August 2005

August 31, 2005

HCFA, other advocates, hospital groups and physicians sent a letter to Governor Romney yesterday asking him to freeze plans to make changes to the state’s Uncompensated Care Trust Fund (“free care pool”), the state administered fund that makes payments to hospitals and community health centers for care they provide to low-income, uninsured patients (read the letter here).

Earlier this month, the Romney administration proposed new regs that would impose new co-payments on pool users, restrict eligibility and eliminate payment to hospitals for services now covered by the fund. The proposal requires all free care patients, whose income varies between zero and 200% of the federal poverty level ($33,000 a year for a family of 3), to make a co-payment for every health care visit and every prescription, and will leave hospitals with no payment source for many of the services they provide.

The letter authors, which include leaders of Health Care For All, the Massachusetts Hospital Association, the Massachusetts League of Community Health Centers and the Massachusetts Medical Society, say these changes will shift at least $100 million in costs on to providers and patients.

The proposed changes are scheduled to take effect on October 1st, but the 14 signers of the letter asked the Governor to delay any significant changes to the pool until after the legislature has acted on the major health reform proposals pending before it. “Now is not the time for the administration to unilaterally initiate major changes to the state’s safety net program,” the letter reads. “Rather, all the stakeholders should now be working together through the legislative process to expand health care coverage and devise a stable and sustainable safety net for the uninsured.”

The proposed changes are scheduled to be heard in a public hearing held by the Division of Health Care Finance and Policy on September 8th at the University of Massachusetts Boston campus.

Brian Rosman is HCFA's point person on this. If you would like more info, contact Brian at rosman@hcfama.org

August 30, 2005

Here are excerpts from our press relase today on the 2005 Census Bureau report on the uninsured:

"Health care advocates are disappointed by new figures showing substantial growth in the number of uninsured people in Massachusetts.

“'The numbers continue to increase. We need aggressive leadership at all levels of government to get people the basic coverage they need to be secure and healthy,' said John McDonough, Executive Director of Health Care For All.

"The federal census bureau released the results of its 2004 Current Population survey today. The census found the uninsurance rate in Massachusetts grew from 10.3% in 2002-2003 to 11.2% in 2003-2004. The rate was 9.1% in 2001-2002. This growth rate corresponds to a 23% increase in the uninsurance rate since the 2003 report, the fourth highest of any state over this period. The Commonwealth is one of only 5 states that marked a significant increase in the past 2 reports.

“'We know from multiple studies that the uninsured receive less care and are therefore more ill. Besides the impact of disease and poor health, uninsurance results in reduced earnings and lower levels of educational achievement,' McDonough said."

It's widely recognized among health policy researchers that the state by state census numbers overestimate the number of uninsured. What is important and valid is the overall trend rate, which -- for Massachusetts -- is up and up and, now once again, up.

August 29, 2005

The Massachusetts Affordable Care Today campaign to put real health reform on the 2006 state ballot has a new website that will be the central organizing site for the effort to collect 100,000 signatures over 12 days starting on September 23rd. The address is: www.massact.org

The Coalition includes HCFA, Families USA, Greater Boston Interfaith Organization, Neighbor to Neighbor, Coalition for Social Justice, Service Employees International Union, Mass. Building Trades Council, and the United Food and Commercial Workers.

Together, we're mobilizing a volunteer army of 2,000 volunteers who will commit to collecting 100 signatures apiece over a 12 day period, something never done in the 85 year history of initiative and referendum in Massachusetts. If you would like to volunteer to be a part of this historic campaign, now's your chance and www.massact.org is your site.

August 26, 2005

Today we learned two numerical factoids about MassHealth that have important policy relevance:

1. The Wait List Monster - The wait list for the MassHealth Essential program (for long-term unemployed adults below the poverty line) is now around 5,400 people. This is after the program enrolled about 1,600 people off the list earlier this week, and another 1,200 people three weeks before. The wait list continues to grow, leaving thousands without coverage.

Policy relevance: The Romney health care plan assumes enrollment of all eligible people into MassHealth. Yet the Essential program, which is now capped at 43,000 people, is building up a big wait list of eligible people denied enrollment due to the enrollment cap.

Two things have to happen to get eligible people into the program. One, more money needs to appropriated for the program. Governor Romney filed his supplemental budget earlier this week, but no funds were included for MassHealth. The legislature will have to find the money to allow enrollment to grow. Will the Governor veto the appropriation? Second, the administration needs to get federal permission to raise the federal cap on enrollment. There's no reason they can't do this now, instead of waiting for the legislature to act first. So far, nothing's happened.

2. Premiums Punish Poor Pediatric Patients - MassHealth released statistics today on their members who lost coverage last year due to failure to pay premiums. The most striking number is that of the 33,773 kids that had to pay premiums to get MassHealth, more than 1 out of 20 were dropped for not paying (the number was 1749, 5.18%).

Policy relevance: Premiums were imposed on tens of thousands in MassHealth in 2003 in order to promote "responsibility" and make MassHealth more closely resemble standard insurance. Yet for low income families, even modest premiums can be a substantial hardship. Kids in particular don't pay the premiums themselves. Yet even healthy kids need regular check-ups and routine care.

The new Free Care Pool regulations proposed by the administration deny Pool eligibility to people who are dropped by MassHealth for failure to pay a premium. These kids will have no source of coverage, and may either go without needed care or face unaffordable bills. Also, RomneyCare requires new premiums from low-income families in the Safety Net Care plan. What will happen to these people if they can't make the payments each month?

August 26, 2005

Back in January, Gov. Romney and Sen. Kennedy announced they had reached a deal with the federal Centers for Medicare and Medicaid Services (CMS) to renew for three years the MassHealth Waiver that has provided hundreds of millions of dollars to the Commonwealth each year since 1997 to support our health care safety net.

For the narrow band of insiders who follow this stuff, the announcement (in the January 15th Boston Globe) was received with a huge sigh of relief – and a recognition that the broad outlines of the deal left many details of enormous consequence unresolved – details that could throttle the whole deal. The deal was reached with US Health & Human Services Secretary Tommy Thompson literally hours before he headed out the door. His successor, former Utah Gov. Mike Leavitt, was expected to follow a tougher budget line. Still, we had until June 30 until the then-current waiver expired, lots of time for detail ironing.

July 30-July 1 came and went with no word on the waiver. No public announcements, no media accounts. No concerns, folks were assured, just nagging details.

Well, now we’re looking at September 1 and still no deal. And around town, the buzz is growing. Folks who pay attention to these things are increasingly worried the Bush Administration will not agree to essential components necessary to keep the promised federal funds flowing – as much as $583 million per year over three years.

If the deal turns sour, one of the first casualties would be the Romney notion that we can cover all the uninsured with the existing money in the Massachusetts health care system. We’re dubious about that assertion even with the waiver dough. Without it, it’s lights out for RomneyCare.

If you want to know more about the gory details of the waiver, check out this issue brief published last spring by the always-fabulous Mass. Medicaid Policy Institute. Sorry no link to the 1/15/05 Globe article – that requires payment to el Globo.

August 24, 2005

Here are excerpts from a new Business Wire piece that provides a window into new small business health insurance practices we're seen nowhere else. And click here for a Lawrence Eagle Tribune article that quotes HCFA's policy-meister Brian Rosman.

"New results released today by Salary.com in its Small Business Basic Medical Coverage Survey show that nearly 90 percent of small businesses are paying more to provide basic medical insurance to their employees in 2005 than in 2004. ... The survey found that the most common cost-containment strategy in use today is to increase the user fees (typically called "co-payments") employees must pay when actually consuming medical treatment and services.

"However, a significant percentage of employers have chosen to contain overall medical costs by increasing the employee share of monthly coverage premiums - a tactic that has a direct impact on employee take-home pay. An even larger percentage of employers report that they intend to adopt this tactic in the near future, making it the fastest-growing trend in medical cost-containment among small businesses today. Other cost-reduction strategies currently used by small businesses include: switching plans, reducing extent of coverage, fine-tuning eligibility standards, and eliminating coverage altogether.

"In one surprising finding, 14 percent of small businesses offer employees significant incentives not to participate in company medical plans, or actively encourage employees to enroll in a spouse's medical plan. Incentives typically offered include: lump-sum salary increases, cash rebates, and contributions to other employee benefit accounts. These companies believe that the potential healthcare cost savings will more than cover the cost of non-participation incentives. "Salary.com estimates that many companies could offer employees a 10 percent salary increase (in lieu of plan participation), and still lower total payroll expenses in a given year," according to Richard Cellini, Head of Research at Salary.com. ...

" Other interesting survey results:

"-- Few Companies Band Together to Purchase Group Insurance: Only 1.7 percent of participating companies report joining forces with other companies through a buyer's cooperative to purchase basic medical insurance. Still, survey results show a substantial uptick in the number of small businesses willing to seriously consider this strategy in the future - making group healthcare purchases a new trend-in-the-making.

"-- Three Clear Winners Have Emerged: Despite the variety of medical plans available today, three plan formats have emerged as favorites among small businesses: Preferred Provider Organizations; Health Maintenance Organizations; and Point of Service providers. Less than 10 percent of small businesses responding offer any other format.

"-- Micro-Employers Offer the Most Generous Plans: "Micro-employers" (1-20 employees) lead all small businesses when it comes to picking up the full cost of medical coverage. 32.2 percent of Micro-Employers offer fully-funded medical coverage (requiring employees to pay nothing toward the cost of medical care premiums). As companies grow in size, fully-funded medical coverage becomes increasingly rare. Less than 3 percent of the largest small companies (200+ employees) offer fully-funded medical plans.

"-- Micro-Employers Also Offer the Least Generous Plans: Micro-Employers are also most likely to disappear altogether when it's time to settle the tab for basic medical coverage. 31.7 percent of Micro-Employers (more than any other small business segment) offer completely unfunded medical coverage (requiring employees to pay 100 percent of all premiums due).

"-- Straddle Companies Experience the Worst of Several Worlds: "Straddle" companies (100-150 employees) occupy the awkward mid-range of the small business category: too large to be lean, yet too small to enjoy economies of scale. Straddle companies report the highest per-employee healthcare costs (17.7 percent of gross annual payroll, versus an average 14.6 percent for all small businesses). Additionally, Straddlers report a higher rate of increase in the cost of medical coverage (11.4 percent for 2004/2005) than almost any other group of small businesses. Perhaps as a result, Straddlers offer employees the smallest contribution toward the cost of medical coverage (45.2 percent on average).

"-- Giant Midgets Stand Tall: The largest small companies (200+ employees) are able to leverage their relative size for the benefit of employees. On average, these so-called "Giant Midgets" pick up 62.5 percent of the cost of medial premiums - one of the very best deals offered in the small business category."

What strikes us the most? All small businesses pay an average of 14.6 percent of gross annual payroll for health insurance. The ballot initiative filed by the MassACT Coalition calls for small employers who don't offer coverage to pay an annual assessment of FIVE percent of gross payroll to the Commonwealth to help pay for the cost of the uninsured. Not too excessive, we suggest...

August 22, 2005

Malcolm Gladwell, of The Tipping Point and Blink, has a must-read article in the new New Yorker on moral hazard: "the bad idea behind our health care system." Gladwell has a great talent in turning dry economic theory into compelling controversy -- in this case, the bad idea from economics that "moral hazard" (or the tendency of consumers to use more of something low-priced or free) is the driving theory behind our health care system.

Here's his conclusion:

"The issue about what to do with the health-care system is sometimes presented as a technical argument about the merits of one kind of coverage over another or as an ideological argument about socialized versus private medicine. It is, instead, about a few very simple questions. Do you think that this kind of redistribution of risk is a good idea? Do you think that people whose genes predispose them to depression or cancer, or whose poverty complicates asthma or diabetes, or who get hit by a drunk driver, or who have to keep their mouths closed because their teeth are rotting ought to bear a greater share of the costs of their health care than those of us who are lucky enough to escape such misfortunes? In the rest of the industrialized world, it is assumed that the more equally and widely the burdens of illness are shared, the better off the population as a whole is likely to be. The reason the United States has forty-five million people without coverage is that its health-care policy is in the hands of people who disagree, and who regard health insurance not as the solution but as the problem."

August 19, 2005

It was supposed to be a fixed game. Congress demands and the Bush Administration appoints a Commission with one mission -- find $10 billion in cuts to the nation's essential health care safety net for the poor, Medicaid. Yesterday's New York Times describes the first meeting, held two days ago. There were a few surprises:

"Michael J. O'Grady, a member of the panel who is also an assistant secretary of health and human services, said the higher co-payments would make beneficiaries more "price-sensitive" and would not impose an undue burden. ... Dennis G. Smith, a top federal Medicaid official, said that was not a large amount in the context of a program expected to cost the federal government and the states $2 trillion in the next five years. ..."

"But Dr. John C. Nelson, a former president of the American Medical Association who is a commission member, said: 'If we raise the co-payment, some people will not get the care they need. These are real people.' A person with chronic illnesses who forgoes medicine because of the higher co-payment could end up in a hospital emergency room, which costs much more, said Dr. Nelson, an obstetrician and gynecologist from Salt Lake City. ...

"Democrats have been leery of the commission, saying it would simply ratify budget cuts proposed by President Bush. But the panel made clear Wednesday that it would not rubber-stamp proposals by Mr. Bush or the National Governors Association.

"Dr. Carol D. Berkowitz, a commission member who is president of the American Academy of Pediatrics, said that co-payments of $3 to $5 could quickly add up to substantial costs for a low-income family with four children. Another commission member, Julie Beckett, said that a $5 co-payment for each drug and doctor's visit is a lot if you have multiple chronic conditions and multiple needs.' Ms. Beckett is policy director of Family Voices, an advocacy group for children with special health care needs."

Here in Massachusetts, the Romney Administration is a loyal adherent to the Bush Administration policy of CPFA -- Co-Payments For All. New proposed changes to the Uncompensated Care Pool would impose cost sharing on all uninsured persons, no matter how limited their income. Just like in DC, we could use a few physicians of conscience here as well. If interested, let me know -- mcdonough@hcfama.org

August 18, 2005

How much damage will be done to Medicaid, the basic health program for poor Americans, during the Bush era? The worst may be yet to come. Check out this Associated Press article on the South Carolina proposal for a new financing structure for its Medicaid program. South Carolina's Governor Mark Sandord proposes personal health accounts for Medicaid clients. If an individual needs more care than their personal health account allows, tough luck. Apparently, the state's wacko libertarian governor never read the book, When Bad Things Happen to Good People.

Princeton health economist Uwe Reinhardt, a German immigrant who spent his childhood in wartime Nazi Germany, talks about the essential difference he observes between GIs in World War II and many people in American society today. In WWII, whether a soldier survived or got his head blown off had nothing to do with skill or smarts, and everything to do with luck. This created a sense of social obligation and generosity of spirit. Too many students he teaches today, he observes, were born on third base and believe they hit themselves home runs. They think they deserve their privilege and to hell with everyone else. How else to explain the arrogance and obliviousness of these dangerous people?

Believe it or not, our only hope is that the Bush Administration will say no to this nonsense. We'll keep you informed...

August 17, 2005

I know, I know! I refer way too often to articles in the New York Times. But dammit, they have some of the best stuff anywhere, and it's irresponsible to ignore. Today, they publish the second of three pieces on the real quality of care in American health care. Click here and weep. Here's a promise: after HCFA gets done with access (no later than 11/06 we hope) we'll grab the quality issue by the throat.

Here's just the start from today's story -- it gets better as it goes along:

"Mary Duffy was lying in bed half-asleep on the morning after her breast cancer surgery in February when a group of white-coated strangers filed into her hospital room. Without a word, one of them - a man - leaned over Ms. Duffy, pulled back her blanket, and stripped her nightgown from her shoulders.

"Weak from the surgery, Ms. Duffy, 55, still managed to exclaim, "Well, good morning," a quiver of sarcasm in her voice. But the doctor ignored her. He talked about carcinomas and circled her bed like a presenter at a lawnmower trade show, while his audience, a half-dozen medical students in their 20's, stared at Ms. Duffy's naked body with detached curiosity, she said.

After what seemed an eternity, the doctor abruptly turned to face her.

"Have you passed gas yet?" he asked.

"Those are his first words to me, in front of everyone," said Ms. Duffy, who runs a food service business near San Jose, Calif.

"I tell him, 'No, I don't do that until the third date,' " she said. "And he looks at me like he's offended, like I'm not holding up my end of the bargain."

August 16, 2005

Since Congress created Medicaid 40 years ago in 1965, clients have had the ability to sue in federal courts to enforce their rights to eligibility and benefits. This has been an essential way for poor clients to compel recalcitrant states to meet their obligations. Now, in a stunning example of how the influence of the far right is enveloping our justice system, this right is disappearing.

Yesterday's New York Times details how federal courts have decided that unless the statute explicitly contains in its language a private right to action, then more than 50 million Medicaid clients have no right to sue in court to protect their rights.

"Rulings Trim Legal Leeway Given to Medicaid Recipients" describes this disturbing evolution: "The court decisions are raising questions about what it means to have health insurance, if the terms of such coverage cannot be enforced. The rulings, in more than a dozen cases, affect millions of people and involve a wide range of services like nursing home care, home health visits and preventive care for children."

One of the pioneer lawyers who clear pioneer this new legal terrain, according to the article, is John Roberts, President Bush's nominee for the US Supreme Court, and former clerk to Chief Justice Rehnquist.

August 15, 2005

For some time, we've talked about how Health Savings Accounts (HSAs) are scams. Sometimes we call them "faith based health insurance" (you're supposed to pray you don't get sick), or "Houdini health insurance" (keep your eye on the hand offering you a $500 personal health account while the other hand hits you with a $2000 deductible).

Make no mistake -- HSA's are the core of the national Republican health care reform agenda. And they're making progress in pushing this agenda onto the nation (HSA's were enshrined in the awful Medicare prescription drug law enacted by Congress in 2003).

Yesterday's New York Times has a business section article showing that they're actually worse than we thought. "The Promise and Pitfalls of Health Savings Accounts" contains these juicy observations:

"Some people are discovering downsides to the accounts. Ric Joyner, president of the National Association of Professional Benefits Administrators, says he has received frequent calls from companies and individuals interested in setting up the accounts. But lately, Mr. Joyner, who is also president of eflexgroup.com, a benefits administration company in Madison, Wis., says he has been getting calls from people complaining that their account balances are shrinking even though they have not used the money.

"'The money they're setting aside for health care is being eaten up by fees,' he said."

"Typically, the companies that administer the accounts charge a set-up fee of around $20, plus a monthly fee of about $2 or $3. They may also charge an annual fee, as well as a transaction fee every time a customer writes a check or uses the account's debit card. Some charge a fee to close an account.

"American Health Value, an administrator of health savings accounts, charges a one-time, $15 fee to open an account, and $36 annually to administer it. There is also a $2.50 monthly service charge, which is waived if the balance is more than $2,500.

"In the early years of an account, when the balance is typically low, fees can take a relatively big bite out of the total. A new customer with American Health Value who deposited $1,000 during the first year, for example, could expect to pay $45 in fees ($15 to set up the account and $30 for 12 months of service charges at $2.50 each). That $45 far exceeds the $7.50 that the customer would have earned in an interest-bearing account, based on the 0.75 percent now being paid on balances of up to $1,000.

"'Unless employers are putting a bunch of money in, I really don't see how these balances are going to get much bigger,' said Gary Claxton, vice president of the Kaiser Family Foundation, a health care research and education company in Menlo Park, Calif. Some companies permit an account holder to invest the balance in stocks or mutual funds, though a certain minimum balance - say, a few thousand dollars - may be required to do so. Such investments, of course, offer a chance for greater returns - but also the risk of losing money."

Is there a lesson here advocates of "personal" Social Security accounts should heed?

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