November 15 Newsletter

1. Your Comments: T.R. Reid On The Medicare Scare

2. Your Comments: Give ‘Em Hell, Harry!

3. Your Comments: A Professor Emeritas Explains It All

4. Your Comments: A Doc Writes: Pragmatism Is The Name of the Game

5. Your Comments: A Pediatrician Diagnoses the Problem

Your Comments: Journalist T.R. Reid on the Medicare Advantage Cuts and a Silver Lining

There was a big, enthusiastic response to the radio interview with journalist T.R. Reid on the passage of the House bill, provided in yesterday's newsletter. (Who doesn't love T.R. Reid, the creator of the Frontline documentary "Sick Around the World"?) The radio interview with T.R. Reid is only 23 minutes long, but if you're having trouble downloading it, I made a partial transcript of some of the essential points covered in the interview, especially Reid's comments on Medicare Advantage cuts.

Interviewer: “Do you know what the cuts to Medicare Advantage would mean? Why would those be cut?”

T.R. Reid: “They would be cut, and people with Medicare Advantage now would pay a little more in premium, and that’s because all the rest of American taxpayers are subsidizing those plans. Those plans were set up to prove that the private insurance companies could be just as efficient as government. Initially, the law said that their fees could only be 95% of the standard Medicare fees, because they were going to be 5% more efficient than government…”

Interviewer: “They were basically competing with standard Medicare, right? People could sign up for standard Medicare through the government or sign up for these Medicare Advantage plans.”

T.R. Reid: “That’s right and you get it through one of these insurance companies. And initially they (the insurance companies) said ‘Hey, this is going to be a good deal, we’re going to save the government money, provide the same care for 5% less because we’re so efficient.’ As it turned out, they (the private insurance companies) weren’t efficient enough to do that, so they keep coming back to Congress for subsidies from the taxpayers. You and I pay for peoples’ Medicare Advantage. It now costs 14% more – they cost 114% of what it would cost to provide basically the same coverage through Medicare. So Congress said ‘Why should we pay 14% subsidies to insurance companies that take about 20% out of every dollar to pay for their administrative costs?’ They (Congress) cut that to save money and it’s definitely true – people who are now getting subsidized by other taxpayers for Medicare Advantage will have to pay more out of their own pocket.”

A few more points made by journalist T.R. Reid in that essential interview:

1. He points out that cuts in the wasteful Medicare Advantage program are going to subsidies to help uninsured people get coverage.

2. He breaks down who will benefit from the House bill, and who will be left out.

3. He doesn’t see the possibility that employers will dump employees into the public option as a downside.

4. He reinforces the fact that universal coverage provides the political will and the leverage to do the tough cost-cutting that is necessary.

5. Lastly, he saw an upside to an imperfect bill:

T.R. Reid: “I have good news for that caller who said she had thought we were going to cover everybody and was surprised that we don’t. I think this is going to lead to universal coverage in this way: I think a lot of state legislatures are going to see that Washington fell way short. I mean, the bill improves some things, but it doesn’t cover everybody. I think in January there are going to be bills in 25 different legislatures trying to set up some kind of state program to get to universal coverage. A couple of states, three or four, will make it work, the rest of us can watch them and copy it, and we’ll get there state by state. And the reason I say this is in my book I list some countries that got to universal coverage on a province-by-province basis. Or a state-by-state basis: one state makes it work and the others see it and say, ‘Hey, let’s try that.’ So I think this is going to lead to local experimentation that will get us to universal coverage. That’s my bet.”

Your Comments: Give ‘Em Hell, Harry!

Following on T.R. Reid’s ideas on cost-cutting, Pat sent Friday's important message from Robert Reich, which urges Senate Leader Harry Reid to push for reconciliation first, and she included this note:

“Of course you must have received tons of links to the Reich letter to Senate Leader Harry Reid (I don't think I missed it in your earlier newsletter), but I gotta say I love the "Give 'em hell Harry" diatribe, and wouldn't it just be something? It even leads me to view the prospect of an "opt out" option in a positive light. If only!”

Your Comments: A Professor Emeritas Explains It All

Yesterday I promised a synopsis of the House bill, and I’ve found an excellent, highly readable one by Professor Leveen. I need to check with her on one small point, and will send it to you ASAP, but no later than tomorrow morning. In the meantime, I am including a brief note that arrived from her after the passage of the House bill.

“I believe there are some remarkable provisions in the House bill that are by no means guaranteed in the Senate bill and are worth fighting for. Two of these include:

1) The Exchange is really intended to play a strong role, with authority to reject premiums or premium increases that are too high.

Indeed 3962 has a new title --Title I--with "immediate reforms" which include Sec 104: "Sunshine on price gouging by health insurance issuers"--and the Manager's amendment provides more details re: this process as well as $1B in grants to help establish this process. And it starts in 2010. The issue of premium increases has really received much more attention than in the original bill.

2) Eligibility for the exchange has been expanded: from business with 10/20 employees, and more permitted, in the original bill, to 25, 50, and 100, required, and then more permitted. With additional expansion partly determined by "excess of premium growth outside the Exchange..." . there is a lot to build on here!

Affordability may not be ideal, but there is a mininum benefits standard with limits on cost-sharing, no annual or lifetime limits on spending, and it will apply to ALL plans... there will be no "junk insurance."

31 million people will gain coverage! And since only 10% of the uninsured have incomes over 400% FPL, 90% should be eligible for subsidies. And since median family income is about $70,000/year (household income is about $50,000), that means more than half of our families will qualify for some subsidy: it phases out at $88,000 for family of four.

And once those subsidies are in place, and with employers forced to pay 65-72% of premiums, there will be even more political pressure to stop "price gouging". and I personally am impressed that the term "price gouging" appears in the legislation itself. All those who have worked so hard to bring attention to the abuses by private insurance have had a huge impact. I believe we have a lot to build on, and a lot to fight for!"

Your Comments: Pragmatism Is The Word of The Day!

Doctor Tom wrote this cautionary note with regard to the Stupak-Pitts Amendment:

“The most critical need here is to get a health care reform act on the President's desk. If abortion is a deal breaker for a few critical Democrats (or, for that matter, Republicans), and we run the risk of losing the whole bill because of it, then I would advocate opting for an imperfect bill now with the expectation of improving it over time, as has happened with many other pieces of important legislation in past.... Pragmatism is the word of the day!”

Your Comments: A Pediatrician Sends an Article Showing What We’ve Been Up Against

…and unfortunately, it’s not just the GOP who took the lobbyists’ money:

“Statements by more than a dozen lawmakers were ghostwritten, in whole or in part, by Washington lobbyists working for Genentech, one of the world’s largest biotechnology companies. E-mail messages obtained by The New York Times show that the lobbyists drafted one statement for Democrats and another for Republicans.”

The same pediatrician included his personal note regarding our Congress:

“One has to have some level of self-imposed ignorance or misinformation to think we do not already have ‘socialized medicine.’ Many of those opposed to health care for other US citizens are already receiving government administered “socialized medicine” from Medicare, Medicaid, or the Veterans Administration. Millions of Americans have government subsidized health insurance because they work for some branch of the school systems, city, county, state, or federal government.

It is both immoral and shameful that members of our Congress would continue to deny adequate health care to so many of our citizens.

The Republican solution was recently voiced by Representative Cantor (R,VA) when he told a woman facing massive bills for her cancer treatment that she should “spend down” her assets to try to qualify for Medicaid and/or look for charity.

Maybe it is now time for the "Blue Dog" Democrats to join this pseudo compassionate, pseudo conservative political party. Considering that the late Strom Thurmond's former “Dixiecrats” are now in control of the Republican Party, former respected members of the party such as Abraham Lincoln, Nelson Rockefeller, Everett Dirksen, and Barry Goldwater must be rolling over in their graves.”