Patient Protection and Affordable Care Act by the Numbers.

$2.5 trillion — Cost of the bill is  over 10 years of full implementation

$848 billion — Subsidies provided through the exchanges, increased net outlays for Medicaid and the Children’s Health Insurance Program (CHIP), and tax credits for small employers.

$493.6 billion — New taxes on individuals and employers

$464 billion — Cuts to Medicare

$149 billion — Excise tax on high-premium insurance plans

$130 billion — The projected net reduction in federal deficits of  over the 2010-2019 period

$120 billion — Changes to existing law regarding tax preferences for health care and effects of other provisions on tax expenditures for health care

$25 billion — Unfunded state mandates in additional Medicaid expenditures over the 2010–2019 period

$15 billion — Amount allocated to  establish a Prevention and Public
Health Fund.

$8 billion — Penalty payments by employers whose workers received subsidies

25 million –  People who would purchase their own coverage through the new insurance exchanges

24 million — People would be left without insurance

19 million — People who will get a subsidy to help them buy health insurance

4 million — People the CBO estimates will choose the public option

$23,000 — The initial threshold for a single policy that will be subject to a
40 percent excise tax

$8,500 — The initial threshold for a single policy that will be subject to a
40 percent excise tax

2,074 — Number of pages of the bill

2,014 — The year most nonelderly people with income below 133 percent of the Federal Poverty Level would be made eligible for Medicaid.

$750 — The penalty an employer would have to pay for each full-time worker who obtained subsidized coverage (See 50)

50 — The number of workers an employer must have before they would have to pay a penalty if they did not offer coverage (See $750)

Source: CBO letter to Senate Majority Leader Harry Reid dated November 18, 2009. Website: http://www.cbo.gov/doc.cfm?index=10731

Healthcare Without a Public Option Should not Quiet the Debate.

The headlines this morning are all about the Obama Administration softening its position on the need for a public option as part of a health care overhaul. Democrats say that it will not pass the House without such a plan and Republicans say that they cannot support any bill that includes it.

The administration has hinted for months now that they could live with out a public option as long as the bill that emerges from the three House committees and two Senate committees some kind of a health plan that will provided completion to private insurers. This could possibly be a co-op, they say.

I think the Los Angeles Times analysis of the move is right on target. The Times noted that, “Obama angered some liberals but took a big step toward winning over moderate Democratic lawmakers — a trade-off that sharply improves the chances Congress will approve the overhaul.”

I also believe that the move takes some of the heat out of the Town Hall Meetings. The public option is a lightning rod issue for those wanting to find the lowest common denominator in this debate. The public option = government-run healthcare = socialism = bad – end of argument.

Let’s hope that this not quiet the debate. Remember, the bill that has emerged from the House is over 1,000 pages in length. There are still enough drastic changes in the bill to keep benefits attorneys and regulators busy for the next 30 years. And, let’s not forget the cost is still estimated to be over $1 trillion.

Half of Voters Favor Obama Health Plan. But What is it?

With each passing day, I am becoming more convinced that a good many of the people who are engaging in the “debate” about healthcare reform have no clue about the issues that the Obama administration and Congress are wrestling with.

Last evening I logged on to a White House Forum on Healthcare Reform that was being conducted on Facebook. Not surprisingly, most of the participants in this chat room environment we posting comments favoring the Obama health plan. I don’t have a problem with people taking sides on an important issue like this, but most of the participants seem to lack knowledge of what is now being debated in Congress.

While I participated, a large number of the comments were directed at the sole person in the chat room who seemed to be challenging the need for reform, saying that he had a health savings account and it lowered his premiums and covered him for the unexpected and the catastrophic – a pretty good definition of insurance if you ask me.

However, this guy’s logic was met a myriad of slogans and catch phrases that indicated to me that the contributors were misinformed about the plans that are making their way through Congress. In fact they were making up their own version of what healthcare reform would look like.

Most comments, in my opinion, reflected a belief that there should to be a government-run single-payer system, and it ought to be free. One theme running through the posts was that of not wanting to have an insurance company telling them and their doctors what is, or is not, covered. I tried squaring that with having a government-run system, but my logic couldn’t take me there.

Thank goodness, that is not at all what the administration and Congress has been talking about. In fact, compared to where a lot of the people participating in the forum were, the bill being marked-up by the HELP Committee in the Senate sounds almost reasonable, despite its trillion dollar price tag and the threatened public plan option.

Having participated in this online experiment in democracy in action, I was not surprised when I read this morning that a new Rasmussen Reports national telephone survey found that 50% of U.S. voters at least somewhat favor the Democrats’ health care reform plan, while 45% are at least somewhat opposed.

This in response to a question that did not in any way describe the plan as it stands to date. It was simply presented as the health care reform proposed by President Obama and Congressional Democrats.

What was interesting about the survey results is that while the overall numbers favor the plan, those with strong opinions tilt the other way. Twenty-four percent (24%) strongly favor the plan, but 34% are strongly opposed.

This tells me that these are the people who have taken at least some time to study the issues and learn about what the administration and Congressional leaders are really proposing including the projected costs and the proposed means of covering those costs.

Congress will reconvene on July 6. Hopefully, over the upcoming long weekend, more Americans will take time to read a newspaper article or simply Google “healthcare reform” and read what comes up. I think most will be surprised when they learn the details of the product that Congress is producing, and the price they will pay for it.

Health Insurers Agree to End Charging Higher Premiums for Women.

Yesterday, on this blog, I referred to the national healthcare reform debate as being like a chess game with each side making moves in turn that will eventually lead to the final outcome.

In yesterday’s blog post, I wrote about how, on Monday of this week, a conciliatory position was struck by Senator Charles E. Schumer (D-NY) who said that any new government-run insurance program should be made to comply with all the rules and standards that apply to private insurance.

Schumer went on to list out a series of principles that should apply to any public plan. This included:

  • The public plan must be self-sustaining. It should pay claims with money raised from premiums and co-payments. It should not receive tax revenue or appropriations from the government.
  • The public plan should pay doctors and hospitals more than what Medicare pays. Medicare rates, set by law and regulation, are often lower than what private insurers pay.
  • The government should not compel doctors and hospitals to participate in a public plan just because they participate in Medicare.
  • To prevent the government from serving as both “player and umpire,” the officials who manage a public plan should be different from those who regulate the insurance market.

Still, the insurance industry through Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group, responded to the Schumer plan by saying, “We are very, very grateful that members of Congress have been thoughtfully looking at our concerns.” But she said she still saw no need for a public plan “if you have much more aggressive regulation of insurance,” which the industry has agreed to support.

That was Monday. On Tuesday, Ignagni made her move on the chess board by offering to end the practice of charging higher premiums to women than to men for the same coverage. She made the offer in testifying before the Senate Finance Committee and with a nudge from Senator John Kerry, (D-MA), who, according to the New York Times, told Ignagni, “The disparity between women and men in the individual insurance market is just plain wrong, and it has to change.”

The Times pointed out that women are often charged 25 percent to 50 percent more than men for insurance providing identical coverage. In interviews last fall, insurance executives said they had a sound reason for the different premiums: Women ages 19 to 55 tend to cost more than men of the same age because they typically use more health care, especially in the childbearing years. Moreover, insurers said women were more likely to visit doctors, to get regular checkups, to take prescription medications and to have certain chronic illnesses.

The importance of the leveling the cost of insurance between men and women really has to do with plans for Congress to provide tax credits or subsidies to millions of people with low or moderate incomes to help them buy insurance. If the insurance being purchased is priced higher for a woman than it is for a man then the woman will end up receiving less assistance from the government than would a man.

The move on the part of Ignagni to agree to parity in pricing will help tidy up this issue and will better position the industry to continue argue against the need for a government-run health plan designed to compete with private plans to provide coverage for low income persons.

With these day-to-day serves and volleys, I may soon need to change my analogy from that of a chess match to that of a fast-paced tennis match.

Dems Offer Compromise on Proposed Government-run Insurance Program.

Time moves quickly inside the Beltway. It was just last week that Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, told a press briefing that Congressional leaders “will get to this a little later,” referencing the creation of any new government-run insurance program.

Apparently “a little later” was yesterday when Senator Charles E. Schumer of New York, the third-ranking member of the Senate Democratic leadership, proposed that any new government-run insurance program comply with all the rules and standards that apply to private insurance.

The New York Times said that the proposal was made in a bid to address fears that a public program would drive private insurers from the market. It added that this was an attempt by Democrats in Congress to shift the debate from the question of whether to create a public health insurance plan to the question of how it would work.

The Times reported that the chairman of the Senate Finance Committee, Baucus, had asked Schumer to seek a solution to the public plan issue that would be acceptable to the Obama administration as well as Republican leaders and the insurance industry. In his response, Mr. Schumer set forth these principles:

  • The public plan must be self-sustaining. It should pay claims with money raised from premiums and co-payments. It should not receive tax revenue or appropriations from the government.
  • The public plan should pay doctors and hospitals more than what Medicare pays. Medicare rates, set by law and regulation, are often lower than what private insurers pay.
  • The government should not compel doctors and hospitals to participate in a public plan just because they participate in Medicare.
  • To prevent the government from serving as both “player and umpire,” the officials who manage a public plan should be different from those who regulate the insurance market.

In addition, the Times reported that Schumer said the public plan should be required to establish a reserve fund, just as private insurers must maintain reserves for the payment of anticipated claims. And he said the public plan should be required to provide the same minimum benefits as private insurers.

This sounds to this blogger as if the Democratic leadership has made the first step to find a compromise solution on one major issue now separating  the two sides in this debate. Still, as the Times article points out, some thorny questions remain. Could states tax the premiums of a public plan, as they tax private insurance premiums? Would the public plan have to comply with state laws, as private insurers do? Would the government ever allow the public plan to become insolvent?

Alas, the biggest question may be whether the insurance industry will ever accept  a public plan of any kind. The Times reported that Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group, responded to the Schumer plan by saying, “We are very, very grateful that members of Congress have been thoughtfully looking at our concerns.” But she said she still saw no need for a public plan “if you have much more aggressive regulation of insurance,” which the industry has agreed to support.

This chess match will continue for a while, but keep in mind the Democrats are in the position to end the game their way this fall through the budget resolution passed last week allowing them to consider healthcare reform legislation without the threat of a filibuster.

Needed: More Primary Care Docs.

A thoughtful piece on healthcare reform appeared yesterday on the HealthLeaders website, www.healthleadersmedia .com.

In an article entitled “It’s Time to Pay Primary Care More,” Elyas Bakhtiari noted that at a time when Democratic leaders in Congress prepare to introduce healthcare reform legislation, the Obama administration is expressing concern about the growing primary care doctor shortage and exploring ways to increase physician supply.

Bakhtiari applauded the national healthcare reform architects for paying attention to previous efforts in Massachusetts, where the promise of universal coverage has fizzled somewhat, in part because of a primary care shortage. He writes that faced with inadequate primary care access, patients are showing up at emergency rooms and adding to overall costs-ED visits have risen 7% and the cost of emergency care has climbed 17% in Massachusetts in the past two years.

Causing the shortage in primary care docs, Bakhtiari points out, is that primary care doesn’t pay enough to lure many of today’s medical students. He notes that when presented with the options of making $180,000 as a family practitioner and $400,000 or more as a proceduralist, students are increasingly choosing the latter.

Bakhtiari then points to the large government-run healthcare programs as driving this shortage. The pool of dollars for reimbursing physicians for Medicare and Medicaid is limited, writes Bakhtiari. And, he says, that while the payment disparity has benefited certain surgeons and specialists, the damage caused by a lack of primary care physicians affects the entire healthcare system.

The conclusion that Bakhtiari reaches is that reforming the entire healthcare system can only be done by making some very hard choices such as increasing payment to primary care at the expense of some of the higher-paid specialists.

It appears that the Congressional architects of healthcare reform may have gotten this same message. On Wednesday of this week, the New York Times reported that Senator Max Baucus, (D MT), and Senator Charles E. Grassley (R IW), had unveiled a set of detailed recommendations intended to slow the growth of Medicare, hold doctors and hospitals more accountable, and improve the care of patients with chronic illnesses.

Key to this effort, The Times said, is a proposed 5 percent bonus payment for office visits and other “primary care services” provided to Medicare patients by family doctors and internists. General surgeons in rural areas would receive a similar bonus, but Medicare payments to many other specialists would be reduced.

Of course, this proposal has made many providers nervous, but it is, I think, a step in the right direction. Government programs like Medicare and Medicaid now provide coverage for about half of our population. If healthcare reform developed this year contains a “Public Plan” option that would be available to the working population, this percentage will skyrocket. It is time that these programs are used help shape healthcare delivery into a more efficient, cost effective system.

Did Sen. Baucus Just use a Jedi Mind Trick to Confuse About the Public Plan?

The word coming out of Washington over the last few days dealing with healthcare reform legislation reminds me somewhat of the Jedi hand wave mind trick from the original 1977 Star Wars movie.

Luke, Obi-Wan, and the two droids are entering the village where they hoped to find a pilot who can help them escape the Imperial blockade, but they are stopped at a roadblock by Stormtroopers searching for the two droids.

Stormtrooper: Let me see your identification.

Obi-Wan: [with a small wave of his hand] You don’t need to see his identification.

Stormtrooper: We don’t need to see his identification.

Obi-Wan: These aren’t the droids you’re looking for.

Stormtrooper: These aren’t the droids we’re looking for.

Obi-Wan: He can go about his business.

Stormtrooper: You can go about your business.

Obi-Wan: Move along.

Stormtrooper: Move along… move along.

After being confronted by a number of Democrats in the House last week over possibly getting soft on  adding the so called “Public Plan” in health care reform legislation, Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, told a press briefing “will get to this a little later.”

It was not reported whether, or not he waved his hand, but Baucus went on to say he wants to get a “little momentum” behind health reform legislation before the committee tackles such a divisive issue.

“Cool it,” Baucus said. “We don’t have to deal with it now. It’s kind of a hot-button item.” (Maybe another little wave of the hand?)

Essentially, Baucus said he will temporarily set aside talks on a new public insurance option to focus on maintaining employer self-insurance plans.

According to CQ Today, Baucus turned attention to large self-insured employers saying he would aim to preserve this self-insurance system while expanding private coverage and public programs such as Medicaid. He said, “We’ll end up with more private insurance and more public insurance.”

As for the creation of a new public insurance option, Baucus said that it is “on the table,” adding that it “might be to the side a little bit, … but it’s still on the table.” He added, “We’re trying to get momentum going. We’ll get to the public option a little later. Let’s not forget: There’s an awful lot more here than the public option” (Young, The Hill, 4/24).

Move along… move along…

“Public Plan” Still Big Part of Obama Healthcare Reform Agenda.

Nancy-Ann DeParle, director of the White House health reform office, is certainly getting her share of press today as healthcare writers try to unwind what she had to say during a forty minute discussion with reporters that was sponsored yesterday by the Kaiser Family Foundation.

President Barack Obama’s top health care adviser said that work on healthcare reform has been quietly continuing on Capitol Hill despite the Easter recess. She said that she has been spending 60% to 75% of her time there talking with congressional members and staff who appear far more receptive to a reform package than they did more than 15 years ago. She also says that many other healthcare stakeholders are more open to reform efforts, including healthcare providers, employers, and business groups.

When the event was opened up for questions, several reporters asked DeParle about the so called “public plan” which has been a part of the Obama administration’s health reform plan since the Presidential campaign.

Offering the option of government coverage to workers and their families has become one of the most contentious issues in the debate about overhauling health care to cover the uninsured and curb costs. Obama has proposed a public plan, and liberals insist it be part of any final deal. Conservatives and businesses fear that could open the door for a government takeover of the system. Some republicans have said that a public plan is a deal breaker when it comes to health care reform legislation.

When asked about her definition of a “public plan,” DeParle said it would be a plan sponsored by the government with very low administration costs, paying no commissions to brokers and creating no profits for insurers.

DeParle repeatedly told the group that the Obama administration was open to any plan that would achieve the lower costs that would lead to the ability to cover more people.

“There are ways to get around policy concerns. That is why we think we can reach agreement,” she said. But, she noted that ideological objections to government’s role would be hard to overcome.

Also yesterday in the Wall Street Journal, Kerry Weems and Benjamin Sasse brought attention to the public plan by writing that the comparison between public and private plans is a false comparison.

They wrote that, “Private insurance and public benefits are not the same business. For all its warts, private insurance tries to manage care. Medicare is mostly about paying the bills presented to it.”

The two went on to list four reasons why the administrative expenses of private insurance plans represent money well spent for their members. They are:

  1. Provider networks that can include high-value providers and exclude low-quality providers while Medicare is forbidden from excluding poor quality providers.
  2. Private insurers must negotiate rates instead of just fixing prices using a statutorily.
  3. Private insurers must combat fraud — or go out of business. The two wrote that the total amount of Medicare fraud is unknown. “The government does not measure or estimate fraud in its programs; instead, it measures payments made ‘in error.’ According to Medicare’s own most recent data, payments made in error amount to over $10 billion annually. (Medicaid’s payment errors in 2007 equaled a whopping $32.7 billion, according to a report by the Department of Health and Human Services.)”
  4. Private insurers must incur the administrative cost of marketing. They point out that a public plan competing with other alternatives would also have to market itself to the public, and this means tax dollars used to advertise against private plans. Or the public plan could ‘compete’ by using heavily subsidized marketing channels not available to private insurers, such as Social Security mailings, welfare offices, unemployment check stuffers, and the constellation of government-funded “advocacy organizations.”

As Weems and Sasse concluded in their WSJ piece there should be an honest discussion of administrative costs and their value. Those who believe that health care should have no profit should be open with their views and not hide behind the false economy of Medicare.

To view a web cast of Nancy-Ann DeParle’s remarks, click here.