Re: McCain Plan to Aid States on Health Could Be Costly
- From: "Jerry Okamura" <okamuraj005@xxxxxxxxxxxxx>
- Date: Thu, 10 Jul 2008 07:25:30 -1000
Every proposal to address medical care will be costly. It is not possible that any changes will not be costly....
"Jim Higgins" <gordian238@xxxxxxxxxxx> wrote in message news:IOKdnUIaRp4SqujVnZ2dnUVZ_gSdnZ2d@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
McCain Plan to Aid States on Health Could Be Costly
http://tinyurl.com/6ozsvn
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 fi-nancing 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.”
--
Civis Romanus Sum
.
- References:
- McCain Plan to Aid States on Health Could Be Costly
- From: Jim Higgins
- McCain Plan to Aid States on Health Could Be Costly
- Prev by Date: Re: McCain promises to balance budget in 4 years
- Next by Date: "Black Hole" is Racist?
- Previous by thread: McCain Plan to Aid States on Health Could Be Costly
- Next by thread: France At Forefront Of Free, Innovative Cancer Care
- Index(es):
Relevant Pages
|
Loading
