Health Insurance

(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. 

Much of the debate in Congress right now still centers on the public plan, and the need to make sure there is adequate competition in the new insurance exchanges that would be established under health reform.  We have also written several times about fresh approaches to dealing with malpractice reform, which President Obama has said is overdue.

Senate Democrats recently revisited an old idea that could potentially address both of these challenges -- ending the exemption that medical malpractice companies and health insurers currently enjoy from antitrust laws.

When a lobby -- like AHIP, the health insurance lobby -- pushes out a report intended to inflict last minute damage on an important bill late on a Sunday on a three-day weekend, they may score a few points in the first wave of headlines but ultimately the truth wins out. Not only did the second-day headlines (like Politico's "Insurers Face Blowback") note the questions about the AHIP report’s veracity, even the consulting company that wrote the report, PricewaterhouseCoopers, basically said it was a meaningless exercise in the application of irrelevant assumptions. In other words, AHIP got what it paid for.

PricewaterhouseCoopers said:

The gloves are off in the fight for health reform, and the insurance industry has decided that it's time to start throwing analytically indefensible punches. Two recent cases in point: (1) the headline grabbing "report" entitled the "Potential Impact of Health Reform the Cost of Private Health Insurance Coverage," by PriceWaterhouseCoopers , for AHIP (the main health insurance industry trade group); and (2) the "Blue Perspective" entitled "Age Discounts ‘A Must' to Encourage Young Adults to Purchase Insurance," by the Blue Cross and Blue Shield Association. 

Thankfully the Urban Institute, in work funded by the Robert Wood Johnson Foundation, has recently released a thorough and devastating rebuttal to the Blue claims.  So my comments below focus mostly on the AHIP paper. 

A recent statement from the Senate Finance committee outlined how small business health insurance exchanges, tax credits, and grants for workplace wellness as part of health reform would all make quality coverage more available and affordable for small businesses. In this guest post, San Diego small business owner Vince Mudd explains why he -- and the workers he insures -- can't wait. Mudd is CEO of San Diego Office Interiors, a design-build interiors company and the president of International Realty and Development.

Through his involvement in the regional Chamber of Commerce, the San Diego Regional Economic Development Corporation, Campanile Foundation at San Diego State University, and State Compensation Insurance Fund, he has worked to ensure that health related issues -- and their impacts on small business -- are understood by policy makers, business people and the public.

Many politicians and pundits claim that efforts to reform our health system are moving too quickly. Yet for millions of small business owners like me, health reform cannot happen soon enough.

The idea that we can solve our health care problems by allowing people to buy an insurance policy "across state lines" sounds tantalizingly easy. Unfortunately it's not true. It will make our problems worse and be devastatingly risky for many Americans. Yet the idea has been resurrected in bills proposed by the Republican Study Committee (RSC), Congressman John Shadegg (R-AZ), and Senator Jim DeMint (R-SC).

Don't be fooled: without significant and nationwide market reforms (like those put forth by the committees of jurisdiction in both the House and Senate), selling health insurance across state lines will lead to less-comprehensive insurance packages, higher costs for families, and reduced access to care. It is a step backwards for not only our insurance markets, but also, and more importantly, for the American people who struggle every day to secure quality, affordable coverage.

Last year, New America published a detailed explanation of why this policy is an unviable solution. Our paper and two-page summary can be found here, and previous blog posts can be found here, here, here, and here. But this is the bottom line:

Last time I ran into Bill Frist, he was sounding distinctly nonpartisan on a panel discussion about preventive care and social determinants of health. We then talked about comparative effectiveness research at Vanderbilt, where he is affiliated, and he was so enthusiastic that he took my notebook out of my hands and began sketching diagrams of DNA molecules (at least I think that's what they were.) I asked him why he didn't write on op-ed about this, given that the research has been so controversial among his fellow Republicans. As far as I know, he hasn't written that an op-ed -- but he just penned an endorsement of an individual mandate to purchase health insurance.

The mandate is a lynch pin of effective insurance market reform and it's coming under increasing Republican attack. Some state legislators are even talking about amending their constitutions -- a largely symbolic conversation among conservatives -- to ban such a requirement.

In his guest column for U.S. News and World Report, Frist called for an individual mandate. He wants to begin smaller than the bills currently being considered in Congress, recommending a mandate for catastrophic coverage as "an appropriate place to start." But he defined catastrophic coverage as good enough to protect people from bankruptcy from medical bills, and made clear that he favors expanding coverage as the economy improves.

While you listen to the Democrats (and Republican Olympia Snowe) on the Senate Finance Committee talk about affordability and access, and the Republicans (minus Snowe) talk about malpractice, partisanship and "rush jobs" (are there any members of the panel who haven't spent years and years in the Senate, House or state government pondering how to fix health care?)  -- we wanted to also point your attention to another White House paper on "The Burden of Health Insurance Premium Increases on American Families."

The paper points out that insurance keeps costing more and more, and, on the whole, we keep getting less and less. Insurance premiums have doubled in the last decade (and our wages sure haven't) and they are going to keep rising. One in five adults under age 65 was uninsured in 2008. Those numbers, too, are rising.

Health reform won't just expand coverage. Insurance regulation has the potential to change the very nature of coverage, with real consumer protection. As the White House paper put it, "Stability and security will be accomplished by establishing the following rights for all Americans:"

Veteran health advocate and researcher Stan Dorn is guest blogging for us today. Stan has worked on health policy for 25 years at the state and federal level. He began as a legal aid attorney helping low-income Californians obtain health care. Later as health division director at the Children's Defense Fund he led the organization's health policy team in a national campaign that contributed to the creation of the Children's Health Insurance Program -- and he helped defeat Newt Gingrich's proposal to replace Medicaid with a block grant.  He is now a senior research associate at the Urban Institute. The views here are his own.

If health reform legislation does not guarantee a public option, could progressives support it, in good conscience?

I hear this question a lot. My answer is yes -- so long as the bill provides millions of low-income uninsured with affordable, comprehensive health coverage.