If We Mandate Insurance, Should 20-Somethings Pay Less?

Should insurers be able to offer less expensive policies to the young and healthy? Or should they be required to offer the same benefits to everyone at the same price?

In states where insurance is mandated, should twenty-somethings get a break? In a post on Health Care Policy and Marketplace Blog Robert Laszewski addresses these questions. He begins by focusing on a report  just released by the health insurance trade association (AHIP). The study looks at state health insurance reforms of the 1990s that tried to eliminate discrimination by insisting that insurers must sell “individual” policies to people who are not covered by an employer or another group without discriminating on the basis of health, age or gender. According to the AHIP, these reforms have had some “unintended consequences.”

Commenting on "The FDA Betrays its Mandate"

Commenting on "The FDA Betrays its Mandate,"  Gregory D. Pawelski  responded:

Take Physicians Out of the Retail Pharmacy Business

Lee Newcomer, with United Health Group, had stated at the 12th annual conference of the National Comprehensive Cancer Network, 44% of patients having blood work-ups indicated they were not anemic. Len Lichtenfeld, deputy chief medical officer for the American Cancer Society, reiterated that Newcomer was right on the spot on this. Few drugs work the way we think and few physicians/scientists take the time to think through what it is they are using them for.

A New York Times article stated that anemia drugs, given by injection, have been heavily advertised, and there is evidence that they have been overused, in part because oncologists can make money by using more of the drug. Lichtenfeld told United Press International, "Probably more than a billion dollars is spent on erythropoietin each year, which makes it one of the most expensive cancer drugs."

Should People Who Don’t Take Good Care of Themselves Pay More for Health Insurance?

When healthcare reformers talk about making health insurance fair, some suggest that people who don’t take care of themselves really shouldn’t expect the rest of us to pay for their folly. They point to a study published in 2002 showing that, each year, the average smoker needs an extra $230 worth of inpatient and ambulatory care. “Problem drinkers” require an additional $150; obesity adds $395 to the annual bill, while simply being overweight costs an average of $125 a year. (According to researchers about one in three Americans are overweight while in one in five is obese).

Asking those who puruse less-than-healthy lifestyles to pay higher healthcare premiums seems, on the face of it, a simple matter of equity. But one needs to ask: what will be the effect? And where do we draw the  line?

 

Jacob Hacker on “Sicko” --and Employer-Based Insurance

You know that Michael Moore’s “Sicko” is being taken seriously by the medical community when you see it reviewed in The New England Journal of Medicine. The issue that came online last week contains Jacob Hacker’s take on the film—as well as his prescription for national health care reform.

Hacker calls the first half of the film “ruthlessly efficient,” declaring that, “along with Al Gore's global-warming warning, An Inconvenient Truth, Sicko may well be remembered as our generation's Silent Spring or The Jungle — propaganda, in the best sense of the word, that pricks our collective conscience about problems that are hidden in plain sight.”

But as a political scientist (Yale) and New America Foundation fellow, Hacker is dissatisfied that, in the second half, Moore doesn’t offer a better solution to the crisis. This may be asking a bit much of Moore. My theory is that a film-maker, like any other artist, need only raise the right questions, (however abstractly), spurring his audience to think—and to imagine.

That said, Hacker’s point that Moore ignores the best model for reform by never mentioning Medicare is a good one: “He talks about the post office, the fire department, public education — but not the one public program that most resembles the ‘free universal health care’ he extols.

“That's too bad,” says Hacker, “because the Medicare model is the not-so-secret weapon in the campaign for affordable health care for all. Today, many advocates of national health insurance have wisely started calling for Medicare for All’ rather than their old rallying cry, ‘Single Payer.’”

Hacker’s right. To many Americans, “single payer” evokes images of long lines—not to mention the Specter of Socialism. Medicare, on the other hand, represents the Promised Land –that point in time when you no longer have to worry about whether or not you have health insurance, or whether it will cover what you need. Medicare is hardly perfect, but not a few seniors breathe a huge sigh of relief when they finally find themselves in the warm embrace of the second-most-popular federal program in the U.S. (Social Security comes first.)

But Hacker doesn’t think we’re ready for “Medicare for All.” Instead, he suggests that “For now, the best step may be to require employers either to provide their workers with good private coverage or to enroll them, at a modest cost, in a new public program modeled after Medicare. Workers enrolled in this new public framework could be asked to pay a modest premium on top of employers' contributions, based on their income, and they could be allowed to enroll in qualified private plans — as people with Medicare coverage can today. No doubt many employers would seize the opportunity to obtain inexpensive coverage for their workers, which would give the new public insurance plan a large, diverse enrollment and a great deal of leverage to contain costs and improve care.”

UnitedHealth Care vs. the Kids

Wednesday night, the House voted 225–209 to pass a bill that would, in the words of a Wall Street Journal editorial, “steal nearly $50 billion from Medicare Advantage, the innovative attempt to bring private competition to senior health care” in order to beef up the State Children’s Health Insurance Program (SCHIP), a program that delivers health care to poor children.

SCHIP is scheduled to expire September 30; the House bill would renew the program while expanding it to include another 5.1 million children at a cost of an extra $50 billion over five years. The bill’s backers propose to fund the legislation by increasing the federal cigarette tax by 45 cents while simultaneously paring the premium that Medicare pays private insurers who provide Medicare to seniors. The goal of the bill, reformers say, is to ensure that all children in the United States have health insurance. The Wall Street Journal’s editors see things otherwise: “Democrats apparently want to starve any private option for Medicare,” the editorial concluded.

Rupert Murdoch hasn’t yet weighed in, so I decided to take a look at the proposal. Would the legislation really make it impossible for private sector insurers to continue to offer needed benefits to seniors?
I began by looking at insurers’ finances only to discover that the health care insurance industry is, in fact, facing rough weather ahead. While the cost of providing health care continues to climb, more and more employers are backing away from providing health care benefits for their employees. Others are raising premiums and co-pays to a point that some workers can’t afford to participate in the plans. This means that insurers are losing customers.

As a result, one might expect that insurers’ profits would be falling. One would be wrong