingdom, (which I presume includes Scotland) is 18th followed by Ireland at 19th.

Along with high obesity rates in the U.S., could there be a link between not having a national ban on smoking in public spaces and our country’s poor ranking among the world’s health systems?

As the Senate Finance Committee holds hearings this week on a plan to spend $774 billion to provide insurance coverage for an additional 29 million uninsured nonelderly people by 2019, would it not make better sense for us to all to start making the right personal choices that collectively will lead to a healthier society?

[1] The World Health Organization’s ranking of the world’s health systems was last produced in 2000, and the WHO no longer produces such a ranking table, because of the complexity of the task.

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Study Shows Medicare Advantage Enrollees Benefit From Private Sector Innovations.

America’s Health Insurance Plans (AHIP), last week, released a study that supports the position often taken in this blog. That is that innovations that lead to better and lower cost medical care come from private sector initiatives.

AHIP released a study showing that Medicare Advantage enrollees spent fewer days in a hospital, were subject to fewer hospital re-admissions, and were less likely to have “potentially avoidable” admissions for common conditions examined by the study.  The study was based on an analysis of statewide datasets on hospital admissions in California and Nevada compiled by the Agency for Healthcare Research and Quality (AHRQ).

”The study’s findings,” according to AHIP, “demonstrate that the innovative programs developed by Medicare Advantage plans – which place a strong emphasis on preventive health care services that detect diseases at an early stage and disease management programs for seniors with chronic illnesses – are working to help keep patients out of the hospital and avoid potentially harmful complications.”

Key findings from the report include:

  • Medicare Advantage beneficiaries in California spent 30 percent fewer days in the hospital than patients with FFS Medicare, and in Nevada, seniors in Medicare Advantage plans spent 23 percent fewer days in the hospital.
  • Medicare Advantage enrollees were re-admitted to the hospital in the same quarter for the same condition 15 percent less often in California and 33 percent less often in Nevada compared to FFS Medicare.
  • In both California and Nevada, seniors in Medicare Advantage were 6 percent less likely than seniors in FFS Medicare to be admitted to the hospital for conditions described by AHRQ as “potentially avoidable,” such as dehydration, urinary tract infection, or uncontrolled diabetes.

It seems to me that this speaks to the fact that care is better coordinated when seniors are engaged with a private carrier rather than directly with Medicare. There is no management in Medicare, just a payment system. This is what has many concerned about the prospect of a government health plan.

Kyl Amendments to Preserve, Improve HSAs.

The New York Times reported that as of the Friday 5 p.m. deadline, 564 amendments had been filed to Senator Max Baucus’ bill to reform healthcare.

One Senator, Jon Kyl, a Republican from Arizona, has offered up nine amendments aimed at preserving and improving Health Savings Accounts (HSAs).

Mark-up of the bill will begin Monday, September 22, at 9:00.



America’s Healthy Future Act of 2009

Short Title: Ensuring Consumer Access to Catastrophic Coverage Options

Description of Amendment: The federal government shall not prohibit any individual, regardless of age, from enrolling in the “young invincible policy” or a high deductible health plan with a Health Savings Account.



America’s Healthy Future Act of 2009

Short Title: Ensuring Consumer Choice of Health Care Benefits

Description of Amendment: The amendment would prohibit the federal government from limiting consumer choice by defining the health care benefits offered through private insurance.



America’s Healthy Future Act of 2009

Short Title: Ensuring Consumers’ Choice of Insurance Options that Best Meet Their Health Care Needs

Description of Amendment: The federal government shall be prohibited from limiting consumer choice by setting actuarial values of health insurance plans.



America’s Healthy Future Act of 2009

Short Title: Increase Current Limits on HSA Contributions

Description of Amendment: Under current law, contributions to HSAs are limited annually under a formula specified in the statute. The limits are adjusted annually for inflation by the IRS. In 2009 the annual contribution limit for self-only coverage is $3000 and for family coverage is $5,950. Prior to 2007, contributions could not exceed the individual’s HDHP deductible.

Although some HDHPs cover 100% of expenses after the deductible is met, many HDHPs charge co-insurance until a higher limit on out-of-pocket expenses (including deductibles, co-payments, and coinsurance) is met. Under current law, these limits cannot exceed $5,800 for HDHP self-only coverage and $11,600 for family coverage in 2009. The limits are adjusted annually for inflation by the IRS.

People with HSAs that have out-of-pocket limits above the annual HSA contribution limits cannot deposit enough money into their HSAs to cover all their potential out-of-pocket expenses. This amendment would increase the annual HSA contribution limits to equal the amount of the individual’s HDHP out-of-pocket maximum (i.e., as high as $5,800 for singles and $11,600 for families in 2009).

Effective Date: Upon Enactment Offset: The amendment would tie the premium tax credit to the lowest cost bronze plan.



America’s Healthy Future Act of 2009

Short Title: Improved opportunities to rollover funds from Flexible Spending Arrangements (FSAs) and Health Reimbursement Arrangements (HRAs) to fund Health Savings Accounts (HSAs)

Description of Amendment: Current law allows employers that offered Flexible Spending Arrangements (FSAs) or Health Reimbursement Arrangements (HRAs) to roll over unused funds to an HSA as employees transitioned to an HSA for the first time. However, the unused FSA funds may not be rolled over to HSAs unless the employer offers a “grace period” that allows medical expenses to be reimbursed from an FSA through March 15 of the following year (instead of the usual “use or lose” by December 31) and must be made before 2012. In addition, the amount that may be rolled over to the HSA cannot exceed the amount in such an account as of September 21, 2006. This amendment would clarify current law to provide employers greater opportunity to roll-over of funds from employees’ FSAs or HRAs to their HSAs in a future year in order to ease the transition from FSAs and HRAs to HSAs.

Effective Date: Upon Enactment Offset: The amendment would tie the premium tax credit to the lowest cost bronze plan.



America’s Healthy Future Act of 2009

Short Title: Catch-up contributions by spouses may be made to one Health Savings Account (HSA)

Description of Amendment: Current law allows HSA-eligible individuals age 55 or older to make additional catch-up contributions each year. However, the contributions must be deposited into separate HSA accounts even if both spouses are eligible to make catch-up contributions. This amendment would allow the spouse who is the HSA account holder to double their catch-up contribution to account for their eligible spouse. Effective Date: Upon Enactment

Offset: The amendment would tie the premium tax credit to the lowest cost bronze plan.



America’s Healthy Future Act of 2009

Short Title: Expanded Definition of “Preventive” Drugs Description of Amendment: Current law allows “preventive care” services to be paid by HSA-qualified plans without being subject to the policy deductible. Although IRS guidance allowed certain types of prescription drugs to be considered “preventive care,” the guidance generally does not permit plans to include drugs that prevent complications resulting from chronic conditions.

This amendment would expand the definition of “preventive care” to include medications that prevent worsening of or complications from chronic conditions. This will provide additional flexibility to health plans that want to provide coverage for these medications and remove a perceived barrier to HSAs for people with chronic conditions. Effective Date: Upon Enactment Offset: The amendment would tie the premium tax credit to the lowest cost bronze plan.



America’s Healthy Future Act of 2009

Short Title: Greater Flexibility Using HSA Account to Pay Expenses

Description of Amendment: When people enroll in an HSA-qualified plan, some let a few months elapse between the time when their coverage starts (e.g., January) and when the health savings bank account is set up and becomes operational (e.g., March). However, the IRS does not allow for medical expenses incurred in that gap (between January and March) to be reimbursed with HSA funds.

This amendment would allow all “qualified medical expenses” (as defined under the tax code) incurred after HSA-qualified coverage begins to be reimbursed from an HSA account as long as the account is established by April 15 of the following year.

Effective Date: Upon Enactment Offset: The amendment would tie the premium tax credit to the lowest cost bronze plan.



America’s Healthy Future Act of 2009

Short Title: Expanded definition of “qualified medical expenses”

Description of Amendment: The current definition of “qualified medical expenses” generally does not include fees charged by primary care physicians that offer pre-paid medical services on demand because there is no direct billing for individual services provided by the physician and the arrangement is not considered “insurance.” This amendment would allow amounts paid by patients to their primary physician in advance for the right to receive medical services on an as-needed basis to be considered a “qualified medical expense” under the tax code.

The modification would affect all health care programs using the definition, including HSAs, HRAs, FSAs, and the medical expense deduction when taxpayers itemize. Effective Date: Upon Enactment Offset: The amendment would tie the premium tax credit to the lowest cost bronze plan.

Baucus Bill by the Numbers.

$774 billion – the estimated credits and subsidies to be provided through the insurance exchanges, increased net outlays for Medicaid and the Children’s Health Insurance Program (CHIP), and tax credits for small employers.

$215 billion – the revenues expected from the excise tax on high-premium insurance plans.

$20 billion – the estimated penalty payments made by uninsured individuals.

$27 billion – the estimated penalty payments to be made by employers whose workers will receive subsidies via the exchanges.

$12 billion – the estimated indirect effects on federal revenues associated with the expansion of federally subsidized insurance.

$500 billion – the projected net cost over 10 years for the proposed expansions in insurance coverage.

$49 billion – the estimated net reduction in federal budget deficits of over the 2010–2019 period.

29 million – The number of uninsured nonelderly people who would have coverage by 2019.

25 million – the number of nonelderly residents who would still not be insured by 2019 (about one-third of whom would be unauthorized immigrants).

11 million – the projected increase in the number of enrollees in Medicaid.

Source: Congressional Budget Office.

Will the Dems Go It Alone on Health Reform?

CapitolThe New York Times is carrying an article this morning saying that two of the three Republicans in a small group called the “Gang of Six” who are trying to forge a bipartisan compromise on health care have requested numerous major changes in a proposal drafted by the chairman of the Senate Finance Committee, reducing the chances that he can win their support.

Some of the issues they are raising drive right at the core differences between the parties. For example, the Times says that the Republicans, Senators Michael B. Enzi of Wyoming and Charles E. Grassley of Iowa, have told Senate Finance Committee Chairman Max Baucus of Montana that health legislation must include language affirmatively prohibiting the use of federal money to pay for abortion.

The report says that the two senators are asking for the restriction to apply to any subsidies that help low-income people buy insurance. In addition, they said, health plans should not be obliged to provide abortion. Thus, they said, the bill should “include a conscience clause to protect entities from being required to contract with abortion providers.”

In addition to this objection, Enzi and Grassley have raised a number of others. For example, they have apparently objected to the fees that Mr. Baucus wants to impose on health insurance companies, clinical laboratories and manufacturers of medical devices.

Five year wait for legal immigrants.

They also want a five-year waiting period for legal immigrants to receive tax credits, or subsidies, to help them buy insurance.

Perhaps one of the biggest philosophical objections the republicans are making has to do with the individual mandate that would fine a family that went without coverage up to $3,800 a year. Grassley, according to the Times, has reservations about this approach. He believes that “the individual responsibility to have health coverage should be reconsidered and replaced with a reinsurance policy to ensure that affordable health coverage is available to everyone in a voluntary system, with a lower overall cost for the package,” one document says.

This final objection, to me, is sounds like Grassley is saying, “Let’s start over.” While this may not be a bad idea, it will not produce a bill out of the Senate that has bi-partisan support, and could force the Democrats to try to pass a bill without republican support.

Attention shifts to “Group of 17.”

It seems that President Barack Obama recognizes this and  is already gearing up for such a fight. According to the Washington Post, he has already turned his attention from the “Gang of Six” to the “Group of 17” who are moderate Democrats in the Senate and who are leery of the high price tag of health care reform and its impact on the federal deficit.

Nevertheless, the Post points out, if Democrats turn to reconciliation, a procedural move that would cut off a Republican filibuster and enable the bill to pass with 51 votes, the 17 votes could become even more important.

In the next day or, two, we will probably know whether a bill will surface that has bi-partisan support, or if the Democrats will try to go it alone.

Meanwhile, I am sure that many Democrats are reading a USA TODAY/Gallup Poll conducted after President Obama’s speech to Congress last week that “shows Americans almost evenly divided over passing a health care bill. According to the poll, six in 10 “say Obama’s proposal, if enacted, would not achieve his goals of expanding coverage to nearly all Americans without raising taxes on the middle class or lowering the quality of health care. For the first time, a majority disapprove of the way he’s handling health care policy.”

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“You lie!” Overshadows Republican Protest.

nullLast Wednesday night when Republican Congressman Joe Wilson of South Carolina angrily pointed towards President Barack Obama and shouted, “You lie!” he took the wind out of the sails of a planned Republican protest.

After the speech to a joint session of Congress, East Texas Congressman Louie Gohmert (R-Tyler) and other Republicans participated in a demonstration of opposition to the President’s healthcare approach by holding a protest sign that read “What Bill?” That protest got little coverage after Wilson’s commentary grabbed all of the headlines.

The protest was intended to draw attention to the fact that the House Democrats’ health care bill, H.R. 3200, does not exactly jibe with what the President described in his speech as “his plan.” (Something that I have written about in this blog.) Gohmert told his home town paper, The Daily Sentinel, that was the message he was expressing with signs that said, ‘What Bill?’ and ‘What Plan?’

Gohmert has introduced his own healthcare bill, H.R. 3478, which is still in committee and is not likely to reach the House floor. It would expand Health Savings Accounts (HSA) for individuals and businesses and allow them to deposit as much money into those accounts as they wish. That money would be exempt from taxes but could only be used to cover medical expenses. Individual coverage under Gohmert’s plan would include a $2,500 annual deductible for individuals and a $3,500 annual deductible for families and households. Under his bill, Gohmert says that senior citizens could chose between their current Medicare plan or the government-paid deductible plan plus whatever cash they put inside an HSA to cover costs above the deductible.

I like this idea and wish that more members of Congress were trying to advance these concepts. After all, these types of consumer-driven health plans have proven themselves to be able to achieve the goals that the President articulated for his healthcare reform initiatives, namely provide insurance to those who don’t have it while slowing the growth of health care costs for our families, our businesses, and our government. Everyone can agree we need this.

With Democrats controlling both ends of Pennsylvania Avenue, the Gohmert bill will never see the light of day. But what can happen is for Republicans to come back to the table with Senator Max Baucus and help him write a bill that makes sense. It is time for Senators Mike Enzi and Chuck Grassley to reengage.

Even former Republican Presidential candidate, Bob Dole, according to the New York Time, has, at the request of  Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee, recently reached out to Republicans to produce a bipartisan bill by next week.

Dole was quoted as saying, “I wasn’t trying to sell them anything. I’m just saying to them, ‘Don’t throw in the towel.’ ”

He’s right, don’t throw in the towel. It is time to move beyond the heated rhetoric of August and negotiate a workable plan.

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HSAs Help People Save for Retirement.


Over the Labor Day weekend, President Obama, noting that millions of Americans do not have enough savings to cover their retirement, announced a package of initiatives to spur increased savings.

He suggested four administrative actions, which do not require new legislation from Congress, intended to make it easier and more automatic for people to put money into tax-advantaged retirement accounts.

The four new initiatives, all of which are based on new behavioral research on ways to encourage people to save in a systematic way, included:

  1. Automatic enrollment plans, whereby employees would be automatically signed up for their 401K unless they explicitly ask not to participate.
  2. Instructions to the Internal Revenue Service to allow people to check a box on their tax returns to receive their tax refunds in the form of United States savings bonds.
  3. Making it easier for employees to contribute the money for unused vacation time and overtime to their retirement accounts.
  4. Publishing an easy-to-read guide to help people understand the arcane rules governing retirement plans when people change jobs.

I have a fifth idea.

Encourage people to buy a qualified health insurance plan and open and fund a Health Savings Account (HSA).

The HSA, created in 2004 is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High Deductible Health Plan (HDHP). The funds contributed to the account are not subject to federal income tax at the time of deposit and unlike a flexible spending account (FSA), funds roll over and accumulate year over year if not spent. Funds can be withdrawn tax-free to pay for qualified medical expenses.

Best of all, withdrawals for non-medical expenses are treated very similarly to those in an IRA in that they are treated as normal income if taken after retirement age.

So, why not solve two problems at once, encourage people to select an affordable health insurance plan and then take advantage of the opportunity to save money for future medical expenses and retirement.

I also have some ideas about allowing anyone who has health insurance coverage to open an HSA, but I will save that for another time.

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