As I noted earlier, the Senate Health, Education, Labor and Pensions Committee chaired by Edward Kennedy has released a rough draft of a health care plan entitled The American Health Choices Act. The committee will be debating the plan later this month and changes are likely to be made. Even the plan as distributed contains many blanks to be filled in later.
Among the positive points, the plan begins on the first page by stressing the importance of the doctor-patient relationship and states that nothing in the plan interferes with the rights of health care professionals to determine what is best for their patients. The plan also allows patients their choice of health plans and doctors. I’m sure this won’t stop conservatives from falsely claiming that this amounts to a government take over of health care or falsely claiming that this will lead to bureaucrats rather than doctors making medical decisions. My previous post notes outright untrue statements already being made by conservative bloggers.
Conservatives were also making false claims about John Kerry’s 2004 plan which was far more voluntary than the current plan. My general prediction on health care reform has been that the longer conservatives block proposals the worse the situation will be and the more government involvement will be advocated to fix the problem. I would have preferred we had accepted Kerry’s 2004 plan, and in retrospect many conservatives might now wish they had also backed a voluntary plan of that nature which lacked mandates. My fear is that if conservatives block this year’s plan the entire system of employer-paid health care will collapse within the next decade and we will wind up with an even bigger government plan than this.
The plan would prevent exclusions for preexisting conditions and would require that insurance companies accept every individual and employer in the state who applies for coverage. Rates can only vary based upon factors such as family structure and community ratings. Insurance companies would not be able to deny coverage to those who most need medical coverage as now occurs. Insurance companies would also be unable to refuse to renew coverage once people become ill. There could not be lifetime or annual limitations on coverage and there can only be limited cost sharing for certain preventive services.
The government would subsidize premiums for people with incomes up to 500 percent of the poverty level ($110,000 for a family of four). There will be penalties, supposedly to be set at “the minimum practicable amount that can accomplish the goal” for those who do not obtain coverage. There would be an exemption from penalties if “affordable health care coverage is not available” or if the premium payments would cause “an exceptional financial hardship.” While Obama has backed away from his opposition to mandates, primarily as both Congressional Democrats and the insurance industry backed mandates, he did propose the hardship waiver last week. There will also be breaks for smaller businesses to assist with covering employees.
The bill would expand Medicaid to cover people with incomes up to 150 percent of the poverty level ($16,245 for an individual and $33,075 for a family of four). Ideally a universal health plan would end the discrepancies in coverage based upon income and ultimately eliminate the problem of people who qualify for Medicaid receiving second class care. Ironically a recent Republican proposal, while having its flaws, did a better job of providing the same care to the poor as is received by all (assuming that the Republican plan provides sufficient funding for them to obtain coverage on the individual market).Medicaid patients already have difficulty finding physicians who will accept them and often wind up in Medicaid mills which provide limited care receive Medicaid reimbursement. I fear that a plan such as this which increases the number of uninsured patients seeking physicians will lead to even more physicians deciding to accept newly insured patients and discontinue seeing Medicaid patients as long a reimbursement remains well below payment for treating patients in other plans.
The plan would include a public plan which uses the Medicare fee schedule but pays 10% more. While I don’t know if this is intentional or accidental, this would make the public plan become more favorable for primary care physicians while less favorable for many procedure-based specialties. In general health care is better and less expensive in an area when there are many primary care physicians, and becomes more expensive when dominated by subspecialists. Many advocates of health care reform have been advocating using reform to increase the number of primary care physicians compared to specialists.
Doing a quick comparison of the fee schedules for office calls from several health plans I participate in I found that they typically do pay a higher amount than Medicare but by amounts less than 10%. Therefore a public plan which pays 10% more than Medicare would be likely to provide higher pay to most primary care physicians. Medicare over the years has attempted to reduce the discrepancy in pay between primary care physicians and subspecialists, but private plans will often pay higher amounts for procedures. I wouldn’t be surprised if many surgeons and other groups of procedure-based specialists were to complain about the pay from the proposed public plan.
I should also point out that comparing allowed amounts for office calls only tells part of the story. While private plans might have a fee schedule paying 8% more than Medicare for an office call, they frequently also have higher co-pays and deductibles, leaving much of this money uncollectible. Collection percentage from Medicare is much higher than from private plans with Medicare being excellent at paying all claims promptly after being submitted. Collecting money from many private plans often entails much higher office overhead than Medicare, making actual return on their patients less than for Medicare patients despite a higher fee schedule on paper. If all patient had Medicare most primary care physicians would probably come out ahead financially even if paid eighty percent of what Medicare pays due to eliminating plans which pay less, higher collection percentages, and reduced overhead.
The plan does include assisting the states in establishing American Health Benefits Gateways which would be involved in providing insurance choices to individuals. Use of such Gateways would be voluntary with insurance companies being allowed to offer insurance outside of the Gateways and individuals allowed to purchase such coverage. As I noted earlier, conservative bloggers have been posting falsehoods about the Gateways, confusing regulations for government oversight of the Gateways with review of confidential patient records. While there is new government bureaucracy to be set up, this proposal also appears far less complex and intrusive compared to HillaryCare, which I had opposed.
