This week, for the first time, the Senate Committee on Health Education Labor and Pensions passed the Health Insurance Marketplace Modernization and Affordability Act. The bill -- which had passed the House several times, but had been stalled at the Senate until now -- allows for the creation of Small Business Health Plans, or SBHPs. Such plans would give small-business owners the opportunity to take advantage of economies of scale by banding together across state lines, and through trade and professional organizations, to garner savings with insurance policies.
With the Senate Committee passage, it appears that small businesses are one step closer to affordable health care.
Ignoring the key critique of AHPs (that insurers will offer paltry benefits and there will be a race to the bottom), there's another elephant in the room.
Let's say insurers band together and buy insurance. How many more years will they be able to afford this insurance, as premiums rise across the board? In this case, getting it is not half the battle, as premiums could quickly become unaffordable.
One part of the article perplexes me. If the following is true (and I've no reason to believe it isn't),
In 1998, Butler made the decision to go with an outsourcing company that would provide her employees with benefits. Butler-Burgher has an employee-leasing arrangement with Gevity, a Bradenton, Fla.-based human resources firm, which has a network of hundreds of thousands of staffers.
Here's how it works: Butler pays a fee to Gevity (in this case, $950 per employee per year), and Gevity technically becomes Bulter's employer. Under that arrangement, Gevity handles all of Butler's human resources, payroll, and legal issues. By taking advantage of the economies of scale, Butler's employees receive a menu of health and other benefits, such as 401(k) plans. "We went to a model that was able to provide Fortune 500 benefits at a reasonable cost," says Butler, who estimates that her company saves 20% to 25% on health coverage as a result of the arrangement.
Isn't this a fairly compelling argument against AHPs? This employer has already found a way around regulation and has been completely able (and seeminlgy satisified with the arrangement) to provide insurance with a company across state lines.
The Senate Health, Education, Labor and Pensions Committee on Wednesday voted along party lines to approve an association health plan
(AHP) bill. President Bush pointed to AHP’s in his state of the union
address as one of many reforms to help individuals attain health
insurance. But AHP’s expose individuals to another frontier of risk,
where their health benefits are paltry, uncertain, and expensive.
key complaint driving the creation of AHP’s is that state regulation
bars insurers from offering affordable health plans. If insurers could
offer plans on a national market, bypassing any state regulations, more
plans would be offered and more individuals would become insured.
Unfortunately, this type of thinking isn’t supported by reality.
Bare-bones plans have been offered for years, and people don’t want them. But more than that, Ezra Klein takes a look at why we have state regulations in the first place:
The reason states mandate that insurers cover certain
procedures is so insurers can't price folks who are likely to need
those treatments out of the market. Insuring young women, if you didn't
need to cover anything related to pregnancy, would be relatively cheap.
Pricing the pregnancy package through the roof would be relatively
easy. And denying the claims of those who bought the base package and
then got pregnant would be trivial -- and would save you a ton of
money. So almost all states mandate that you cover maternal care. And
this goes across the board, from procedures the old use but the young
don't need to packages that target specific lifestyles. If you allow
the insurance companies to subdivide the market by treatment needs,
what you'll have is bargain-basement pricing for the young and healthy
coupled with unbelievable premiums for their less-lucky friends.
But this statement from Committee Chair Mike Enzi (R-WY) on the purpose of AHPs is the most revealing:
Let us put the power in the hands of small employers and
family-owned businesses, rather than in the hands of insurance
companies or the government. Let the consumers band together to drive the change that we want to see happen
Enzi is completely wrong about where the power in this situation is
going. It’s funneled directly to the insurers! They’ll be offering
bare-bones plans to these small businesses, who will have no ability to
negotiate higher benefits. Why? Because there’s nothing barring them
from trying to negotiate plans with insurers now. Insurers simply
aren’t interesting in offering an affordable but comprehensive product
to small businesses.
But why trust history? Enzi wants consumers to band together and
employers to provide them with cheaper health care. Because they
surely haven’t had enough time to do so the last forty years.
bill has already passed committee. If it passes the Senate, it will
only continue to weaken health insurance as we know it. The way to
solve our health insurance problems isn't by cutting benefits, it's by
fixing our fragmented system that costs twice as much as our more
generous international counterparts.
Matthew Holt is quite enamored with Uwe Reinhardt's discussion of HSA's at a recent KFF event. Matt pasted the transcript over at THCB, but the gist is that using HSA's as a way of controlling costs actually shifts the responsibility of cutting back on health services principally on the backs of the lower third of the U.S. income bracket. It's well put and worth reading if you have a few minutes.
Uwe Reinhardt also spoke at the National Health Policy Conference in February. He's a fantastic, engaging speaker. I don't think I've ever seen someone able to make health policy so funny. Any Democratic candidate with health reform on the brain would be genius to just bring him along on campaign stops to go after HSA's. He's damn convincing.
ABC's new reality show, Miracle Workers
is the wrong take on health care. The show, following in Extreme Home
Makeover's footsteps, creates a construction that Bad Things happen to
people, and a choice handful will be lucky enough to come under the
lens of millions and deemed worthy of assistance. It's a revival of
the notion of the deserving poor -- this family’s house is crumbling
from foundation to roof, but because the mother also rescues turtles
from the highway, they've done something to deserve help.
But the Miracle Worker conception of the deserving poor is much more insidious. As the show sets out to:
give ordinary people who do not have the network,
access to the necessary medical community or in some cases the
resources to these procedures. Their seemingly overwhelming medical
problems will be taken in hand by a renowned team of medical
specialists. The patients’ lives will be transformed before viewers’
eyes as the professionals employ cutting-edge medical technology to
heal those who need it most.
It’s taking the uninsured and making them special cases to nurture and
heal. It’s ignoring the fact that 46 million people are in the same
place as the two patients featured every week on this show.
would be prohibitively expensive to rebuild every crumbling home across
the nation, but the added cost of covering the uninsured is quite
small. There’s a variety of ways to go about it; some involving small
changes, others monumental shifts. But this problem isn’t uncurable;
it’s not a fact of life (or doesn’t have to be). It’s fixable. This
show could really make leaps and bounds for health care if it discussed
these cases in the context of what they are: the lucky few of an
addressable problem. Every person in this nation deserves access to
this kind of care, and there’s any number of ways we can go about
ensuring that. We should take that joy and hope the sick enjoy when
they get adequate care, and use that as reason to cover everyone.
Instead Americans will blissfully sit in front of their television,
eyes a little wet as the “miracles” progress, little thought given to
the rest of the uninsured and how they’ll never see doctors like this.
Ezra has a great post on the logic of Walmart-directed outrage. Responding to this:
Just out of curiousity, why should taxpayers be outraged? This is after
all, precisely what the Democratic party has been arguing for for
decades. For a half-century, Democrats have been arguing that what
America really needs is a universal health-care system, funded by
taxes. Indeed, the only reason why Wal-Mart employees are eligible for
Medicaid in the first place is because Democrats made a push to amend
Medicaid so that the working poor could get Medicaid benefits, even
though they are employed.
So, it's a little silly to be complaining that Wal-Mart employees
are using Medicaid benefits when the goal of the Democratic Party is
ensure that everyone gets taxpayer-funded benefits.
Yep. In fact, it's probably a helluva lot more efficient for the
government to be picking up the tab. What taxpayers should be outraged
by is that Wal-Mart isn't following their ethos to its logical
conclusion and loudly advocating for a universal health care system.
They should be angry at the hypocrisy, not the usage of federal/state
Bingo. What's bad here is that people can work full time and still be unable to afford health insurance. It's not that Wal-Mart isn't spending enough on health insurance; they don't spend enough on wages. Higher wages, more than anything, would make a huge difference. Piddling over whether Wal-Mart spends 7% or 9% on health insurance is pointless.
There's been a lot of talk about charging smoking employees more for their health insurance. Several companies charge employees an extra $20 to $50 dollars a month for their habit. But how do they come up with that?
Are there numbers somewhere that say smokers cost an extra $x/month on average? Or is this an arbitrary way of estimating how much extra smokers should pay?
With rising health costs, "mini-medical" or "limited-benefit" plans that cover only routine physician visits and offer little to no coverage for hospitalization or emergency care have become popular options for some U.S. companies as an alternative to more comprehensive plans, the Wall Street Journal reports.
This is just genius. On top of all the other crap insurance companies and businesses are coming up with not to pay for health insurance, now we have insurance that excludes the whole point of having insurance! You know -- not being liable if you get in a terrible accident or have an awful disease. Remember how much my surgery cost? These plans cap at $10,000 annually. That's nothing you if you have a semi-serious health problem. It's a false sense of security, and until we have a viable catastrophic care market to accompany it, these kind of plans will just leave people open to huge financial risk.
Kaiser reports on a new study that found assigning community-based care managers to uninsured Latino children instead of traditional Medicaid/SCHIP methods resulted in higher rates of enrollment and retention. How much higher? Significantly so, according to the study -- the intervention group was more likely to obtain health insurance (96% vs 57%), and 78% remained insured after one year, compared to 30% in the control group. Parents also reported higher levels of satisfaction with the process.
A few weeks ago I talked about problems enrolling uninsured but eligible children in California. I argued that the current methods in place may have reached their limit in terms of being able to enroll new kids, and creative thinking was needed to get the rest into programs. The majority of uninsured kids in California are Latino, so this study, carefully considered, could help state workers get a much bigger chunk of kids insured.
The only question is cost. It's not cheap to assign a care manager to every family, but nobody said the important things in life come free...