Unemployment, COBRA coverage questions

Kathleen Pender

Sunday, March 8, 2009

Recent columns on unemployment and the federal subsidy for COBRA health coverage have generated a lot of questions from readers. Here are some answers.

Q: I worked for a company as an independent contractor. Am I eligible for unemployment benefits?

A: Generally, independent contractors and self-employed people are not eligible for unemployment benefits. However, you might be if you had enough wages from a job you held as an employee during your base period, which is the 12-month period three to six months before you lost your job. It won’t hurt to apply.

Q: I lost my job at the end of last year and tried to find a new one but couldn’t. Now I decided to open a small business. Will that affect my unemployment benefits?

A: It could. It depends in part on whether you continue to seek full-time work while working on your small business and whether you would abandon your business if work was offered and you couldn’t do both.

If you earn money from your small business, those earnings would be deducted from your unemployment benefits, says Loree Levy, a spokeswoman for the California Employment Development Department.

Q: At what point does one become eligible for unemployment benefits after your workweek is reduced?

A: In California, it’s sometimes possible to receive partial unemployment benefits while still working if your hours have been reduced.

If an employer sets up a Work Sharing Unemployment Insurance Program with EDD, employees whose hours and wages are cut back at least 10 percent will get some benefits.

Even if your employer has not set up a formal program, you may qualify if your weekly earnings, after the cutback, are less than $600.

For more information, go to www.edd.ca.gov and search “work sharing” and “partial claims.”

COBRA subsidy: A law known as COBRA lets many workers who lose their jobs continue their group health coverage for up to 18 months, but employers can require them to pay the entire cost. In California, some employer plans must offer COBRA coverage for 36 months.

My Feb. 26 column said that, thanks to the stimulus act, if you are involuntarily terminated between Sept. 1, 2008 and Dec. 31, 2009, and are eligible for COBRA, the federal government will pay 65 percent of your premium, through your employer, for up to nine months. You pay the other 35 percent.

The subsidy can also cover your spouse or dependents who are eligible for COBRA, but you cannot get the subsidy if you are eligible for Medicare or another group health plan, such as your spouse’s.

If you were laid off since Sept. 1, and qualified for COBRA but declined coverage, you will get another chance to sign up for COBRA and receive the subsidy for up to nine months.

Q: How do I apply for the subsidy?

A: If you were terminated since Sept. 1, you should receive a notice from your former employer or health insurance company no later than April 18, says Mark Boxer, an employee benefits lawyer with DLA Piper in San Francisco. The notice will explain how to apply. Once you receive your notice, you will have 60 days to apply.

Q: When does the subsidy begin?

A: If you were laid off after Aug. 31 and have been paying your own COBRA premiums, the subsidy will be retroactive to March 1.

If you were laid off after Aug. 31 but declined coverage, you can now apply to have COBRA coverage retroactive to Feb. 17.

The subsidy will begin when COBRA coverage begins.

Q: Is this subsidy taxable?

A: No. However, if your adjusted gross income for the year in which you receive the subsidy is higher than $125,000 (single) or $250,000 (married filing jointly), you will have to pay back all or some of the subsidy when you file your tax return.

You could waive the subsidy, but Boxer says it would be better to take it because the waiver is irrevocable.

Q: I might lose my health insurance in August. My domestic partner has coverage at her company, which technically I could go on, but my insurance coverage with my current provider is better, even if I had to pay 35 percent.

Here’s the dilemma. You can’t get the new COBRA subsidy if you could be covered under someone else’s health plan. But since the federal government doesn’t recognize my partnership, would I be eligible for the subsidy if I continued COBRA on my own?

A: Yes, because the federal government does not recognize domestic partners.

Q: My husband will be terminated later this year. I plan to continue in his health plan through COBRA even though he has obtained coverage for himself on his own. Will the subsidy be available to me even if my husband, the actual laid-off employee, does not utilize COBRA?

A: Yes, as long as you are not eligible for Medicare or another group plan.

In Divide Over Health Care Overhaul, 2 Major Unions Withdraw From a Coalition

In Divide Over Health Care Overhaul, 2 Major Unions Withdraw From a Coalition

By ROBERT PEAR

 

WASHINGTON — Two labor unions have pulled out of a broad coalition seeking agreement on major changes in the health care system.

The action, by the American Federation of State, County and Municipal Employees and the Service Employees International Union, shows the seeds of discord behind the optimistic talk at a White House conference on health care this week.

It also illustrates the difficulty of reaching agreement on two of the knottiest issues in the health care debate: whether to offer a new government-sponsored insurance option, and whether to require employers to help pay for employee health benefits.

Labor unions and leading Democrats in Congress support both ideas. But insurers and many employers oppose them.

The coalition, known as the Healthcare Reform Dialogue, is led by the president of the American Hospital Association, Richard J. Umbdenstock, and includes representatives of doctors and nurses, patients and consumers, insurers, drug companies and employers of all sizes.

Peter S. Adler, president of the Keystone Center, a nonprofit group facilitating the discussions, said the dialogue started with 20 participating organizations and now had 18.

“S.E.I.U. and Afscme have left the table,” Mr. Adler said Friday in an interview. “They have voluntarily pulled out at this moment. We are trying to keep the lines of communication open.”

Mr. Adler, a professional mediator with 30 years of experience, said the coalition had been meeting since September. It tentatively plans to issue recommendations later this month on how to rein in health costs and help achieve the goal of universal coverage. Congress is grappling with the same issues and is struggling to find bipartisan consensus.

Members of the dialogue said they had been unable to reach agreement on proposals for a new public insurance plan or a requirement for employers to contribute to the cost of coverage.

Steven Kreisberg, director of collective bargaining and health care policy at the federation of state, county and municipal employees, said: “I can confirm that we did drop out of the dialogue last week. We are no longer part of the group.”

Mr. Kreisberg said his union had withdrawn for “various reasons,” which he declined to discuss.

The federation has flooded Congress with petitions supporting affordable health care for all. The petitions say Americans should have “the choice of a public plan, so we’re not left at the mercy of the same private insurance companies that have gotten us into this mess.”

In the past, the federation has suggested that a public plan option could “build both public support and the infrastructure for a single-payer system” at some distant point in the future.

Insurance companies and many Republicans resist the idea of a new public plan, saying it would have unfair advantages and could ultimately drive some private insurers from the market.

One participant in the dialogue, speaking on condition of anonymity because the talks were supposed to be secret, said, “The final report will be a consensus product reflecting the lowest common denominator.”

Another participant, Ronald F. Pollack, executive director of Families USA, a liberal-leaning consumer group, said the two unions “wanted a more robust, expansive agreement.”

In the campaign, Mr. Obama proposed a public plan option and said he would require large employers to contribute to the cost of coverage for their employees or to the cost of the public plan.

Lori Lodes, a spokeswoman for the Service Employees International Union, said: “We support the public insurance option. We strongly support the health care proposal President Obama laid out in the campaign.”

Ms. Lodes declined to discuss her union’s relationship with the coalition. She referred questions to Mr. Adler, the mediator.

The most active participants in the coalition include Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group, and Billy Tauzin, president of the Pharmaceutical Research and Manufacturers of America, which represents drug companies. Top executives from the American Medical Association, the Blue Cross and Blue Shield Association and the United States Chamber of Commerce have also been participating.

In a further effort to build consensus, the Obama administration announced on Friday that it would hold five regional forums on health care. They will be held in California, Iowa, Michigan, North Carolina and Vermont.

Source: www.nytimes.com

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Hanging On to Health Coverage, if the Job Goes Away

Hanging On to Health Coverage, if the Job Goes Away

By WALECIA KONRAD

 

Correction Appended

IF you’re fortunate to still have your job, but aren’t sure how much longer that will be the case, lost income may not be your only worry. Your medical insurance is at risk, too.

“When you’re still on the job, even if it’s just for a little while longer, you’re in a slightly better position to make the most of the benefits you have now and to figure out your options,” said the Oklahoma insurance commissioner, Kim Holland, a longtime promoter of affordable health insurance.

She and other experts offer the following advice about girding for the worst case.

Use it before you lose it. “My clients wouldn’t want to hear me say this,” said Tom Billet, a senior executive with the corporate benefits consulting firm Watson Wyatt. “But if you feel a layoff is pending, now is the time for you and your family to get physicals, dental check-ups, eye exams and prescriptions filled.”

That’s what Denise Young Farrell is doing. Ms. Farrell, the mother of two children in Park Slope, Brooklyn, lost her job early this year when her department at the Lifetime Networks cable channel moved to California. Her husband lost his job at Bear Stearns last year. Ms. Farrell’s severance package included two months of paid health care.

Check your benefits handbook to see how long your health care coverage will last if you do lose your job. Often, employers will continue coverage until the last day of the month in which the employee worked. So if your last day at work was March 5, for example, you may have coverage until March 31, giving you a few extra days for those doctor visits.

Sign onto your spouse’s plan. If your spouse has employer-sponsored family health insurance benefits, he or she can add you and your dependents anytime during the year. But do be aware of the deadlines. Most companies require any changes to be filed within 30 or 60 days of the “qualifying event.” Depending on your spouse’s company, that could mean the day you were laid off or your last day of coverage.

In addition, some companies require written proof from your former employer that you were laid off. To avoid snags, try to arrange this before your last day of work. And be sure to check when the new coverage takes effect. If your spouse’s plan has a three-month waiting period, for example, you’ll need to find temporary coverage elsewhere.

Get to know Cobra. If you have health benefits in your current job, odds are you’ll be eligible to continue purchasing that coverage temporarily under the 1986 law known by its acronym, Cobra.

Cobra requires employers with 20 or more workers to make health insurance available to a former employee for up to 18 months after leaving the job — regardless of whether you quit or were laid off. But because the former worker must pay the full cost of that insurance, the premiums can easily exceed $1,000 a month for family coverage.

The new federal stimulus plan that President Obama recently signed into law does provide some temporary relief for laid-off workers. But even if you qualify for the subsidy, you’ll still pay 35 percent of the total health premium, compared to the 10 or 15 percent you paid as an employee. So you might be paying $300 to $400 or more a month. And that is for only the first 9 months of the 18-month Cobra coverage. For the second nine months you’ll be paying full fare.

For fuller details on the new Cobra provisions, see the Web site tinyurl.com/akh5mz.

If you do choose Cobra, pace yourself. Time it right, and you can essentially get two months of free Cobra coverage.

After your last day of coverage under your employer’s plan, you have 60 days to sign up to extend that coverage under Cobra. If you think you’re on the verge of getting a new job, or if you’re trying to find a more affordable insurance option, you can put off paying two months of Cobra premiums until you approach the deadline. If the new job or alternate insurance works out, you will have avoided those hundreds of dollars in Cobra premiums. But if you do fall ill or get in an accident in the interim, you will be covered — as long as you pay those back premiums.

Do be vigilant, though, about that 60-day deadline. Miss it, and you lose your Cobra eligibility.

Try to negotiate health care as part of your severance. If you are eligible for any type of severance, consider asking for an extension of health insurance in exchange for a smaller cash payout. That will give you more time to research your health insurance options and help you avoid a gap in coverage.

There is one caveat, said Kathryn Bakich, national health care compliance director for the Segal Company, a benefits consulting firm: Avoid having your company pay part or all of your Cobra premiums as part of a severance agreement. Employers are still waiting for guidance on this point from the Labor Department and other government agencies, but if your former employer pays your Cobra premiums directly, you may be ineligible for the new Cobra subsidy, according to Ms. Bakich and other benefits experts. You’d be better off trying get a lump sum payment that you could use to pay Cobra premiums, if extending your current coverage isn’t an option.

When Cobra is not an option … If you work for a small company (fewer than 20 employees) that doesn’t offer Cobra, 40 states offer what’s called mini-Cobra continuation coverage that allows you to stay in your group plan. Some states may offer the new Cobra subsidy in these plans. (Check with your state’s insurance department.) If you do not have access to Cobra or a state continuation plan, or if those benefits are close to running out, it’s important to find insurance of some kind, whether it is group or individual.

Federal law mandates that at least one nongroup insurer in your state must provide coverage to everyone, regardless of health issues. In many cases this is your state’s high-risk insurance pool, but there are no limits on how much insurers can charge for this coverage, so premiums can be extremely expensive. For more information on what your state offers, go to the National Association of Insurance Commissioners’ Web site, naic.org, to link to your state’s insurance department.

If you have a flexible spending account — use it. Here’s a little known bonus in the employee’s favor:

Let’s say you signed up to contribute $1,000 this year through payroll deductions to your health care flexible spending account. So far you’ve only put in about $200. No matter. “Companies must still reimburse you for the full amount you’ve elected even if you haven’t contributed the total to the account yet,” Mr. Billet said.

In this example, if you file claims for $1,000 of eligible health care expenses before your last day on the job, you will get the full reimbursement — not just the $200 you’ve paid in.

Source: www.nytimes.com

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Government-run plan could trip up health overhaul

Government-run plan could trip up health overhaul

By RICARDO ALONSO-ZALDIVAR – Mar 6, 2009

WASHINGTON (AP) — Giving Americans the option of buying medical coverage through the government — an idea put forth by President Barack Obama — is a potential deal breaker for some Republicans and insurance companies whose support would ease the way for a health care overhaul.

The proposal, which Obama advocated in his presidential campaign, would for the first time offer government-sponsored coverage to middle class families, as an alternative to private health plans. By some estimates, it could reduce premiums by 20 percent or more — making it much more affordable to cover an estimated 48 million people who don’t have health coverage.

But insurers fear competition from a government plan could drive them out of business.

And Republicans worry it would lead to a government takeover of health care.

Liberals, meanwhile, are equally adamant that Americans deserve the choice of government-sponsored health care.

Such a plan could be similar to what seniors have in Medicare, which is government run. Or it might be designed like the federal employee health plan, available to members of Congress, and delivered through private insurers.

Whatever he decides, Obama could find himself trapped between liberals in his own party and conservatives he’s trying to woo in support of a health care overhaul.

Asked about the issue at the White House health care summit this week, the president said he would address the qualms. And while saying he wanted to consider all ideas, he did not abandon the notion of a government plan.

“I’m not going to respond definitively,” Obama said, answering a question from Sen. Charles Grassley, R-Iowa. “The thinking on the public option has been that it gives consumers more choices and it helps … keep the private sector honest, because there’s some competition out there.

“I recognize, though, the fear that if a public option is run through Washington, and there are incentives to try to tamp down costs … that private insurance plans might end up feeling overwhelmed.”

Obama says he is committed to preserving a health care system in which government, employers and individuals share responsibility. Many Americans may not realize the government already picks up nearly half the nation’s $2.4 trillion health care bill, through programs including Medicare and Medicaid.

A public plan for the middle class could give a final nudge that puts the system squarely in government hands.

Obama’s campaign proposal — a foundation for Democrats in Congress — called for setting up a national insurance marketplace through which individuals and small businesses could buy coverage. People could pick private insurance or opt for a public plan that would resemble coverage for federal employees.

But Sen. Mike Enzi, R-Wyo., said that kind of public plan could make it all “a sham.” Enzi’s views carry weight because he is the senior Republican on the Senate health committee, which will help write the bill.

“It’s important that the private market be involved, and not to set up the whole thing so it’s a sham to compete with the government, so the government eventually can be the only supplier,” Enzi said in a recent interview. “We are not going to do an expansion of Medicare. To use that as the model and try to make everybody compete with it, would severely limit the market.”

A recent analysis by the Commonwealth Fund, a nonprofit group that sponsors health care research, is giving supporters of a public plan some ammunition.

The study estimated costs and coverage under a hypothetical health reform plan similar to what Obama proposed in the campaign. It found that a public plan like Medicare could reduce projected health care costs by about $2 trillion over an 11-year period. Premiums in the public plan would be at least 20 percent lower, partly because of reduced administrative costs. Within a decade or so, some 105 million people would be in the public plan, compared to about 107 million with private insurance.

Commonwealth Fund President Karen Davis said the administration has been very interested in the study. “Some of their top economists are on the phone, poring over it,” she said in an interview.

But Robert Zirkelbach, a spokesman for the industry group America’s Health Insurance Plans, said Medicare and Medicaid pay hospitals and doctors below their actual costs. “It would be very difficult to create a level playing field,” he said.

Democrats say they will fight to make sure a public plan stays in the final bill.

“We’re not trying to figure out what represents the interests of private insurers, we’re trying to come up with a plan that makes sure all Americans have health care,” said Rep. Jan Schakowsky, D-Ill., who serves on a House panel that will help write the bill.

Source: www.associatedpress.com

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Many U.S. Residents Younger Than Age 65 Lacked Health Insurance at Some Point During Past Two Years, Report Finds

Many U.S. Residents Younger Than Age 65 Lacked Health Insurance at Some Point During Past Two Years, Report Finds

      One-third of U.S. residents younger than age 65 lacked health insurance at some point during the past two years, according to a report released on Wednesday by Families USA, Reuters reports. The report examined data from surveys conducted by the U.S. Census Bureau and the Agency for Healthcare Research and Quality.

According to the report, among the 262 million U.S. residents younger than age 65, 86.7 million lacked health insurance at some point during the past two years. The figure included 60.1 million adults and 26.6 million children ages 18 and younger, the report found. Among residents younger than age 65 who lacked health insurance at some point during the past two years, three-fourths lacked coverage for at least six months, and 60% lacked coverage for at least nine months, according the report. The report also found that 52% of individuals and families with annual incomes between the federal poverty level and 200% of the poverty level lacked health insurance at some point during the past two years.

Families USA released the report as President Obama and congressional leaders plan to address comprehensive health care reform legislation this year. Ron Pollack, executive director of Families USA, said, “There are a number of facets that are essential to health care reform — bending the cost growth curve and improving quality — but expanding coverage has got to be among the top objectives of health care reform” (Dunham, Reuters, 3/4).

Source: www.kaisernetwork.org

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Underinsured Americans: Cost to you

As the recession shrinks health care coverage for more households, experts warn of a double-whammy on all consumers.

By Parija B. Kavilanz, CNNMoney.com senior writer

Last Updated: March 5, 2009: 5:27 PM ET

NEW YORK (CNNMoney.com) — Americans already shouldering the cost of millions of people without health insurance should brace for a double-whammy: a surge in the number of the “underinsured,” or consumers who have some but not enough coverage.

The problem, according to health care industry experts, is that the government and those with employer-based plans will have to pick up the tab as more Americans are unable to pay their entire medical bill.

As the recession puts a bigger strain on consumers’ wallets, many underinsured Americans either can’t or won’t pay the high deductibles and co-pays for treatment they receive in hospitals and emergency rooms.

By one estimate, 25 million Americans can’t afford to cover the gap between what their insurance covers and their medical bills demand.

The issue shows the steep challenge faced by President Obama and other Washington leaders vowing to put the health care system on a course for long-term fiscal viability. On Thursday, the president is convening 150 experts, advocates and lawmakers for a “summit” to debate options.

Many people without adequate insurance are also delaying or forgoing medical care until it becomes an absolute emergency, said Dr. David Chin, managing partner of consulting firm PricewaterhouseCooper’s Global Healthcare Research Institute.

By law, hospitals have to treat all emergency admissions regardless of insurance.

“If the underinsured can’t pay the bills, the hospital either writes it off as bad debt or shifts the cost to its charity care program,” said John Pickering, principal and consulting actuary with consulting firm Milliman Inc.

Increasingly, hospitals are shifting costs to “those who can pay,” said Wynn Bailey, partner and health care expert with consulting firm AT Kearney. “That’s the government, private insurers and the self-insured.”

Bailey said hospitals are negotiating higher treatment rates with insurance companies to offset the bad debt.

In turn, commercial insurance providers are charging higher premiums to their clients, both businesses and individuals, to cover their cost increases. As businesses struggle with their employee health care costs, they are shifting a higher percentage of overall premiums to their workers, charging higher deductibles, or encouraging greater use of generic drugs.

“It’s a vicious cycle,” said Pickering.

Bailey said he wouldn’t be surprised if people with employer-based health insurance have to pay 5% to 10% more for their coverage over the next year or two.

Not tracked by government

One reason the exponential growth in underinsured Americans hasn’t made headlines is because this group isn’t yet tracked by the government, explained Sara Collins, economist and assistant vice president with health policy research group The Commonwealth Fund.

“It’s harder to define the underinsured,” Collins said.

The Commonwealth Fund defines underinsured as those who incur high out-of-pocket costs – excluding premiums – relative to their income, despite having coverage all year.

Using that measure in consumer surveys, Collins’ firm estimates that 25 million adults under age 65 were underinsured in 2007.

More importantly, Collins pointed out that the number of underinsured increased 60% from 2003 to 2007. That compares with a 5.1% increase in the number of uninsured Americans – to about 46 million – over the same period, according to the U.S. Census Bureau.

“The 25 million [number] can still be an underestimate,” Collins said.

What’s also troubling, she said, is that the ranks of the underinsured are spreading across income levels and have seen the most rapid increases lately in middle-income households earning between $40,000 to $60,000.

Obama’s plans

Meanwhile, Obama has made health care reform a top priority, detailing a dramatic overhaul of the system in his budget outline last week.

Some of Obama’s initiatives will provide short-term relief to both the uninsured and underinsured.

Specifically, the government will provide a 65% subsidy to businesses who continue Cobra premiums for laid off employees for a period of 9 months.

“But what happens after that period?” said Bailey. “Many people are wary about finding another job in a year in this economy.”

Longer term, Obama last month extended the Children’s Health Insurance Program Reauthorization Act which renews and expands health coverage by an additional 3 million children, to 11 million children.

Investments in health care technology will eliminate unnecessary costs and prevent duplicative care, Bailey said.

Also, in his budget, Obama proposed a 10-year health care reserve fund of $630 billion to “bring down costs and expand coverage.”

Bailey has reservations.

That $630 billion “sounds like a lot of money. But total health care consumption this year is expected to be about $2 trillion,” he said. “So is spending $63 billion a year enough to transform this gigantic beast?”

“Obama’s proposals certainly are a start, but much more is needed,” said Bailey. 

Source: www.cnn.com

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Q+A: Obama faces challenge on healthcare overhaul

By Donna Smith

 

WASHINGTON (Reuters) – President Barack Obama has launched a drive to overhaul the U.S. healthcare system, a far reaching undertaking that most Americans believe is needed, but are unsure about how to tackle.

 

WHAT’S THE PROBLEM?

 

Americans spend more on healthcare than any other country, yet some 46 million lack health insurance. The cost of care and insurance has been rising rapidly, hurting businesses that provide health coverage to their workers. Most workers get their healthcare coverage through their employers. When workers lose their jobs, many also lose their health insurance. Government programs for the elderly and poor fill in some of the gaps, but not all.

 

WHO IS FOR THE OVERHAUL?

 

Business, consumer and health industry groups and lawmakers agree the current system is not working for many Americans and needs to be fixed. They agree costs are too high and too many people are left with inadequate or no coverage. But beyond that basic agreement lie some deep differences that Obama will have to balance if he is to succeed where others have failed.

 

WHAT DO BUSINESSES WANT?

 

Most large employers and many small businesses offer healthcare coverage to their workers. For workers this is the most cost effective way to receive coverage even if they have to pay some or all of the cost, because insurance is cheaper when the risk is shared among a pool of people. Self-employed people and others seeking insurance in the individual market pay the highest costs because they are not part of a risk-sharing pool. Reducing cost is a primary goal.

 

WHAT DO CONSUMERS WANT?

 

Affordable, effective healthcare that does not disappear when one gets seriously ill or loses a job. Medical bills can pile up fast and lead to bankruptcy.

 

WHAT’S IN IT FOR INSURERS?

 

It depends on how the overhaul is structured to ensure all Americans get coverage. Requiring everyone to obtain health insurance is being considered. Such a mandate, which also would likely include a government subsidy for low income people, would bring more revenues into the insurance industry. But in exchange for the mandate, insurers would no longer be free to exclude people for pre-existing conditions. Insurers also oppose creating a government plan, similar to Medicare for the elderly, that would compete with private insurance.

 

WHAT ABOUT HOSPITALS AND DOCTORS

 

Hospitals want an overhaul that would mean fewer uninsured people and that also would also promote health and wellness instead of just treating sickness. A shortage of doctors is a major concern and they are seeking more money for training. Primary care doctors could benefit from proposals that would improve their compensation for overseeing the care of patients. The goal is to reward doctors for good outcomes, rather than pay for individual procedures and treatments that can lead to higher costs.

 

WHAT’S IN IT FOR PHARMACEUTICAL AND MEDICAL DEVISE

 

INDUSTRIES

 

Covering every American means more people can afford prescription drugs and treatments and thus increase demand. But the overhaul will aim to lower the cost of those drugs and treatments. Provisions promoting the use of generic drugs and requiring more information about the effectiveness of various treatments could impact these industries.

 

WHERE ARE THE BIGGEST BATTLE GROUNDS?

 

Obama has called for a bipartisan effort on the healthcare overhaul. Big partisan battles can be expected over how much government programs will be involved.

 

Democrats and their liberal allies want a government plan to be part of the mix of insurance options available to consumers in order to lower the cost of coverage.

 

Insurers, Republicans and conservatives oppose the idea, arguing it would be the first step toward a complete government takeover of the health industry.

 

A number of Republicans also oppose gathering and providing more information on the effectiveness of treatments. They argue it would eventually lead to rationing of care.

 

(Writing by Donna Smith; Editing by David Storey

Source: www.reuters.com

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Leaders in Congress draw healthcare battle lines

Tue Mar 3, 2009 2:11pm EST

By Maggie Fox, Health and Science Editor

WASHINGTON (Reuters) – Two powerful members of the U.S. Congress drew up battle lines on Tuesday over one of the most fundamental questions underlying healthcare reform — how much government health programs will be involved.

California Democrat Henry Waxman told a meeting of the Federation of American Hospitals any new system would include a significant role for private insurance but would work best with “creative tension” between public and private insurers.

Waxman, chairman of the House of Representatives Energy and Commerce Committee, supports making use of the clout of Medicare, which caters for the elderly and disabled, and other government programs beyond their considerable influence on which treatments private insurers will pay for.

Roy Blunt, a Missouri representative assigned to lead the Republican efforts on healthcare reform, disagreed. “If the government is one of the competitors, eventually there are no competitors left,” Blunt told the same meeting.

“Competition is important. The president said he wanted competition and wanted the private sector out there,” Blunt said. “But the government doesn’t have to factor in what the real world has to factor in,” he added — for example overhead and other costs.

President Barack Obama has laid out a broad framework for reorganizing the U.S. healthcare system, which currently costs more than any other industrialized country’s system and yet leaves patients more dissatisfied.

Obama has proposed setting aside $634 billion for a fundamental health care overhaul, saying he would raise taxes on the wealthiest Americans to help pay for it.

He has made clear he would like to see a combination of public and private approaches — extending public insurance to some of the 46 million people who currently lack any cover, and perhaps requiring people to buy private insurance.

BIPARTISAN VOTE

Obama has said he wants a bipartisan agreement on healthcare reform, even though the Democrats have a big enough majority to force through legislation. Blunt said bringing Republicans on board would require compromise.

He said he did not think Americans who elected Obama gave him a strong enough mandate to justify a major shift to government-sponsored healthcare.

Waxman, whose Energy and Commerce committee will play an important role in approving any legislation, told his audience of hospital administrators that he would work with Republicans and with industry to make sure any legislation was agreeable.

When former first lady and now Secretary of State Hillary Clinton tried to reform healthcare in 1994 the effort was torpedoed in part by opposition from the insurance industry and an advertising campaign that convinced people who had good health insurance coverage that they risked losing it.

Waxman said Congress must “give the people the assurance that if you have got something you like, you won’t lose it.”

Waxman also strongly supports Obama’s plan for an independent organization to compare different treatments to find out which works best, instead of leaving it up to drug and device makers who have vested interests.

Blunt said Democrats would get a fight on this, too. “An awful lot of people think that this is the first billion-dollar step toward the government deciding what kind of healthcare you should get,” he said.

“If you are a 59-year-old guy like me, I am pretty sure I don’t want the government making that decision.”

(Editing by Donna Smith and David Storey)

Source: www.reuters.com

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FACTBOX: Groups agree and disagree on U.S. health overhaul

WASHINGTON (Reuters) – President Barack Obama is pushing an ambitious overhaul of the U.S. healthcare system to help contain soaring costs and provide coverage for an estimated 46 million uninsured Americans.

There is widespread agreement among consumer and business groups that the current system is broken. But there is plenty of disagreement on how to fix it.

Here are some of the major groups involved in the debate and what they are seeking:

*AARP, the advocacy group for older Americans, seeks to make affordable healthcare coverage available to all, especially people ages 50-64, the fastest growing group of uninsured. It also wants Medicare changes that reward doctors and hospitals for quality rather than the quantity of care.

*National Federation of Independent Business says the rapidly rising cost of healthcare is a major worry for small business. Reining in care costs and insurance premiums is a top priority. The group seeks insurance market reform to create better access to affordable coverage.

*Business Roundtable represents some of the largest U.S. corporations and its members provide health coverage to more than 35 million employees. Bringing down costs is a major goal. It seeks market-based changes that promote competition and allow insurance companies to compete in multi-state regions, rather than state-by-state. It would require all Americans to obtain health insurance.

*Service Employees International Union wants a sweeping overhaul of the healthcare system to ensure coverage for all. It backs a minimum benefit that would include preventive care and long-term care that allows patients to receive care at home or in community-based settings rather than in hospitals or nursing homes.

*American Medical Association, which represents physicians, believes a major concern is the current Medicare payment structure that would cut payments to doctors by about 20 percent — although Congress has in recent years intervened to stop these decreases from taking effect.

*American Hospital Association says everyone should be required to have healthcare insurance. It backs policies that promote healthier lifestyles and wants to redesign payment structures so that primary care physicians are better rewarded for coordinating patient care.

*Pharmaceutical Research and Manufacturers of America wants an overhaul built on the existing employer-based system. It backs expanding coverage through a “public-private” approach that broadens private health insurance and uses public health programs to plug in the holes and cover the uninsured.

*America’s Health Insurance Plans seeks to reduce soaring costs. It says any guaranteed coverage with no exclusions for pre-existing conditions needs to be coupled with a mandate for individuals to get coverage. Backs refundable tax credits to help low income people afford health insurance.

(Compiled by Donna Smith, editing by Vicki Allen)

Source: www.reuters.com

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Health care reform – seven suggestions to consider

My last two articles talked about some of the problems with currently proposed forms of health care reform and some of the economic hazards any reform must overcome. I did not post those words to be pessimistic, but to offer a realistic warning about what is wrong with the system and how well meant, but poorly considered fixes might make the problem worse in the long run. Of course, there are solutions I can offer so today I’m going to point out what we might do to truly improve the health care system.

Transparency – One of the biggest problems with health care is no one knows what any procedure really costs ahead of time. Some well meaning individuals decided that should hospitals and doctors have clear and easily understood pricing posted, they might compete over pricing and reduce quality. This has not worked well and needs to be abandoned. Hospitals and doctors should openly post their pricing and be allowed to enforce a single price for every procedure rather than the current system were the uninsured pay one price and each insurance company negotiates its own price for each procedure.

Quality Control – Right now the civil legal system is used to enforce an almost ad-hoc quality control over doctors. Someone who is unhappy with the results of a procedure can sue their doctor for malpractice and potentially gain a huge sum of money if they find a sympathetic jury. When you are dealing with as complex an organism as the human body, some of these lawsuits are not based on any true fault of the doctor, however poor policing of doctors by the AMA and licensing boards has created a feeling that lawsuits are the only way to punish bad doctors. This needs to be fixed, both to eliminate the lawsuit lottery, and to raise the quality of care. The presence of less than competent doctors has tainted the industry and allowed the problem to fester; the only other industry with a similar problem is the legal profession where unethical lawyers are shielded from punishment by their peers rather than immediately disbarred for their actions.

Simplify Payment System – One of the best arguments for single payer systems is the fact that it eliminates a huge amount of paperwork for the doctors. No longer does a doctor have to employ two or more clerks simply to fill out and submit forms to multiple different payers for reimbursement. Especially as every insurance agency has its own unique forms and policies it wants followed before it will release the money. This has acted to increase the costs doctors must bear, and naturally they have passed this on to their customers. If there was a single standardized form to be filled out, it would reduce their costs and the savings could be passed on to customers, especially if we include price transparency and people knew which doctors were passing the savings on.

Return Insurance to being Insurance – In every other area where insurance is sold, homes, and cars, insurance does not cover regular maintenance. Its used to cover the for catastrophic damages while payments for the regular and routine maintenance is left to the owner. Somehow health insurance has become a health maintenance payment, without people realizing the increase in costs that represents. Some private group insurance policies are going back to a system of catastrophe insurance with a high base deductible before they start to pay any benefits, which encourages a more reasonable approach to the use of health care.

End Unlimited Free Care – Right now anyone who cannot pay or who wants to avoid paying can go to any emergency room in the nation and receive free service from the hospital. Hospitals are unable to turn people away if they enter through the emergency room, and its become a drain on the system. There is no question that all people deserve care, but emergency rooms need to be for true medical emergencies, not for indigent customers who are unwilling or unable to pay normally. Removing this feature will reduce the costs that must be spread over paying customers and allow prices to fall. Right now an increasing number of hospitals are closing down because they can no longer afford to treat patients who are unwilling or unable to pay.

Return Insurance to Insurance 2 – end the mandates for coverage for treatments like acupuncture, chiropractics, laser hair removal and fertility treatments. Some of these might be “quality of life” issues, but they are not true health issues and if insurance truly is about protecting a person’s financial situation in chases of bodily injury than these treatments have no place being covered.

Limit Medical related bankruptcies – Right now its possible to remove all your medical bills by declaring bankruptcy. Unfortunately, this leaves the medical providers with a large loss in their accounting books, a loss they tend to make up by charging others a higher rate. It becomes an almost self-fulfilling situation. Hospitals need to recover lost payments caused when patients default and declare bankruptcy, so they increase their fees for all procedures, which only pushes other patients into default. There needs to be a middle ground where the hospital can still receive some money after treating a patient. However, the world of six figure bills also needs to vanish if that is to be possible.

This is not a complete list, but if we just chose three of these seven ideas and put them into play, the cost of health care would start to fall. Of these the only one that has even been suggested by most liberals is the single payer system, and that only because they see a government umbrella over health care as a workable solution. The fact that the inevitable result will be rationing of care seems to elude them.

And there will be rationing no matter what method we use to “fix” health care. Price is used to influence the choices we make. If people are fully aware of the price of something, and are cognizant that they cannot avoid paying, they will self-ration when they decide the costs outweigh the benefits. Right now with no true idea of the costs, there is no impulse to ration beyond the people who have discovered that overuse of health care has left them unable to obtain insurance and unsure of the costs involved in treatment. I can say from experience that being treated while insurance and uninsured for the same malady is quite a surprise. I have twice gone to the hospital suffering from a kidney stone. The first time I had insurance and the total bill paid by the insurance company was under $3000. When I was uninsured, the final total of all the bills was $9000 for the same treatment. Unfair perhaps, but the difference was merely a result of a failed market, caused by too much government interference

Source: www.examiner.com

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