It’s time for a reality check: According to the latest U.S. Census Bureau survey, the number of uninsured Americans rose from 16.1% to 16.3 % of the population in 2010, representing 49.9 million people who have no health coverage. Many of these folks lost their jobs as a result of the persistent weak economy and along with those jobs went employer-provided health benefits.

To make matters worse, as the economy shows no sign of recovering anytime soon, two key federal stimulus programs—one that subsidized COBRA benefits for laid-off workers and another that temporarily increased the federal matching rate for Medicaid—have ended in recent months.

The new Census survey finds that the percentage of people covered by employment-based health insurance decreased to 55.3 percent in 2010 from 56.1 percent in 2009. Meanwhile, the percentage of Americans covered by private insurance has been decreasing each year since 2001, with little accompanying rise in the number of adults covered by Medicaid.

The options for coverage have decreased further—even for those families or individuals who try to purchase private insurance. Earlier this year, a Government Accountability Office study of 459 insurers found that an average 19% of applicants nationally were denied health care coverage when they applied for plans.

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When it comes to Medicare, a fundamental question still begs an answer: If seniors are forced to use more of their own money to pay for their care, will they scale back on unnecessary doctor visits and other medical services that needlessly increase Medicare spending? In other words, with more “skin in the game” would Medicare spending really go down?

As Congress works on coming up with ways to cut the federal budget deficit, Medicare is clearly in the crosshairs. Proposals are circulating that would introduce more cost-sharing for seniors—including having wealthier seniors chip in more for their care and reducing coverage for specific services like home health care or expensive cancer drugs. Cost sharing is used in most Medicare Advantage plans in the form of tiering; by giving patients an incentive to use preferred providers in a particular network.

But the most recent proposals are geared toward increasing cost-sharing in fee-for-service Medicare Part B, which covers out-patient care—i.e. doctor visits and other services received outside of the hospital. The rationale is that if seniors have to pay more out of pocket in terms of deductibles and co-payments, they will be less likely to seek out “inappropriate” or unnecessary care.

The problem is that there is scant evidence that having more “skin in the game” would cause seniors to suddenly become active “consumers” of health care—using the same skills they deploy when hunting for bargains in grocery stores to avoid useless doctor visits and medical services. There is some evidence that cost-sharing can reduce inappropriate care for relatively healthy, non-poor, younger individuals, but the data is out-of-date and can not be extrapolated to the Medicare population. According to advocates for seniors, when researchers looked at how cost-sharing affected the most vulnerable in these studies—those who were poor and chronically ill and, therefore, most similar to the highest utilizers of Medicare—increased cost had a negative effect, reducing access to needed care.

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The last time the states were rallied to rise up against federal legislation was during the civil rights battle over forced integration of schools. A similar call for organized state-level resistance is now being made in a manifesto recently published by the American Legislative Exchange Council (ALEC), a powerful but “discreet” group that counts some 2,000 conservative state legislators as well as representatives from some of the nation’s largest industries as members.

The Council’s publication, “The State Legislators Guide to Repealing ObamaCare”, urges lawmakers to “Decline to Build the ObamaCare Edifice” and offers 14 practical steps states can take to undo or impede the Affordable Care Act. These steps include having states return federal grants for setting up health insurance exchanges, encouraging them to opt completely out of Medicaid, and urging them to file federal waiver petitions to block the medical loss ratio requirement (the new rule requiring insurers to spend 80-85% of premiums on patient care).

When it comes to health care reform, ALEC is perhaps best known as the group that drafted the “Freedom of Choice in Health Care Act;” model state legislation drawn up in 2008 that would block any state or federal “public option,” bar the individual mandate and obviate other major provisions of the Affordable Care Act. According to the Council, eight states (including Virginia, Idaho, and Arizona) have actually enacted such model legislation and it has been “introduced or announced” in 42 others. The mission of ALEC’s health and human services care task force is to promote “free-market, pro-patient health care reforms at the state level.”

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Below, a guest post by Paul Raeburn, a journalist and author, and a media critic at the Knight Science Journalism Tracker

This weekend, those of us who live in New York and on the East Coast were treated for days to front-page news about Hurricane Irene. Meanwhile, other important stories were mostly ignored or relegated to back pages. (I use the term “front and back pages” figuratively, to refer to the emphasis given to stories in newspapers, radio and television, and on the web.)

Over the past few weeks, scattered stories have begun to appear in the media about one particular event that should, in my view, be front-page news. The U.S. is suffering from a serious shortage of cancer drugs, particularly generic drugs given by injection and used in hospitals to treat serious conditions such as breast and testicular cancer. Patients whose cancer requires a regular schedule of drug administration over a period of weeks are being forced to delay treatment, quit early, or skip treatments. There’s little question that this will cost lives. It’s unilateral disarmament—while treatments are stopped or delayed, tumors take no notice. Their unrelenting growth continues.

Yet the story has received only middling coverage.

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When it comes to reducing health care spending, everyone agrees that ferreting out the fraud and abuse in the system is absolutely imperative. But despite this urgency, because fraud pervades almost every facet of our health care system, routing it out will be a formidable task. Will an injection of funding, new anti-fraud initiatives coming from the Affordable Care Act, and a fundamental change in the way the government pays for certain services allow us to finally make a dent in health care fraud?

First of all, getting a fix on the total cost to taxpayers from health care fraud is like guessing how many jellybeans are in a jar. Some estimates calculate only “improper billing”—payments made in the wrong amount to the wrong person or for the wrong reason—reported by the Medicare and Medicaid programs. Other figures include private insurance fraud in the mix. Still other estimates factor in waste and abuse as well (this includes improper use of procedures and tests, preventable errors and hospital readmissions and defensive medicine costs; for example.)

Louis Saccoccio, executive director of the National Healthcare Anti-Fraud Association—whose members include about 100 private insurers and public health agencies—testified recently at a House Ways and Means Committee hearing that financial losses due to health care fraud range from $75 billion to a staggering $250 billion a year. Meanwhile, the Centers for Medicare and Medicaid Services (CMS) estimated that in fiscal year 2010, government health programs made a total of over $70 billion in improper payments, about $48 billion of them paid by Medicare alone.

Even more confounding, “fraud” can be perpetrated on vastly different scales: by multi-state organized crimes rings that improperly bill Medicare for $40 million dollars of home health care, by a single physician who brings in an extra $20,000 a year by regularly “up-coding” office procedures (i.e. like the dermatologist my daughter used to see who squeezed a pimple at each visit and billed our insurance $250 for “acne surgery”), and by giant health care companies like HCA who systematically defrauded Medicare of hundreds of millions of dollars.

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For a while now, diabetes has been at epidemic proportions in this country, with nearly 24 million Americans currently suffering from the disease. The great majority have Type-2 diabetes, the kind that is linked to obesity and physical inactivity and is responsible for 90-95% of all cases in people over 40. The costs associated with this epidemic are also enormous: $218 billion each year in medical expenses and lost productivity. In fact, about 10 percent of all U.S. health care spending and a whopping one-third of Medicare dollars is spent on people with diabetes.

The epidemic shows no signs of abating. In the next 25 years, the number of cases is expected to double. According to a report on obesity released last month by the Trust for America’s Health, “Since 1995, diabetes rates have doubled in eight states. Then, only four states had diabetes rates above 6 percent. Now, 43 states have diabetes rates over 7 percent and 32 have rates above 8 percent.

Finally, according to the Robert Wood Johnson Foundation, as a result of the U.S. having the highest rate of obesity among all developed countries, we now have the highest rate in the world of hospitalization of diabetes patients.

The only glimmer of hope in this epidemic is that for a while now there has been incontrovertible evidence that relatively inexpensive community-level prevention efforts can really pay off. This evidence includes results of a national comparative effectiveness trial that included 27 centers with over 3,000 participants, all at high risk of contracting diabetes. The trial, funded by the National Institutes of Health back in 1999, compared how effective three interventions were in preventing the onset of diabetes in these high-risk  individuals: 1) basic advice that you might get at the doctor’s office once a year or twice a year, 2) diabetes medication to lower blood sugar levels and 3) an intensive lifestyle intervention.  It was the intensive lifestyle intervention that worked the best.

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Once again free speech within the intimate confines of a doctor’s office is under attack.

In Florida, the Journal of the American Medical Association reveals today, doctors can risk losing their medical licenses or be fined up to $10,000 if they ask a patient either verbally or on a form whether they or a family member keep a firearm in the house.

According to JAMA, “the law states that licensed Florida health care practitioners and health care facilities ‘should refrain from making a written inquiry or asking questions concerning the ownership of a firearm or ammunition by the patient or by a family member of the patient, or the presence of a firearm in a private home or other domicile of the patient or a family member of the patient.’ Additionally, practitioners and facilities are instructed against recording such information (if disclosed) in the medical record.” Alabama, Minnesota, North Carolina, Oklahoma, and West Virginia have all introduced similar bills that would prohibit physicians from asking about guns in the home.

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The short-lived reprieve for Medicare and Medicaid is over. The no-longer sacrosanct government health programs will most definitely face cuts of some sort by this coming November when the new 12-person congressional “Super Committee” is charged with trimming at least another $1.2 trillion from the national budget.

On Monday, President Obama made his priorities clear: He called for “tax reform that would ask those who can afford it to pay their fair share,” (i.e. get rid of Bush-era tax breaks for the wealthy) and “modest adjustments” (i.e. cuts) to entitlement programs like Medicare and Social Security.

Senate Majority Leader Harry Reid (D-Nev.) is set to appoint Sens. Patty Murray (D-Wash.), Max Baucus (D-Mont.) and John Kerry (D-Mass.) to the congressional debt-reduction "super committee" and more appointments will be announced by other Congressional leaders as the August 16 deadline gets closer. Whatever its make-up, the committee's battle over entitlement cuts will occur on familiar territory. In a comprehensive—but ultimately depressing—post for Politico, David Nather writes that the super committee will likely start with “a list of the standard ideas that are already ‘out there’” for cutting Medicare and Medicaid.

“There’s a pretty long menu of ideas to choose from, thanks to the work that’s already been done by the bipartisan negotiations led by Vice President Joe Biden,” writes Nather. “And the supers will also be able to draw from the suggestions of other bipartisan groups, like President Barack Obama’s fiscal commission and the Senate Gang of Six.”

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The poor economy has led to rising and persistent unemployment, belt-tightening and a lower standard of living for many Americans. But this cutting back hasn’t been bad for everyone. As consumers put off medical care like doctor visits and surgery or were dropped off private insurer rolls altogether, some of the country’s largest health insurers actually saw profits rise.

Last week, UnitedHealth Group, the nation’s largest private insurer, reported a 13% increase in net profits and earlier this week Aetna (the third largest insurer in terms of market value) reported that its second-quarter net income rose 9%. According to Reuters, Aetna’s stock shares are up about 40 percent this year as well.

WellPoint, the second-largest health insurer, reported a 3% drop in second-quarter profits as medical costs for its growing Medicare Advantage business have come in "significantly higher" than the company expected this year. WellPoint, which is making a calculated foray into Medicare and betting on the demographics of the baby boom generation, was hit with an unanticipated enrollment of sicker (i.e. more expensive) subscribers over the age of 65 into its MA plan in California as other players pulled out of the market. Bloomberg reports that the percent of income Wellpoint spent on care in increased to 85.7 percent from 82.9 percent a year earlier.

Still, the company’s shares climbed roughly 30 percent this year as enrollment increased overall, (compared with the S&P 500 index rise of only about 6 percent) and WellPoint management raised their 2011 earnings estimate for the second time this year.

What’s the reason for the rosy outlook for large insurers?

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By announcing its new recommendation that all women over 40 should have yearly screening mammograms, the American College of Obstetricians and Gynecologists (ACOG) joins prominent groups like the American College of Radiology, the American Cancer Society and others who have decided to resolutely ignore the extensive evidence supporting less frequent screening in this age group.

In November 2009, the U.S. Preventive Services Task Force, an independent group of experts in prevention and primary care who are appointed by the Department of Health and Human Services, issued revised guidelines on screening mammography. After an exhaustive review of dozens of studies, the task force 1) found that yearly screening mammograms for women under 50 who have no risk factors for breast cancer offered more harm than benefit, 2) recommended that women over 50 should receive mammograms every one to two years and that 3) there was insufficient evidence to recommend routine screening for women over 75.

According to the task force findings, among women in their 40s, one breast cancer death would be averted for every 1,904 women screened regularly for 10 years. Among women in their 50s, one breast cancer death would be averted for every 1,339 women screened; and for those in their 60s, one for every 377 screened.

The task force’s overall recommendation was to endorse patient choice; “The decision to start regular, biennial screening mammography before the age of 50 years should be an individual one and take patient context into account, including the patient's values regarding specific benefits and harms."

These new guidelines incited a firestorm of controversy among breast cancer advocates, doctors and professional groups—many of whom have ties to the pharmaceutical and medical imaging industries. Accusations of health care rationing combined with impassioned stories of how women’s lives were saved by routine mammograms elicited all manner of emotional responses, including this reference to the “government takeover of health care” from Rep Marsha Blackburn from Tennessee who asserted, “This is how rationing begins. This is the little toe in the edge of the water; this is when you start getting a bureaucrat between you and your physician.”

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