The high cost of medical care is on the lips of every politician and draining the pocketbooks of most Americans. After creating the Medicare/Medicaid monster, the government’s expanded intervention into the medical care marketplace with the inaptly named Affordable Care Act doubled the premiums and deductibles for both employer-sponsored and individual insurance. Piling on more laws, regulations, and agencies is not the answer.
Anonymity, complexity, and opacity invite shady behavior. Individuals, companies, and patients who defraud the massive federal “health system” would never dream of lifting money from their patients’ wallets or stealing from their doctors’ cash drawer.
The government’s track record does not bode well for imposing more bureaucracy to remedy a problem created by the layers of third-party payer bureaucracy. Waste, fraud, and abuse are so rampant that the government has a Medicare Strike Force to root out and recover lost federal funds. Medicare fraud—about $60 billion in 2016 alone—is about 10 percent of Medicare’s total payments. By contrast the typical private business loses 5 percent of its revenues to fraud. Unfortunately, since its inception in March 2007, the Medicare Strike Force has recouped less than $2 billion per year in misappropriated funds.
Medicare’s $16.7 billion per year hospice program is fertile ground for the unscrupulous. Hospices are paid a fixed daily sum for each patient enrolled “regardless of the services provided.” One amoral scheme recruits patients who unknowingly forgo curative treatment options by joining hospice. A recent Office of Inspector General (OIG) report revealed that in 2012 hospices billed Medicare more than $250 million for services to patients in long-term care or assisted-living residences who did not require hospice care, costing four times more than the appropriate level of care. Even worse, the OIG found that the quality of care suffered in 31 percent of programs. The bureaucratic morass allows the perpetrators to pocket the fixed fee and skimp on the services.
Further, the government cannot keep track of its program dollars. According to another OIG audit, in 2009, Medicare Prescription Drug program paid $33.6 million and hospice patients paid $3.8 million for medications that should have been included in the hospice daily fee. Even after discovering the snafu, the problem got exponentially worse. In 2016 the government paid $160.8 million for drugs that hospice organizations should have paid for from its fixed daily fee. Our tax dollars paid for the drugs twice.
Physicians know what patients want and are acting on it. Free from the restraints of government “healthcare” programs, the physician-led, price-transparent, direct-pay Surgery Center of Oklahoma performs some surgeries for less than the copays of some insurance policies. Direct Primary Care physicians provide 24/7 access and basic labs for as little as $50 per month with at-cost medications and low-priced x-rays.
The corporate private sector has learned a thing or two from innovative physicians. Care Accelerator is Sam’s Club’s version of “affordable [medical care] options with transparent pricing.” To offer relief from high out-of-pocket costs, $50 (individual) to $240 per year (families) buys access to lab screening for diabetes and heart disease, free generic drugs, telehealth, and up to a 30 percent discount on vision, dental, and other ancillary services. Additionally, Walmart is training its own employees for jobs in the health sector and ideally to staff Walmart’s own medical services. For their employees, Apple has “health care built around you” with its AC Wellness that offers office and home visits; Amazon launched its Amazon Care telemedicine services.
Given the outrageous price of drugs—largely due to the pharmacy benefit manager middlemen—Good Rx discount coupons are just what the doctor ordered. Good Rx is free to the consumer and makes money from advertisements on the website and referral fees. One typical victory is a Medicare patient whose neurologist prescribed a drug for his Parkinson’s disease symptoms. The government demanded testing that could not be done because of the patients debilitated condition. Despite a sympathetic ear and supporting research, the government arbiter could only parrot the party line: because the drug was not on the “list,” it was not covered by Medicare. In a fortunate twist of fate, with a Good Rx coupon the patient paid $34 per month cash instead of the drug’s $1,100 per month price with 20 percent patient co-pay that would have been charged through the Medicare Prescription Drug program.
Congress claims it plans a full-frontal attack on the high cost of medical care (with the same results as the war on poverty and drugs?). Frankly, we are better off with Congress engrossed in its impeachment clown show and keeping its nose out of our medical business.
Dr. Singleton is a guest columnist. Her opinions are her own. Dr. Singleton is a board-certified anesthesiologist. She is Immediate Past President of the Association of American Physicians and Surgeons (AAPS). She graduated from Stanford and earned her MD at UCSF Medical School. This is an edited version of her column that originally appeared on pennypress.com. Reprinted with permission.
Bernie Sanders is strongly promoting “Medicare for All,” and claims to be its father (“I wrote the damn bill,” he proclaimed to the nation during the second round of Democratic Presidential debates).
His plan does not look like Medicare at all. It appears that he hardly knows anything about Medicare. He probably has no experience with it. Despite his advanced age, he does not need to depend on it. Members of Congress are allowed to receive Medicare benefits, but unlike most other Americans, they can receive other benefits in addition.
Sitting members of Congress can get routine examinations and consultations from the attending physician in the U.S. Capitol for an annual fee. And military treatment facilities in the Washington area offer free emergency medical and dental care for outpatient services.
Members are also eligible for the Federal Employees Health Insurance Program, and they won’t be kicked off as soon as they reach Medicare age. They do have to go through an Obamacare exchange, but it is a small one, the DC Health Link, which reportedly functions well. There are 57 gold-tier plans to choose from, not one or two as in many states. Their portion of the premiums could be as little as 25 percent of the total premiums. Apparently, subsidies for senators don’t run out just because their salary exceeds 400 percent of the federal poverty level.
Funding for Medicare for All will apparently be vacuumed up from all other sources of payment for “healthcare,” and will go into the big collective pot. Then people can get everything without premiums, copays, or deductibles—so they say. This is not at all like Medicare.
Medicare Part A, for hospital care, is funded through the Medicare payroll tax: a 2.9% first-dollar tax—no deductions--on all employment income, half of which is paid by the employer. Seniors believe that they have been funding this through their working years, as they are constantly told. They have indeed paid, but their taxes were immediately used to pay for the care of older retirees. So, their hospital bill today will be paid from the wages of about 2.5 workers (say the persons pumping their gas, collecting their trash, and repairing their plumbing). Already that is not enough, so the IOUs in the “trust fund” are being redeemed from general tax revenues. That fund will soon be gone, according to the Medicare trustees, as Baby Boomers are flooding into the system. It would vanish in a nanosecond if we loaded in everybody, with or without illegal immigrants.
Medicare has long been implementing ways to curb runaway expenditures. From the mid 1980s comes the Prospective Payment System, or Diagnosis Related Groups (DRGs), under which payment has nothing to do with services rendered to a particular patient. According to my 1985 “Ode to DRG Creep”:
“Now the pay’s by the head, if alive or if dead,
Diagnosis determines the money,…
We need costs less than average, and discharges quicker
We will get no advantage -- For care of the sicker.”
Since “quicker and sicker” discharges might cause a need for readmission, the government penalizes hospitals for readmission. One way to prevent readmission is to discharge to hospice or directly to the morgue. If Bernie were an anonymous Medicare patient, he’d get a consultation on POLST. That’s Physicians Orders for Life-Sustaining Treatment, which translates in the Newspeak Dictionary to “Legally Enforceable Orders to Terminate Life-Sustaining Treatment Including Food and Water.”
Bernie might think he had been admitted—say he had an IV in a hospital room. But if he gets discharged before his second midnight, he might be classified as an outpatient, which is covered under Medicare Part B, and get a “surprise” bill for thousands of dollars, because of the “Two-Midnight Rule.”
Or Bernie might expect to have a little rehab after an orthopedic procedure, but if he is in hospital for fewer than three midnights, rehab isn’t covered. He might have the choice of paying out of pocket, or going home where he will be alone, unable to get out of bed.
Yes, Bernie on Medicare will have free choice of doctors—except for the ones who aren’t accepting Medicare patients.
If Bernie himself were stuck on Medicare with no way out, he might think it not so wonderful. Has anyone heard him tell people about these Medicare problems?
Maybe he means the Canadian Medicare system. It does have a way out for non-senators—called the United States.
Intensified by the early fight for money and backers among Democratic presidential hopefuls, Medicare for All and similar single-payer insurance programs have been promoted with increased volume. While there are differences among the “I’ll give you more for less” sales pitches, they share the common central premise that such plans have far lower administrative costs than private insurance, so their version of reform will produce a massive infusion of available resources.
However, the “proof” offered for those administrative cost savings claims mainly consists of constant repetition, with candidates then quickly moving on to the free lunches they would supposedly enable. But given that claim’s central place in their proposals, we must question that premise and with it, the glib answers claimed for it.
How Should We Measure Administrative Efficiency?
For health care plans, the standard measure of efficiency is administrative costs as a percentage of total costs. And in those comparisons, Medicare appears substantially more efficient. But that does not mean there would be savings if people were moved from private insurance to Medicare for All.
The primary reason is that Medicare beneficiaries are far older and less healthy than the population. That makes health care costs far higher per Medicare beneficiary. In fact, before Obamacare, medical expenditures per Medicare beneficiary were routinely more than double those for the privately insured. However, nonmedical administrative costs are only slightly related to total medical expenditures. They are primarily related to the number of persons covered. This causes the standard measure to grossly exaggerate Medicare’s relative administrative efficiency.
Consider an example. Say both Medicare and private insurance beneficiaries had identical administrative costs of $500 each, but the Medicare patient received $5,000 in benefits, while the private patient received $2,500 in benefits. Medicare would show a 10 percent share of administrative costs, and private insurance would show a 20 percent share. In other words, despite the same administrative cost per beneficiary—that is, the same actual efficiency—the standard measure makes private insurance administrative costs look twice as expensive as Medicare.
Simply ask what would happen to administrative expenses if one private insurance beneficiary was moved into Medicare in the example above. Despite Medicare supposedly being half as costly in that regard, administrative costs would not change. No resources would be freed up. And given that the administrative cost per Medicare beneficiary is actually higher than for private insurance, the shift of someone into Medicare would increase administrative costs—leaving fewer resources, rather than more—available for medical care.
What Should Be Included in Medicare’s Administrative Costs?
The public-private comparison also typically compares the administrative costs of private insurance to those that show up in Medicare’s budget. But many of the administrative costs do not show up there. They appear in other agencies’ budgets. The costs of collecting taxes appear in the IRS budget. The costs of collecting premiums appear in Social Security’s budget. Many of the accounting, building, and marketing expenses appear in the Health and Human Services budget. Including those costs would roughly double Medicare’s reported administrative costs.
How Should We Count Taxes on Private Insurance?
Private insurance administrative costs are generally defined as premiums paid in minus claims paid out. However, that means everything except claims payments are counted as administrative costs whether or not they have anything to do with administration. For example, many states impose a premium tax (averaging about 2 percent) on health insurers, and those tax payments are incorrectly categorized as administrative costs. This also makes Medicare, which is exempt from such taxes, look relatively more efficient than it really is.
How Should We Count Disease Management and On-Call Consultation Services?
As with taxes, counting private insurance administrative costs as total premiums minus claims paid introduces other measurement distortions, as well. Insurance companies offer disease-management and on-call nurse consultation services. However, those services do not generate insurance claims. Consequently, those costs are also counted as administrative rather than medical.
How Should We Count Fraud and Fraud Prevention Efforts?
Waste, fraud, and efforts at their prevention also complicate administrative efficiency comparisons. Consider what happens if Medicare (estimates of whose excess spending exceed $50 billion yearly) spent less on prevention efforts. It would look more efficient because its administrative costs would be lower and because undetected excess spending would be counted as medical expenses, not waste. In contrast, insurance companies, whose bottom lines are at stake, are much more diligent about eliminating such excess spending. But those efforts, even though they can generate very large overall savings ($1 of fraud prevention has been estimated to reduce those costs by as much as $15), raise their measured administrative cost percentage, making them look less efficient.
How Should We Treat the “Excess Burden” Caused by Switching to Single Payer Systems?
In addition to all these biases exaggerating private insurance administrative costs and understating Medicare’s administrative costs, another large difference should be noted. When people pay more to get better private insurance coverage, they don’t treat it as a tax, but as part of their employee compensation. Under Medicare for All, however, higher payments into the system will not provide greater benefits. That means that Americans will rationally start treating those payments as taxes in exchange for nothing.
It will, therefore, act as a large income tax increase with correspondingly large economic distortions. Those distortions, created by the wedges taxes impose between what buyers pay and what sellers keep, reflect the wealth destroyed by the reduction in mutually beneficial market arrangements that result, which economists call excess burdens. While not incorporated in official comparisons, they are very large added costs of single-payer systems compared to private medical insurance.
One study found that even the “lowest plausible assumption about the excess burden engendered by the tax system raises the true costs of delivering Medicare benefits to about 20-25 percent of Medicare outlays,” imposing costs far higher than any supposed private insurance administrative cost deficiency.
It is striking how much single-payer promoters rush past their repetitions of administrative cost savings claims before quickly turning to their vote-buying promises in large part funded by them. It almost seems that they don’t want voters to think carefully about those claims. And that might reflect an accurate judgment. If people questioned the basis of those promised solutions, it would reveal supposed administrative cost savings to be the opposite once the compounded mismeasurements are deciphered, and it would not be anyone’s ticket into the White House.
Gary M. Galles is a professor of economics at Pepperdine University and a guest columnist to the Penny Press. His recent books include Faulty Premises, Faulty Policies (2014) and Apostle of Peace (2013). This piece was originally published on fee.orgm then pennypresslv, reprinted here in full, with permission.
Jason Lewis is the outgoing, Minnesota Congressman who on Veterans Day blamed a recently deceased prisoner of war for costing him reelection and Republicans the House majority in the 2018 Midterm Elections. In his defense, Lewis had no control over the publication date of his op-ed after he submitted it to The Wall Street Journal. Lewis did, however, blame the late Republican Arizona Senator and Vietnam POW John McCain for his election loss and the losses of his fellow House Republicans. It just happened to be published on Veterans Day, which has been the focus of just about everyone on social media.
Most of the media, however, has resisted mentioning the date of publication, but haven’t bothered to check if there’s some truth to Lewis’s claim. McCain couldn’t possibly be entirely responsible for Republicans losing 39 House seats. No single moment, however momentous, decides an election let alone 39 elections. There are a myriad of reasons why people vote the way they do. Money is just one reason.
The biggest spender in House elections won just 89.8 percent of the 2018 House races—down from 95.4 percent in 2016. But the biggest reason House Republicans lost so much in the 2018 Midterm Elections might very well have been because of their support for the American Health Care Act (AHCA) and the failure of Senate Republicans to pass the legislation because of John McCain.
In his ill-timed op-ed, Lewis alleges that the Arizona Republican Senator’s decisive vote against Congressional Republicans’ “skinny repeal” of the Affordable Care Act (ACA), also known as Obamacare, "prompted a 'green wave' of liberal special-interest money, which was used to propagate false claims that the House plan 'gutted coverage for people with pre-existing conditions.’”
Lewis might be absent-minded at best, insensitive at least, and downright disrespectful at worst, but his claim is not entirely wrong. He and fellow Republicans were wrong, however, to assume McCain would vote along party lines when it came to healthcare, even when faced with an opportunity to repeal and replace Obamacare.
Like most Republicans, McCain campaigned for reelection in 2016 promising his Arizona constituents to repeal and replace Obamacare. And like most Republicans in 2016, he won reelection. But McCain was never like most Republicans, especially when it came to healthcare.
Healthcare has long been a concern of McCain’s. He was an early co-sponsor of the Americans with Disabilities Act of 1990. In 1998, he introduced a bill to regulate the tobacco industry and increase taxes on cigarettes that failed due to opposition from his fellow Republicans. And it took a lot of convincing stories of personal struggle, but in 2001 he joined a bipartisan effort to pass a patients’ bill of rights despite being concerned about the right it gave patients to sue health care companies.
McCain then shocked his fellow party members by running for President on a healthcare platform in 2008. While his opponent adopted a healthcare approach implemented by Republican Governor Mitt Romney in Massachusetts, McCain’s plan would have subjected health insurance premium contributions from employers to income tax. Tax credits would help taxpayers offset the costs of employer coverage or coverage purchased on the individual market, and any remaining funds could be deposited in a health savings account (HSA).
McCain also wanted to allow Americans to buy health insurance coverage across state lines, but he didn’t want government getting its hands on healthcare. He did, however, propose federal funding to help people who couldn’t get coverage through the individual market because of their health conditions, i.e. pre-existing conditions. So protecting affordable access to healthcare coverage for people with pre-existing conditions was important to McCain almost a decade before his decisive vote against the AHCA.
Yet Republicans and Democrats alike were shocked at McCain’s vote to kill his party’s baby that was going to show Republicans’ constituents they finally did what they had long promised: repeal and replace Obamacare. And that might have been enough to carry them to victory in 2018 because the adverse effects of their AHCA predicted by the Congressional Budget Office—including higher premiums resulting from 24 million more Americans going uninsured by 2026—wouldn’t take effect in time for American voters to reprimand them in the 2018 Midterm Elections.
The only problem with the Republicans’ plan was the free press, which informed constituents of the potentially devastating impact of the AHCA, especially for people suffering from pre-existing conditions. In turn, those constituents voiced their opposition to the bill and let their Congresspeople know how many votes they could expect to lose in their next election. Turns out once people got a taste of Obamacare and discovered it wasn’t just nasty, expensive health food but tasty, affordable health food, they started to like it. Why do you think Republican Congresspeople in 14 states continue to withhold Medicaid expansion from their constituents? They say they don’t want to take federal funding for healthcare out of principle, but what they really don’t want is their constituents discovering how much they could be saving on health insurance premiums.
On July 28, 2017, a week after learning of an “aggressive,” inoperable brain tumor, McCain, reminiscent of a Roman emperor deciding the fate of a wounded gladiator, killed Congressional Republicans’ last-ditch efforts to repeal and replace Obamacare with the "most powerful thumb in the country." It took two other votes from Republican Senators Susan Collins of Maine and Lisa Murkowski of Alaska to kill the American Health Care Act. Any one of the three voting “yes” would have resulted in a tie broken by Vice President Mike Pence.
Andy Slavitt, a former acting administrator of the Centers for Medicare and Medicaid Services under President Barack Obama, called McCain’s “no” vote on the AHCA a “watershed moment in health-care policy” in an interview with the Arizona Republic. But it was also a watershed moment in political policy, too. It was both a reprimand of the Republican Party by a most-respected Republican, and a reminder that people, regardless of political affiliation, are going to do what they think is right. More so than anything, regardless of pre-existing conditions protections, McCain didn’t care for the Congressional Republicans’ process (or lack thereof) to repeal and replace Obamacare. Not allowing the legislation to go through committee and instead forcing it through Congress rubbed the old school Republican the wrong way.
Republican Representative Jeannette Rankin, the first woman elected to Congress and still the only woman elected to Congress from Montana, broke with her party and all of Congress when she voted against declaring war on Japan after the attack on Pearl Harbor in 1941. She was joined by a bipartisan group of 49 House members and six Senators voting against war with Germany 24 years earlier. McCain’s “most powerful thumb in the country” moment was reminiscent of Rankin and is McCain’s most legendary moment. It's for what he'll be most remembered.
There’s no denying McCain’s momentous “no” vote motivated an already energized Democratic Party. Whether it resulted in a “green wave” of donations from those with liberal special interests is debatable. Democratic House candidates received 50 percent more in campaign contributions than Republican House candidates in 2018, but that was paced by individual donations, not special interests represented by Political Action Committees (PACs). Democrats raised twice as much from individuals as Republicans to make up for a $46-million deficit in PAC contributions.
Whether McCain’s momentous vote was responsible for specific donations is impossible to determine, but Democrats did receive 54.7 percent of the $226,586,167 health-related campaign contributions, which was fifth most amongst business sectors in contributions made to 2018 campaigns. That’s actually down from health sector spending on the 2016 election, which saw health as the sixth-highest sector represented by campaign contributions, but nearly 60 percent more than what the health sector spent on the 2014 Midterm Elections.
So McCain’s vote against the AHCA might have been responsible for increased election spending on Democrats from the health sector, but it was absolutely responsible for robbing House Republicans of the ability to run for reelection advertising the fulfillment of their promise to repeal and replace Obamacare. That alone could have been enough to sway the 2018 House Midterm Elections toward Democrats, if they weren’t already swinging that way.
Almost five months before Democrats flipped their first Congressional seat—getting an upset win from Doug Jones over Republican Roy Moore in Alabama’s special election for Senator on Dec. 12, 2017—McCain gave Democrats their first ray of hope since being robbed of the White House by Russian election meddlers assisted, perhaps, by Donald Trump’s Presidential campaign. Whether Trump acted as an accomplice in the confirmed election interference by the Russians could be revealed by Special Investigator Robert Mueller any day now that Trump has reportedly responded in writing to Mueller’s questions.
Both Trump and Pence failed to convince McCain to support the AHCA, with Trump even assuring McCain the bill wouldn’t become law. Trump wasn’t likely considering a “no” vote from another Republican Senator, although that might be exactly what he wanted McCain to think. It’s more likely Trump was told a key provision of the bill would be found unconstitutional.
In his op-ed, Lewis alleges Democrats’ claims that the AHCA “gutted coverage for people with pre-existing conditions” were false. But like Lewis’s op-ed rejecting responsibility for his and House Republicans’ election losses, Democrats’ claims weren’t entirely false. PolitiFact awarded “Half True” ratings to ads and statements from Democrats on healthcare in North Carolina, Wisconsin, Florida, Virginia and California. Why?
The MacArthur-Meadows Amendment to the AHCA was introduced in the U.S. House of Representatives on April 13, 2017. It was meant to coerce the votes House Republicans needed from the Rightest-leaning, three-dozen-or-so members of the House Freedom Caucus in order to pass the AHCA legislation onto the Senate. The amendment introduced by Republicans Tom MacArthur, a former insurance executive and now outgoing member of Congress, and recently reelected Mark Meadows of North Carolina, chair of the House Freedom Caucus, would have effectively gutted coverage for some people with pre-existing conditions.
People suffering from pre-existing conditions who didn’t maintain continuous health insurance coverage for all but 63 days of the prior 12 months would be forced to pay health insurance premiums based on their medical history, which would no doubt be higher than premiums currently available to them. While not every person with a pre-existing condition would be directly affected, nearly a third of people with pre-existing conditions experience a gap in coverage over a two-year period due to job changes, other life transitions, or periods of financial difficulty, according to the Department of Health and Human Services.
Since price most dictates what Americans’ healthcare coverage actually covers, Republicans effectively “gutted coverage for people with pre-existing conditions” by allowing health insurance companies to pick and choose what healthcare services are covered and at what price for people with pre-existing conditions failing to maintain continuous coverage. That’s why PolitiFact awarded “Half True” ratings to all those ads run by or for Democrats.
So while Lewis isn’t entirely wrong about increased campaign contributions being made to Democratic House candidates in 2018, he is wrong in calling it “liberal special-interest money,” as individual donations were the source of Democrats’ “green wave” of contributions, not PACs representing special interests. Whether that increase in Democratic contributions was a result of McCain’s vote against the AHCA is debatable and impossible to determine. And while Lewis claims that money was used to “propagate false claims that the House plan 'gutted coverage for people with pre-existing conditions,’” those claims made by and in behalf of Democrats were at least partially true, making Lewis mostly wrong, but not entirely wrong.
"Disapprove of the president's style if you like, but don't sacrifice sound policy to pettiness," Lewis wrote to close his op-ed, which would have been fitting had the AHCA actually been sound policy. The MacArthur-Meadows Amendment sacrificed any semblance of soundness the AHCA had, so if Lewis wants to blame someone for Republicans losing the House, he might start with the members of the House Freedom Caucus instead of attacking a dead POW of the Vietnam War who can’t defend himself.
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The most recent World Health Organization rankings of the world’s health systems has the United States at 37th -- seven spots behind its neighbor to the north, Canada, and 19 spots behind its American predecessor, the United Kingdom. That might not seem so bad on a list 190 nations long, but the United States ranks last in health care system performance among the 11 richest countries included in a study conducted by The Commonwealth Fund. In that study, “the U.S. ranks last in Access, Equity, and Health Care Outcomes, and next to last in Administrative Efficiency, as reported by patients and providers.”
Much of our inflated health insurance premiums in America comes from paying to create your bill. That’s right -- 25 percent of total U.S. hospital costs are administrative costs. The United States had the highest administrative costs of the eight countries studied by The Commonwealth Fund. Scotland and Canada had the lowest, and reducing U.S. per capita spending for hospital administration to Scottish or Canadian levels would have saved more than $150 billion in 2011.
Treating healthcare like any other marketplace requires careful, complicated codification of products sold and services rendered. People must be paid to determine how much your healthcare costs, and that can’t be changed, but it can be improved upon. Allowing insurance companies to profit from people’s health makes for a marketplace in which every cent of cost is counted and every penny of profit is protected. Profit motive always results in more scrutiny by the haves at the expense of the have-nots.
You might think that an industry that preys on the unhealthy and the healthy alike would prefer their consumers healthy as to enjoy the profits from your premium payments without paying for healthcare. But the cost of your health insurance premium already includes your health insurer’s profit margin. The health insurer is going to do all it can assure a certain amount a profit except for a catastrophic health emergency that consumes the country. But if the consuming population is unhealthy relative to other markets, the health insurer has good reason to inflate prices to cover its projected costs. That is indeed the case in the United States.
The United States is the 34th healthiest nation in the world, according to 24/7 Wall St. That’s not terrible, but not what you probably expect from a nation advertised by Americans as the greatest in the world. And you’re paying for it.
Not unlike a mortgage or auto insurance premium, the cost of your health insurance premium is an average based on the health insurer’s risk. That risk is the potential costs the health insurer could incur based on the perceived health of its insured consumers. I’ve written in the past how Republicans can’t repeal and replace Obamacare because their constituents, most of whom reside in the South, need Obamacare. Southerners are the least healthy Americans, with 20 percent reporting fair or poor health in 2014. The South also has the highest rates for diabetes, obesity and infant mortality in the nation. The South also accounts for nearly as many uninsured people as the rest of America combined, and 17 percent of the uninsured fall into the coverage gap for Medicaid expansion. Your health insurance premiums pay for their healthcare as well as your own, which is why, given the current for-profit health insurance marketplace, I would welcome a fat tax.
A fat tax is a tax on fat people. People who live unhealthy lifestyles should pay more for health insurance. As a healthy consumer of health insurance, I’d prefer to pay a lower premium given my dedication to maintaining good health at the expense of those who refuse to maintain good health. I might be fat shaming some people, but I don’t care. I shouldn’t have to pay for your diabetes because you can’t resist stuffing your face with Twinkies. Maintaining your health is your responsibility and no one else’s, and you should be punished for failing to maintain good health at the expense of your neighbors. But since something that could ever be referred to as a fat tax by the opposition would never pass Congress, a rewarding people with discounts for their healthy habits would be much more likely.
I foresee this program as mirroring the Progressive auto insurance Snapshot program -- “a program that personalizes your rate based on your ACTUAL driving.” Instead of plugging a device into your car, you’d use a Fitbit or similar health monitoring device with a heart rate monitor. Couple your daily monitoring of your exercise and diet with the results of regular checkups with your physician to confirm your healthy habits and you’ll be given a discount on your monthly health insurance premium as determined by your overall health.
Simply scheduling and completing regular checkups will help lower premium prices by catching things early and allowing for preventative medicine to work rather than resorting to more expensive reactionary measures. That could be the first discount bracket: schedule and complete a physical twice annually for two percent off your monthly premium. That way everyone at least has a chance to save some money. Those who fail to do so will pick up the tab.
The real discounts will be reserved for those consumers who regularly show signs of living a healthy lifestyle. People who don’t use tobacco products would receive a one-percent discount on their monthly premiums that the insurer will recoup from charging tobacco users with a one-percent premium penalty.
Non-drinkers would also receive a one-percent discount, as alcohol is a cancer-causing carcinogen and dangerous when consumed irresponsibly. Accessing a penalty for drinking, however, would be problematic, as social and occasional drinkers shouldn’t be penalized for enjoying alcohol responsibly. But say you get a ticket for driving while intoxicated -- that’s two percent tacked onto your health insurance premium for putting your own health and the health of your neighbors at risk. The same goes for possession of illegal drugs, except cannabis. No discount or penalty would be accessed for cannabis use since it is proven to kill cancer cells and be of medical value.
Even if you are a tobacco user and a heavy drinker or drug user, you too deserve opportunities to lower your health insurance premiums. So anyone who meets the Department of Health and Human Services recommendations for weekly exercise for a month gets a one-percent discount on their premium the following month. That’s just 150 minutes of moderate aerobic activity or 75 minutes of vigorous aerobic activity weekly. Add that to the two-percent discount for completing bi-annual physicals, and you could offset the penalties of driving under the influence and smoking.
Big money will be saved based on your body fat. If an adult male or female maintains an athletic body fat percentage (between five and 10 percent for males and between eight and 15 percent for females), they get an additional two-percent premium discount on top of the two percent for completing bi-annual physicals. That same two percent would have to be paid by someone, though, so it would fall on the obese.
Adult males with a body fat percentage over 24 and adult females with a body fat percentage over 37 would receive a two-percent premium penalty. If they make their two appointments for physicals annually, there wouldn’t be any change to their bill. The overweight, being males with body fat percentages between 21 and 24 and females with body fat percentages between 31 and 36, would receive a one-percent premium penalty.
Adult men with body fat percentages between 11 and 14 and women between 16 and 23 would get a one-percent discount for maintaining a “good” body fat percentage. Those men with body fat percentages between 15 and 20 and women with body fat percentages between 24 and 30 would pay no penalty nor receive a discount for maintaining “acceptable” body fat percentages.
These discounts and penalties would motivate consumers to improve their health in order to save money, in turn, lowering premiums for everyone by improving the overall health of all consumers in the marketplace. The higher the U.S. climbs out of that 34th spot in overall health, the less everyone pays in health insurance premiums.
I pay roughly $135 monthly in health insurance premiums for a high-deductible, Bronze package I found on MNSure -- Minnesota’s equivalent to the Obamacare marketplace. I maintain an athletic body fat percentage under 10 (two-percent discount). I exercise and regularly exceed the Department of Health and Human Services’ weekly recommendations (one-percent discount). I don’t smoke (one-percent discount), and I don’t drink (one-percent discount). I saw my doctor twice last year (two-percent discount). Add it all up and I’d save seven percent on my monthly health insurance premiums, or a measly $9.45 monthly. That’s over $113 annually, though, much of which would be recouped from the penalties assessed to the unhealthy. I could think of a lot of things on which I could spend that $113. It would be nice to be able to afford a steak once in a while.
While Medicare-for-All is picking up steam in Liberal circles, it’s still at least three years away from being seriously considered by Congress as a solution to ever-increasing healthcare costs. Meanwhile, here’s a solution that addresses two problems: ever-increasing healthcare costs and the declining health of Americans overall.
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Despite Donald Trump declaring Obamacare dead after signing an executive order on Thursday, United States Senators came to a bipartisan agreement on Tuesday to float Obamacare for the next two years. That doesn’t mean Obamacare is in the clear, but it is still the law of the land, and with open enrollment beginning on Nov. 1, it’s time you understood your healthcare options so you can make the right choice for you and your family.
Medicaid expansion has been implemented in 32 states, and if you’re a citizen of Louisiana, your state expanded Medicaid in July of 2016, so check to see if you qualify. If you make less than $16,040 annually and are single, you do. Here’s the breakdown of the Federal Poverty Level for households of multiple people and here’s where you can find your state’s income requirements. Medicaid in any state will be considerably cheaper than a Bronze plan on the Obamacare marketplace.
Louisianans are already taking advantage of the Medicaid expansion, with enrollment in the program increasing 42 percent since Obamacare debuted in 2013. The state’s 21.7 percent uninsured rate in 2013 has fallen to 12.7 percent.
Going uninsured only increases premiums for your family, friends and neighbors, and if you were to require medical care, you would incur considerable medical debt for which you could end up paying the rest of your life. A 2016 study by the National Bureau of Economic Research found those who visit the hospital without insurance double their chance of declaring bankruptc within four years.
Even if your hospital visit doesn’t burden you with medical debt, any “uncompensated care” the hospital provides, it makes up by raising rates on medical care for everyone. So going uninsured raises medical costs for everyone and is not advised.
That said, if you haven’t been to the doctor in years, don’t do dangerous work or have dangerous hobbies and are healthy -- you can determine whether it would be cheaper to pay the penalty for going uninsured than it would be to pay a health insurance premium.
The penalty for going uninsured in 2017 is 2.5 percent of your income or $695 -- whichever is higher. So if you make less than $27,750 annually, you’d pay $695, which would likely be cheaper than any health insurance plan you could purchase on the Obamacare marketplace. In fact, if you make less than $45,000 annually, the penalty for going uninsured ($1,125) is likely less than your premiums would be for the year. Keep in mind that premium payments are only part of your potential healthcare costs, though. It only takes one accident or illness to make you regret going uninsured.
Catastrophic health insurance plans cover the same essential health benefits marketplace plans cover, including preventative care and three primary care visits. They’re also cheap and protect you from both the penalty for going uninsured and the medical debt that could bankrupt you in the future. You might even qualify for a catastrophic plan if you’re over 30 years old.
If you have experienced any one of the hardships listed here in the past year, you could qualify for a catastrophic health insurance plan. Some examples would be death of a family member, increased expenses due to caring for a sick family member, or damage to property due to natural disaster. You might even qualify if you experienced a hardship applying for health insurance not listed on the website.
You could also be eligible for a catastrophic health plan if your employer doesn’t offer affordable health insurance and Obamacare is prohibitively expensive for you, or if your state didn’t expand Medicaid, for which you would qualify. Be sure to investigate your eligibility for a catastrophic health insurance plan thoroughly, especially if you live in one of the 18 states that didn’t expand Medicaid.
If you and your family is healthy and has no history of medical problems, a Bronze health insurance plan is probably all you need. Bronze plans only cover up to 60 percent of medical costs, though. Silver health insurance plans cover up to 70 percent of expenses, Gold plans cover 80 percent and Platinum plans cover up to 90 percent of medical expenses.
Based on you and your family’s medical history and current health, you can determine which plan best fits into your budget while also covering your expected medical costs for the year. If you are injury-prone or have a history of visiting the hospital regularly, a Gold or Platinum plan might actually save you money in a bad year health-wise.
So there’s your checklist for understanding your options prior to Obamacare open enrollment starts on Nov. 1. Exhaust all of your healthcare options before giving up and taking the penalty, because you never know what could happen.
If you like this, you might like these Genesis Communications Network talk shows: USA Prepares, Building America, Free Talk Live, The Easy Organic Gardener, American Survival Radio, Jim Brown’s Common Sense, Good Day Health, MindSet: Mental Health News and Information, Health Hunters, America’s Health Advocate, The Bright Side, The Dr. Daliah Show, Dr. Asa On Call, The Dr. Bob Martin Show, Dr. Coldwell Opinion Radio, The Dr. Katherine Albrecht Show
The Senate Republicans’ Better Care Reconciliation Act takes federal money dedicated to America’s poor and gives it to the rich. While Obamacare raised taxes on high-income Americans to subsidize insurance for the poor, the Republicans intend to cut those taxes and reduce federal funding to insure low-income Americans.
So instead of insuring the most Americans and lowering the collective tax burden of uninsured hospital visits, the Republicans’ plan is to insure fewer Americans and increase that collective burden for which we all pay. Those visits by uninsured Americans cost $900 each.
Those likely to be hit hardest are those on Medicaid, which includes nearly 40 percent of all American children. The Republicans are proposing a maximum payment to states per enrollee, and while it’s set to increase annually, it will be at a lower rate than medical costs increase. So Medicaid enrollees will be forced to flip more of the bill or go uninsured. As time goes by, fewer and fewer Americans will be insured, and we’ll be right back in the mess Obamacare fixed.
I realize the Republicans are all about personal responsibility, but they have to realize that many Americans are not personally responsible. A 30-year-old, healthy American who doesn’t partake in dangerous activities (i.e. driving, which is the most dangerous activity) could likely go uninsured and not cost the American taxpayer a dime during the year. But those aren’t the people that caused the health insurance mess in the first place. Insurers have caused this mess, and the Republicans just want to keep paying them more.
The moment this idea for private health insurance came about the average American was screwed. Profiting from people’s health is not unlike the undertaker profiting from death. People will pay anything to live longer, and people will pay just about anything for someone to “make the arrangements” for loved ones who have died. “Just because we’re bereaved doesn’t make us saps!” says Walter Sobchak in The Big Lebowski. Well, people are saps when faced with death, which is exactly why private insurance is wrong on every level.
Faced with death, money's no object. It doesn’t matter how rich or poor you are, you’d give anything you had to live longer. Republicans realize this and intend to take everything you have so you have nothing to give when faced with death. It’s why they take affordable insurance plans and make them unaffordable behind the guise of “personal responsibility,” and it’s why they move federal dollars from benefiting those who need them most to people who don’t need them at all.
I am one of the 74 million Medicaid enrollees that only has insurance because of Obamacare and because my home state expanded Medicaid. I feel sorry for the states that have elected not to expand Medicaid. I pay $264 annually for health insurance. I have made two doctor’s visits in the last year. Before that I was uninsured and paid nothing. At least now I’m creating revenue and saving the American taxpayer money by not making hospital visits while uninsured.
I will lose insurance because of the Republicans’ bill and won’t feel guilty about costing the American taxpayer money if I’m forced to see a doctor while uninsured. Nobody should. This bill will be a disaster for America, and in five years or so, we’ll be attempting to fix the same problem Obamacare fixed. Hopefully, next time, a Medicaid-for-all plan will be the only one considered. Until then, low- and moderate-income Americans will either pay a higher percentage of their income to private insurance companies or go without, raising the tax burden for all Americans. How is this bill supposed to help everyone again? Oh, right. It’s not about everyone for the Republicans. It’s about them and their deep pockets, and the rich people like them.
If you like this, you might like these Genesis Communications Network talk shows: USA Prepares, Building America, Free Talk Live, The Easy Organic Gardener, American Survival Radio, Jim Brown’s Common Sense, Good Day Health, MindSet: Mental Health News and Information, Health Hunters, America’s Health Advocate, The Bright Side, The Dr. Daliah Show, Dr. Asa On Call, The Dr. Bob Martin Show, Dr. Coldwell Opinion Radio, The Dr. Katherine Albrecht Show
On Thursday, by a slim margin, the vote of 217-213 was one over the 216 votes needed to pass the bill.
The AHCA includes an amendment that includes $8 billion in spending over 5 years to subsidize high risk pools that could be affected by the “waivers” offered to states who wished to opt out of requirements that insurance companies cover preexisting conditions.
Freedom Caucus members who opposed the first draft of the bill, supported this new bill, crucial to allowing President Trump to make good on his promise to “repeal and replace” Obamacare. Representatives Fred Upton and Billy Long switched their vote from “no” to “yes” bolstering GOP support for the bill that could not lose more than 22 votes.
The American Health Care Act has had to appeal, not to Democrats, but to GOP members who were split on whether the AHCA repealed too many popular components of Obamacare.
The original AHCA including the following:
Eliminate the tax penalties, “individual mandate” and “employer mandate” imposed on those who don’t purchase health insurance for themselves or employees.
Tax credits will be based on age rather than income ranging from $2000/year for those younger than 30 to $4,000 a year to those who are older than 60. A family would receive up to $14,000 in tax credits a year. These tax credits would start phasing out when income becomes $75K individually or $150K as a family. For every $1,000 in earnings above those thresholds, the value of the credit phases down by $100.
Allow insurance companies to charge a 30% surcharge to those who have gaps in insurance longer than 63 days.
Maintain coverage, preventing denial, to those with pre-existing conditions
Maintain coverage for children under age 26 who wish to stay on their parent’s plans.
Maintaining the bans on caps on annual or lifetime coverage
By 2020, ACA promised federal funds for Medicaid expansion will stop. Funds will continue for current Medicaid recipients
Create a Patient and State Stability Fund, which provides states $100 billion to use as they wish for their underserved populations, hospitals, providers or programs that would provide direct care.
States will receive money for Medicaid in a lump sum per person rather than an open-ended promise of funds.
Taxes on medical device industry will expire as will those on pharmaceutical companies and indoor tanning services.
Planned Parenthood is “defunded” as AHCA funds cannot be used to pay for services at their clinics.
HRA increase – starting in 2018 individuals could contribute pretax dollars to their Health Savings Account up to $6550 individually and families up to $13,100.
The bill is being analyzed by the Congressional Budget Office (CBO) and will need to be approved by the Senate to move forward.
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Daliah Wachs, MD, FAAFP is a Board Certified Family Physician. The Dr. Daliah Show , is nationally syndicated M-F from 11:00am-2:00pm and Saturday from Noon-1:00pm (Central) at GCN.
Republicans are again trying to repeal and replace Obamacare, but what they’re really doing is attempting to alter the Affordable Care Act just enough so they hold onto their jobs and fulfill a promise made by Donald Trump to repeal and replace Obamacare “one Day 1.” We are nearing Day 100, and the House Republicans can’t even agree amongst themselves let alone get enough votes in the Senate to pass their American Health Care Act.
The best thing that could have happened for Republicans with regard to the Affordable Care Act would have been to accomplish the goal announced by House Majority Leader Mitch McConnell just after Barack Obama was elected president. "The single most important thing we want to achieve is for President Obama to be a one-term president,” he said. They failed, and so will their attempt to repeal and replace Obamacare.
The problem for Republicans, and specifically Southern Republicans, is that Obamacare is working for some and would work for most of their constituents. In fact, the South had the highest rate of uninsured people in 2012 at 18.6 percent. And it’s not all Hispanics. Over 68 million of them are white.
Southerners are also the least healthy of all Americans, with 20 percent reporting fair or poor health in 2014. Southerners are also the most impoverished Americans, with 17 percent of Southerners living below the poverty level in 2014. The South also has the highest rates for diabetes, obesity and infant mortality in the nation. The South accounts for nearly as many uninsured people as the rest of America combined, and 17 percent of the uninsured fall into the coverage gap for Medicaid expansion.
Yet Southerners have taken advantage of, or actually, been disadvantaged by the Supreme Court decision to not force Medicaid expansion upon all states. Had all states been required to expand Medicaid, 7 million people would gain coverage, 4.3 million fewer people would be uninsured and states would see between $5 and $10 billion in uncompensated care savings over the next 10 years, which would offset increased state spending by between 13 and 25 percent.
Of the 19 states resisting Medicaid expansion, 14 are in the South. The states with the most people who stand to gain insurance through expansion are Florida (1.253 million), Texas (1.186 million) and Georgia (.682 million). Georgia nearly elected a Democrat to the house just a few days ago, Texas is turning blue, and two Republican incumbents lost House seats to Democrats in Florida last November, while Democratic incumbents retained all six of their seats.
In short, Southerners need Obamacare and the subsidies that come along with it. They’re just starting to realize it. Now, if America adopted a Medicare-for-all system that Bernie Sanders has proposed, maybe we could stop spending nearly $3 quadrillion on health care as a nation.
If you like this, you might like these Genesis Communications Network talk shows: USA Prepares, Building America, Free Talk Live, The Easy Organic Gardener, American Survival Radio, Jim Brown’s Common Sense, Good Day Health, MindSet: Mental Health News and Information, Health Hunters, America’s Health Advocate, The Bright Side, The Dr. Daliah Show, Dr. Asa On Call, The Dr. Bob Martin Show, Dr. Coldwell Opinion Radio, The Dr. Katherine Albrecht Show, Drew Pearson Live