Public support for health reform rebounds

After a summertime of town hall meetings featuring loud opposition to health reform, (regardless of whether you think that the anti-health reform demonstrations were spontaneous or organized), Congress is buckling down to tackle health reform. The silly season is over, which raises the question: what do Americans now think about health reform?

According to a latest Kaiser Health Tracking poll, “public support for health reform ended its summer slide, reversed course and moved modestly upwards in September.” According to Kaiser, 57 percent of Americans now believe that tackling health care reform is more important than ever—up from 53 percent in August. Despite the uptick, a substantial share of the public (47%) favors taking longer to work out a bipartisan approach to health reform, compared to 42 percent who would prefer to see Democrats move faster on their own.

Substantial majorities of Americans continue to say they back individual reform components designed to expand coverage, including an individual mandate (68%), an employer mandate (67%) and an expansion of state programs such as Medicaid and the Children’s Health Insurance Program (82%). The component that draws among the strongest support across the political spectrum is the provision requiring that health insurance companies cover anyone who applies, even if they are sick or have a pre-existing condition, which garners 80 percent support.

Even health reform support among seniors has increased in the past month, Kaiser found. Seniors are still more skeptical than other groups that health reform will benefit them, but the share of seniors who think their family would be better off if reform passes climbed 8 percentage points from August, from 23 percent to 31 percent. Twenty-eight percent thought they would be worse off, and 33 percent said it wouldn’t make a difference. Fifty-five percent of seniors said they were “confused."

On the other hand. So, clearly, Americans are feeling more positive about health reform, right? Not so fast, according to a recent Rasmussen survey which shows that public support of health reform has reached a new low. Who do you believe, the reputable political pollster or the reputable healthcare pollster? Can they both be right?

With all the public misinformation and confusion surrounding health reform, some experts believe that legislators should not rely on polls at all. As an example of public misinformation/confusion, one poll asked respondents whether the federal government should stay out of Medicare—which is impossible—and 39 percent agreed that it should stay out of it.

In short, Americans say they favor health reform, except when they don’t, if the polls are to be believed. Is it any wonder that our elected officials seem to be all over the place when it comes to health reform? Maybe they’re just reflecting the views of the general public.

Improved Care And Compensation Key To Budget Balance

Health insurance reform opponents maintain that we cannot afford to expand coverage without saddling our children and grandchildren with a huge tax bill for many years to come. Many experts point out that reorganizing and improving care nationwide to eliminate or drastically reduce the waste of unnecessary medical services could help finance expanded access to cover uninsured. We’ve covered a similar topic, reducing medical errors, in a previous blog post.

Physician Elliott S. Fisher, from the Dartmouth Medical School, and colleagues from the Dartmouth Institute for Health Policy and Clinical Practice, discussed the cost reduction solution in the article “Getting Past Denial — The High Cost of Health Care in the United States,” in the September 24 New England Journal of Medicine. These researchers’ conclusions are based on the Dartmouth Atlas of Health Care, first published in 1973 by Dartmouth’s Jack Wennberg, also a physician. The Atlas continues to rigorously examine patterns of medical resource intensity and utilization across the United States.

Doctors and other medical providers often claim that their greater use of services and higher costs are due to sicker, poorer patients. But sicker, poorer patients do not account for the spending differences. Physician Atul Gawande provided an excellent illustration in the case of high cost McAllen, Texas.

When the Dartmouth group reexamined regional differences in price-adjusted health care spending and intensity of care taking into consideration patients’ risk factors, they found that health status accounts for $593 of the $3,280 difference between the lowest- and highest-intensity regions, or just about 18% of the difference. Differences in poverty and income levels in regions accounted for little, if any, of the variation in the cost and intensity of care.

More than 70% of the differences in spending “cannot be explained away by the claim that "my patients are poorer or sicker,"” Dr. Fisher and colleagues wrote.

The Dartmouth Group’s previous extensive research on medical practice patterns across the United States has shown that “discretionary decisions by physicians seem to account for most of the regional variation in spending.” For example, “compared with Medicare beneficiaries in the lowest-spending regions, patients in the highest-spending regions spend more time in the hospital (an average of 2.1 days vs. 1.4 days), have more frequent physician visits (14.5 vs. 10.7 per year), and undergo more magnetic resonance imaging (MRI) procedures (21.9 vs. 16.6 per 100 beneficiaries) and computed tomographic (CT) scans (61.4 vs. 46.9 per 100 beneficiaries).” These differences are not reflected in worse outcomes or in rationing for patients in the lowest-spending regions.

Less intensive, invasive, and more cost-effective services, do require more management time from primary care doctors, nurses, or even specialists, although currently, they are not reimbursed for such time. Instead, physicians are compensated according to the number and complexity of services they provide.

“The implications for health care reform efforts are clear,” Dr. Fisher and colleagues concluded. “Health is indeed a critical determinant of health care spending. Efforts to improve the health of the public and to reduce the burden of chronic illness should be pursued. And because caring for sicker patients costs more, payment reforms will have to be carefully designed. Health systems such as academic medical centers and safety-net providers that care for disadvantaged patients or those with complex conditions will need to be reimbursed fairly with the use of careful case-mix adjustment in order to reduce the likelihood of harm to either patients or the institutions themselves.”

“We should recognize that so much discretionary care is provided in the United States that we could easily afford to expand coverage without increasing taxes — or rationing care — as long as we couple coverage expansion with a commitment to rapidly test and broadly implement successful reforms in payment and delivery systems,” Dr. Fischer and colleagues emphasized. “We should not let denial get in the way of acceptance of the need to move forward on fundamental reform of the U.S. health care delivery system. We can't afford the alternative.”

Nearly all human resources and benefits executives surveyed by the Towers Perrin consulting firm view cost containment for employers and employees and improving health care quality as top priorities for health care reform. The question is, how do we get the other players in this equation on board?.

Scenes from a bill mark up

Sometime ago we discussed how difficult it can be to comprehend legislative language. This issue came up again, briefly anyway, as the Senate Finance Committee spent several days (and nights) last week wading through the more than 500 amendments filed by various Senators (both Republican and Democrat) to the "Chairman's Mark" (that is, the 200-plus page version of health care reform legislation offered by Chairman Baucus (D-MT)). (Mark-up hearings continue this week.)

Senator Bunning (R-KY) offered an amendment that would have required that the actual legislative language of the bill be completed and posted on the Internet 72 hours before the committee votes on the bill. (The 200-page Chairman's Mark is actually a plain language (or, per the Senators, "conceptual language") summary; no actual legislative language is available yet.)

Bunning and other Republicans supporting the amendment argued that it would promote transparency. The Democrats' response? Such a requirement would slow down the process, legislative language is difficult to understand, and, anyway, committee precedent is on their side--SFC apparently always uses a plain language summary as its basis for committee votes. After a spirited debate, the amendment was voted down, almost on party lines--13 to 10. However, Chairman Baucus agreed that a plain language version of the final bill (plus cost estimates from the Congressional Budget Office) would be made available to the public prior to the committee's final vote.

Not surprisingly, the conservative part of the blogosphere had some fun with this one--see here and here for examples. Why not surprising? Well, their side lost. And (ironically) it's an issue that a layperson can understand, unlike many of the issues raised by other amendments on the table (take this one, offered by Sen. Kerry (D-MA): "adjustment to FMAP language to include individuals covered under section 1115 waivers". Only wonks can get worked up about that one (without research, anyway)). Finally, in fairness, there is something odd about the group of people charged with writing the laws being unwilling to grapple with the language of the very statutes they are now trying to change.

So, will this issue matter in the long run? Probably not, though at least one observer thought Senator Snowe (R-ME) was genuinely irritated by the Democrats' position. No doubt the Dems would have preferred to avoid that: Snowe's vote may be very important in the weeks ahead.

Don’t Panic

As my colleague recently pointed out, employers responding to a Towers Perrin survey indicate cost will be their major concern in health reform. Watson Wyatt (soon merged with Towers Perrin) concurs in its own survey of 160 employers, which found that 73% believe health care costs will increase if health care reform legislation is enacted. Even more (86%) think the health care proposals being considered would weaken the role employer-sponsored plans play in providing health care coverage.

These concerns may be especially strong among small employers. Yesterday I talked with a friend in Texas who is starting up a management consulting business with a partner. They plan to hire eight to ten workers, likely through a professional employee organization (PEO). My friend’s partner is quite wary of government intrusion and wondered if it was true that he would have to spend an additional 8% of payroll on employees’ health care and when that was taking effect.

“Don’t panic,*” I told my friend, for several reasons:

1. There are five separate versions of health reform in Congress right now, and no one knows what will be in a final version, if any. No reason to worry about details that are unknowable.

2. All of the proposals do have provisions affects small plans, but they also have provisions that provide exemptions and credits to many small employers. For example, the 8% of payroll figure is only in one of five plans and there are lesser percentages applied to small employers. In fact, if you already provide health care to employees, reform could be a financial advantage.

3. How any of this would affect a PEO is unclear, although one amendment to the Senate Finance bill recognizes a variety of potential questions, including, will small businesses lose eligibility for the small business tax credit if they contract with a PEO for certain human resource services? Will small businesses otherwise exempt from the shared responsibility provisions become liable as a result of the small business-PEO relationship? The amendment can be found here.

4. Effective dates for various provisions range from 2010 to 2017, so right now there is no way to know when a provision might be effective.

So, to all you small employers out there, keep doing what you’re doing.** And don’t panic.

* The advice on the cover of The Hitchhiker’s Guide To The Galaxy, by Douglas Adams.** Paraphrase of end comment in the Food Network Series, Throwdown With Bobby Flay

Pharma scores high in blame game

Who do you blame for the problems with our current health care system? Health insurance companies? The pharmaceutical industry? Former President Bill Clinton?

According to a recent Harris Interactive poll, 90% of adults blame the health insurance industry, and 60% believe it deserves a “great deal” of blame. Almost as many -- 84% -- blame the pharmaceutical industry, and 53% think it deserves a “great deal” of the blame.

Substantial but smaller majorities believe that all of the following are to blame: Republicans in Congress (74%), business (72%), hospitals (70%), Democrats in Congress (69%), President George W. Bush (66%), and doctors (61%). However, less than 30% believe any of these deserve a “great deal” of blame.

A 58% to 42% majority does not think President Bill Clinton is to blame.

What’s the deal? It’s interesting to note the high percentage of folks who blame the pharmaceutical industry for our current problems.

As you’ll recall, earlier this summer, President Obama announced an agreement among the Obama Administration, Senate Finance chairman Max Baucus (D-Mont.), and major drug manufacturers to move toward reducing by half the price of prescription drugs in the Medicare program. Drug manufacturers that participate in Medicare Part D will either pay a rebate to Medicare or offer a substantial discount of at least 50% on prescription drugs to seniors who fall within the "doughnut hole" – payments between $2,700 and $6,153.75 not covered by Medicare.

The agreement would reduce pharmacy industry revenues by $80 billion over ten years by discounting the cost of medicines in Medicare's Part D prescription drug program.

Strange bedfellows? Many questions have arisen about this agreement. Former Secretary of Labor Robert Reich posted on his blog that he was “appalled by the deal the White House has made with the pharmaceutical industry's lobbying arm to buy their support.”

Michael C. Dorf, a FindLaw columnist, examines the deal from a legal perspective, asking “Was the Deal Capping Drug Cost Savings Inappropriate?” He notes that “one particular aspect of the PhRMA deal is troubling along a wholly different dimension: PhRMA's agreement to fund advertisements in favor of health care reform raises issues under the spirit, if not the letter, of the First Amendment.”

The Huffington Post writes that an internal memo it obtained “says the White House agreed to oppose any congressional efforts to use the government's leverage to bargain for lower drug prices or import drugs from Canada -- and also agreed not to pursue Medicare rebates or shift some drugs from Medicare Part B to Medicare Part D, which would cost Big Pharma billions in reduced reimbursements.”

Let’s amend the deal? Discussions about the pharma deal arose this week during the Senate Finance Committee’s mark-up of Baucus’ reform proposals. The New York Times Prescriptions blog states, “The first big fight over the Senate Finance Committee’s health care legislation erupted Tuesday night: a rollicking brawl over a deal that the Obama administration cut with the pharmaceutical industry to achieve $80 billion in savings on drug costs over 10 years, money that would help pay for the legislation.”

The blog reports that Senator Bill Nelson (D-FL) “has proposed an amendment that would essentially toss out the White House deal with PhRMA, the lobbying association for the drug industry. Mr. Nelson said his alternate plan would extract an additional $86 billion more from the drug industry.”

What will employers do if health reform is enacted?

It seems like just about everyone has offered their opinions, both pro and con, on the health reform debate. However, one issue that has received scant attention in the ongoing discussion about health reform is: what will the nation’s employers do if health reform legislation were to be enacted into law? Now we know, at least to some extent, thanks to a survey by Towers Perrin, a benefits consulting firm.

Employers say they will not absorb any additional costs that arise from health reform and, in fact, they plan to take action to avoid doing so, according to the survey. Among the steps they’d consider include reducing benefits, raising prices for customers, and/or reducing head count. Towers Perrin surveyed 433 HR and benefit executives from midsize and large organizations.

Even though employers have not been as vocal in the whole health reform process as others, they are closely watching legislative developments in Washington, with 80 percent of surveyed employers monitoring health reform developments. Almost one-fourth (23%) are rethinking benefit changes in light of possible reforms, and almost all of them (89%) expect to reexamine their health benefit strategies for active employees in response to the passage of health care reform legislation.

Cost issues, the Towers Perrin survey determined, will dominate the post-reform world with 90 percent listing cost containment as their most important health reform goal. This should not come as a surprise in light of the 150 percent increase in health care costs employers have faced during the past 10 years.

One interesting issue arising out of the survey is how employers say they would respond to a “pay or play” mandate. Surveyed employers say they would react in the following ways:

• 37% of employers would provide company-sponsored health coverage that substantially exceeds the standard.
• 29% of employers would discontinue company-sponsored health coverage and pay the assessment if the per-employee costs of payments to the federal government were substantially lower than their current costs.
• 26% of employers would provide company-sponsored health coverage at the level of the minimum standard required.

As we learn more, on an ongoing basis, about what might eventually appear in legislation that might actually be voted on by the House and the Senate, it will be interesting to see how employers react.

Who do they think they're foolin'?

Today the Senate Finance Committee begins discussions on Chairman Max Baucus’s health insurance reform proposal. Montana’s Sen. Baucus last week released his much anticipated proposal, the America’s Healthy Futures Act. In a couple of posts this past week, my colleagues discussed portions of Sen. Baucus’ proposal.

While the health reform bills from the three House Committees (Ways and Means, Energy and Commerce, and Education and Labor) and from the Senate Health, Education, Labor, and Pensions Committee all provide for a public health insurance option, Sen. Baucus’ offering replaces that option with what he calls a Consumer Operated and Oriented Plan, or CO-OP for short.

These CO-OPS, favored by North Dakota Democrat Sen. Kent Conrad, could be organized in groups within states or across states. The CO-OPs’ primary attraction for conservatives is that they would be run by private sector entities, not by the big, bad, incompetent government. Costs to the federal government (that’s us taxpayers) and adding to the federal debt presumably is another major concern.

Whether the desired health insurance coverage expansion is to be achieved through health insurance CO-OPs. or a federally-sponsored, public health insurance plan option, both strategies would require start-up funding to pay claims. All of the health reform proposals would provide the start-up funds from the federal treasury.

Sen. Baucus would allow $6 billion for the CO-OPs start-up funds, while the House Tri-Committee proposal for a Health Benefit Plan Start-Up Trust Fund for the national public option allows $2 billion. Wyoming Republican Sen. Mike Enzi (one of the six “bipartisan” negotiators, along with Sen. Conrad) has already offered an amendment to the Baucus proposal to reduce the CO-OPs start-up fund by $1 billion.

The public health insurance option, as envisioned by more “liberal” Democrats, would repay the start-up funds within 10 years, be self-sustaining, and negotiate provider reimbursement rates. The federally-sponsored public health insurance option, because it would cover large groups, would have strong bargaining power, and perhaps succeed at reducing the growth of health spending.

The small CO-OPs, on the other hand, would have much lower bargaining power and limited ability, if any, to reduce health care cost growth. In fact, the Baucus proposal prohibits the CO-OPs from setting payment rates. And Iowa Republican Sen. Charles Grassley takes it even further with an amendment that states: “just as with [Medicare] Part D [prescription drug benefit], the Secretary [of the U.S. Department of Health and Human Services] may not interfere with the negotiations between a co-op or co-ops and drug manufacturer, pharmacy, hospital or any other health care provider; and may not require or institute a price structure for the reimbursement of any health care service covered by the co-op or co-ops.”

Also coming out of taxpayers’ pockets would be the “affordability” subsidies that would be necessary to help low, and sometimes, moderate-income individuals and families get mandated health insurance coverage.

Without a public health insurance option, the American taxpayer would be subsidizing the expensive private health insurance market exclusively. So many conservatives have been up in arms about the government "bail outs" of Wall Street financial firms and of the auto industry, but they seem to support “bailing out” the health insurance industry, which is quite profitable, thank you. Why the double standard?

The Baucus proposal and larger employers

Under the 200-page proposal (no bill text yet!) issued last week by Senate Finance Committee Chairman Max Baucus (D-MT) and scheduled for mark-up on Tuesday, an employer would not be required to offer health insurance coverage. However, employers with more than 50 employees that do not offer coverage would have to pay a fee for each full-time employee who receives a tax credit for health insurance through a state exchange. The new fee would kick in beginning January 1, 2013.

How is the fee determined? It’s a bit complicated, so stay with us. Employers will be required to pay a flat dollar amount for each employee covered through a state exchange. The dollar amount will be contained in a fee schedule to be published annually by the Department of Health and Human Services. Generally, the flat dollar amount would be equal to the average tax credit offered in the state exchanges. (The payments would be contributed to a general fund and would not be linked to the individual employees.)

The good news for employers is that this fee is capped. The total fee for any one employer cannot be higher than an amount equal to $400 multiplied by the employer’s total number of employees. So consider, for example, an employer with 100 employees that does not offer insurance and has 30 employees receiving a tax credit in a state exchange. If the HHS flat fee is set at $3,000, then under the HHS schedule that employer should owe $90,000. Given the cap, however, that employer must pay only $40,000.

What’s been the reaction to the fee proposal so far? Some progressives aren’t happy—they’d prefer a less complicated fee structure. Other SFC Democrats have signaled they want to change the employer responsibility provisions as well.

So, is this proposal likely to be included in any final bill (assuming we get that far)? Well, with over 500 amendments awaiting discussion by the committee (if you really want to, see here, here, and here), what do you think?

Maybe Money Is Not The Most Important Part

In the 1960s, my father priced steel for a Chicago-based forging company, and he once was asked to provide some cost comparisons for keeping a plant in Chicago or moving the operation to Tennessee.

He had only one important question before he provided his calculations: What answer do you want? That may seem cynical, but in reality it was a recognition of how hard it is to project costs and budgets into the future—and how important it is to know your priorities, regardless of costs.

So too with cost calculations for health care reform—the figures you get will depend at least in part on what result you want.

And in something as complicated as projecting trillion-dollar costs decades into the future, we might as well just admit we’re all making stuff up to justify the result we want.

For example, when he released his health reform proposal, Senate Finance Committee chairman Max Baucus (Mont.) stated that the cost of the bill put before the Finance Committee was $856 billion over ten years. However, an analysis by the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) put the costs at $774 billion. In addition, the CBO reported that “Enacting the chairman’s proposal would result in a net reduction in federal budget deficits of $49 billion over the 2010–2019 period.”

Despite a Finance Committee staff memo trying to explain away the difference between $856 billion and $774 billion, the CBO probably said it best when it noted that its “estimates are all subject to substantial uncertainty.”

In the face of this substantial uncertainty, we also are confronted with the question, “What answer do we want?”

Groups as different as the CEOs from the Business Roundtable and health professionals from Health Reform USA acknowledge that the current system is “unsustainable.”

Or, as the late Sen. Ted Kennedy (Mass.) wrote to President Barack Obama, “What we face is above all a moral issue; at stake are not just the details of policy, but fundamental principles of social justice and the character of our country.”

Bronze benefit package would be minimum creditable coverage under Baucus plan

America’s Healthy Future Act, which Senate Finance Committee Chairman Max Baucus (D-Mont.) released yesterday, contains numerous provisions aimed at making health care coverage affordable. One of those endeavors is the creation of four benefit categories for the health insurance market: bronze, silver, gold and platinum.

No national standard exists. Baucus’ proposal explains that currently, federal law does not define a minimum creditable coverage (MCC) benefit package for purposes of individual, small group, and other group private health insurance. States have the primary responsibility of regulating the business of insurance and may define what qualifies as MCC. (I discussed some of these state benefit mandates in a previous post and provided a preview of a national benefit standard.)

New categories, standard benefits. The chairman’s proposal provides that no policies (except grandfathered policies) could be issued in the individual or small-employer market that do not comply with one of the four categories. All insurers would have to offer coverage in the silver and gold categories. All plans would be required to provide:

· preventive and primary care services,
· emergency services,
· medical and surgical care,
· physician services,
· hospitalization,
· outpatient services,
· day surgery and related anesthesia,
· diagnostic imaging and screenings (including x-rays),
· maternity and newborn care,
· pediatric services (including dental and vision care),
· prescription drugs,
· radiation and chemotherapy, and
· mental health and substance abuse services.

Plans could not charge cost-sharing (e.g., deductibles, copayments) for preventive care services, except in cases where value-based insurance design is used. In addition, plans would not be allowed to set lifetime limits on coverage or annual limits on any benefits.

Definition of levels. The bronze benefit package, which would represent MCC, would be equal to the actuarial value of 65 percent with an out-of-pocket limit up to the HSA current law limit ($5,950 for individuals and $11,900 for families in 2010) indexed to the per capita growth in premiums for the insured market as determined by the Secretary of Health and Human Services. (For a refresher on “actuarial equivalence,” see my learned colleague’s previous post.)

The silver benefit package would have an actuarial value of 70 percent with the out-of-pocket limits for MCC.

The gold benefit package would have an actuarial value of 80 percent with the out-of-pocket limits for MCC.

The platinum benefit package would have an actuarial value of 90 percent with the out-of-pocket limits for MCC.

A separate “young invincible” policy would be available for those 25 years or younger. This plan would be a catastrophic-only policy in which the catastrophic coverage level would be set at the HSA current law limit, but prevention benefits would be exempt from the deductible.

Doctors are big fans of public option

During the past 60 years, going back to the Harry Truman presidency, the American Medical Association has been a strong opponent against health reform efforts initiated by either political party. But now, even the AMA has done an about face and is firmly in the pro reform camp. Until recently, however, little was known about the individual views of doctors on health reform.

Thankfully, we finally have a better understanding about the views of doctors on health care reform in light of a recent poll that was conducted by the Robert Wood Johnson Foundation (RWJF)/Mount Sinai School of Medicine in New York and published on September 14 by the New England Journal of Medicine (NEJM). In this survey, 63 percent of the 2,130 doctors surveyed favored giving patients a choice that would include both public and private insurance and an additional 10 percent of surveyed doctors said they would prefer a public option only. The other 27 percent favored private reforms only.

“There should be no confusion about where doctors stand in the debate over expanding health insurance coverage: they want reform,” Dr. Risa Lavizzo-Mourey, president and CEO of the Robert Wood Johnson Foundation, says. In fact, with almost three-fourths (73 percent) of doctors supporting a public option, doctors are more likely to favor the public option than the general public does.

Even more amazing is the fact that support for the public option is broad and deep among doctors. According to the survey, the strong support for the public option occurs among doctors “across all demographic subgroups, specialties, practice locations, and practice types.” Primary care doctors are the most likely (76 percent) to support the public option while doctors with the least patient contact--such as radiology, anesthesiology, and nuclear medicine--were the least likely (66 percent) to support the public option.

Not surprisingly, physician support for the public option is strongest in the northeastern part of the nation—with 81.5 percent of doctors there supporting a public option—and least strong in the south. Even in the south, however, 65 percent of doctors support a public option.

One of the biggest gripes I’ve heard about the public option is that it would put government bureaucrats between patients and their doctors. Apparently, at least according to RWJF survey, the doctors don’t seem to mind that. Patients put their trust in their doctors every day to do what's best for their lives and well-being so I'm wondering how much this survey will impact the health reform debate. Do Americans trust their doctors on health reform?

MedMal Reform: A Red Herring

There they go again, conservatives and health care industry representatives insisting on medical malpractice reform as a priority in any health reform package. They claim that malpractice awards raise health care costs and that the awards, for pain and suffering in particular, should be capped.

In his efforts to get conservatives to cooperate with him to pass “meaningful” health reform this year, President Barack Obama in his September 9 address to a joint session of Congress appeared to jump on the malpractice reform bandwagon.: ."I don't believe malpractice reform is a silver bullet, but I have talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs," he said as he proposed a modified solution.

But the President's idea of reducing health care costs by reducing medical malpractice claims seeks instead to fund pilot projects in states that focus on improving patient safety and admission of, and apology for, errors when they occur. .For example, as a result of the University of Michigan Health Care System’s program to recognize medical errors early and apologize to patients and their families, medical malpractice claims against the system dropped by 55% between 1999 and 2006.

A 2002 Institute of Medicine study aimed at cutting malpractice lawsuits. offered some recommendations such as giving health care providers "immunity," or protection against lawsuits if they agreed to participate in a government-run “administrative system” that compensated injured patients, mostly based on a formula. (O no, not those dirty words again—“Government-run.”)

The Congressional Budget Office has said that although efforts to curb medical malpractice lawsuits can reduce malpractice insurance premiums they don't really affect health care spending. ”Studies have found that tort limits, by reducing malpractice awards, cause premiums for malpractice insurance to fall and thus could have a very modest impact on doctors’ fees and health care spending,” the CBO wrote in its February 10 report to the Senate Committee on the Budget. “Some observers argue that tort limits would yield larger reductions in that spending because doctors would stop ordering unnecessary tests and taking other steps to reduce the risk of being sued. CBO has not found consistent evidence of such broader effects, but that may reflect the difficulty of disentangling the impact of changes to the medical malpractice system from other factors affecting medical costs.”

In fact, the CBO has estimated that medical malpractice costs, including defensive medicine, represent less than 2% of total spending for health care and that limiting medical liability would save less than 0.5% of health care spend. The Government Accountability Office has reached a similar conclusion.

In a recent report on claims of a reported medical malpractice crisis in New York, the New York Public Interest Research Group (or NYPIRG) concluded that “the medical malpractice “diagnosis” made by organized medicine and echoed by most policymakers is at odds with the reality as represented in the nation’s only comprehensive database of malpractice payments.” The National Practitioner Data Bank is the only publicly available information about physicians’ and hospitals’ medical malpractice experience and, although medical providers are required to report all claims awards, not all do so.

The NYPIRG also recommended that “future discussions on how to reduce inflation in doctors’ malpractice insurance rates should focus on the best way to reduce lawsuits – improving patient safety so as to avoid preventable injuries. Serious consideration should also be given to a requirement that all physicians periodically demonstrate maintenance of competency in the scope of their current practice as a condition of recertification.”

From what I read, then, insisting on medical malpractice (or tort) reform as an essential piece of health reform serves more as a distraction from Congress’ most important work..

If it's cheaper, they will come

While we wait for key legislative choices to be made on health reform, let’s review the impact of an Obama health insurance initiative from earlier this year: the COBRA premium subsidy.

The rap on COBRA has always been: it’s great if you can afford it, but if the premium is 102% of the cost of the coverage (as is allowed by law) then who's got that kind of cash? The stimulus package (that’s the American Recovery and Reinvestment Act of 2009 (P.L. 111-5) for you wonks out there) enacted in February tried to address that problem by providing for a 65 percent reduction in the premium otherwise payable by certain involuntarily terminated individuals and their families who elect COBRA. The subsidy is available to eligible individuals involuntarily terminated during the period from September 1, 2008 through December 31, 2009.

So what’s the result? It turns out that if you make COBRA cheaper, more people will sign up.

Large employers report that COBRA enrollment has doubled since the COBRA premium subsidy was enacted in February 2009, according to a new analysis from Hewitt Associates, a global human resources company. Hewitt examined the COBRA enrollment activity at 200 large U.S. employers during the period from March 2009 to June 2009. During that time, monthly enrollment rates for workers eligible for the subsidy averaged 38 percent, up from 19 percent during the period September 2008 through February 2009.

Hewitt estimates that subsidized COBRA coverage will cost the average worker $3,000 per year, while regular, unsubsidized COBRA coverage costs nearly $9,000 per year.

Now, another truism about COBRA is that the "classic" COBRA recipient is, on balance, older and sicker than people who are currently employed. For example, this study by the Agency for Healthcare Research and Quality using data from 2005-2006 showed that 13.6 percent of COBRA enrollees reported either poor or fair health, as opposed to 5.9 percent of currently employed adults.

It remains to be seen whether these general demographic trends continue, given the burgeoning number of unemployed workers taking advantage of the COBRA premium subsidy in 2009.

So What’s With All These Republican Proposals In Democratic Reform Plans?

In what some might view as a final attempt at bipartisanship, President Barack Obama and Senate Finance Chairman Max Baucus (Mont.) have suggested a number of health reform provisions that originally came from Republicans.

At the end of the August recess, Mr. Baucus (Mont.) circulated among members of the so-called Gang of Six in the Finance Committee a “Framework for Comprehensive Health Reform,” which included the following provision that has long been a favored approach among Republicans:

Interstate Sale of Insurance. Starting in 2015, states may form "health care choice compacts" to allow for the purchase of non-group health insurance across state lines. Such compacts may exist between two or more states. Once compacts have been formed, insurers would be allowed to sell policies in any state participating in the compact. Insurers selling policies through a compact would only be subject to the laws and regulations of the state where the policy is written or issued.

Then, on September 9, Mr. Obama addressed a joint session of Congress (and the public) to provide a clearer picture of his plans for health reform.

In addition to briefly describing the “80%” of what needs to be done in health reform and on which he said “there is agreement in this chamber*” Mr. Obama proposed the following elements that initially had been suggested by Republicans:

MEDICAL MALPRACTICE LIABILITY REFORM. Mr. Obama said that “I don’t believe malpractice reform is a silver bullet, but I’ve talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs.” He then said that he would direct Secretary of Health and Human Services Kathleen Sebelius to examine “authorizing demonstration projects in individual states to test” caps and other limits on malpractice liability rewards.

INSURANCE POOLING. Mr. Obama said that a national health insurance exchange would not take effect for four years, but “in the meantime, for those Americans who can’t get insurance today because they have preexisting medical conditions, we will immediately offer low-cost coverage that will protect you against financial ruin if you become seriously ill.” Mr. Obama then said, “This was a good idea when Sen. John McCain [Ariz.] proposed it in the campaign, it’s a good idea now, and we should all embrace it.”

During the 2008 presidential campaign, Mr. McCain proposed the creation of insurance pooling mechanisms, in which the federal government would work with states to create a federally-supported guaranteed access plan for people who are denied coverage due to preexisting conditions. Premiums in the plan would be limited and financial assistance would be given to those below a certain income level.

PUBLIC OPTION TRIGGER. While insisting that “I will not back down on the basic principle that if Americans can’t find affordable coverage, we will provide you with a choice,” Mr. Obama did acknowledge that one constructive idea “worth exploring” was a public option trigger recently proposed by Sen. Olympia Snowe (Maine) under which “the public option [would] go into effect only in those markets where insurance companies are not providing affordable policies.”

One description of a possible trigger is that health care legislation would create a nonprofit government corporation to assess what health insurance options are available to residents, how much those policies cost, and whether they would be affordable to 95%of residents of every state. It would be up to Congress to determine what was affordable, and lawmakers likely would set state-by-state, sliding-scale thresholds based on income and census data. If affordable coverage were not available to 95%of a state’s residents, the government entity would give insurers a second chance to offer coverage at affordable rates. If they failed to do so, the agency would contract with hospitals, physicians and other health care providers to create a government-sponsored health insurance plan designed to help reach that 95%target.

WHO IS THE TARGET?

Although all of these proposals would appear to be directed at encouraging Republicans to consider health reform, the suggestions might be aimed more at conservative Democrats in Congress and independent and centrist voters who could sway their own Senators.

In the House, the Democrats do not need any Republican votes to pass a relatively expansive version of health reform, but conservative Democrats may need the cover of a few conservative measures to help their reelection efforts.

The Senate, of course is more problematic, and so far only Ms. Snowe among the Republicans has expressed much interest in the Democratic plan. Those conservative measures mentioned above are likely to convince most Senate Democrats to push for a variant of the Baucus proposal. That still might not be enough by itself for a filibuster-proof 60 votes, but the “conservative” overtures could sway some public opinion back to the Obama proposals, which in turn could convince one or two Republican Senators that voting for a limited version of health reform is politically smarter than voting against it.

And without sixty votes? After October 15, the process will get even messier, with the Democrats in the Senate compelled to use the reconciliation process to pass the budgetary portions of health reform.

Right now the key to all of this is to see what kind of bill emerges from the Senate Finance Committee, which is scheduled to begin markup next week. If that Committee can craft a 60-vote bill, health reform legislation is all but assured. Don’t hold your breath.

*Common elements in both House and Senate proposals include an individual mandate; --a health insurance Exchange (Exchange) through which individuals and businesses (small businesses in the two Senate committees proposals) can purchase health insurance; --subsidies for individuals/families with incomes of up to a specified multiple of the federal poverty level; --new rules for the individual and small group insurance markets; --guaranteed issue and renewability requirement for individual and small group insurers; --limited rate variation only for family status, age, geography; state involvement in some way, primarily administrative; --targeting fraud, waste and abuse to reduce costs; --promoting prevention and wellness; --support of comparative effectiveness research; --strengthening primary care and chronic care management, including expanding the primary care medical professional workforce; --and Medicaid expansion. More information on current health reform proposals can be found in a new CCH briefing on health care reform.

You're hired . . . or not, depending on employer health fee

As my learned colleague explained to us yesterday, Senate Finance Committee Chairman Max Baucus’ reform plan contains a proposal that would require employers that do not offer health coverage to pay a fee for each employee who receives a tax credit for health coverage through a health exchange. Employees whose family income is below 300 percent of the poverty line would qualify for the tax credit (which means that employers would not have to pay the fee for employees with higher family incomes). The provision would apply to employers with more than 50 full-time employees (30 hours and above).

The Center on Budget and Policy Priorities has released a report that says this proposal “would have serious consequences, particularly for low-income and minority workers and women.” The report states:

“The proposal would make it considerably more expensive for employers to hire workers from lower-income families than workers from higher-income backgrounds to do the same job. As a result, it would distort hiring decisions. Employers would have strong incentives to tilt hiring toward people who have a spouse with a good income (or have health coverage through a family member), teenagers whose parents make a decent living, and people without children (since the eligibility limit for the subsidies in the new health insurance exchanges will increase with family size). Low-income women with children in one-earner families would be particularly disadvantaged.”

The report also notes that the proposal would likely influence employers when deciding which employees to terminate during a reduction in force. “Workers from low-income families would cost the firm significantly more to retain than other workers who are paid the same wage to do the same job,” according to the report.

At last, a word from Baucus

At long last, Baucus speaks!! After a summertime of wrangling, Senator Max Baucus (D-MT), chairman of the Senate Finance Committee (SFC) has released a “framework for comprehensive health reform.” This is a preliminary document that he circulated yesterday to the other members of the “gang of six.” Baucus hopes to unveil his health reform bill before President Obama speaks to Congress today. The SFC, which has jurisdiction over the Internal Revenue Code, Medicare, and Medicaid, is the fifth and final committee to have input into health reform, the only committee that didn’t complete its work before Congress took its August recess.

Highlights from the framework

• The Baucus framework does not include a public option nor does it include a “trigger mechanism” as advocated by Senator Olympia Snowe (R-ME), but it does include state-established health insurance exchanges. In the state health insurance exchanges, four benefit categories would be created and a separate “young invincible” policy would also be available. All policies in the individual and small group market would be required to cover specified benefits, such as preventive services. Fully insured and self-insured plans would not be subject to the list of required benefits, except for first dollar coverage for preventive services.
• Beginning in 2013, an individual mandate would be imposed. This means that all American citizens and legal residents (but not undocumented immigrants) would be required to purchase health insurance or have coverage through an employer, through a public program such as Medicare, or through some other source. An exemption from this mandate would apply if the lowest cost available premium exceeds 10 percent of a person’s income.
• Beginning in 2013, the penalty for failing to obtain insurance coverage would be $750 or $950 per year for singles, depending on income, and $1,500 or $3,800 per year for families, again, depending on income.
• Employers would not be required to offer insurance coverage to their employees but those with more than 50 full-time employees would have to pay a fee if they do not offer coverage and any of their employees receive a tax credit for health coverage through a health exchange.
• In the individual insurance market, beginning in 2013, coverage would be offered on a guaranteed issue basis and would be barred from excluding coverage for preexisting health conditions. However, premiums could vary slightly based on tobacco use and family composition and vary substantially based on age (up to 500 percent of premiums). Further, lifetime limits would be prohibited and health insurers could not rescind health coverage.
• Starting in 2015, health insurers would be allowed to sell insurance across state lines pursuant to “health care choice compacts” created between two or more states.
• Health care affordability tax credits would be available to help pay for health coverage, within limits and cost-sharing assistance would be available, again, within limits.
• Beginning in 2010, health plans would be required to report the proportion of premium dollars that are spent on items other than medical care. Also beginning in 2010, hospitals would be obligated to list standard charges for all services.

How to pay for it all

The Baucus framework includes a number of provisions to help pay the reported $900 billion cost. Among these are:

• A 35 percent excise tax on “high cost insurance” sold in the group and self-insured market but not the individual market. High cost insurance is defined as health insurance plans that are above $8,000 for singles and $21,000 for family plans. The excise tax would be imposed on insurance companies and would be indexed for inflation.
• Contributions to flexible spending arrangements (FSAs) would be limited to $2,000 per year.
• The definition of “qualified medical expenses” would be standardized. Under this proposal, the definition used for the itemized deduction would also apply to HSAs, HRAs, and FSAs.
• Annual fees would be imposed on health insurance providers, pharmaceutical manufacturers, medical device makers, and clinical laboratories and allocated by market share in the industry. For example, for health insurers, the annual fee would be $6 billion.

What's next?

President Obama will speak to Congress later today about his plans for health reform. By then, Baucus may well have unveiled his own health reform bill. Things are bound to start happening fast and furiously. It’s becoming “do or die” time for health reform.

The Gang of Six Revealed

At an event in my neighborhood last week some neighbors were discussing health care reform and wondered who the “Gang of Six” are and why they have so much power. Good question, I thought, and decided to explore the answer to this question. As Robert Reich, former Secretary of Labor under President Bill Clinton and now a professor at the University of California, Berkeley, wrote in his August 21 blog post: “who, exactly, anointed these six to decide the fate of the nation's health care? “

The oft cited “Gang of Six” are the six Senators, three Democrats and three Republicans, in the Senate Finance Committee who presumably are committed to crafting a bipartisan health reform plan. The combined populations in the states that these six senators represent equal 2.6% of the total U.S. population of 300 million, yet, they’re determining the fate of health reform for the entire country, Mr. Reich pointed out in his blog.

Let’s take a quick look at the profiles of these six “powerful” senators and who their campaign contributors are, courtesy of the Center for Responsive Politics.

Max Baucus, Montana Democrat and Finance Committee Chairman Because his committee includes a representative cross-section of senators, it is said that.if the plan passes his committee, it has a good chance of passing the full Senate and Congress. The AARP calls him a “pragmatic Democrat” who is able to work with Republicans. As of the first week in September he seemed to be backing away from a bipartisan agreement, or maybe he’s just staying away from a public health insurance option. Mr. Baucus received campaign contributions of $555,075 from the insurance industry, and $507,333 from the pharmaceutical industry. Amazingly, nearly three-fifths (57%, the most of the Gang of Six) of his campaign contributions come from individuals and 42% from political action committees.

Charles Grassley, Iowa Republican and ranking member of the Committee. He has been in Congress for 30 years and had been thought as willing to work on compromise. However, he is quoted as saying: "No public option. No play-or-pay. No things that are going to lead to any rationing of health care. No interference with the doctor-patient relationship." From 2005 through 2009, Sen. Grassley has raised $606,000 from the health sector (including health professionals, pharmaceutical firms, and lobbyists and hospitals) and $390,000 from finance/insurance/real estate sector. Nearly half of Sen. Grassley’s campaign contributions come from political action committees, while 37% comes from individual donations. Among his top campaign contributors are Amgen (a biotechnology firm), Blue Cross Blue Shield, and Select Medical Corp., a national company of specialty medical care hospitals.

Olympia Snowe, Maine Republican, Committee member, a moderate Republican in a primarily Democratic state, she is willing to work, and vote, with Democrats.. Maine is one of the few states that has attempted health reform. Sen. Snowe told National Public Radio that controlling costs is her primary focus: "What we have to do is develop a plan that's going to be available to people on an affordable basis ... containing costs, both for the American consumer and the American taxpayer." Sen. Snowe received more than half of her contributions (54%) from individuals and only 36% from PACs.

Kent Conrad, North Dakota Democrat, Chairman of the Senate Budget Committee, is a “deficit hawk” and principal proponent of health care co-ops in lieu of a public, government run insurance option. He says the co-ops would help drive down costs, never mind that they also would dilute negotiating power. Sen. Conrad received campaign contributions of more than $450,000 from health professionals and insurers, a total of 45% from PACs, and nearly half from individuals.

Mike Enzi, Wyoming Republican, member of the Senate Committee on Health, Education, Labor and Pensions as well as of Finance, is the most conservative member of the Gang and an accountant by training. He favors market-based, incremental reforms. Mr. Enzi ‘s hometown newspaper, the Gillette News Record, quoted him as saying that the health reform effort “is going to take awhile and I’m pretty sure it’s going to fail." Sen. Enzi is by far the leader among the Gang of Six in the proportion of campaign contributions he receives from PACs—75%--but gets less than one-fifth from individuals. Do you wonder on whose side he is? But then, his state is very sparsely populated, so he has to rely on PACs and special interests for campaign financing.

Jeff Bingaman, New Mexico Democrat, a member of the Senate Finance and the Health, Employment, Labor, and Pensions Committees, favors a public health insurance option and would resort to “reconciliation” which limits amendments and discussion and makes it easier to shut off debate, to pass a Democratic version of health care, should a bipartisan agreement fail. .From 2005 through 2009, Sen. Bingaman received a mere $207,600 from health professionals, and nearly half of his campaign contributions come from individuals.

There you have the Gang of Six—how much sway will they actually have on national health reform? It’s Congress’s first day of work after their summer recess and President Barack Obama tomorrow will address both Chambers on health reform. Stay tuned...

Paying Attention To What Works, And What Does Not

In addition to Massachusetts, other states and local government have tried health care reform and their own versions of a public option, with some successes and some failures. As Congress returns to health care reform next week, legislators would be well advised to study both.

MAINE

In June 2003, Maine became the first state to pass universal health care legislation. The Dirigo Health Reform Act's intent was to provide every Maine citizen with access to quality health care by 2009. Before the law was enacted, Maine had approximately 136,000 to 190,000 citizens who lacked health care coverage for at least part of the year.

The key vehicles for coverage expansion were a health insurance product for small businesses, the self-employed, and the unemployed, with subsidies for low-income people; and expansion of Medicaid to additional parents and adults without dependent children.

The Dirigo plan's first few years have not seen the sort of success that policymakers had envisioned. The Maine Heritage Policy Center found that DirigoChoice sales are 75% below projections. Approximately 11,000 people were enrolled as of September 2006, and since the program began, only about 15,000 have been enrolled at one time or another. Of the enrolled citizens, 30% are small employer members, 28% are the self-employed, and 42% are individuals, according to data from Mathematica Policy Research, a nonpartisan research firm.

That number has now dropped to below 10,000, according to the state's own reporting. About two-thirds of those who enrolled already had insurance, which they dropped in favor of the public option and its subsidies. Instead of 128,000 uninsured in the program today, the actual number is just 3,400.

According to a recent article, one reason is a adverse selection problem: The sickest, most expensive patients used DirigoChoice, unbalancing its insurance pool and raising costs. That made it unattractive for healthier and lower-risk enrollees. And as a result, few low-income Mainers have been able to afford the premiums, even at subsidized rates.

SAN FRANCISCO

On the other side of the country, San Francisco has had better luck so far.

Ninety-four percent of participants in San Francisco's new universal health care program are at least somewhat satisfied with it, and 92% would recommend it to a friend and think other cities should create similar programs, according to a recent report from the Kaiser Family Foundation. Four in 10 participants said their care was considerably better since joining the program.

In July 2006, San Francisco enacted a plan for universal health care coverage of city residents that requires many employers in the city to contribute to the cost of health care for their employees. At the time the law was passed, San Francisco had an estimated 82,000 uninsured individuals, the majority of whom were either employed or in a family with an employed individual.

After the Kaiser report was released, San Francisco mayor Gavin Newsom said, "Even those who fight reform cannot deny that our present health care system is broken. It is inefficient, unfair, and enormously costly. A public plan can work. San Francisco is proving it by driving down costs, improving access to care and creating competition."

“Fishy” request smells, lawsuit alleges

In case you hadn’t heard, the White House Office of Health Care Reform recently asked the public to report emails or items on the web about health care reform that seem “fishy.” The administration set up an email to do so at: flag@whitehouse.gov. It has now been changed to: http://www.whitehouse.gov/realitycheck/contact.

The administration had indicated previously on the whitehouse.gov website that there was “a lot of disinformation about health insurance reform out there” and that “[t]hese rumors often travel just below the surface via chain emails or through casual conversation. Since we can’t keep track of all of them here at the White House, we’re asking for your help.”

What’s that smell? The Association of American Physicians and Surgeons (AAPS) and the Coalition for Urban Renewal and Education (CURE) are now saying that the administration’s information-collection process doesn’t pass the smell test. In fact, the groups have filed a free speech lawsuit against the Office of the President and other White House officials.

(If you’re wondering about sovereign immunity, (a) you think too much, and (b) according to the complaint, pursuant to the Privacy Act and the Administrative Procedure Act, “the United States has waived its sovereign immunity for actions against the United States and its instrumentalities, agencies, and officers for non-monetary injunctive, declaratory, and other equitable relief and for the entry of judgments and decrees against the United States in such actions.”)

The groups claim that the “White House has unlawfully collected information on political speech, thereby illegally using the power of the White House to chill opposition to its plans for health care reform.”

“My hate mail started shortly after the White House issued the ‘fishy’ request,” said Kathryn Serkes, Director of Policy and Public Affairs for AAPS. “We were quite visible and vocal before then, so it doesn’t seem like a coincidence. Who did they share their data with? With whom might they share it?”

AAPS and CURE are asking the court to require the White House to remove all information already collected and also prohibit it from collecting any personal data in the future.

In health reform debate on illegals, each side believes what it wants

One curious thing about the whole health reform discussion is that, in many instances, supporters on each side of the debate can read the same language but yet end up with completely different interpretations. As a result, health reform myths somehow become health reform reality. A case in point is the hottest of the hot button issues: how illegal, undocumented immigrants would be treated under H.R. 3200, America's Affordable Health Choice Act, the House version of health reform. According to a Center for Immigration Studies report, as many as one-third of the 46 million people without health insurance are illegal aliens and their children so this is not exactly a minor issue.

What the bill does and doesn't say. In section 246 of H.R. 3200, the bill text clearly states: “nothing in this subtitle shall allow Federal payments for affordability credits on behalf of individuals who are not lawfully present in the United States.” In other words, undocumented illegal aliens would not be eligible for subsidized health benefits under the bill. Similar language can be found in the Senate HELP Committee health reform measure. What could be more straightforward?

Aha, but there’s a catch! Isn’t that always the case? In this instance, the House Ways and Means Committee, on July 17, voted down an amendment to H.R. 3200 offered by Rep. Dean Heller (R-NV) during bill markup that would’ve added a citizenship verification process. This proposal would’ve required citizenship verification using existing methods already in place to verify eligibility for other federal benefit programs. Without such a process, health reform opponents claim, the system is open to abuse and undocumented immigrants might be able to get affordability benefits under the bill.

CRS to the rescue...or not. Last week, the Congressional Research Service (CRS), a nonpartisan policy research arm of Congress, released a report on the “Treatment of Noncitizens in H.R. 3200.” You’d think that, if anyone could clarify the issue, it would be the nonpartisan CRS, but you would be wrong. Again, both sides are claiming that the CRS report supports their side.

What does the CRS report say? Basically, according to the CRS, H.R. 3200 does not contain any restrictions on immigrants who are in the U.S. illegally from participating under the health insurance exchanges. However, the CRS points out, as noted above in section 246, illegal immigrants would be ineligible for subsidies to help them afford health insurance coverage.

The CRS acknowledges that some have voiced concerns over the lack of a citizenship verification mechanism in H.R. 3200. However, the CRS report also points out that, under section 142(a)(3) of the bill, the Health Choices Commissioner is responsible for administering the health affordability credits under the bill. Thus, says the CRS, “it appears, absent of a provision in the bill specifying the verification procedure, that the Commissioner would be responsible for determining a mechanism to verify the eligibility of noncitizens for the credits.”

Where do we stand? So, in light of the CRS report, what did we learn? The CRS report pretty much reinforced what we already knew: the plain language of the bill bars illegals from obtaining affordability credits under the bill but yet the verification procedure seems a bit iffy. Both sides can still read into what is and isn’t in the bill to bolster their own arguments about whether illegals are covered by health reform or not.

The battle rages on…

In Whom Do We Trust?

Remember last Tuesday’s blog post on the Congressional Budget Office’s projection that the House’s health reform proposals would cost $1.6 billon? Well, if prior experience is any indication, maybe we should not be so quick to accept the CBO’s projection. In 1983, 1997, and again in 2003, the CBO substantially underestimated the savings and overestimated the costs of new Medicare programs, including the Part D prescription drug program, according to an August 25 New York Times op-ed by Jon Gabel, a highly respected researcher and senior fellow at the National Opinion Research Center of the University of Chicago.

“The budget office’s cautious methods may have unintended consequences in the current health care reform effort,” Mr. Gabel concluded. “By underestimating the savings that can come from improved Medicare payment procedures and other cost-control initiatives, the budget office leads Congress to think that politically unpopular cost-cutting initiatives will have, at best, only modest effects. This, in turn, forces Congress to believe it can pay for reform only by raising taxes, which then makes reform legislation more difficult to pass.”

Meanwhile, despite this summer’s heated arguments on health reform, more than half (53%) of the public believes that tackling health reform is more important than ever, the Kaiser Family Foundation August Health Tracking Poll. revealed. Public backing for key individual elements of health reform remains steady, according to the poll. Substantial majorities continue to say that they support individual reform components designed to expand coverage, including a public plan option (59%), an expansion of state programs such as Medicaid (80%), an individual mandate (68%) and an employer mandate (68%).

One in four Americans now believe that health care is this country's most important problem --up from 16% one month ago, according to the most recent economic poll released by the Gallup organization. However, an August 18 NBC-Wall Street Journal poll. revealed that Americans are skeptical of the current health reform proposals, mostly due to misconceptions about what the plans would do.

And while the arguments continue on what health care reform, if any, should look like, health care claims costs are projected to increase by an average of more than 10% next year, four times higher than the annual increase in average hourly earnings, according to the 2010 Segal Health Plan Cost Trend Survey. Even the much touted high deductible health plans are expected to experience an increase of nearly 12%.

Aon Consulting reached a similar conclusion in its Health Care Trend Survey. And 2009 marks “the third consecutive double-digit percentage increase in the amount that employees spend for healthcare services,” according to the Milliman Medical Indez.. “This is primarily due to increased employee contributions...The current economic environment has significant implications for healthcare costs. The consequences of employers' lost business, consumer insecurity, and provider revenue pressures affect healthcare utilization, charges for healthcare services, and who pays for the healthcare.”

A new report by RAND concludes that the rapid growth in health care costs has an adverse economic effect on U.S. industries, particularly those with a higher proportion of workers with employer-sponsored health insurance.

In light of these reports, who still thinks that President Barack Obama is moving too fast to implement “meaningful” reform and that it would be too costly?