Affordable Care is Simply Not Affordable

HealthCareGovSiteNew Orleans    The more studies that are done, the more time that passes, the more it seems impossible to get around the core issue embedded in the compromises of the Affordable Care Act: it’s just not affordable for lower income families.

The government’s projections for the current signup period are frankly modest at about nine million signups, rather than the twenty million projected several years ago for this period. Given the number of states that continue to boycott the expansion of Medicaid, which is where a lot of the gap for the uninsured continues, the budget offices are finding the predicted costs of Obamacare are about 20% lower than originally expected.

Furthermore, the mandate is not pushing enough people into insurance who don’t have it, particularly among lower waged workers. Studies are finding that at about $40,000 the maximum participation is achieved. Lower income families are simply paying the penalty, because it’s cheaper than the insurance bite.

Reports from employers are very depressing, though not surprising. Having represented big health care employers with sorry health plans for decades and seen the abysmal participation figures, we were hardly shocked, but still reading figures for huge food service companies with tens of thousands of employees and their reports of only 500 workers out of 25,000 actually signing up for employer insurance is ridiculous. The workers are blocked from access to ACA marketplace subsidies and cost sharing because they have opted out of corporate insurance, but they have opted out because the costs are too high and the benefits are too crummy with essentially catastrophic coverage and deductibles as high as $6000. Who can afford any of that on $10 or $15 per hour?

Increasingly, it seems clear we have a little bit of something for health insurance, but it’s only a bit better than nothing, and under the private company and corporate-centered regime, it’s too pricey and too paltry. We need real national health insurance, but that means a more significant governmental investment, and that is a bridge way past the level of political consensus.

It is also way past the level of public support, which fuels the continued opposition to Obamacare. When even the primary beneficiaries of the program among low-and-moderate income families are still priced out of the market, who is left to show the program the love it needs and deserves?

Half-stepping clearly has only gotten us halfway to where we need to be. We shouldn’t be surprised, but that doesn’t make it any easier to live with the disappointment or the continued perilous state of national health protection in the United States for low-and-moderate income families.

The Problem of Obamacare Dropouts: Cost, Confusion, and Language

indexNew Orleans   We’re knocking on the door of another Affordable Care Act enrollment period beginning November 1st. There are ten million eligible people who have not yet received coverage of whom 40% or 4 million are lower income. Reports indicate that there are improvements in the website, but there is no indication that there is improvement in the outreach.

Having labored in the vineyards of the enrollment process, it is hard not to take note of the fact that as difficult as it is to enroll families in the program initially, it is also difficult to keep them enrolled. In 2015 after an announcement that 11.7 million had selected plan in the 2015 enrollment year, latest information from the end of June is that 9.9 million continue to be enrolled for a dropout rate of 15% and almost 2 million people. That hurts! Experts are saying the obvious culprits are costs, especially in all of the states that have not extended coverage and expanded Medicaid services, and confusion, which is part and parcel of the continuing fragmentation of the insurance marketplace and the myriad array of choices that confront families inexperienced with the already opaque health insurance industry.

One element of the confusion that may not be on everyone’s radar may be language and the foot dragging, half-hearted compliance with Title VI of the Civil Rights Act and its requirement that there be no discrimination in this area. Recently we participated in a conference call organized by the Seattle-based Alliance for a Just Society, and listening to the work from various groups around the United States, it is hard not to believe that inability to access the website and documents based on language has to be counted as part of the problem, and one that should be easy to correct. Of course seeming easy and being easy are different things, since many of us no doubt can remember that in the initial enrollment year the government was chronically unable to even make the enrollment website accessible in Spanish, much less other languages that are less ubiquitous in modern America.

The Civil Rights Act requires accommodation, either through accessible printed and on-line materials or by providing – and paying for – translation services. A fair number of languages are seen as the major dozen or so in the United States, but where there is sufficient density in a geographical area, ranging to more than 1000 individuals, the requirements stiffen. The proposed semi-official languages are based on a national grid not local issues, so local community organizations are having to step up to advocate and ensure that underserved populations facing language barriers get needed translation services to navigate the complexities of the health insurance mandate. There was talk of a new rule making process so that will have to be kept on the radar as well.

It is unlikely in the current climate of contention that the huge issues of costs and program expansion are going to get a quick fix, but lowering language barriers would seem to be a straight forward objective easily within our reach. What the heck, it’s already the law!

Affordable Care Act Potholes

aca_flagNew Orleans        Some twelve million people may have enrolled under the Affordable Care Act, but that doesn’t mean that Obamacare can catch a break.  Everywhere we turn there seems to be more potholes on the road.

Of course there’s the decision due in June by the Supreme Court on whether or not subsidies can be offered to the poor to enroll in the states where the federal government runs the marketplace.  Worse, dozens of current and former Congressman basically are saying that the four words that are in contention in this challenge were basically a “whoops, my bad” drafting mistake that was never part of debate or deliberation, but always assumed a “no brainer.”  Unfortunately that could still be enough to eviscerate health care coverage for lower income families in many states.

Now new studies and data are also pointing out the obvious problem with tax penalties not being effective in forcing enrollment when they come many months in the spring when taxes are due and long after the enrollment window has closed to gain coverage under the Act.  Interestingly, the lower income families seem more responsive to the penalties than those with more income hinting that the penalties might even be too low.

But, even past these almost technical problems, the concern we have often expressed that too much of the employer and marketplace coverage is simply too thin to cover the care is also becoming more obvious.   Too many people are woefully under-insured.

New estimates from the Commonwealth Fund Biennial Health Insurance Survey for 2014 found that 23 percent of 19 to 64 year-old adults who were insured all year – some 31 million people – had such high out-of-pocket costs or deductibles compared to their incomes that they were technically almost uninsured.  11 percent of privately insured adults had deductibles of $3000 or more in 2014, making any health insurance they might have, catastrophic at best.   The inability to limit deductibles is a huge crisis for lower income workers and their families with these low rider policies.

Normally, we could expect that what is broken could be fixed, but given the political season and the whooping and hollering that continues to be embedded in Congress in the far right efforts to deny healthcare to millions, there seem to be too many holes and not enough shovels.


Go Ahead And Die! (Pirates Of The Health Care-ibean)  Music by Austin Lounge Lizards

Narrow Networks Prove Price, not Choice, Rules Healthcare Decisions

WebNew Orleans          It’s becoming increasingly obvious that deep down without being willing to admit it, Americans are voting with their feet on the issue of health care and the tally is showing that their real preference would probably be the British National Health Service.  Now, there’s no likelihood of that happening of course but narrow and ultra-narrow networks are mimicking something very similar to that with the lowest price trumping choice at every turn.

In the marketplace offerings provided by the Affordable Care Act for 2014 almost half of the public exchange insurance selections were so-called narrow network options and 20% were ultra-narrow networks.   Narrow networks limit the insured consumer’s choice of hospitals and doctors within the network for their healthcare needs.  An ultra-narrow network provides even more stringent limits.   Of course seeking healthcare outside of that network is going to be more expensive so issues of transparency are central, but the ability of insurers to negotiate better pricing plans through narrowing in exchange for promising more volume of patients is working for both consumers and hospitals.

The McKinsey Center for Health Options quoted in the New York Times:

…found that 70 percent of the lowest-priced plans for 2015 were based on narrow networks of hospitals. They also had much lower rate increases in 2015, with a median increase of 4 percent, about half as much as broader plans.

McKinsey defines a narrow network as being composed of 31 to 70% of the hospitals in a geographical area and an ultra-narrow network as including 30% or fewer hospitals in an area.  Nearing 40% of consumers are choosing these plans and the industry is reporting only about 5% turnover between 2013 and 2014 choices, so that’s what they’re saying and they’re sticking to it.

It seems that consumers are saying two things.  First, that some health care is better than no health care, and, secondly, that the cheaper they can purchase adequate health care, the more that will drive their choices.

The industry would have us believe that this is a hand-clap for the general quality of health care in the United States, and perhaps this is one-hand clapping.  The industry’s earlier harangue about choice, echoed by many conservative politicians, seems on its way to being disproved on several counts. At one level when cost is driving the decisions there are no Marcus Welby’s and young Dr.Kildaires out there; it’s all about the money.  The same can be said about all of the super low end cheapo insurance policies that offered virtually no coverage and then would parade out consumers claiming they loved these worthless products; it’s all about the money.

Americans, like everyone, want to live without fear of dying, and that means believing they can go to a hospital when they feel sick.  In these days where it’s all about the money, they are going to increasingly look for the lowest cost for that simple guarantee, especially now that some kind of choice is mandatory.  In the meantime as the conservatives continue to rail about Obamacare, don’t let Americans know that in places like the United Kingdom and many other countries they can go to hospitals, regardless of income, and get quality care for free, or they might vote for that as well, if they were ever afforded the choice.


Begging for Change–Healthcare Blues

Uneven Results in North Carolina Indicate that New Nonprofit Hospital Rule Might Work

316261297889322-xlNew Orleans   A combination of factors has curbed some, but not all, of the appetite for nonprofit hospitals’ frenzy of legal actions against lower income families in North Carolina, giving hope that the new Affordable Care Act restrictions against draconian collection practices might actually be effective.

We have been following closely whether or not nonprofit hospitals are modifying their behavior around the country in the wake of the final IRS and Department of Treasury rules that will require them to be much more effective in allowing lower income families to access charity care at the peril of their own tax exemptions.  Much of what we have seen while examining IRS form 990s, which the hospitals are required to file annually with the IRS, has not been encouraging given that all of these institutions have known this was coming since 2010 when Obamacare became law.  The leisurely four years until the rules became finalized at the end of 2014 should have allowed mountains to be moved in normal behavior and now that we are entering the penalty phase, the battle lines are being formed.

North Carolina may become one of the more interesting ones.  The passage of the Act and its amendments involving charity care prompted an investigation in 2012 by the states big newspapers, including the Charlotte Observer, in the biggest city uncovered 40,000 lawsuits that the state’s nonprofit hospital has filed to collect debts.  The headlines led to a happy confluence of forces with the legislature passing a law restricting emergency collection practices much like the language in the federal statute.   An updated review of the court records by the newspapers indicates that some hospitals have attempted to comply, others are scofflaws, and some cleaned up their act completely.  On the whole that’s good news and a potential harbinger of good things to come for the rest of the country as well.

A recent story by Ames Anderson and David Raynor in the Charlotte Observer,

…found that lawsuits by the state’s hospitals dropped by more than 45 percent from 2010 through 2014 – from about 6,000 to 3,200. At Carolinas HealthCare System, the state’s largest hospital system, the drop has been even sharper. The Charlotte-based hospital system filed about 1,400 lawsuits against patients last year – roughly half the number it filed in 2010.  One hospital, Iredell Memorial in Statesville, has stopped filing lawsuits against patients. In 2013, it was one of the state’s most litigious hospitals, filing about 270 bill-collection lawsuits. Last year, it filed none.   Lawsuits have also slowed to a trickle at two other hospitals: High Point Regional Hospital, which has recently joined UNC Health Care, and Lexington Medical Center, owned by Wake Forest Baptist Health.

More than 3000 cases is still a lot, and 1400 in one year from the Carolinas HealthCare System is outrageous, but progress is progress, and now with a powerful stick coming into the hand of advocates and organizations in North Carolina that could threaten and remove the hospitals’ tax exempt status, we might see more hospitals devoting themselves to their nonprofit mission like Iredell Memorial.

This is clearly a fight, but seems increasingly like one that we can win.


Please enjoy Hurricane by Blues Traveler, Thanks to KABF.

Affordable Care Act Backwash

k10329New Orleans         Talking to Professor Adam Seth Levine of Cornell University on Wade’s World  about his new book, American Insecurity:  Why Our Economic Fears Lead to Inaction, about how our political and organizational communication can subvert our own message or “self-undermining rhetoric” in his words, I asked him for his opinion about how the Administration “sold” the Affordable Care Act in the first enrollment period.  Specifically, I was curious if he had paid any attention to the early avoidance of any discussion of penalties and their last minute shift of emphasis on the same issue to incentivize enrollment.  Professor Levine was careful in his response, since one of the groups where he surveyed message reactions was HCAN, Health Care for America Now, an advocacy supporter of Obamacare’s passage that included ACORN in many states.  Careful, but not conclusive, although increasingly the backwash on enrollment, including the impact of the penalties, income estimates, and overall individual costs, are becoming a major part of the story.

The Wall Street Journal relied on a survey by McKinsey & Company indicating that “12% of uninsured people would buy policies if informed of the penalty” though, although there seems to have been no question that asked how many that had signed up did so because of the penalty or a way to separate the twin programmatic dynamic between mandatory and penalty.   The same survey also found that 41% were “unaware of the penalty.”  Many opted to pay the penalty for the first year of $95 or 1% whichever is higher largely based on their own personal cost-benefit analysis.  31% didn’t believe they needed health insurance and embraced the penalty as a savings.  26% believed they needed insurance but couldn’t afford it and went with the penalty.   The Obama Administration has extended signup periods until April 15th, tax day, since the penalties are deducted from tax refunds.  An observer commented that the extension was “good PR,” but the inaction on signups might indicate that their ambivalence about banging on the penalties may involve Levine’s “self-undermining rhetoric.”

H&R Block found through February that half of its clients who had subsidies because of their income are having to repay some of their subsidy through their tax refunds, which isn’t as painful, but still stings. Block claims that more than half of its customers underestimated their income, leading to a higher frontend subsidy causing an average $530 in reduced returns or 17% by their numbers.   This was still a smart way for the Administration to handle this collection problem though, since as Block, Jackson & Hewitt, Liberty, and countless tax preparers could have told the government from their experience with predatory pricing on refund anticipation products, people are more forgiving about losing money before it gets in their hot hands.

The penalties will get higher in coming years, so we need more information, messaging, and more effective outreach that drives people into insurance, but the rub will continue to be the costs and the fact that there are no limits to the deductibles for qualified plans.  Congressman Paul Ryan and a host of Republicans are trying to come up with so-called alternatives, but most of them focus on bringing the zombie policies back to life with lower-cost, limited-coverage plans that are virtually worthless. Consumers are looking at the monthly costs along with $5000 and $6000 deductibles and too many of them, pressed for money, are concluding that if they can walk and talk still, they are better off saving the money now. Unless costs are addressed more aggressively and deductibles and copays are capped, as they are in Massachusetts, rising penalties will build a political base for worthless plans that only have value at best for catastrophic health crises, not for better health for all our people.