Yesterday, I appeared on GRITtv with Laura Flanders where Yale political scientist Jacob Hacker, best known as the architect of the public option, Luke Mitchell, senior editor at Harper’s magazine, and I discussed what’s left of health reform legislation, our best hopes, and our deepest concerns, going forward.  (Click on the link, and scroll down to “Who Let Joe Lieberman Kill the Public Option?”)

During the course of the program, Flanders entertained her audience with clips of Senator Joe Lieberman saying very different things at different times when responding to the same issue. These included shots of Lieberman contradicting himself on the question as to whether one senator should take it upon himself to block major legislation. It’s worth watching the video of the show if only to see and hear Lieberman; he’s just as sanctimonious when he says X as when he takes the opposite position. The clips make Lieberman’s hypocrisy clear. He will say whatever will advance Joe Lieberman’s career.

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 “Every Decision from Here on In Must Put Patients’ Interests First”

Does anyone remember the original goal of healthcare reform?  I could type it in my sleep: “to provide high quality, affordable care for all Americans.”

Today, the goal has shrunk; the current Senate compromise aims only to make certain that 30 million uninsured Americans have insurance–which may or may not provide access to the care they need.

Washington would do this by mandating that all Americans buy insurance—or pay a penalty. Insurers, in turn, will be required to accept all customers, despite pre-existing conditions. Insurers will not be able to charge you more if you are sick– though they will be able to put a gun to your head if you are middle-aged.

Optimists say that by providing insurance for everyone, we will save tens of thousands of lives.  Maybe. Maybe not.

 Glass Half Empty

Over at Firedoglake, Scarecrow takes a grim view of the “compromise” that Senator Joe Lieberman has extracted from his colleagues: “Whatever Joe Lieberman’s motives, the reality is that he just performed a moral crime on national television. He’s essentially said that if Democrats want to provide even poor health insurance to 30 million uninsured Americans, the federal government and those citizens will have to pay blood money to an industry protection racket that will have the economic and political power to set the terms of that protection, shield itself from oversight and competition, and raise prices at will.  . .

 “The health reform debate is no longer about ‘reform,’” Scarecrow argues. “It has now become a hostage rescue effort for more than 30 million innocent victims”—i.e. the uninsured. "Every decision from here on must put the victims’ interests first, and whether we pay the extortionists’ ransom demands or not depends how that serves the victims’ safety.”  I agree. This is not a time to stop negotiating.  

Let me be clear: the “extortionists” are not just the private sector insurance companies (which desperately need 30 million new customers), but the hospitals, drug-makers, specialists and other players in the system. Will they put patients’ interests first? In other words, under the new scheme will they agree to make safe, comprehensive care available at a price that patients and taxpayers can afford?

Much depends, first, on how the private sector insurers are regulated. At present, we’re told that they will be overseen by the Office of Personnel Management (OPM), the group that administers Federal Employees’ Health Benefit Plans (FEHBP).  

OPM does not “regulate.” It oversees.  Rand  Health Compare explains: “There is no designated minimum benefit package for FEHBP plans. The federal government does mandate certain coverage (such as for catastrophic expenses and mental health parity), but in general FEBHGP  plans can provide highly variable products that differ in types of services covered, copayments, and out-of-pocket limits within broad categories (such as hospital, surgical, ambulatory, and obstetric care).  . . . Depending on the plan selected, enrollees may have different cost sharing for out-of-network providers.”  http://www.randcompare.org/options/mechanism/open_enrollment_in_fehbp.

How good are the “in-network” providers?  That varies.

Within the FEBHP, “choice” means that you are “free to choose” (forced to choose) the plan that you can afford. Typically, less expensive plans carry higher co-pays. The FEBHP  Chinese menu also offers “high-deductible” plans that some employees cannot afford to use, except in an emergency. This may mean that they go without the regular care and chronic disease management that their families need.  

When it comes to using the sheer size of its membership to negotiate lower premiums for federal employees, OPM has made little or no effort. From 2001 to 2008,, average premiums have risen by 62.3%.  Over the same span, Medicare has done a better job of controlling spending, keeping health care inflation down to 6% a year.

On top of runaway premium increases,  FEHBP participants have watched co-pays climb http://www.afge.org/index.cfm?page=ContentTest&fuse=Content&ContentID=1410.Under the least expensive Blue Cross/Blue Shield plans patients are charged $25 for each visit to a primary care physician who is “in network.” If they go to a doctor who does not accept the plan’s fees, patients must pay the full bill, without help from their “insurance.”  If a patient winds up at the ER, his co-pay is $75. If he is hospitalized, he pays $100 a day up to $500 –unless the hospital is “out of network;” in that case, he pays all charges. For some prescriptions that are not in the plan’s formulary, the co-pay is 50% of the cost of the drug. http://www.ibx.com/pdfs/custom/fep/2009_fep_chart.pdf

The major reason federal employees like their insurance is that the government pays up to 75% of annual premiums. (Though some federal employees still don’t sign up because they cannot afford 25% of premiums that can run as high as $13,000 for a family plan.)  Under the Senate plan, the uninsured will not be so lucky. Unless they qualify for subsidies, families who sign up for a menu of private plans modeled on FEHBP will have to foot the entire bill themselves.

Keep your eye on what happens when the House and Senate plans are merged. The House legislation calls for federal regulation of insurers. The Senate bill leaves regulation to the states —and many states just won’t be inclined to regulate.  

In part 2 of the post, I’ll talk about why the Senate plan would leave many older Americans uninsured, and why it is not likely that the private insurers overseen by the OPM will take it upon themselves to put patients’ interests first. 

That said, I also will elaborate on the features of the House and Senate plans that deserve progressive votes– as long as they survive final negotiations.  

Finally I will explain why I’m not giving up hope. Reformers have lost the game, not the match. This is just the first piece of health care legislation that you will see over the next three (or four) years.

At the moment, the Senate health-care compromise would replace the public option with a menu of private sector non-profit insurance plans overseen by the Office of Personnel Managment (OPM), the goup that oversees Federal Employees’ Health Benefit Plan (FEHBP).

 I say “at the moment” because I’m not at all certain that this compromise will hold. As one pundit observed over the week-end: “It’s bad enough to witness how the legislative sausage is made; it’s worse to see it being made on the fly.”

But let’s assume for a moment that the Gang of Ten Solution holds. What will it mean for unemployed and self-employed Americans under the age of 55?    Those who support this proposal talk about how much federal employees like FEHBP, and how successful it has been, as if it were a single plan, like Medicare, that offers the same benefits to everyone. 

The truth is the FEHBP is make up of a menu of private plans—some pretty good, some not so good. Many carry very high deductibles. Senators and postmen typically have very different plans.

Over at Kaiser Health News, Gail Wilensky, an economist and a senior fellow at Project HOPE, an international health education foundation, and a former administrator of the Health Care Financing Administration (now the Center For Medicare & Medicaid Services) asks a key question about the private sector plans OPM would oversee:

“One of the real questions . . . .  how much variation in the benefit structure will actually be allowed? When you look at FEHBP, you've got the $5,000 a year Mail Handler plan, and you have standard Blue Cross Blue Shield, which is $12,000 – $13,000 a year. Those are pretty big differences. The issue is what are you going to set up: a skinnied down plan with a tight network that would allow it to be low cost, or whether you insist on a very expansive plan in terms of benefits with few exclusions. The question is going to be the nature of what these plans are supposed to look like.” http://www.kaiserhealthnews.org/Stories/2009/December/14/FEHBP-health-insurance-public-option-OPM.aspx

Today, some observers have been aruging that we must pass some form of health care reform because if we don’t, tens of thousands of Americans will die prematuely 00 because they don’t have health insurance.

But having health insurance doesn’t necesssary mean access to the health care that might save lives: good chronic disease management; smoking cessation clinics with no co-pay; Pap smears with no co-pay; pre-natal care and nutrititional counseling; mental health care; primary care with no co-pay;  chemotheray  that can acually give a cancer patient extra years; very expensive drugs that can slow down MS; access to specialists (who may or may not agree to join the network of a less expensive plan that pays lower fees. )

Finally, experience shows that if the insurance carries a high deductible, patients are just as likely to defer needed care as they are to put off less vital care.

The alternative is  to require that all of the plans that the OPM oversees provide a full package of comprehensive benefits. This means that they will be more likely to cost $12,000 to $13,000. Like any private sector plan, they will have high administrative costs to cover lobbying, marketing, advertising and executive salaries. Unlike the public option , they will have no vested interest in reducing costs and lifting the quality of care.

Probablly we’ll wind up with a mixed bag: pretty-good plans for those who can afford the  highest premium;s and  poor plans for the middle-class and the  poor. Supporerts will call this “giving Americans choices” and ignore the fact that we are still rationing care by ability to pay.

Will  the least expensive plans save tens of thousands of lives?  Probably not.   They should save some lives, but as Marilyn Moon, vice president and director of the health program at the American Institutes for Research points out on Kaiser Health News: 
“These private plans aren't necessarily [going to be] doing what is best for the population. They're doing what they think is best for their own competitive environment and other criteria. So the question is, how are you holding the plans accountable?”

OPM doesn’t hold the federal employee plans accountable. It’s not a regulatory agency and it doesn’t have the size or the clout to insist that insurers meet certain standards in terms of providing value for health care dollars. Without a public plan in the marketplace, no one will be setting a benchmark that puts patients first.

Boston surgeon Atul Gawnde and Don Berwick, the president of the Institute for Health Care Improvement, understand that we can create a sustainable, universal U.S. healthcare system only if we reduce costs. And they recognize that by spending less, we can, in turn, lift the quality of care. As Berwick puts it: “The best health care is the very, very least healthcare that we need to gain the long and full and joyous lives that we really want.”

Talk to virtually anyone who has studied the problem in depth, and they agree. While many uninsured and underinsured patients receive too little care, a great many well-insured patients—including Medicare patients—receive too much of the wrong kind of care. Gawande explains: “Our system neglects low-profit services like mental-health care, geriatrics, and primary care, and [is] almost giddy in its overuse of high-cost technologies such as radiology imaging, brand-name drugs, and many elective procedures.”

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“Where is the plan to make health care affordable?”

“I want to see the savings.”

“Show me the money: Lay it out in simple language– on one page.”

Critics of health care reform legislation have become increasingly adamant on one point: They want to know how reformers are going to rein in the skyrocketing cost of care. And they want to know now. They’re not interested in “pilot projects,” or proposals that they refer to as “reform lite.” They want a proposal that the Congressional Budget Office can “score,” tallying up the savings the way one might add up the points in a tennis match, neatly, definitively, without argument.

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Kaiser has just posted a report which suggests that the Medicare Buy-In will be even more expensive than I thought. It turns out that median family income for Americans 55 to 64 who don’t have insurance is just $22,510. By contrast, as I reported yesterday, median income for all Americans in that age group is substantially higher–$58,000. Many have jobs—and employer-based insurance.

This means that the Medicare Buy-In will be attracting seniors who are much poorer than average. In this country, there is a high correlation between poverty and poor health. The group most likely to opt into Medicare will be sicker—and need more care—than the average middle-aged American.

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Last night, the news broke that the “Gang of Ten” (the Senators who have been trying to break the deadlock between moderates and liberals) had come up with a two-part alternative to the public option.  Under their proposal, Americans 55 to 65 could buy in to Medicare if they choose—and if they could afford it. Meanwhile, for Americans under 55, the public option would be replaced with non-profit private insurance plans overseen by The Office of Personnel Management, the group that now administers the Federal Employees’ Plan.

Begin with expanding Medicare to people 55 to 65. This is an idea that I wrote about in Money-Driven Medicine. Bruce Vladeck, who ran Medicare during the Clinton administration, was convinced that Medicare could compete successfully with private insurers, in large part because its administrative expenses are so much lower. I agree that in the late 1990s, it would have been a good idea.

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A family illness has kept me away from the blog for much of the past week.

But today, I plan to post–about the  Senate compromise, and other matters.

Tomorrow, I'll begin catching up with responses to comments.

Maggie

Senate liberals and moderates have closed ranks, defeating many who hoped to use seniors’ fears of Medicare cuts to bury health care reform.

As the Assocociated Press (AP) reported: “Unflinching on a critical first test, Senate Democrats closed ranks Thursday behind $460 billion in politically risky Medicare cuts at the heart of health care legislation, thwarting a Republican attempt to doom President Barack Obama's sweeping overhaul.

“The bid by the bill's critics to reverse cuts to the popular Medicare program failed on a vote of 58-42, drawing the support of two Democratic defectors. Approval would have stripped out money needed to pay for expanding coverage to tens of millions of uninsured Americans. .  ..”

Tuesday, I appeared on GRITtv with Laura Flanders and explained why conservatives who oppose health care reform were objecting to Medicare cuts—not because they wanted to protect Medicare patients, but because they wanted to protect the for-profit insurance industry.

You’ll find the roundtable discussion, which included TNR’s Jon Cohn, The Nation’s John Nichols and Pro Publica’s Olga Pierce here: Laura Flanders – http://lauraflanders.firedoglake.com/

This vote reinforces my belief that, in the end, we will wind up with legislation that resembles  the House bill, and includes a strong public option.

Those who oppose reform have been using the recent CBO report to claim that, under the Senate bill, many Americans will pay more for health care.

That’s not what CBO said. A careful reading of the report suggests that even people in the individual market will wind up paying less because under reform, insurance is likely to cover more of their health care costs.

First, here’s what CBO actually said: For most Americans who have group insurance (usually through an employer) there will be little change in their premiums. Those who purchase their own insurance in the individual market (usually the self-employed and early retirees) could see their premiums rise by 10 percent to 13 percent in 2016.   But, “that extra cost would buy better coverage, the CBO said, and hefty federal subsidies would drive down payments by nearly 60 percent on average for low- and middle-income families.”

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