Re: McCain Health Plan and That High-Risk Pool
- From: mg <mgkelson@xxxxxxxxx>
- Date: Wed, 09 Jul 2008 07:19:12 -0600
I was raised by a single mother who never had an automobile and used
to walk about 5 miles to work. She worked as a nurse's aid at a local
hospital. At the same time most of my friends had fathers who worked
at the local steel mill, some of them probably as union janitors or
laborers who undoubtedly made double or triple what she did.
For individuals and corporations, the story of America has always been
to avoid competition and free enterprise whenever we can. Competition
is for the suckers. Workers used to avoid competition with unions and
still do whenever possible. Corporations avoid competition, whenever
they can, with mergers, import/export laws, and special tax benefits,
help from the Fed, and a devalued dollar, etc. Bush sent our troops to
Iraq in order to get control of their oil so US/British oil companies
wouldn't have to compete with Iraqi oil.
The fundamental problem we have right now with the medical industry
is that they are not competing in the world-wide market, but the
middle class is. As a result, their prices keep going up, up, up, and
middle class wages keep going down, down, down. As I've said before,
what the American medical industry needs is a dose of free enterprise.
We need to figure out some sort of a system that gives Americans the
option to get medical care from foreign providers. Until that happens
politicians can come up with all the plans they want to shuffle costs
around, but it's not going to solve the fundamental problem.
On Tue, 08 Jul 2008 19:51:28 -0700, Rita <Rita@xxxxxxxxxxx> wrote:
The New York Times.
July 9, 2008
McCain Health Plan and That High-Risk Pool
By KEVIN SACK
PIKESVILLE, Md. ? If Senator John McCain?s radical plan for remaking
American health care is to work, he will have to find a way to cover
people like Chaim Benamor, 52, a self-employed renovator in this
Baltimore suburb. Mr. Benamor never found it necessary to buy
insurance before having a mild heart attack last year and now, 13
years shy of Medicare, has little hope of doing so.
The heart attack left Mr. Benamor with a $17,000 hospital bill, $400
in monthly prescription costs and a desperate need for insurance.
After being rejected by a number of commercial carriers, he turned to
the Maryland Health Insurance Plan, one of 35 state programs for
high-risk applicants whom no private company is willing to insure.
He decided that the annual premium ? $4,572 for a plan with heavy
deductibles ? was more than he could handle on an income of about
$35,000. Yet his earnings were too high for him to qualify for state
subsidies.
?I?d like to get it, but what do you pay first?? Mr. Benamor asked at
his dining room table. ?Do you pay the mortgage? Do you pay your child
support? Do you pay your car insurance? Do you pay for your medicine??
In late April, Mr. McCain, Republican of Arizona, announced that if
elected president he would seek to insure people like Mr. Benamor by
vastly expanding federal support for state high-risk pools like
Maryland?s, or by creating a structure modeled after them. But as Mr.
Benamor?s case demonstrates, even well-regarded pools have served more
as a stopgap than a solution.
Though high-risk pools have existed for three decades, they cover only
207,000 people in a country with 47 million uninsured, according to
the National Association of State Comprehensive Health Insurance
Plans. Premiums typically are high, as much as twice the standard rate
in some states, but are still not nearly enough to pay claims. That
has left states to cover about 40 percent of the cost, usually through
assessments on insurance premiums that are often passed on to
consumers.
Health economists say it could take untold billions to transform the
patchwork of programs into a viable federal safety net. The McCain
campaign has made only a rough calculation of how many billions would
be needed and has not identified a source for the financing beyond
savings from existing programs. Finding the money will only get more
difficult now that Mr. McCain has pledged to balance the federal
budget by 2013, which already requires a significant reduction in the
growth of spending.
Mr. McCain?s proposal stands in sharp relief to that of his Democratic
rival, Senator Barack Obama of Illinois, who wants to require insurers
to accept all applicants, regardless of their health. That is now the
law in five states, including New York and New Jersey.
For those who can afford the premiums, or who qualify for subsidies in
the 13 states that provide them, the high-risk programs can be a
godsend.
Richard and Susan Logan, both of whom have battled cancer this decade,
said they were grateful to have coverage for themselves and their
daughter through the Maryland plan, even though it will cost $22,232
this year. They had been rejected by 25 commercial insurers, said Mrs.
Logan, 57, a part-time billing clerk for a physician.
The Logans, who live in Gambrills, near Annapolis, estimate that
without the high-risk pool, they would pay $40,000 a year for
medication alone.
?The plan?s worth its weight in gold for that,? said Mr. Logan, 62, an
aviation accident investigator. ?Otherwise, we?d be paying for the
medications out of our retirement.?
A fifth of the 14,000 participants in the Maryland plan receive
subsidies that drop their premiums below the market rates charged to
healthy people, said Richard A. Popper, the plan?s director. But many
in the middle find the policies both unaffordable and intolerably
restrictive, and Mr. Popper estimates that two-thirds of those
eligible have not enrolled.
Almost all of the state pools impose waiting periods of up to a year
before covering the health conditions that initially made it
impossible to obtain insurance. In some states, fiscal pressures have
forced heavy restrictions in coverage and enrollment. Florida, which
has 3.8 million uninsured people, closed its pool to new applicants in
1991, and the membership has dwindled to 313.
An informal survey by the American Cancer Society recently found that
only 2 percent of nearly 2,700 callers to its insurance hot line
enrolled in high-risk pools within two months of being referred to
them. ?In most cases, we know they probably didn?t apply because they
discovered high premiums or pre-existing condition clauses and just
didn?t bother,? said Stephen Finan, associate director of policy for
the group?s Cancer Action Network.
There is no census of the medically uninsurable. But in 2006, insurers
turned down 11 percent of all individual applicants for medical
reasons, including 22 percent of those 50 or older, according to
America?s Health Insurance Plans, an industry trade group.
Finding a way to cover the sickest of the uninsured is critically
important because 15 percent of the population is responsible for
three-fourths of health care spending. Many wind up in emergency
rooms, which cannot legally reject them, leaving hospitals with more
than $30 billion in unpaid bills each year.
Mr. McCain?s proposal, which he calls the Guaranteed Access Plan,
would be part of a market-based restructuring that is in many ways
more fundamental than the universal coverage proposed by Mr. Obama.
With the goal of making the insurance marketplace more equitable and
competitive, Mr. McCain would end the longstanding exclusion from
income taxes of health benefits paid by employers. The 17 million
nonelderly people covered by directly purchased insurance do not enjoy
that advantage.
Mr. McCain would replace the exclusion with refundable health care tax
credits of $2,500 per person and $5,000 per family in the hope of
driving consumers into the individual insurance market. To help push
down premiums, he would allow the purchase of policies across state
lines.
Currently, those who buy insurance individually often face higher
costs because their risks are not spread across broad groups of
workers. Though insurers cannot discriminate against participants in
group plans, they evaluate consumers seeking individual coverage case
by case to determine if they are worth the risk of coverage, and at
what price. Insurers contend that if they had to charge the same rates
to all comers, many would wait until they were sick to buy policies.
The McCain campaign recognizes that in an invigorated individual
market, even larger numbers of chronically ill people would go without
the protection afforded by group coverage. High-risk pools would
theoretically serve to fill the gaps.
Critics argue that, to date, insurers have benefited from the state
pools as much as the uninsured. As long as premiums remain above
market rates, the pools insulate commercial insurers from the greatest
risks while giving customers little incentive to abandon their private
policies.
?They are run in ways that protect the profitability of commercial
insurers,? said Karen Pollitz, a professor at Georgetown University
who has studied high-risk pools and who has served on the board of the
Maryland plan. ?They leave the illusion that there?s a safety net
without there really being much of one.?
Mr. Obama?s plan differs from Mr. McCain?s in several ways. In
addition to requiring insurers to accept all applicants, he would
require that parents obtain insurance for their children. To make
premiums affordable, he would create a Medicare-like government plan
that would be open to all and pump up to $65 billion a year into
subsidies. The money would come from repealing President Bush?s income
tax cuts for those earning more than $250,000 a year.
When Mr. McCain unveiled his high-risk pool proposal, his chief
domestic policy adviser, Douglas Holtz-Eakin, the former director of
the Congressional Budget Office, estimated the federal cost at $7
billion to $10 billion. Mr. Holtz-Eakin said five million to seven
million uninsured people would be singled out for coverage.
But in a recent interview, Mr. Holtz-Eakin emphasized that the
projections ?could change dramatically? depending on how the program
was structured.
Mr. Holtz-Eakin and other McCain health advisers, including Thomas P.
Miller, a resident fellow at the American Enterprise Institute, and
Stephen T. Parente, a health economist at the University of Minnesota,
said premiums would probably be capped at twice the standard rates.
They said subsidies might be available to those making up to four
times the federal poverty level, or $41,600 for a single person.
Financial incentives would probably be provided to those who
effectively manage their diseases. No decision has been made about
waiting periods for pre-existing conditions, the advisers said.
Mr. McCain?s proposal would represent a huge increase over the $50
million a year that Congress now appropriates in grants to the state
pools, in a program that began in 2002. But several analysts
questioned whether even $10 billion would be nearly enough, given that
the states now spend about $2 billion to insure 207,000 people.
?I do not for a minute think it will cost 7 to 10 billion dollars a
year,? Ms. Pollitz said. ?It may cost 7 to 10 billion dollars a week.?
In an admonition for Mr. McCain, Maryland?s five-year-old plan, like
others before it, has quickly become a victim of its growth. As
enrollment expanded by 30 percent in each of the last two years,
actuaries forecast insolvency as soon as 2010 and compelled the plan?s
board to apply the brakes.
Over the last two years, it has raised premiums, deductibles and
co-payments, increased out-of-pocket maximums, lowered the lifetime
cap on payments and added a waiting period for pre-existing
conditions, which rose to six months from two months on July 1. It
also increased the amount applicants must pay to buy their way out of
the waiting period.
At the same time, the plan is making more people eligible for
subsidies. To keep it afloat, the state is raising the assessment on
hospital bills that provides two-thirds of its financing.
?It?s not easy when you see there is strong demand for something and
you need to temper that demand,? Mr. Popper, the plan?s director,
said. ?But you either find a way to slow enrollment through economic
forces or you close the plan and no one gets in, which is a solution
that no one wants.?
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