Today Reuters treated us to a questionably titled non-news item, Americans More Confident of Healthcare Costs. It might be one of the only times in history (backed up by Pew Research!) that Americans will be pulled in by positive vs. negative news headlines.

We all know bad news sells. But when you can use “good” news to defeat needed healthcare reform that the deep-pocketed free market opposes, so much the better. Hey, the US healthcare situation isn’t that bad, right? Right?

Wrong. The major findings from this supposedly positive gem are as follows:

• People who make more money are more confident they can pay for medical care (wealthy, 40% greater than average; poor, 20% less than average)

 

• People who have insurance are far more confident about paying than those who lack insurance (insured, 10% higher than average; uninsured, 80% less than average)

 If you’re wondering, like I was, what “average” is (20% confidence? 30%?), you won’t find a definition anywhere in the article.

Gary Pickens, Chief Healthcare & Science Research Officer at Thomson Reuters, sums it up nicely:

There is “a clear disparity in outlook between those with higher income levels who have insurance coverage and those who are uninsured. This gap needs to be an area of focus for healthcare professionals and policymakers.“

Um, last time I checked that was a primary driver behind healthcare reform. There is a huge gap between the haves and the have nots. That gap grows wider all the time as healthcare costs rise exponentially.

[polldaddy poll=1938486]

So I ask you, why would this so-called news story have a positive headline? Is it the same reason the New York Times let insurance companies plant op-eds masquerading as actual news stories in their vaunted publication?

And you thought propaganda was a Communist phenomenon. Hmm, maybe they ARE taking over the country! Or maybe unbiased news, whether through official or personal channels, is a thing of America past.

© 2009, Actively Fused LLC                 condron.us            blogsurfer.us

It’s amazing when someone with so much power and so much money really cares about the rest of the population.

Ted Kennedy’s cause was to ensure every American had the basics of what he had: excellent healthcare.

In ‘The Cause of My Life’, Kennedy reveals why it mattered to him and what he had in mind. Here is an excerpt:

“In 1964, I was flying with several companions to the Massachusetts Democratic Convention when our small plane crashed and burned short of the runway. My friend and colleague in the Senate, Birch Bayh, risked his life to pull me from the wreckage. Our pilot, Edwin Zimny, and my administrative assistant, Ed Moss, didn’t survive. With crushed vertebrae, broken ribs, and a collapsed lung, I spent months in New England Baptist Hospital in Boston. To prevent paralysis, I was strapped into a special bed that immobilizes a patient between two canvas slings. Nurses would regularly turn me over so my lungs didn’t fill with fluid. I knew the care was expensive, but I didn’t have to worry about that. I needed the care and I got it.

…But quality care shouldn’t depend on your financial resources, or the type of job you have, or the medical condition you face. Every American should be able to get the same treatment that U.S. senators are entitled to.”

Read Kennedy’s last Newsweek article, published just one month before he died, here.

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Don’t understand how US healthcare currently works? A picture speaks a thousand words, so here it is:

 

Ted Kennedy saw those red flags early in life. Check out this 4 minute video of a very powerful speech describing his experience. (Sorry, no video embedding capabilities but you can click here!)

 

 

 

 

 

 

 

 

 

 

Flag Photo Copyright Mike Licht, NotionsCapital.com                   condron.us         blogsurfer.us

 

 

 

 

 

 

 

 

 

Mention the term “public option” and the temperature in the room rises rapidly. You’ll hear “keep the government’s hands off my healthcare!” and “Obama’s going to kill grandma” and all sorts of memorably engineered one-liners.

People get overly excited and start bashing every underperforming nationalized (yes, “government-run”) healthcare system they can think of, including Canada and the UK. Which ignores the fact that any of these systems perform better than the US healthcare set-up (see “Why Won’t ‘Nationalized Healthcare’ Countries Clean Up Their Mess?”).

It also ignores the fact that the US is actually considering Switzerland’s social insurance healthcare model (haven’t heard any Swiss bashing, have you?). But “rationing” and “death panels” are the scare words de jour.

Have you noticed what you don’t hear, though? Insurers are not crying, “Stop insurance reform!” What? There are 6 healthcare lobbyists for every Washington lawmaker, $263 million spent on healthcare lobbying so far this year, 428% increase in health insurer profits since 2000, and not a peep to “hold everything!” The silence is deafening.

Silence Is Golden

Now, you don’t rake in that kind of cash from the supposed health of a bunch of obese Americans by being stupid. So what gives?

First of all you will need to understand the political difference between “healthcare reform” and “insurance reform”.

Healthcare Reform = Consumer Protections + Public Option

Insurance Reform = Consumer Protections

Since the general public is now so jittery towards anything involving government, Obama and Co. have resorted to talking about Insurance Reform. This means anything to do with the public option is sitting at the edge of the table, waiting to get swept into the garbage can.

But how did the jitters start? Former insurance industry PR executive Wendell Potter spelled it out in testimony before the Senate. In a PBS interview, he then said:

“…the industry is using the same tactics they’ve used over the years, and particularly back in the early ‘90s, when they were leading the effort to kill the Clinton plan.”

Then there was the game plan to discredit Michael Moore’s “SiCKO”. You can download AHIP’s document here. It spells out the industry’s strategy: “Highlight horrors of government-run systems.” It also recommended threatening Democratic party leaders that if they endorsed the movie, AHIP would run derogatory ads during reelection time, not contribute to their campaigns, and in fact contribute to their opponents.

So it shouldn’t surprise you to find out that it’s the insurance industry behind all those scary phrases being bantered about by talking heads and uninformed citizens today. PBS host Bill Moyers obtained a strategy memo for healthcare reform opponents written by Frank Lutz, the Republican strategy leader. It said:

“First, you have to pretend to support it. Then use phrases like, ‘government takeover’, ‘delayed care is denied care’, ‘consequences of rationing’, ‘bureaucrats, not doctors prescribing medicine’.”

It expanded from there, as you can see in this chart. And insurance leaders themselves haven’t actually had to say a word in public.

Why So Agoraphobic?

Agoraphobia is fear of public places. And health insurers are extremely afraid of a national public option. Why? In Potter’s words:

“The industry doesn’t want to have any competitor…has been shrinking the number of competitors through a lot of acquisitions and mergers. So first of all, they don’t want any more competition period. They certainly don’t want it from a government plan that might be operating more efficiently than they are.”

Yes, Medicare does have administrative expenses of 3% compared to the average private insurer’s 14-20%. So for good measure AHIP also had the supposedly non-partisan health policy consulting firm Lewin Group (turns out it’s owned by UnitedHealth) release a study indicating a government-run plan would undermine private plans and put them out of business.

Fear and claims of foul play certainly are effective, wouldn’t you say? But again, for all the froth it’s worked up over the public option, AHIP seems to be pro-insurance reform. Hmmm.

Private Insurance Bonanza

So what happens if health reform passes WITHOUT a public option, in other words, insurance reform only? Let’s take a look at some provisions in the healthcare reform bills under consideration and survey the territory after a HR 3200-like bill passes.

Coverage Mandates: Each of the healthcare reform bills under consideration includes an individual and employer coverage mandate. Translation: you must buy insurance, and your employer must help you to do so. If you are low-income, the government will subsidize your premiums.

Insurer Impact: Giant revenue gains. Although insurers must now cover those with pre-existing conditions, the huge increase in plan members spreads risk better, and the government will ensure each member’s premiums are paid in full.

Co-ops: If included in the final bill, they will not be able to compete. Small size, no clout in provider reimbursement rate negotiations, and healthcare inexperience will lead to high costs (including high premiums) and eventual failure.

Insurer Impact: Higher membership. Already consolidated industry minimizes competition and reduces individuals’ health plan choices.

Premium and Benefits Regulation: The bills set acceptable premium variation criteria, such as family size, age, and geographic discrepancies, while prohibiting others, such as gender and health status. They also require a minimum benefits standard and ensure the percentage of premiums spent on claims is in line with other insurers. However, no premium caps are included in any bill.

Also, the standards for members’ medical cost reimbursement are going down as we speak, thanks to industry lobbying. The Senate Finance Committee revised its insurer requirement downward from 76% to 65% “to hold down premiums”. However, most group health plans currently cover 80-90% of policyholder’s medical bills.

Insurer Impact: Greater profitability. Provides the ability to charge higher premiums in cooperation with one another, ostensibly to cover any additional costs from sicker members. Also allows the industry to shift more costs onto policyholders by providing less insurance per premium dollar.

Retroactive Policy Cancellation: Also called rescission, none of the bills prohibit this practice for members of individual plans. CEOs of Wellpoint, UnitedHealth and Assurant stated point-blank during a Senate hearing that they will not limit retroactive policy cancellation to only cases of intentional fraud. Apparently Congress doesn’t want to regulate against it?

Insurer Impact: Profitability safety net. Convenient safety valve against removal of lifetime maximum benefits. When members of individual plans rack up too many claims, their policies will be cancelled retroactively from the policy start.

Robert Laszewski, a 20 year insurance industry executive turned consultant, said it perfectly: “It’s a bonanza…hallelujah!” Confirms Potter, the former PR executive turned whistleblower, “It would be quite a windfall.”

Public Over A Barrel

Gerald Shea of the AFL-CIO sees it from the public perspective:

 “They have beaten us six ways from Sunday. Every time we want to make a small change to provide cost relief, they find a way to make it more profitable.”

You’ll notice there aren’t any options for you in the above insurance reform scenario. Pay up, or pay up. Insurance premiums have already doubled in the past 8 years, and you pay higher deductibles and co-pays for the privilege. When mandated private insurance is your only choice, you have no right of refusal.

Private health insurers are well aware the next healthcare reform drive won’t come around for 15-20 years or more. People need time to recover and forget the trauma of this reform movement, to feel sufficient pain for Round 3, and to have the right leadership in place to spearhead it.

Maybe we had better knock them out in Round 2?

©2009, Actively Fused LLC                                        condron.us           blogsurfer.us           

Today let’s tackle something counter-intuitive. Namely:

If you like your current healthcare benefits, you are actually PRO-reform. Surprise! And yes, I know you don’t believe me so hear me out for a minute.  

I understand you are probably one of the most vocal opponents of reform. You feel like your excellent benefits package is being threatened by all this talk of change. There are certainly lots of fear-mongers out there preying on that perception.

But let me tell you why, if you like what you’ve got, you really are pro-reform.

Employer-Based Benefits and Government Programs

Typically, if you like your benefits you are getting them either:

1. Through your employer, or
2. Through Medicare or another government program

You are indeed fortunate, as your benefits are likely to be fairly affordable and provide comprehensive coverage for pre-existing conditions, prescriptions, and preventive care. You are also probably pretty nervous that all this talk of healthcare reform means these benefits might be taken away from you.

So when Senator Joe Lieberman stands up and says most of the healthcare reform initiatives can wait, you breathe a huge sigh of relief. Not so fast—here’s what he means:

1. As a politician, the easiest thing to do is nothing: Not rocking the boat helps his poll numbers go up so he can get re-elected.
2. He won’t feel the effects of doing nothing about healthcare: Congressmen and women enjoy the Federal Employee Health Benefits Program, the widest selection of health benefits in the country, for less than 2% of their rank-and-file $174,000 salary. If costs go up, taxpayers cover the increase.

Why Pro-Status Quo = Pro-Reform

For you there is no such magic formula. Here is why your great benefits, and their cost to you, will not stay as they currently are.

First, the current trend of insurance costs is unsustainable. The price of insurance has risen 95.2% since 2000, while income has only risen 17.5%. These are findings from a study by Families USA, a non-profit that advocates for affordable healthcare.

What are you getting for that enormous increase? Fewer benefits. Higher deductibles. And bigger co-pays or coinsurance.

Let’s look at how it breaks down in Pennsylvania for an employer-purchased family and individual health plan in the table below: 

 

 

 

 

 

 

 Those are some ugly numbers for Pennsylvania workers. The reasons for the increases include:

• Medical treatments—rising cost, increased use
• Inadequate oversight of insurance companies
• Lack of competition among insurers
• Cost shifting from uninsured (growing) to insured (shrinking)

Moreover, insurance costs are rising ever faster. Your employer and the government cannot afford to absorb these increases, so more and more of those costs will be passed on to you. In fact fewer employers are even offering benefits, from 69% in 2000 down to 63% in 2008.

So if you get kicked out into the individual insurance market, you will need both More Options and More Consumer Protections. That is what the healthcare reform bills like HR 3200 and the Senate HELP Committee bill are all about.

They also contain Medicare payment reforms (primarily to hospitals) to wring waste from the system, encourage providers to become more efficient, and most importantly, ensure there is enough funding to maintain seniors’ plush benefits coverage. Yes, you read that right–there is NO benefits reduction for seniors in the healthcare reform bills.

Furthermore, the much maligned public option is there to increase competition (something co-ops with no experience or clout cannot do) and bring down costs over the long term, meaning larger paychecks instead of your current shrinking one.

Your Money Out The Window

Aetna CEO Ron Williams took home over $24 million in compensation last year, the largest compensation of the top 10 health insurers’ combined $85.5 million. That’s your premium money at work. Did you know they also categorize any claims paid on your behalf as losses? That’s right, your care impairs their profits.

But don’t feel bad. The largest 10 for-profit health insurers still made $12.9 billion in profits in 2007. That’s a 428% increase since 2000.

There are also 6 healthcare lobbyists for every lawmaker in Washington, and so far $263 million has been spent on healthcare lobbying in 2009. All together that’s an awful lot of money that’s NOT being spent on your healthcare.

Take Action To Keep Your Benefits

So while there are hundreds of millions of dollars being spent to ensure things DO remain the same for entrenched special interests, your interests are not among them. If you like your healthcare benefits and want to keep them, it’s time to hop on the healthcare reform bandwagon.

To keep the status quo, we need change.

©2009, Actively Fused LLC                                 condron.us                        blogsurfer.us