Coverage

Can health reform heal our federal budget? Yes, but whatever passes now is just the beginning, and there will always be room for improvement.

That's our takeaway from an excellent event we tweeted this morning hosted by the US Budget Watch, a joint project between the Committee for a Responsible Federal Budget and The Pew Charitable Trusts.

There was a lot of ground covered by a panel of experts moderated by the Washington Post's Ceci Connolly and featuring New America's director of health policy Len Nichols. They tackled everything from raising Medicaid eligibility rates to fixing the Sustainable Growth Rate formula in a fiscally responsible way. But for now, we'll just give you the highlights of the discussion.

Ceci Connolly at the Washington Post asks the $64,000 question -- or maybe it's more of a $6.4 trillion question. Do the House and Senate health care bills go far enough in reshaping how we deliver health care so that we can control rising costs?

A lot of experts, she notes, see the approach as too timid by far.

"The bills are directionally correct, but they're not going far enough," said George Halvorson, chairman and chief executive of Kaiser Permanente and the author of "Health Care Will Not Reform Itself."

(We are refiling this post to make the paragraph about the SEC a little clearer for our readers.)

"The American people and I are asking a serious question and one that deserves a straight answer -- why are health insurance costs going up each year?" Sen. Jay Rockefeller (D-WV) questioned in a letter (part 1 and part 2) to H. Edward Hanway, the CEO of CIGNA, yesterday. "Are they spending it to make people well when they are sick and keep them healthy? Or is the money they charge going to profits, to executive salaries, and to figuring out how to deny care to people when they really need it?"

Sen. Rockefeller explains:

We get really tired of hearing foes of health reform go on and on about waiting lists in Canada and how it's rationing... And how nobody in the United States lacks care because they can always go to the emergency room. We know that yes, people in other wealthy industrialized countries sometimes wait for elective procedures, but here in the United States people -- particularly the poor and the underserved or the uninsured -- do plenty of waiting and postponing even when lives are at stake. (And how many people do you know who get cancer diagnosis, surgery, chemo, radiation and follow up care in their local ER?) 

The American Cancer Society has made the point during the health care debate that uninsured and underinsured people get diagnosed later and die sooner. A new study in the Journal of Thoracic Oncology (which we read about on Health News Daily) found that the length of time a newly diagnosed lung cancer patient has to wait for treatment depends in part on whether they are treated at a public (safety net) or private hospital, whether they are insured, their age, and their race. 

If voters had been feeling a little differently a year ago, Doug Holtz-Eakin (former Congressional Budget Office director and chief economic policy advisor to Senator McCain's 2008 presidential campaign) would be spearheading the McCain health care team.

And, if voters had been feeling differently a year ago, Holtz-Eakin would still have employer-sponsored health coverage.

But instead of a position with the McCain Administration, he is unemployed -- and the clock is ticking on his current health coverage. He will soon join the scores of Americans who are having difficulty obtaining affordable, comprehensive health insurance. "I worry about where I go next in the way many Americans do," he told the Washington Post.

Holtz-Eakin walked away from the 2008 presidential campaign without a job and therefore without employer-based health care. Since then, he has been able to keep the private health insurance plan he had during the campaign through COBRA (the acronym for the Consolidated Omnibus Budget Reconciliation Act, a 1986 federal law that allows individuals to temporarily extend group health coverage to people whose health benefits otherwise would be terminated). 

In the health care debate, the public option frequently takes center stage. But, according to the latest CBO estimates for the House health reform bill, all that attention may be unwarranted. The numbers are in -- the public option in the House bill will likely cover only two percent of Americans (around six million of those under 65) by the time it is fully implemented in 2019.

This low estimate shows that the public option will likely be a small "niche" operator, reports the AP, and that House leaders have designed the public option to accurately target those who have difficulty acquiring private coverage, but are not eligible for Medicare or Medicaid. The public option will be available to those working in small business or individuals seeking to buy coverage on their own.

The CBO projects that those who are less healthy will probably be attracted to the public option because of more relaxed rules about accessing specialists and medical services, reports the AP. Taking on higher risk patients will likely make public option premiums higher than private coverage -- so most consumers will seek private insurance -- and a massive exodus from private coverage is unlikely.

(Reposting to fix a typo in a Brendan Borrell's name)

A few good reads from this week that we didn't have time to blog about (some travel, two magazine deadlines and Halloween costumes to prepare) but still wanted to share:

Reuters Health, under the relatively new direction of Ivan Oransky, has an investigative piece by Brendan Borrell looking at some of the intrigue and controversy surrounding a couple that has to a certain extent become the face of the growing medical tourism industry.

Kaiser Health News' Julie Appleby (expanding on and explaining some fine analysis by the Center on Budget and Policy Priorities) raises some concerns about affordability under the Finance Bill.  She writes:

Proponents of the Senate Finance Committee's health care bill say the legislation will limit the amount that lower- and middle-income people must pay for health insurance to a maximum of 12 percent of their incomes.

This post appears on the National Journal's Health Care Experts Blog where you can also see what other health policy analysts have to say about allowing states to opt out of a public health insurance option.

The public plan debate marches on this week as we discuss whether or not states should be allowed to “opt-out” of the public health insurance plan. Allowing states to choose not to provide the public health insurance plan as an option in their markets has its virtues. It establishes the infrastructure necessary to create a public health insurance plan nationwide, but it also makes the decision ultimately a state judgment. This may be a safer way to go for those who worry about government expansion.

While we do not know the details of what kind of public plan states would be able to “opt-out” of, we suspect the center of gravity is closer to a level playing field approach, such as that proposed by Senator Schumer (where the plan would have to negotiate payment rates with providers) as opposed to the version supported by progressive Democrats in the House (where the plan would administer prices based at least in part on Medicare rates). If the level-playing field approach is in fact adopted, assertions that the plan would simply “underpay providers” rather than “driving real reforms that bring down costs and improve quality” are unfounded.

We often get so caught up following the politics of health reform that we forget how incredibly important reform will be for real people. It's also easy to forget that members of Congress, and the First Family, no less, have had their own confrontations with the health care system -- and that they might actually be able to relate to John and Jane Q. Public.

In a quick, five-minute video message aimed at American women, First Lady Michelle Obama makes health reform a little more personal -- as both a mother and a woman -- and divulges a medical scare that she and the President experienced two years back with their daughter, Sasha. They knew something was terribly wrong, and they were able to quickly get an appointment with their family pediatrician. The doctor expressed concern that Sasha might have meningitis and risked deafness -- possibly even death. He sent the family straight to the Emergency Room. But the Obama's were lucky -- and they know it.

"That moment in our lives flashes through my mind when we talk about health-care reform," Obama explains. "How if we hadn't had insurance, if we couldn't afford a doctor, we might have waited until it was too late."

But the First Lady promises us that with health reform, "every family will have the same peace of mind as we've had."

There has been a lot of attention lately on what health reform can do for women. We have retold (here and here) several painful stories and explained how the nuances of the health insurance industry disproportionately affect women. For example, gender rating, pre-existing conditions and coverage gaps. Michelle Obama's video, part of a week-long celebration of women leading up to Maria Shriver's annual Women's Conference, features Roxi Griffin (both a lung and breast cancer survivor) and Health and Human Services Secretary Kathleen Sebelius. Watch the full video:

Economic decisions are rarely the product of a simple costs-benefit analysis. This is particularly true of the decision to purchase health insurance, where the costs are upfront and certain, while the benefits are uncertain and down the road.

Requiring that all Americans purchase health insurance confronts this challenge, and it is a central aspect of the current health reform legislation in Congress. The so-called individual mandate is necessary to make other insurance market reforms like community rating and guaranteed issue work. Coupled with subsidies to make insurance affordable, the individual mandate can be an effective tool for coverage expansion.

The debate in Congress focuses mostly on whether the penalties for not purchasing health insurance ($750 in the Senate Finance Bill) relative to the coverage subsidies are enough to actually influence people's decisions. The success of an individual mandate, however, depends on more than just subsidies and fines, and Monday's Washington Post lays out some important lessons from the field of behavioral economics.

One of the central insights of behavioral economics -- reflected in recent books like Nudge, which was co-authored by the White House's Cass Sunstein -- is that the choices we make are often determined by how easy it is to make them. As Brookings' William J. Congdon tells the Post: