On Kenneth Thorpe’s Analysis of Senator Sanders’ Single-Payer Reform Plan

Steffie Woolhandler and David Himmelstein
Originally published on January 29, 2016

Professor Kenneth Thorpe recently issued an analysis of Senator Bernie Sanders’ single-payer national health insurance proposal. Thorpe, an Emory University professor who served in the Clinton administration, claims the single-payer plan would break the bank.

Thorpe’s analysis rests on several incorrect, and occasionally outlandish, assumptions. Moreover, it is at odds with analyses of the costs of single-payer programs that he produced in the past, which projected large savings from such reform (see this study, for example, or this one).

We outline below the incorrect assumptions behind Thorpe’s current analysis:

1. He incorrectly assumes administrative savings of only 4.7 percent of expenditures, based on projections of administrative savings under Vermont’s proposed reform.

However, the Vermont reform did not contemplate a fully single-payer system. It would have allowed large employers to continue offering private coverage, and the continuation of the FEHBP and Medicare programs. Hence, hospitals, physicians’ offices, and nursing homes would still have had to contend with multiple payers, forcing them to maintain the complex cost-tracking and billing apparatus that drives up providers’ administrative costs. Vermont’s plan proposed continuing to pay hospitals and other institutional providers on a per-patient basis, rather than through global budgets, perpetuating the expensive hospital billing apparatus that siphons funds from care.

The correct way to estimate administrative savings is to use actual data from real world experience with single-payer systems such as that in Canada or Scotland, rather than using projections of costs in Vermont’s non-single-payer plan. In ourstudy published in the New England Journal of Medicine we found that the administrative costs of insurers and providers accounted for 16.7 percent of total health care expenditures in Canada, versus. 31.0 percent in the U.S. – a difference of 14.3 percent. In subsequent studies, we have found that U.S. hospital administrative costs have continued to rise, while Canada’s have not. Moreover, hospital administrative costs in Scotland’s single-payer system were virtually identical those in Canada.

In sum, Thorpe’s assumptions understate the administrative savings of single-payer by 9.6 percent of total health spending. Hence he overestimates the program’s cost by 9.6 percent of health spending — $327 billion in 2016, and $3.742 trillion between 2016 and 2024. Notably, Thorpe’s earlier analyses projected much larger administrative savings from single-payer reform — closely in line with our estimates.

2. Thorpe assumes huge increases in the utilization of care, increases far beyond those that were seen when national health insurance was implemented in Canada, and much larger than is possible given the supply of doctors and hospital beds.

When Canada implemented universal coverage and abolished copayments and deductibles there was no change in the total number of doctor visits; doctors worked the same number of hours after the reform as before, and saw the same number of patients. However, they saw their healthy and wealthier patients slightly less often, and sicker and poorer patients somewhat more frequently. Moreover, the limited supply of hospital beds precluded the kind of big surge in hospitalizations that Thorpe predicts. In health policy parlance, “capacity constraints” precluded a big increase in system-wide utilization.

Thorpe bases his estimates on what has happened when a small percentage of people in a community have had copayments eliminated or added. But in those cases there are no capacity constraints, so it tells us little about what would happen under a system-wide reform like single-payer.

Thorpe does not give actual figures for how many additional doctor visits and hospital stays he predicts. However, his estimates that persons with private insurance would increase their utilization of care by 10 percent and that those with Medicare-only coverage would increase utilization by 10 to 25 percent suggest that he projects about 100 million additional doctor visits and several million more hospitalizations each year – something that’s impossible given real-world capacity constraints. There just aren’t enough doctors and hospital beds to deliver that much care.

Instead of a huge surge in utilization, more realistic projections would assume that doctors and hospitals would reduce the amount of unnecessary care they’re now delivering in order to deliver needed care to those who are currently not getting what they need. That’s what happened in Canada.

3. Thorpe assumes that the program would be a huge bonanza for state governments, projecting that the federal government would relieve them of 10 percent of their current spending for Medicaid and CHIP — equivalent to about $20 billion annually.

No one has suggested that a single-payer reform would or should do this.

4. Thorpe’s analysis also ignores the large savings that would accrue to state and local governments — and hence taxpayers — because they would be relieved of the costs of private coverage for public employees.

State and local government spent $177 billion last year on employee health benefits – about $120 billion more than state and local government would pay under the 6.2 percent payroll tax that Senator Sanders has proposed. The federal government could simply allow state and local governments to keep this windfall, but it seems far more likely that it would reduce other funding streams to compensate.

5. Thorpe’s analysis also apparently ignores the huge tax subsidies that currently support private insurance, which are listed as “Tax Expenditures” in the federal government’s official budget documents.

These subsidies totaled $326.2 billion last year, and are expected to increase to $538.9 billion in 2024. Shifting these current tax expenditures from subsidizing private coverage to funding for a single-payer program would greatly lessen the amount of new revenues that would be required. Thorpe’s analysis makes no mention of these current subsidies.

6. Thorpe assumes zero cost savings under single-payer on prescription drugs and devices.

Nations with single-payer systems have in every case used their clout as a huge purchaser to lower drug prices by about 50 percent. In fact, the U.S. Defense Department and VA system have also been able to realize such savings.

In summary, professor Thorpe grossly underestimates the administrative savings under single-payer; posits increases in the number of doctor visits and hospitalizations that exceed the capacity of doctors and hospitals to provide this added care; assumes that the federal government would provide state and local governments with huge windfalls rather than requiring full maintenance of effort; makes no mention of the vast current tax subsidies for private coverage whose elimination would provide hundreds of billions annually to fund a single-payer program; and ignores savings on drugs and medical equipment that every other single-payer program has reaped.

In the past, Thorpe estimated that single-payer reform would lower health spending while covering all of the uninsured and upgrading coverage for the tens of millions who are currently underinsured. The facts on which those conclusions were based have not changed.

Drs. David Himmelstein and Steffie Woolhandler are professors of health policy and management at the City University of New York School of Public Health and lecturers in medicine at Harvard Medical School. The opinions expressed here do not necessarily reflect the views of those institutions.

Myth vs Reality

Doctors group welcomes national debate on ‘Medicare for All’

Nonpartisan physicians group calls single-payer reform ‘the only effective remedy’ for nation’s continuing health care woes and urges focus on facts, not rhetoric

FOR IMMEDIATE RELEASE, January 22, 2016
Contact: Mark Almberg, PNHP communications director, (312) 782-6006, mark@pnhp.org

Physicians for a National Health Program, a nonprofit, nonpartisan organization of 20,000 doctors who support single-payer national health insurance, released the following statement today by its president, Dr. Robert Zarr, a Washington, D.C., pediatrician.

The national debate on single-payer health reform, or “Medicare for All,” that has emerged in the course of the presidential primaries is a welcome development. But unfortunately a number of misrepresentations about single-payer national health insurance – and the prospects for its attainment – have crept into the dialogue and are potentially misleading the public.

Most of these misrepresentations, or myths, have been decisively refuted by peer-reviewed research. They include the following:

Myth: A single-payer system would impose an unacceptable financial burden on U.S. households. Reality: Single payer is the only health reform that pays for itself. By replacing hundreds of insurers and thousands of different private health plans, each with their own marketing, enrollment, billing, utilization review, actuary and other departments, with a single, streamlined, tax-financed nonprofit program, more than $400 billion in health spending would be freed up to guarantee coverage to all of the 30 million people who are currently uninsured and to upgrade the coverage of everyone else, including the tens of millions who are underinsured. Co-pays and deductibles, which have been rapidly rising under the Affordable Care Act, would be eliminated. Further, the single-payer system’s bargaining clout would rein in rising costs for drugs and medical supplies. Lump-sum budgets for hospitals and capital planning would control costs even more.

A recent study shows 95 percent of U.S. households would come out financially ahead under an improved version of Medicare for all. The graduated, progressively structured tax burden would be based on ability to pay, and the heavy cost to average U.S. households of private insurance premiums, co-pays, deductibles, and many currently uncovered services would be eliminated. Patients could go to the doctor or hospital of their choice, and would no longer be restricted to proprietary networks. Multiple studies over a period of several decades, including by the General Accountability Office and the Congressional Budget Office, show that a single-payer system would provide universal coverage at a much lower cost, per capita, than we are spending now. International experience confirms it. Even our traditional Medicare program, which falls short of a true single-payer system, has much lower overheadthan private insurance, and shows that publicly financed programs can deliver affordable, reliable care.

A single-payer system would also greatly diminish the administrative burden on our nation’sphysicians and hospitals, freeing up physicians, in particular, to concentrate on doing what they know best: caring for patients.

Covering everyone for all medically necessary care is affordable; keeping the current private-insurance-based system intact is not.

Myth: The U.S. has a privately financed health care system. Reality: About 64 percent of U.S. health spending is currently financed by taxpayers. (Estimates that are lower than this exclude two large sources of taxpayer-funded care: health insurance for government employees and tax subsidies to employers and individuals for purchasing private health plans.) On a per capita basis, the amount of government-funded health care in the U.S. exceeds the health spending of nations with universal health systems, e.g. Canada. We are paying for a national health program, but not getting it.

Myth: A single-payer system would overturn the gains won under the Affordable Care Act and provide inferior coverage to what people have today. Reality: A single-payer system would go far beyond the modest improvements that the ACA made around the edges of our current private-insurance-based system and ensure truly universal care, affordability and health security. For example, H.R. 676, the Expanded and Improved Medicare for All Act, would guarantee coverage for all necessary medical care, including prescription drugs, hospital, surgical, outpatient services, primary and preventive care, emergency services, dental, mental health, home health, physical therapy, rehabilitation (including for substance abuse), vision care and correction, hearing services including hearing aids, chiropractic, durable medical equipment, palliative care, podiatric care, and long-term care. It would eliminate financial barriers to care like co-pays and deductibles and eliminate restrictive networks. It would end the steady erosion of job-based coverage under our current arrangements and disconnect insurance coverage from employment. H.R. 676 currently has 61 sponsors.

Myth: The American people don’t support single payer. Reality: Surveys have repeatedly shown that an improved Medicare for All is the remedy preferred by about two-thirds of the population. A recent Kaiser Family Foundation survey yielded similar results, showing 58 percent of Americans support Medicare for All. A solid majority of the medical profession favors such an approach, as well, as do more than 600 labor organizations, and many civic and faith-based groups.

Myth: The goal of establishing a single-payer system in the U.S. is unrealistic, or “politically infeasible.” Reality: It’s true that single-payer health reform faces formidable opposition, especially from the private insurance industry, Big Pharma, and other for-profit interests in health care, along with their allies in government. This prompts some people to conclude that single payer is out of reach and therefore not worth fighting for. While such moneyed opposition should not be underestimated, there is no reason why a well-informed and organized public, including the medical profession, cannot prevail over these vested interests. We should not sell the American people short. At earlier points in U.S. history, the abolition of slavery and the attainment of women’s suffrage were considered unrealistic, and yet the movements to achieve these goals were ultimately victorious and we now wonder how those injustices were allowed to stand for so long.

What is truly “unrealistic” is believing that we can provide universal and affordable health care, and control costs, in a system dominated by private insurers and Big Pharma.

We call upon our nation’s lawmakers and the political leaders of all political parties to heed public opinion and to do the right thing by acting swiftly to bring about the only equitable, financially responsible and humane cure for our health care ills: single-payer national health insurance, an expanded and improved Medicare for all.

Physicians for a National Health Program (www.pnhp.org) has been advocating for single-payer national health insurance for three decades. It neither supports nor opposes any candidates for public office.

What’s Scary? Lumping the Affordable Care Act in with Medicare

By Steve Blank
Single Payer Action Network

On Tuesday, when Marilyn Tavenner took responsibility for the failure of HealthCare.gov to launch effectively, I was confused and troubled.

“I want to apologize to you that the website does not work as well as it should,” she told the House Ways and Means Committee, adding that HealthCare.gov “can and will be fixed.”

Why was I confused? Because Marilyn Tavenner is the head of the federal Centers for Medicare and Medicaid Services (CMS), and it hadn’t occurred to me that the ACA would fall under the auspices of CMS. After all, the ACA operates under a completely different model than Medicare and Medicaid which are federal programs that traditionally have used tax dollars to subsidize payments to health care providers and hospitals. On the contrary, the ACA’s Marketplace uses tax dollars to subsidize payments to private health care insurers. Apparently, the notion of public money being reserved for public programs is a thing of the past. In March, under pressure from states opting out of Medicaid expansion, Obama moved to allow Medicaid funding to be used for purchasing private health insurance.

This is a critical distinction, and it begins to explain why the ACA confuses so many people. The ACA uses federally collected dollars to subsidize health care, a long-sought aspiration of liberal health care expansion, but the money ends up in the hands of shareholders and CEOs, a characteristic of neo-liberal federal spending. The ACA, unlike Medicare and Medicaid, is not a public service at all, but a conduit for flowing tax dollars into the pockets of CEOs and shareholders of private insurance corporations.

The ACA does more than maintain the status quo, it reinforces an obsolete insurance model that was never good in the first place. So long as employer-based health insurance remains a “perk” for full-time workers, employers will be encouraged to reduce employee hours, lowering workers’ pay, and freeing businesses from the legal obligation to provide their employees with health insurance. The notion that the workers can then simply go to the exchange for comparable insurance is a fallacy because their yearly incomes and benefit packages have just been reduced. Paying for health care insurance that used to be a perk of your job after your pay has been reduced is an unfair burden, even at subsidized rates.

While it is true that the employee’s reduced income may mean she/he is entitled to federal health insurance subsidies on the ACA Exchange, it is important to realize that these subsidies are being paid to the private insurance companies for brokering the deal instead of being paid directly to health care providers and hospitals, as it is under the Medicare program. Ultimately, the insurance corporations are the ones being subsidized, not low-income people.

This law is a travesty, and it may effect the way public spending is framed in future discussions. And this is why I am so troubled. Lumping the ACA in with CMS sets a dangerous precedent. If embraced by our non-representatives in Congress, the practice of subsidizing private corporations to run federal programs that have historically been publicly operated is very likely to become the new model for Medicare and Social Security in the future. (We already see this happening with our public education system and the corporate-run charter school explosion).

The ACA positions health care as a corporate commodity and distances us from a place where health care is embraced as a human right. The shareholders are winning and people are losing. This is not the road toward Single Payer, and any foggy notion to see it as such must be resisted.

Single Payer Advocate Quentin Young: Passing Obamacare Worse than Doing Nothing

Passing Obamacare was worse than doing nothing and the legislation should have been defeated.

That’s the conclusion of single payer advocate Dr. Quentin Young, national coordinator for Physicians for a National Health Program (PNHP), in his just released autobiography – Everybody In, Nobody Out: Memoirs of a Rebel Without a Pause.
“Had I been in Congress, I would have unequivocally voted against Obamacare,” Young writes. “It’s a bad bill. Whether it’s worse than what we have now could be argued. We rather think because of its ability to enshrine and solidify the corporate domination of the health system, it’s worse than what we have now. But whether it is somewhat better or a lot worse is immaterial. The health system isn’t working in this country — fiscally, medically, socially, morally.”

Young rejects the idea that President Obama should have compromised on single payer in the face of industry opposition.

“I don’t have any sympathy for the idea that the president had to compromise because his opposition was strong,” Young writes. “Winning is not always winning the election. Winning is making a huge fight and then taking the fight to the people — re-electing people who are supporting your program and defeating those who aren’t.”

Young first met the young Barack Obama in the mid-1990s at social gatherings.

At the time, Obama was lecturing at the University of Chicago Law School and practicing law.

“We did not become bosom buddies after a few of these social gatherings — I just viewed him as a nice, bright guy living in the neighborhood,” Young says.

When Obama ran for the Illinois Senate, Young supported him.

“I was happy with his views on health care,” Young writes. “He recognized that major reform was necessary and indicated support for a single-payer approach. No blushing friend, I took every opportunity to solidify his position. While not an official adviser, I tried to influence him as much as I could. My colleagues and I sent him notes touting the advantages of single-payer and the form it might take and talked with him and his staff about it whenever I had the chance.”

“I felt I did influence him,” Young said.

When Obama ran for the Senate in 2003, Obama told the Illinois AFL-CIO:

“I happen to be a proponent of a single payer universal health care program. I see no reason why the United States of America, the wealthiest country in the history of the world, spending 14 percent of its Gross National Product on health care cannot provide basic health insurance to everybody. And that’s what Jim is talking about when he says everybody in, nobody out. A single payer health care plan, a universal health care plan. And that’s what I’d like to see. But as all of you know, we may not get there immediately. Because first we have to take back the White House, we have to take back the Senate, and we have to take back the House.”

But just a year later, Obama had flipped and came out against single payer in Illinois.

“I was very disappointed by his move to the right to keep the insurance companies in command,” Young told the Springfield State Journal Register in 2004. “I’m not accusing him of lying or misconduct. I’m accusing him of a lack of courage.”

But despite Obama’s “lack of courage,” Young supported Obama in his run for U.S. Senate and later for president. Young was just setting himself up for more disappointment.

At a town hall meeting in Portsmouth, New Hampshire in August 2009, Obama was asked whether he supported a universal health care plan.

“First of all, I want to make a distinction between a universal plan versus a single-payer plan, because those are two different things,” Obama said.

“A single-payer plan would be a plan like Medicare for all, or the kind of plan that they have in Canada, where basically government is the only person — is the only entity that pays for all health care. Everybody has a government-paid-for plan, even though in, depending on which country, the doctors are still private or the hospitals might still be private. In some countries, the doctors work for the government and the hospitals are owned by the government. But the point is, is that government pays for everything, like Medicare for all. That is a single-payer plan.”

“I have not said that I was a single-payer supporter because, frankly, we historically have had a employer-based system in this country with private insurers, and for us to transition to a system like that I believe would be too disruptive. So what would end up happening would be, a lot of people who currently have employer-based health care would suddenly find themselves dropped, and they would have to go into an entirely new system that had not been fully set up yet. And I would be concerned about the potential destructiveness of that kind of transition.”

“All right? So I’m not promoting a single-payer plan,” Obama said.

In March 2010, Congress passed the Affordable Care Act — Obamacare — by a narrow margin.

“PNHP’s policy experts did a line-by-line examination of the bill and, while acknowledging that it contains some modest benefits that make changes around the edges of our existing system, basically gave it two thumbs down,” Young writes. “To this day, much to the chagrin of many of our friends who wanted reform, I remain adamant in my rejection of Obamacare.”

“Why? We want a system that excludes the private insurance companies,” Young writes. “ We demand such exclusion not because these companies are good or evil (although we think they’re pretty evil). Rather, the reason to exclude them is that they don’t address the needs of the American people.”

Young also rejects the idea of a “public option,” pushed by Democrats such as Howard Dean. A public option “would not have made any significant difference on the overall impact” of Obamacare “contrary to the view of many progressive who believed that it would,” Young says.

“Since WWII, we have learned a lot about disease and certainly have had dramatic improvements in what we can do,” Young writes. “I’m talking about surgery of the heart, vaccination, nutrition issues. All these things have been largely defined in the last half-century. We’ve had something approaching a 12-year life expectancy rise just from scientific intervention.”

“We have all this knowledge, all these options, but we have a very backward financing and delivery system and the result is a great deal of human suffering,” Young says. “And that’s why we remain opposed to the Affordable Care Act. We think we have a winning proposition despite the reality in Congress. Polls repeatedly vindicate our position. A solid majority of the public and 59 percent of doctors support the single payer approach.”

“President Obama could have made it happen,” Young says. “He could have stuck to all the virtues of single payer. And I won’t deny he may have been defeated in the first round. There’s no question that this fight has been dirty and it’s going to get dirtier.”

Note #1: This article was originally posted on October 8th, 2013 at singlepayeraction.org.

Note #2: Listen to Steve Blank’s interview with Dr. Quentin Young, recorded April 8, 2010 on Health Writers.

Obamacare vs. Canada: Five key differences

Despite the partisan war in Washington that shut down the federal government this week, President Barack Obama has succeeded in implementing the first major health reform in the United States in nearly 50 years, as the Patient Protection and Affordable Care Act goes into effect. Even though its most virulent critics raise the spectre of “Canadian-style” health care, “Obamacare” does little to change the enduring differences between the two health care system. What, exactly, does “Obamacare” look like compared to Canada?

Not single-payer: Canadian critics tend to rail against “two-tiered” medicine, but in fact, the U.S. has a multi-tiered system. And despite the hype on both sides of the Congressional aisles, Obamacare keeps the same complex structure in place, while adding another layer through the introduction of health care “exchanges” for uninsured Americans. But the majority of Americans will continue to access care through a variety of health insurance plans made available or subsidized by their employer; nearly 50 million elderly and disabled through the federal Medicare program; another 60 million lowest-income through state-federal Medicaid arrangements.

Not universal coverage: Health care in Canada is based on a simple proposition: every legal resident is covered through a publicly-financed provincial or territorial plan. The individual mandate, derived from a Republican precedent in Massachusetts, stands in stark contrast to Canada’s universality principle. Even though Obamacare broadens coverage, the individual mandate relies on a fundamental insurance principle – care depends on type of coverage – and compels Americans to purchase insurance to access care. Americans now have more affordable insurance options and subsidies to cover their costs, and the lowest-income may be eligible for public coverage through the expansion of Medicaid. Still, despite the crush of online traffic as enrolment began Tuesday, only half of the estimated 40-plus million uninsured will be affected by Obamacare.

Not “national” health insurance: One of the hallmarks of health care in Canada is that, although each province and territory administers a health plan, everyone can expect to be covered for a comprehensive range of services, no matter where they live. And the federal government is expected to chip in to provincial coffers to make this happen. There’s plenty of intergovernmental friction as a result, but nothing like the fractured federalism of the United States. The implementation of Obamacare will further exacerbate regional and state differences, mainly as a result of the Supreme Court decision to curtail the federal government’s obligation for states to expand their Medicaid coverage. As a result, only about half of the states have chosen to sign on to the new Medicaid program.

Not equal access: There’s been some controversy in Canada lately over wait times and access to timely care, but this pales in comparison to the wide gulf that exists in access to care in the United States. Obamacare tries to address this in its provisions for insurance reform, such as lifting pre-existing conditions and limits on co-payment. But for all of the emphasis on affordable care, the new law reinforces the notion that access depends on how much you can afford, not how much you need. In the health insurance exchanges, the price of premiums will depend on your age, health, income, and on whether you opt for a bronze, silver, gold or platinum coverage. In Canada, access to necessary health care services is not a competitive sport.

Not cost containment: The sharpest critics of Obamacare argue it does little to address the fundamental challenge of cost control. The new law includes a review of Medicare reimbursement and the expansion of Accountable Care Organizations to reward cost-effective care. But it doesn’t grapple in a systematic fashion with the overall inefficiencies in health care delivery and financing, the administrative burden of multiple payers, providers and plans, and the cost pressures of defensive medicine. Governments in Canada know that health care is a searing financial responsibility, but they have at their disposal cost containment measures – monopoly fee negotiations with providers, global budgets for hospitals – that remain unfathomable in the American context.

Obamacare is a huge step in American health reform and, if it seen to improve the system, will represent a major victory for Democrats. Like other major reforms of the past, however, it will entrench the private nature of the system, and likely render national health insurance, or anything remotely like “Canadian-style” health care, impossible to attain.

Antonia Maioni is an associate professor at McGill University
Note: This article was originally posted on October 2nd, 2013 in The Globe And Mail

The Affordable Care Act is not a step toward single payer

Posted by Steve Blank
Yesterday the Supreme Court ruled that the Affordable Care Act’s mandate is constitutional. On last night’s Health Writers radio broadcast, I discussed the implications of the ruling with Russell Mokhiber of SinglePayerAction.org. While plenty of interviews are circulating in The Nation and on Democracy Now about how great the bill is, this interview with Russell Mokhiber discusses opposition to the bill from a left perspective. At the end of the program I will offer my own editorial opinion.
Click here to listen to the Health Writers interview with Russell Mokhiber.

Press release from Physicians for a National Health Program

Democrat To Offer A ‘Lifeline’ For Single-Payer Health Care

Posted by Gary Karch
Written by Igor Volsky of Think Progress
May 25, 2012

Rep. Jim McDermott (D-WA) will soon introduce legislation that would allow states to use federal funds they’re receiving through Medicare, Medicaid, and other health care programs to build a universal single-payer system. Advocates are describing the bill as a “lifeline” for advocates:

It would create a mechanism for states to request federal funds after establishing their own health insurance programs…. It would, for the first time, create a system under which a Medicare-for-all program could be rolled out on a state-by-state basis. In California’s case, it would make coverage available to the roughly 7 million people now lacking health insurance.

“This is a huge deal,” said Jamie Court, president of Consumer Watchdog, a Santa Monica advocacy group. “This is a lifeline for people who want to create a Medicare system at the state level.”

The bill could warm the hearts of liberals who expressed frustration with the Affordable Care Act’s more moderate approach of building on the existing health care system and should also satisfy GOP presidential candidate Mitt Romney. The former Massachusetts governor has sought to differentiate his 2006 health reform from Obamacare by rejecting a federal prescription for reform and promising to “pursue policies that give each state the power to craft a health care reform plan that is best for its own citizens.”

The ACA creates state flexibility by granting waivers to states that meet certain coverage standards and a bipartisan group of lawmakers has offered legislation expanding the provision by allowing states with innovative health care solutions to opt out of certain provisions beginning in 2014. Romney, meanwhile, has pledged to build on the ACA’s flexibility and grant states to the ability to opt out of the law entirely.

McDermott’s measure would go even further and encourage states to repurpose federal funds to build a universal single-payer health system of their own. If Republicans are truly interested in states rights, they will back it in mass.

Employer-Based Health Insurance Continues to Trend Down

WASHINGTON, D.C. — The percentage of American adults who get their health insurance from an employer continues to decline, falling to 44.5% in the third quarter of this year. This percentage has been steadily declining since Gallup and Healthways started tracking Americans’ health insurance sources in 2008. Click the following link to READ MORE.
Employer-Based Health Insurance Continues to Trend Down.

How Libby, Montana, Got Medicare for All

By: Kay Tillow

In 2009 when the Washington beltway was tied up with the health care reform tussle, Montana Democratic Senator Max Baucus, chairman of the all powerful Senate Finance Committee, said everything was on the table–except for single payer. When doctors, nurses and others rose in his hearing to insist that single payer be included in the debate, Baucus had them arrested. As more stood up, Baucus could be heard on his open microphone saying, “We need more police.”

Yet when Senator Baucus needed a solution to a catastrophic health disaster in Libby, Montana, and surrounding Lincoln County, he turned to the nation’s single payer healthcare system, Medicare, to solve the problem.

Baucus’ problem was caused by a vermiculite mine that had spread deadly airborne asbestos killing hundreds and sickening thousands in Libby and northwest Montana. The W. R. Grace Company that owned the mine denied its connection to the massive levels of mesothelioma and asbestosis and dodged responsibility for this environmental and health disaster. When all law suits and legal avenues failed, Baucus turned to our country’s single payer plan, Medicare.

The single payer plan that Baucus kept off the table is now very much on the table in Libby. Unknown to most of the public, Baucus inserted a section into the health reform bill that covers the suffering people of Libby, Montana, not just the former miners but the whole community—all covered by Medicare.

They don’t have to be 65 years old or more.
They don’t have to wait until 2014 for the state exchanges.
No ten year roll out—it’s immediate.
They don’t have to purchase a plan—this is not a buy-in to Medicare—it’s free.
They don’t have to be disabled for two years before they apply.
They don’t have to go without care for three years until Medicaid expands.
They don’t have to meet income tests.
They don’t have to apply for a subsidy.
They don’t have to pay a fine for failure to buy insurance.
They don’t have to hope that the market will make a plan affordable.
They don’t have to hide their pre-existing conditions.
They don’t have to find a job that provides coverage.

Baucus inserted a clause in the Affordable Care Act to make special arrangements for them in Medicare, and he didn’t wait for any Congressional Budget Office scoring to do it.

Less than two months after the passage of the health reform bill on March 23, 2010, Nancy Berryhill of the Social Security Administration in Denver joined personally in setting up an office in Libby to sign up these newly eligible people. “This is a new thing,” Berryhill told the Missoulian. “No other group like this has ever been selected to receive Medicare.” Berryhill issued a nationwide alert to inform anyone who had lived or stayed in Lincoln County of their eligibility. She opened a storefront in Libby at the old downtown city hall where she signed up 60 people on the first day. She plastered the towns of Whitefish and Eureka with pamphlets explaining the program and added three new staffers to the office in Kalispell.

Berryhill said she did not know how much the care would cost. That kind of analysis was beyond her directive to sign the people up. There have been no reports of competition from the private for-profit Medicare Advantage plans. The sick are not profitable.

No one should begrudge the people of Lincoln County. The mine wastes were used as soil additives, home insulation, and even spread on the running tracks at local schools. Miners brought the carcinogens home on their clothes. The W. R. Grace Company dumped much of the clean up costs onto the federal government. A June 17, 2009, order by the Environmental Protection Agency, the first of its kind, declared Lincoln County a public health disaster. The Libby Medicare provision in the health reform law is based on the area covered by that EPA order.

Baucus gave his reasons to the New York Times for its only story on this unique benefit: “The People of Libby have been poisoned and have been dying for a decade. New residents continue to get sick all the time. Public health tragedies like this could happen in any town in America. We need this type of mechanism to help people when they need it most.”

Health tragedies are happening in every town. Over 51 million have no insurance. Over 45,000 uninsured people die needlessly each year. Employers are cutting coverage and dropping plans. States in economic crisis are slashing both Medicaid and their employees’ plans. Nothing in last year’s reform law will mitigate the skyrocketing costs. Most insurance is threadbare and doesn’t cover. More than 50% of us now go without necessary care. As Baucus said of Medicare, “We need this mechanism to help people when they need it most.” We all need it now.

Bill Clinton recently stated that the U. S. could give coverage to all for one trillion dollars a year less than we now pay if we adopted the system of any other advanced nation. (Unfortunately, he did not say this when it would have mattered most during the 1993 and 2009 health care reform debates.)

Other industrialized countries have found that to cover everyone for less they must remove the profit-making insurance companies. Congressman John Conyers has reintroduced HR 676, the Expanded and Improved Medicare for All Act, which does exactly that. There are 60 cosponsors. It would cover all medically necessary care for everyone including dental and drugs by cutting out the 30% waste and profits caused by the private insurers.

So as the Ryan Republicans try to destroy Medicare and far too many Democrats use the deficit excuse to suggest cuts in its benefits, let us counter with the Libby prescription to clean up the whole mess. Only a single payer, improved Medicare for All, can save and protect Medicare, rein in the costs, and give us universal coverage.

Medicare will celebrate its 46th birthday on July 30, 2011, and all are invited to join in the festivities. Medicare was passed in 1965 and implemented within less than a year. When we pass HR 676, this single payer bill, we can all be enrolled in the twinkling of an eye.

Obamacare establishes people with health care needs as “customers”

Note from Steve Blank, administrator: The following article was brought to our attention by SPAN member Tim Wong. Our intent in posting it is to provide our audience with look at how private health insurers are framing their cut backs to coverage as a “benefit.” This duplicity is indicative of the kind of corporate “offer” that Obamacare’s free market “exchange” will offer its “customers.” It is now abundantly clear, even to political pragmatists, that market-based health care insurance will never alleviate our broken health care system, let alone protect people from suffering the devastating financial consequences of corporate greed. What the company Medica refers to as “My Plan” provides a sour taste of things to come. They should call it “My Pain.”

Medica Plan May Be Glimpse of Future
Article by: JACKIE CROSBY, Star Tribune

The insurer’s new option sets aside a certain amount of money for each employee to spend Medica is launching a new plan for businesses that it says will help them gain more control of health care costs, while giving employees more say in designing their insurance plans — even as they’re picking up more of the tab.

The Minnetonka-based insurer’s plan may provide a glimpse into how new health insurance exchanges could work, well ahead of the 2014 federal mandate.
The health care reform law requires states to offer marketplaces where people can shop for plans from different providers. Medica’s program is like a private exchange.
Called “My Plan,” the employer sets aside a specific dollar amount for each employee to use for health care. Employees then go online and decide how they want to spend it by choosing among 20 Medica plans.

The program will be available on July 1 to businesses with at least 51 workers.

“There’s a sweet spot in the small- to mid-range employers that will find this very attractive,” said David Delahanty of the human resources consulting firm Towers Watson in Minneapolis. “For the employee, there’s more choice. If you’re single and you’re healthy or if you’re a young family with children, you can find something within these 20 choices that will appeal to you.”
Medica has partnered with Minneapolis-based Bloom Health, which has developed an online tool that assesses a worker’s financial situation, health care needs and appetite for risk, and helps narrow down the choices that best fit.

The tool is being used by 47 companies to help workers compare health care plans on the individual market. Medica’s program provides employers with a group plan.

This is the first time Bloom Health has adopted its platform for a single insurer in Minnesota, though it has done so for plans in other states.

‘Becoming smarter shoppers’

Bloom Health CEO Abir Sen compares it to Expedia or Travelocity. The online tool sorts through Medica’s 20 options and comes back with two or three options that are best for a particular employee.

Sen said that when workers see how much gets put into their account by their employers and what portion they’ll have to kick in for coverage, they make different choices. Individuals are choosing a $3,000 deductible on average, while the most common family plan at Bloom Health has a deductible of $6,000.

“It goes back to the hypothesis that people spend their own money differently than when they spend other people’s money,” Sen said. “They’re becoming smarter shoppers of care. Anecdotally, some of our employers are saying people are starting to pay more attention to preventive care and those sorts of things because now they’re more on the hook for their own health. It’s early yet, but it’s very encouraging.”

John Naylor, Medica’s vice president of sales and account services, said the new plan moves from a “cost shift” to a “cost share” model.

“Employers are making decisions behind the scenes about the level of benefit and the kind of contribution they’ll make,” he said. “Maybe they’ll lower their benefits or find ways to lower cost, or you as an employee take on more. ‘My Plan’ offers a way for employers to control costs, but to give me as an employee more flexibility and choice.”
Simeon Schindelman, Medica’s senior vice president of commercial markets, said the company spent about a year working on the program, based on feedback from some of its 200 brokers as well as businesses.

First of many innovations

Although companies of various sizes and industries have shown interest, no one has officially signed on.

But Delahanty of Towers Watson predicts it’s the first of many such innovations, as the reform law rolls out and companies think more about health insurance exchanges.

“It’s a great step, but it’s one carrier,” he said. “We are going to see some private exchanges pop up during the next couple of years that offer multiple carriers.
“Medica might be one of the participants, but Blue Cross, HealthPartners, UCare, they might all be competing on these exchanges. And some of the larger employers might have an opportunity to go and put their people in them as well.”