Medicaid expansion will leave out many of the poorest: What is wrong with this picture?

In States’ Policies on Health Care Exclude Some of the Poorest, in the New York Times on May 25, 2013, Robert Pear describes how this bizarre situation has come to pass. Basically, it is because the programs established by the Affordable Care Act (ACA) of insurance exchanges and federal subsidies for low-income people, via tax credits, was never the ACA’s plan for the lowest-income Americans. They were supposed to be covered by expansion of the Medicaid program, a federal-state partnership that covers some poor people and varies widely, both in terms of who is covered and what that coverage consists of, from state to state. Recognizing that, coming out of the “Great Recession”, many states were strapped for money, the ACA also included a provision that the first 3 years of the expansion would be paid entirely by the federal government, and that the feds would pay 90% of the cost thereafter.

This, however, was not sufficient inducement for many states to agree to expand Medicaid. They might have if the Supreme Court decision that found the ACA constitutional had not excluded one provision – that, unless the states’ expanded Medicaid they would lose all their current Medicaid funding. The result was the decision in many states to not participate in Medicaid expansion, thus effectively leaving out the mechanism for covering the poorest; tax credits were designed to provide subsidies for those who earned from the poverty level to 4 times the poverty level ($11,490 to $45,960 for a single person) with Medicaid expansion covering those below it. However, many states (virtually all Republican-controlled, although not all those that are Republican controlled) have opted out of this program, leaving those below the poverty level uncovered. The head of the Louisiana Primary Care Association notes that “If the breadwinner in a family of four works full time at a job that pays $14 an hour and the family has no other income, he or she will be eligible for insurance subsidies. But if they make $10 an hour, they will not be eligible for anything.”

 While these states may not have more than half the country’s total population, they do, according to the Times, have more than half the uninsured (they include Texas, the nation’s second most populous state, which has an uninsured rate of about 30%, and Florida, the fourth most-populous, whose legislature has decided not to expand Medicaid despite the support of Republican governor Rick Scott for expansion).  “The Congressional Budget Office estimates that 25 million people will gain insurance under the new health care law. Researchers at the Urban Institute estimate that 5.7 million uninsured adults with incomes below the poverty level could also gain coverage except that they live in states that are not expanding Medicaid.”

The state “featured” in Pear’s article is my home state of Kansas, possibly because of the willingness of the state’s insurance commissioner, Sandy Praeger (pictured here with Secretary of Health and Human Services Kathleen Sebelius, who, the Times does not indicate, was formerly Governor of Kansas, and, before that, Praeger’s predecessor as insurance commissioner), to discuss the situation. Kansas, historically not one of the more generous states for Medicaid, “…provides no coverage for able-bodied childless adults. And adults with dependent children are generally ineligible if their income exceeds 32 percent of the poverty level.” Thus, Ms. Praeger said, “In most cases, she said, adults with incomes from 32 percent to 100 percent of the poverty level ($6,250 to $19,530 for a family of three) ‘will have no assistance.’ They will see advertisements promoting new insurance options, but in most cases will not learn that they are ineligible until they apply.” Whoops. Gotta fix that.

Or not. There is no plan, in Kansas, Texas, Florida, or any of the other states not opting for Medicaid expansion to help to cover these people. Most of the arguments you will hear against doing so cite “costs too much money”, but this is, simply, baloney. The governors and legislatures currently running these states do not, actually, believe in covering anyone (except, of course, themselves and their friends). They believe this is “socialism”. What they believe in is cutting taxes, particularly on the wealthiest individuals and corporations, which Kansas has  aggressively done since Governor Brownback was elected in 2010. The ostensible argument, from the governor, is that low taxes will lead to greater business growth, which will benefit the economy, and help to balance the budget. The first is your basic “trickle down”, proved wrong in every instance since it was first made popular in the 1980s, and the second is a negative tautology – even if business does grow, the extremely low tax rates will make balancing the budget very hard. Indeed, this year Governor Brownback is stumping the state to drum up support for not cutting the higher education budget, but this seems to be falling on deaf ears in the legislature, which sees such spending cuts as yet another opportunity to cut taxes.

Praeger, as insurance commissioner, does not make the decision about Medicaid expansion, but her office is responsible for informing the public about its opportunities to gain insurance on the exchanges (that will be federally-run, because Kansas has also opted out of running its own) and also informing those “poorest of the poor” that the ads for coverage will not be for them. It is obvious that she feels very badly about it; this former state senator and mayor of Lawrence, and former chair of the National Association of Insurance Commissioners (NAIC) is a person with a heart and a concern for people (yes, Virginia, there are Republicans with a heart, and Kansas used to be full of them!). The insurance commissioner does make some decisions; Sebelius, in 2002, blocked the sale of Blue Cross/Blue Shield of Kansas to the for-profit Anthem, stating it would not be in the best interest of the people of Kansas. Many credit that very popular decision for helping her to win the governorship later that year (yes, Virginia, we sometimes elected Democrats as governor!).

It is way too early to know how these decisions will affect elections at either the state or national level. The Times article indicates that “Administration officials said they worried that frustrated consumers might blame President Obama rather than Republicans like Gov. Rick Perry of Texas and Gov. Bobby Jindal of Louisiana [and one might add Kansas], who have resisted the expansion of Medicaid.” However, and very unfortunately, the poorest of the poor do not vote in high numbers. Perhaps the opposite will happen, with those slightly more well-off, who vote at slightly higher rates, crediting the Obama administration for their new coverage, and blaming the state governors and legislatures.

And, of course, this does not even take into account undocumented people living in the US, many of them the breadwinners for families that are composed of citizens, “legal” and “illegal” members.  Children who were born here are citizens (and eligible for programs such as Medicaid and the State Children’s Health Insurance Program, S-CHIP) while often their parents are eligible for nothing. This is not the way to improve health, or to foster family values. But it is consistent with another, anti-immigrant, agenda.

Other first-world countries cover everyone. Not some, many or most people. Everyone. They do it in different ways: Britain has a National Health Service, Canada a single-payer health system which is the government, Switzerland a multi-payer (private) system with a required benefits package and pricing structure. Other countries, Japan and Taiwan, France and Germany, do it differently, but they all cover everyone. We could too.

It’s sad for all of us that we won’t. And it’s life and death for the neediest.
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More data from American Medical News: Millions uninsured on patchwork Medicaid expansion map

Insurance company greed: To know them is to not trust them

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Anthem Blue Cross, a subsidiary of WellPoint of Indianapolis, has taken a lot of criticism for its proposed rate increases on its 800,000 individual policies in California (“Anthem Blue Cross dramatically raising rates for Californians with individual health policies”, Duke Helfand in the Los Angeles Times February 4, 2010, http://www.latimes.com/business/la-fi-insure-anthem5-2010feb05,0,3002094.story), to the extent that a follow-up article by Helfand on February 12 (“Anthem's parent company defends health insurance rate hike”, http://www.latimes.com/business/la-fi-anthem12-2010feb12,0,3807841.story) calls them “beleaguered”. They deserve to be. Their action is not only outrageous, it points out the absolute absurdity of thinking that a solution to the nation’s health care access problems can involve for-profit insurance companies.

Anthem announced increases of up to 39% on individual policies, but the WellPoint announcement adds insult to injury when it says “…that less than a quarter of affected Anthem customers in California will see rate increases of 35% to 39%. The average will be about 25%, while some customers will see rates fall…” Whew! Only 25% on average! Only a quarter of those affected will see increases in the 35-39% range. I guess those folks – and the rest of us because, as I will keep saying, we are all in this together! – can now rest easy.

In addition to investigations by the California Insurance Commissioner and possibly the Attorney General of the state, this one outrageous act has been the target of increasing criticism from the administration and from Congress. Rep. Henry Waxman, Chair of the Energy and Commerce Committee, announced hearings into the rate increase (http://www.speaker.gov/blog/?p=2149), and HHS Secretary Kathleen Sebelius is quoted by Helfand as saying “It remains difficult to understand how a company that made $2.7 billion in the last quarter of 2009 alone can justify massive increases that will leave consumers with nothing but bad options.” Sebelius, who is absolutely correct, has a history with Anthem. In 2002, as Kansas’ Insurance Commissioner, she blocked sale of Blue Cross/Blue Shield of Kansas to Anthem because it was ”not in the interest of Kansans”, an extremely popular position with both the medical and hospital societies and with the public, and played a significant role in her election as Governor later that year.

It would be a mistake, however, to see the WellPoint/Anthem action as an isolated case of stupendous greed by one insurance company. It is an example of the widespread stupendous greed of all of the health insurance companies. The New York Times’ Katharine Q. Seeley (“Administration Rejects Health Insurer’s Defense of Huge Rate Increases”, http://www.nytimes.com/2010/02/12/health/policy/12insure.html) also quotes Sebelius, but also notes that the top 5 health insurance companies, WellPoint, Cigna, UnitedHealth Group Inc., Aetna Inc. and Humana Inc., “…had an average profit last year of 5.2 percent — for a combined total of $12.2 billion. This was an increase of $4.4 billion, or 56 percent, compared with 2008…” The data comes from Security and Exchange Commission filings, and is contained in a report by “Health Care for American Now” (http://www.healthcareforamericanow.org/). The report, at http://hcfan.3cdn.net/a9ce29d3038ef8a1e1_dhm6b9q0l.pdf, also notes that the “medical loss ratio” for these companies is incredibly low. As a reminder for regular people, the ones who pay the bills, the “medical loss ratio” is the percent of the premiums insurance companies collect that they actually have to spend on providing health care, that is, that they do not get to keep!

The medical loss ratios for these companies for 2009, notes Don McCanne in his wonderful “Quote of the Day” for February 12, were:

· WellPoint - 82.6%
· UnitedHealth - 82.3%
· Humana - 82.8%
· Cigna - 81.2%
· Aetna - 85.2%

Or, “…of the estimated $809 billion spent on private health insurance in 2009, the five biggest for-profit companies... captured $232 billion.”

In case you had any illusions that these insurance companies might have made a mistake, or be embarrassed, or in any way could be thought to be serving the public, the statements of WellPoint’s spokesman, Bart Sassi, should change your minds.
"We welcome the scrutiny and are confident that our rates reflect anticipated medical costs and are established consistent with actuarial principles and state law.". That means he thinks it is legal, not that folks can afford it. He adds that Anthem's insurance policies "remain very competitively priced when compared with the dozens of other plans competing in the California individual market." Competitive with the other huge rapacious insurance companies, that is. Oligopolies don’t compete.

Helfand (Feb 11) also reports that “Anthem is not the only health insurer imposing double-digit rate increases. Competitors such as Blue Shield of California and Aetna also have raised premiums significantly in recent years, insurance brokers said. But they said the impending Anthem increases are the largest they have seen.” But at least we know that they have a human side, and are empathic. "We care deeply about our California customers and community,"Sassi said, "Clearly, we understand that these increases create a challenge for many of our members." Not that they are going to do anything about it except raise rates. Words are cheap.

The real message here is that health care reform must happen, and that to include for-profit insurance companies as the centerpiece, or as any meaningful component, is absurd and will guarantee failure in both of its goals: meeting the health access needs of the American people and controlling costs so that medical care does not bankrupt us and prevent the society from implementing the other necessary programs essential to health. If not a government-run single payer plan (the best choice), any health reform plan that does involve insurance companies must require them to be non-profit, or at least closely regulated by the government regarding the services that they must provide and the prices that they can charge. One of these methods is used by every other developed country, all of which have better outcomes for lower cost than we do.

The physician and ethicist Howard Brody has written an important article, “Medicine’s ethical responsibility for health care reform – the top 5 list”, New England Journal of Medicine, Jan 10 2010;362(4):283-5 http://content.nejm.org.proxy.kumc.edu:2048/cgi/content/full/362/4/283, in which he calls on physicians to take a strong and concrete role in cost control by limiting the tests and procedures that they order to those which are evidence based. He suggests that each specialty, through its specialty societies, identify the “Top 5” procedures that are commonly done their field that are both costly and not evidence-based, and exert pressure on their members to refrain from doing them. Indeed, to keep. Brody’s ethical justification for calling on doctors to do this is that “Physicians have, in effect, sworn an oath to place the interests of the patient ahead of their own interests — including their financial interests.” He adds that, while insurance companies, along with pharmaceutical companies, have promised the President to cut their costs as a “contribution” to health reform, “None of the for-profit health care industries that have promised cost savings have taken such an oath.”

You can say that again. This latest round of premium increases to bolster their obscene profits also shows how false their promises were. From the Obama administration and its Congressional allies who have been trying to steer an impossible “middle course”, to the Republican who have united in obstructionism and whose only offering is more give-aways to the insurance industry, to the “teabagger” populists who fear big government but should fear the private insurers rapacity more, it should be clear: To know this is to not trust them.
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