Health Care Reform Facts and Flaws

April 23, 2010

By Padmini Arhant

The reason this topic cannot be swept under the rug, is the confirmed negative factors directly affecting the national deficit, the Senior citizens and the ‘average American’ families for whom the reform should be immediately favorable and not otherwise.

Following the blogpost titled “Health Care Legislation Amendment” April 22, 2010 supplemented with New York Times article reporting the ‘Senators fear Insurance Premium hikes’ prompting them to pass federal regulation on health rates,

There is yet another report with more alarming details.

According to Associated Press – April 23, 2010

Report: Health care costs set to climb –

President’s effort to control spending falls short, review finds

By Ricardo Alonso-Zaldivar – Thank you.

Washington – President Barack Obama’s health care overhaul law will increase the nation’s health care tab instead of bringing costs down, government economic forecasters concluded Thursday in a sobering assessment of the sweeping legislation.

A report by economic experts at the Health and Human Services Department said the health care remake will achieve Obama’s aim of expanding health insurance – adding 34 million Americans to the coverage rolls.

However, the analysis also found that the law falls short of the president’s twin goal of controlling runaway costs.

It also warned that Medicare cuts may be unrealistic and unsustainable, driving about 15 percent of hospitals into the red and “possibly jeopardizing access” to care for seniors.

The mixed verdict for Obama’s signature issue is the first comprehensive look by neutral experts.

In particular, the warnings about Medicare could become a major political liability for Democratic lawmakers in the midterm elections.

Seniors are more likely to vote than younger people and polls show they are already skeptical of the law.

The report from Medicare’s Office of the Actuary carried a disclaimer saying it does not represent the official position of the Obama administration.

White House officials have repeatedly complained that such analyses have been too pessimistic and lowball the law’s potential to achieve savings.

The report acknowledged that some of the cost-control measures in the bill – Medicare cuts, a tax on high-cost insurance and a commission to seek ongoing Medicare savings – could help reduce the rate of cost increases beyond 2020.

But it held out little hope for progress in the first decade.

“During 2010-2019, however, these effects would be outweighed by the increased costs associated with the expansion of health insurance coverage,” wrote Richard Foster, Medicare’s chief actuary.

“Also, the longer-term viability of the Medicare … reductions is doubtful.”

Foster’s office is responsible for long-range costs estimates.

Republicans said the findings validate their concerns about Obama’s 10-year, nearly $1 trillion plan to remake the nation’s health care system.

“A trillion dollars gets spent, and it’s no surprise – health care costs are going to go up,” said Rep. Dave Camp, R-Mich., a leading Republican on health care issues.

Camp added that he’s concerned the Medicare cuts will undermine coverage for seniors.

The health care law, passed by a divided Congress after a year of bitter partisan debate, would create new health insurance markets for individuals and small businesses.

Starting in 2014, most Americans would be required to carry health insurance except in cases of financial hardship.

Tax credits would help many middle-class households pay their premiums, and Medicaid would pick up more low-income people.

Insurers would be required to accept all applicants, regardless of their health.

A separate Congressional Budget Office analysis, also released Thursday, estimated that 4 million households would be hit with tax penalties under the law for failing to get insurance.

The U.S. spends $2.5 trillion a year on health care, far more per person than any other developed nation, and for results that aren’t clearly better when compared to more frugal countries.

At the outset of the health care debate last year, Obama held out the hope that by bending the cost curve down, the U.S. could cover all its citizens for about what the nation would spend absent any reforms.

The report found that the president’s law missed the mark, although not by much.

The overhaul will increase national health care spending by $311 billion from 2010-2019, or nine-tenths of 1 percent.

To put that in perspective, total health care spending during the decade is estimated to surpass $35 trillion.

Administration officials argue the increase is a bargain price for guaranteeing coverage to 95 percent of Americans.

The report’s most sober assessments concerned Medicare.

In addition to flagging the cuts to hospitals, nursing homes and other providers as potentially unsustainable, it projected that reductions in payments to private Medicare Advantage plans would trigger an exodus from the popular program.

Enrollment would plummet by about 50 percent, as the plans reduce extra benefits that they currently offer.”
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Cost/Benefit Determination – By Padmini Arhant

As stated earlier in the ‘National Health Care Legislation’ analysis and subsequent articles related to the health care reform on this website,

The contentious factors in the health care bill are:

The effects of law set in 2014 and 2019 for the 34 million Americans to obtain coverage and,

The exclusive “private for profit” health care service in the absence of a formidable challenger such as the ‘Universal Medicare’ program to provide real protection to the victims in the health care crisis,

Federal aid to middle-class and lower income families is an appropriate measure.

Again, this would not happen until 2014.

However, if it’s meant to facilitate the means for the mandatory insurance purchase from a private industry with enormous flexibility in price adjustments reinforced by the penalties against the struggling households and corporations will be a bonanza for the insurance industry.

Per the AP article, the CBO analysis estimated “4 million households would be hit with tax penalties under the law for failing to get insurance.”

The report found that “the overhaul will increase national health care spending by $311 billion from 2010 – 2019, or nine-tenths of 1 percent.

To put that in perspective, total health care spending during the decade is estimated to surpass $35 trillion.”

Most poignantly, the costs and benefits during 2010 -2019 and beyond are entirely at the private insurance and health care industry discretion with the federal funding for the coverage to the unaffordable and uninsured segments.

Insurers would be required to accept all applicants, regardless of their health.

Nevertheless, the requirement for the insurance industry has no consequences.

Unlike the 4 million households and the corporations facing penalties upon the insurance purchase default.

Then the effects on Medicare elaborated in the reports from the Medicare Office of the Actuary and the neutral economic experts at the Health and Human Services Department deserve attention.

‘It warned that the unrealistic and unsustainable Medicare cuts would drive out 15 percent of hospitals into the red and “possibly jeopardizing access” to care for seniors.

During the 2010 – 2019, the increased costs associated with the expansions of health insurance coverage are expected to outweigh the cost-control strategies in the bill – Medicare cuts …

Also, the longer-term viability of the Medicare reductions is doubtful.

Assessment flagged the Medicare cuts to hospitals, nursing homes and other providers as potentially unsustainable.

Further, it projected that reductions in payments to private Medicare Advantage plans would trigger an exodus from the popular program.

Enrollment would plummet by about 50 percent, as the plans reduce extra benefits that they currently offer.”

Clearly these drastic steps against Medicare is designed to serve the private industry forcing subscribers to choose the private plan due to the extreme reduction in benefits and care, which is adequately prevalent in the current system.

Indeed, the devil is in the details.

Despite the overwhelming health care spending for the decade 2010 -2019, estimated to surpass $35 trillion, the private industry reap the extraordinary benefits with the mandatory insurance law including the penalties against the uninsured.

In addition, the average citizens as consumers and taxpayers would be deprived of the desirable health care with the Medicare cuts to the private sector’s advantage.

Health care is a matter of life and death.

Since, the 34 million Americans will be covered in 2020 and not in 2010, the argument that,

‘The deal is a bargain for guaranteeing coverage to 95 percent Americans’ does not bode well,
especially with the population needing urgent medical treatment now and the astronomical national health care costs evaluated to surpass $35 trillion for the decade 2010 – 2019.

Predominantly due to the status quo extension with the private health care management.

There is no doubt that the health care bill on Medicare and the culminating factors are going to be a major political liability in the midterm elections.

The Republican members cannot possibly derive any credit from their abstinence in the health care legislation.

It’s a win-win situation for the industry with,

The Republican members declining support to the “Universal Medicare.”

Thus, becoming the proxy for the private sector.

Case in point – Filibuster threat against the Independent Senator from Vermont – Bernie Sanders’ courageous call for “single payer” system thwarted with undemocratic opposition.

Expressing concern over the Medicare cuts for seniors and at the same time refusing to vote for the Universal Medicare for all citizens by the Republican members confirms political expediency.

The democrats on their part anyhow ended up with the legislation delivering victory to the special interests.

With the political system controlled by the lobbyists, the citizens only hope is to take democratic action by demanding that the health care legislation be amended in people’s favor.

“Universal Medicare” is easily affordable at $35 trillion and Single Payer system efficiently addresses the health care crisis and the rising national deficit.

Any reluctance from the lawmakers to amend the bill to ‘Universal Medicare’ would reflect their priorities.

Now is the time for citizen action to save lives and democracy.

Thank you.

Padmini Arhant

Written by Padmini Arhant · Filed Under Health | Leave a Comment 

National Health Care Legislation

March 29, 2010

By Padmini Arhant

Last week, President Barack Obama and the Democrats in Congress achieved a historic victory in passing the health care legislation.

The legislative components and the effective period are presented below:

According to the New York Times report March 22, 2010

By Robert Pear and David M. Herszenhorn – Thank you.

Source: Speaker of the House, Congressional Budget Office, Kaiser Family Foundation, MCCLATCHY – TRIBUNE

HIGHLIGHTS OF THE HEALTH CARE OVERHAUL LEGISLATION, WHICH WILL:

1. 90 days after enactment: Provide immediate access to high-risk pools for people with no insurance because of pre-existing conditions.

2. 6 months after enactment:

Bar insurers from:

Denying people coverage when they get sick

Denying coverage to children with pre-existing conditions

Imposing lifetime caps on coverage

Require insurers to:

Allow young people to stay on their parents’ policies until they turn 26

3. Within a year: Provide a $250 rebate to Medicare prescription drug beneficiaries who reach the coverage gap called the “doughnut hole”

4. Jan 1, 2011: Require individual and small group market plans to spend 80 percent of premium dollars on medical services; large group plans would have to spend at least 85 percent

5. 2013: Increase the Medicare payroll tax on dividend, interest and other unearned income for singles earning more than $200,000 and joint filers making more than $250,000

6. 2014: Provide subsidies for families earning up to 400 percent of poverty level ($88,200 a year for a family of four)

Require most employers to provide coverage or face penalties

Require most people to obtain coverage or face penalties

7. 2018: Impose 40 percent excise tax on high-end insurance policies

8. 2019: Expand health insurance coverage to 32 million people

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Late deals added to bill’s revisions – By Alan Fram Associated Press – March 22, 2010 – Thank you.

The latest changes to the bill include:

Tax-exempt insurers would have to pay a new fee levied on insurers on only half their premiums.

An Aug.1, 2010, deadline on new doctor-owned hospitals to apply to the government for eligibility to serve – and get paid for Medicare patients would be extended to Dec. 31.

A new 2.9 percent excise tax on medical devices would be lowered to 2.3 percent.

But it will be broadened to apply to some lower-cost devices it hadn’t initially covered, though hearing aids, contact lenses and other items would be excluded.
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Review and Analysis – By Padmini Arhant

There have been numerous questions by the anxious uninsured and they are being presented in this analysis.

Congressional Report dissection:

Clarification from the legislators would be helpful in understanding the criteria in the following categories:

1. 90 days after enactment: Provide immediate access to high-risk pools for people with no insurance because of pre-existing conditions.

From the concerned individuals – the uninsured with pre-existing conditions but are unsure of their acceptance in the high-risk pool due to variations in the health issue.

A. Who are the qualifiers under the ‘high-risk’ pool in the ‘insurers’ language?

B. Should the insured expect escalation in premium costs due to their ‘pre-existing’ diagnosis as compared to the healthy individuals?

C. If there is a difference in coverage costs; by what percentage will it affect them?

As per the Associated Press report, March 24, 2010 –

D. “But a provision to protect children in poor health has a gap. Insurers would still be able to deny new coverage to kids with health problems until 2014.”

Is it possible for these kids to access care under ‘high-risk’ pool, which is expected to be effective in three months from now, i.e. June 2010?

Therefore, specifics are required in this respect.
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2. 6 months after enactment – October 2010,

The legislative component reverses the status quo for those who are currently insured and,

A. Have difficulties on coverage during their illness including children with pre-existing conditions.

B. Parents are permitted to keep their adult offspring until age 26, on their policy.

C. It prohibits the insurers from limiting coverage and policy cancellation when the patients require treatment.

Unequivocally, it’s a crucial piece of legislation.

However, it could have been made effective immediately rather than a six months delay, due to the nature of the problem.

As it’s well known that in health situations, the cost and cure factor is dependent upon early intervention.
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3. Within a year i.e. in 2010 the legislation involves $250 rebate to Medicare prescription drug beneficiaries upon them reaching the ‘doughnut hole’ or the coverage gap –

Any financial relief to senior citizens and others dealing with enormous health care costs is a welcome change.

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4. Jan 1, 2011 – Enactment calls for ‘marketplace’ insurers to invest premium dollars on medical services by 80 percent for individuals and small plans, whereas the large groups by 85 percent respectively.

Monitoring is essential to ensure such practice among the insurers.

In the absence of oversight, the law would be redundant.

That’s why the independent and non-profit ‘National Consumer Health Rights Agency,’ would be ideal to deliver the service.

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5. 2013: Increase the Medicare payroll tax on dividend, interest and other unearned income for singles earning more than $200,000 and joint filers making more than $250,000

This was the proposal from the House of Representatives to generate revenue for the health care overhaul.

It appears to be preset to meet with the ‘PAYGO’ budgetary requirement to pay for expenditures with funds for the program in progress.

A prudent fiscal policy that is necessary to address the national deficit and approved by the Congressional Budget Office. It’s an important feature of this legislation.

The Republican opposition projected the negative implication of this particular rule on Medicare recipients quoting that ‘the Medicare quality would be affected.’ They need to explain their position.

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6. 2014: Provide subsidies for families earning up to 400 percent of poverty level ($88,200 a year for a family of four)

Require most employers to provide coverage or face penalties

Require most people to obtain coverage or face penalties

7. 2018: Impose 40 percent excise tax on high-end insurance policies

8. 2019: Expand health insurance coverage to 32 million people

In reference to Points 6, 7 and 8:

Perhaps, the funds from the Medicare payroll tax mentioned above are allocated for the subsidies and Medicaid beneficiaries.

Similarly, the 40 percent excise taxes on high-end insurance policies set up to eventually expand health insurance coverage to the targeted 32 million uninsured in 2019.

Again, the same reason stated under 2 C of the analysis, applies to these rules of law.

The people who can’t afford health insurance are most vulnerable to health problems that ultimately become the tax payer responsibility as experienced up until now.

Hence, the law being effective in 2014, four years away from the signed legislation and the reality of the 32 million people being covered in 2019 is a legitimate cause for disappointment among the uninsured.

The authorities owe a plausible explanation to the suffering population regarding the distant period setting for the effectiveness of the law, especially 2014 and 2019.

What is happening to this segment between now and then?

Are there provisions for tax credits to the middle class families and Medicaid expansion to cover the interim premium costs by the uninsured and the unaffordable groups in the society?

If so, how is it being paid for?

Since the revenue from Medicare payroll tax and the excise tax are scheduled in 2013 and 2018, to fund the federal subsidies to lower income families in 2014 and the 32 million uninsured in 2019 respectively,

The health insurance reform cannot be truly evaluated until after 2014.

Besides, the health insurance legislation based on ‘private for profit’ strategy is subject to market rates in 2014 and beyond.

Meanwhile, the legislation tackles the problems faced by the “insured” groups in the society that are significant and guaranteed to save lives.

According to the media reports, the House and the Senate leaders confirmed the available votes to implement a ‘Public Option’ in the health care legislation through reconciliation process within the year.

Indicating that – “We have the votes and we need the will to move forward.”

It’s the best hope for the average citizen in the health insurance reform, considering the anticipated changes becoming law not until 2014 and 2019.

Having passed the legislation, the lawmakers can amend the bill to accommodate the genuine requests from the average citizens for whom the reform was initiated.

It’s a matter of honoring the people’s will in a democracy.

Thank you.

Padmini Arhant

Written by Padmini Arhant · Filed Under Health | Leave a Comment 

Keeping Democracy Alive

March 8, 2009

The new administration is still in the process of filling positions and since the beginning, there has been problems with some major cabinet appointments as the nominees had withdrawn from considerations to avoid political challenges during the hearing process.

Lately, it appears to be the nominee CNN medical correspondent Dr. Sanjay Gupta.

It is evidenced in the following article;

Gupta won’t be next surgeon general

Neurosurgeon and TV Correspondent withdraws from Consideration

By Richard Alonso-Zaldivar, Associated Press – Thank you.

CNN medical correspondent Dr. Sanjay Gupta won’t be the next surgeon general, the Obama administration confirmed Thursday.

Gupta 39, a neurosurgeon with star appeal, was seen as President Barack Obama’s first pick for the job. He would have brought instant recognition to the office of surgeon general, a post that has lacked visibility since the days of C. Everett Koop during Ronald Reagan’s presidency.

An administration official said that Gupta had been under “serious consideration” but took himself out of the running because he wants to focus on his medical career and spend more time with his family.

“We know he will continue to serve and educate the public through his work with media and in the medical arena,” said the official, speaking on condition of anonymity because of the sensitivity of nominations.

The official said there were no problems that would have disqualified Gupta, and it was his decision to withdraw.

The surgeon general is the nation’s doctor, and while the job doesn’t involve much policymaking responsibility, it’s a bully pulpit for promoting public health. Gupta could have helped Obama pitch his health care reform plan.

Initial reports in early January that Obama had approached Gupta about the job created a stir. The new president had not yet taken office. The chairman of the American Medical Association’s board said at the time it would be a boon to the government if Gupta accepted.

But Gupta would have had to give up a lucrative career. He hosts “House Call” on CNN, contributes reports to CBS News and writes a column for Time magazine. He also practices surgery at Atlanta’s Grady Memorial Hospital, which sees more than its share of trauma cases.

Political opposition had started to form.

House Judiciary Committee Chairman John Conyers, D-Mich., called Gupta inexperienced and circulated a letter urging Obama not to appoint him. Conyers is a leading supporter of health care reform that would create a government system similar to Canada’s and is particularly influential among liberals.

Gupta does have some Washington experience. During the Clinton administration, he served as a White House fellow and a special adviser to then-first lady Hillary Clinton.”

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Washington Hypocrisy:

Strangely enough, with recent appointees for high profile cabinet positions involving decision-making on International crisis affecting billions of lives around the globe “experience” didn’t seem to matter to the members of the hearing committee.

Some were sworn in with a mere formality hearing and they were aptly called by the media a shoe-in appointment.

Also, there was swift approval of nominees considered “controversial” with tax issues, conflict of interest notwithstanding the nation’s critical cabinet post supposedly being “unconstitutional.”

However, an administrative post with none or minimal policymaking responsibility as cited in the above article, aroused skepticism in the minds of certain members prompting them to an all out campaign against the adequately qualified and nationally as well as internationally prominent candidate with White House experience, reveals the true colors of Washington Politics.

Last fall, history was made for a reason. People of the human race overwhelmingly came together  to convey a loud and clear message…

It is no longer the “red states” or the “blue states”, but it is the United States of America.

Apparently, like everything else it is being regarded a catchy campaign slogan rather than embracing and most importantly practicing to keep democracy alive.

Thank you.

Padmini Arhant

Written by Padmini Arhant · Filed Under United States | Leave a Comment