Category Archives: SCHIP

Obama Says No One Should Be Forced to Sign up For Insurance; Edwards Says If You Don’t, He’ll Garnish Your Wages—Who is Right?

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John Edwards’ declaration that under his health reform proposal anyone who refuses to sign up for health insurance will be subject to having their wages garnished has led to a blogstorm of often confusing debates.  Under national health reform, should everyone be required to enroll? The Edwards and Clinton plans have mandates insisting that all Americans purchase insurance; the Obama plan has a mandate for children, but not for adults

New York Times columnist Paul Krugman stirred controversy Friday by defending Edwards, and criticizing Barack Obama: “Under Obama’s health care plan, healthy people could choose not to buy insurance—then sign up for it if they developed health problems later,” Krugman observed. “As a result, people who did the right thing and bought insurance when they were healthy would end up subsidizing those who didn’t sign up for insurance until or unless they needed medical care.”

On Sunday former FCC Commissioner Reed Hundt called Krugman out on TPM Cafe in a post headlined “Ease up, Dr. Krugman.” According to Hundt: “The very idea of government mandates directed to individuals evokes a command-and-control model that disturbs citizens who want to enjoy certain freedoms in choosing health care.” As of yesterday, Hundt’s post had drawn some 60 comments—some on point, others muddying the waters.

Meanwhile, at TNR Jonathan Cohn weighs in with a long discussion of just how many people Obama’s plan might leave uncovered—and suggests that one of Obama’s advisers has information showing that under Edwards’ plan, even more Americans would be left “going naked.”

Because the conversation in the blogosphere has become such a mix of good information, misinformation and false assumptions, I’ve decided to try to spell out, as clearly as possible, why we need a mandate. Very simply, it addresses a serious defect in our health care system:  under existing rules, you don’t have to buy insurance, but you can be priced out of the insurance system if you are sick.

After examining that problem–and looking at how requiring insurance solves it– I’d like to answer a sensible question that observers like the Washington Monthly’s Kevin Drum have raised: Why force people to buy insurance? Why not just tax everyone, put the money in a pool similar to the Medicare Trust Fund, and use it to buy universal insurance?

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Conditional Cash Transfers: An Interim Model for Health Care Reform?

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This past September, New York City’s Mayor Bloomberg welcomed 5,000 families into the pilot program of Opportunity NYC– the nation’s first conditional cash transfer (CCT) program. Based on a Mexican program called Oportunidades, CCT programs like Opportunity NYC (ONYC) provide financial incentives for poor households to “meet specific targets” in three areas: education, employment/training, and health.

I recently spoke with Héctor Salazar-Salame, Advisor to the Center for Economic Opportunity, which operates ONYC, about the health components of the program. I wanted to get an idea of the aims and strategy behind ONYC—and also to learn more about CCT as a potential model for thinking strategically about health care reform. 

According to the city’s press release, ONYC’s health incentives will be offered “to maintain adequate health coverage for all children and adults in participant households as well as age-appropriate medical and dental visits for each family member.” In terms of coverage, families can earn “$20 or $50 per adult per month for maintaining health insurance and $20 or $50 for maintaining health insurance for all the children in the family.”

The point is to encourage low-income families to enroll in health insurance plans. “Many families work for employers that offer insurance,” Salazar-Salame explains, but “many times the necessary employee contribution is quite high for low-income families. We’re providing an incentive for families to opt into their work-based, private health plan—and hoping that the incentives will help them offset the cost of the employee contribution.”

If parents are unemployed—or work for employers that don’t offer coverage—the family can still be eligible for health incentive rewards that keep them enrolled in Medicaid. “We know that to recertify for Medicaid can be a challenging yearly process that takes a lot of time,” says Salazar-Salame. (It’s worth keeping in mind that roughly 30 percent of parents who don’t manage to enroll or re-enroll their children in Medicaid have less than a high school education).  “We’re hoping the incentive will help them maintain the insurance that they’re eligible for,” Salazar-Salame explains.

Maintaining insurance is harder than it sounds. In October, Maggie wrote about  just how difficult it can be to stay enrolled in Medicaid and SCHIP, pointing to a Health Affairs article titled "Why Millions of Children Eligible for Medicaid and S-Chip Are Uninsured."

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The Truth about the Politics of National Health Reform

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For the past year, progressives have begun to talk about health care reform as if it is inevitable. Listen to the Democratic Party’s presidential candidates, and it seems just a question of what form the health care revolution will take, how quickly it will happen, and how we’ll finance it. After all, the polls show that the majority of taxpayers, employers and even most doctors want to see a major change.  Moreover, health care research shows that if we cut the waste in our system, we could fund universal coverage. What, then, is stopping us?

As regular readers know, I recently attended a Massachusetts Medical Society Leadership Forum where what I heard about the Massachusetts plan made my heart sink. While everyone in Massachusetts wants health care reform, no one wants to pay for it. Those who are receiving state subsidies to buy insurance are enthusiastic. But uninsured citizens earning more than 300% of the poverty level are expected to purchase their own insurance. The state hoped that 228,000 of its uninsured citizens would sign up; as of last month, just 15,000 had enrolled. Many have decided that they would rather pay the penalty than buy health insurance.

At the forum, Robert Blendon, professor of health policy and political analysis at Harvard’s Kennedy School of Government, talked about what Massachusetts’ experience might mean for the national health care debate: “Massachusetts is the canary in the coal mine,” Blendon, who is also a professor at Harvard’s School of Public Health, declared bluntly. “If it’s not breathing in 2009, people won’t go in that mine.”  If the Massachusetts plan unravels, he suggested, Washington’s politicians will say “If they can’t do it in a liberal state like Massachusetts, how can we do it here?” 

I’m not writing Massachusetts off. The state’s leaders are behind the plan and they may be able to persuade the Commonwealth’s citizens to come on board. But it won’t be easy. 

In the meantime, this week I decided to ask Blendon some follow-up questions: Just what would it take, politically, to achieve national health care reform sometime in the next two to four years?  How many seats would reformers have to capture in Congress?  Is this likely?   Some observers say that if a reform-minded president hopes to succeed, he or she will have to ram a plan through Congress sometime in 2009. But health care is complicated; wouldn’t it make more sense for a new administration to take its time and explain what it is doing to the public, while trying to create a sustainable, affordable, high quality health care system?

Finally, what are the biggest barriers to reform?  If major change proves impossible, what more modest back-up plans should a new president have in mind? What other health care legislation could he or she hope to pass?

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We Can’t Fund SCHIP, But We Can Save Merck

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Today, Bloomberg trumpeted the good news:  “Merck Profit Gains on Cancer Vaccine, Diabetes Pill.”

“Merck & Co., the third-largest U.S. drugmaker, reported a 63 percent gain in earnings,” Bloomberg reported, a victory made doubly by the fact that Merck has seen some rough times. “Competition from generics and the withdrawal of the pain pill Vioxx in 2004 over heart risks have pulled net income down 39 percent since 2001,” the story explained. Indeed, Vioxx gave Merck a black eye, and it’s still battling lawsuits in the courts. But Gardasil, Merck’s new vaccine to prevent cervical cancer, is turning out to be just the blockbuster the company needed. “Gardasil, introduced a year ago [already] has sales of $418 million”

Those of you familiar with my views on Gardasil may want to skip the below section, as it is pulled from an August post. I promise I won’t do this often, but this is an important subject and it’s example of how, if drug manufacturers and their lobbyists work quickly enough, they can sell their story to politicians and to the public before skeptics in the scientific community have a chance to weigh in. Remember the drug industry saying: “It’s important to sell a new drug while it’s still effective” (i.e. before people know too much about it).

On August 27, I wrote:

Earlier this month the FDA announced that the direct-to-consumer ads Merck has been using peddle its new cervical cancer vaccine, Gardasil, are “half-true . . .information currently being advertised could mislead the public.” 

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Massachusetts Health Reform: The Canary in the Gold Mine?

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Advocates for health care reform have been keeping an eye on Massachusetts, hopeful that its new health reform law will serve as a pilot program for the nation.

I’m much less hopeful than I was two days ago.

Yesterday I attended the Massachusetts Medical Society’s Eighth Annual Leadership Forum where I was one of four speakers. This year, the Society (which owns The New England Journal of Medicine)  focused on the cost of health care –with a special emphasis on funding universal coverage in Massachusetts. The new was not good. While the citizens of   Massachusetts believe that everyone has a right to health care (when polled 92% say “yes”), no one wants to pay for universal coverage.   When asked “if the only way to make sure that everyone can get the health care services they need is to have a substantial increase in taxes [should we do it] 55% said “no.”

One speaker at the forum recalled a man who explained why taxpayers shouldn’t have to pick up the bill: “The government should pay for it.” (He didn’t disclose who he thinks “the government” is. )

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UnitedHealth Care vs. the Kids

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Wednesday night, the House voted 225–209 to pass a bill that would, in the words of a Wall Street Journal editorial, “steal nearly $50 billion from Medicare Advantage, the innovative attempt to bring private competition to senior health care” in order to beef up the State Children’s Health Insurance Program (SCHIP), a program that delivers health care to poor children.

SCHIP is scheduled to expire September 30; the House bill would renew the program while expanding it to include another 5.1 million children at a cost of an extra $50 billion over five years. The bill’s backers propose to fund the legislation by increasing the federal cigarette tax by 45 cents while simultaneously paring the premium that Medicare pays private insurers who provide Medicare to seniors. The goal of the bill, reformers say, is to ensure that all children in the United States have health insurance. The Wall Street Journal’s editors see things otherwise: “Democrats apparently want to starve any private option for Medicare,” the editorial concluded.

Rupert Murdoch hasn’t yet weighed in, so I decided to take a look at the proposal. Would the legislation really make it impossible for private sector insurers to continue to offer needed benefits to seniors?
I began by looking at insurers’ finances only to discover that the health care insurance industry is, in fact, facing rough weather ahead. While the cost of providing health care continues to climb, more and more employers are backing away from providing health care benefits for their employees. Others are raising premiums and co-pays to a point that some workers can’t afford to participate in the plans. This means that insurers are losing customers.

As a result, one might expect that insurers’ profits would be falling. One would be wrong

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