Obama Health Law Unlikely to Stem Medical Bankruptcies

[eridani]

For "skimpy" see the Bronze "coverage" for all of us "useless eaters." In MA, the 85% of the population that never will have high health care costs are happy. It's only the sick disposable garbage 15% (who account for 85% if costs--5% alone accounting for 50% of costs) who are bankrupted and killed.

http://www.commondreams.org/view/2011/05/11-6

When President Obama kicked off his health reform push, he highlighted our research finding that 2 million Americans suffer medical bankruptcy each year, promising to end this disgrace. Our latest figures warn that his reform won’t stanch the flow of medical debtors.

The Affordable Care Act (ACA) passed by Congress in March 2010 was modeled after Massachusetts’ 2006 health reform plan – a plan that’s now been up and running for more than three years. So Massachusetts offers a preview of what to expect when the ACA is fully implemented in 2014.

Unfortunately, medical bankruptcies haven’t dropped much – if at all – in Massachusetts. When we surveyed bankruptcy filers there in August 2009, 53 percent cited illness or medical bills as a cause of their bankruptcy, a percentage that’s statistically indistinguishable from the 59 percent figure we found in early 2007. Indeed, because the total number of bankruptcies soared in 2009, the actual number of medical bankruptcies increased from 7,504 in 2007 to 10,093 in 2009.

Why are so many people still suffering medical bankruptcies despite Massachusetts’ health reform? While only 4 percent of the state’s residents remain uninsured, much of the new coverage is so skimpy that serious illness leaves families with crushing medical bills.

[area51]

1. Single-payer. Now.

Each day, 273 people die due to lack of health care in the U.S.; that's 100,000 preventable deaths per year.

We need single-payer health care, not a welfare bailout for the serial-killer insurance agencies.

We don't need the GingrichCare of mandated, unregulated, for-profit insurance that is still too expensive, only pays parts of medical bills, denies claims, bankrupts and kills people.

Republinazi '93 plan:

"Subtitle F: Universal Coverage - Requires each citizen or lawful permanent resident to be covered under a qualified health plan or equivalent health care program by January 1, 2005."

"We will never have real reform until people's health stops being treated as a financial opportunity for corporations."

"Employer-based health insurance has always been a bad idea. Your life should not depend on who you work for." -- T. McKeon

"Any proposal that sticks with our current dependence on for-profit private insurers ... will not be sustainable. And the new law will not get us to universal coverage ...." -- T.R. Reid, The Healing of America

"Despite the present hyperbole by its supporters, this latest effort will end up as just another failed reform effort littering the landscape of the last century." --John Geyman, M.D., Hijacked! The Road to Single Payer in the Aftermath of Stolen Health Care Reform

[villager]

2. Shouldn't we be happy that *insurance companies* won't be going bankrupt!?

:shrug:

[jbnow]

3. This does not make sense. Under The Affordable Care Act

there is a cap on the maximum amount a policyholder would have to pay in a year in terms of deductible and copay. Even if a person had a very serious illness or accident and was in hospital for extended periods the MOST they would pay in a year would be 5,000 (10K max for family) and that is for people who do not get any subsidy, people above that 400% of poverty or whatever.
There is a descending max paid in a year (in $1,000 increments) as income goes down
I realize if you are lower middle class having to pay 2K could be a burden but that is a payment plan, it is not bankruptcy and financial ruin

The insurance policy can't have an annual or lifetime max they pay on a person or condition like most have now
In my state there is one insurer required to take people with pre-existing conditions. It sucks. Someone with diabetes has it. It will pay a max of 5K in a year. Now that invites big trouble in one hospital stay...
Many policies have a cap on certain illnesses and so if cancer recurs with expensive treatment you can just be cut off
And right now if someone gets seriously ill they find some old illness and cut you off. They won't be able too
and so on.

It will not eliminate bankruptcies for sure but most medical bankruptcies are due to the factors that this plan changes.

However I am concerned for older people just over the subsidy level. Age is one of the factors that can still affect rates, up to 2.5 times lowest rate (or maybe 2 times, I forget now.) If they still are paying off a house etc they may ask for and get a waiver and still be uninsured... or really be burdened by the payments

Would be interesting to compare the laws but this "new coverage is so skimpy that serious illness leaves families with crushing medical bills" seems to be one of those differences. But I wonder if Mass thought they had it covered too

[eridani]

4. We are all turning bronze--a really shitty color for older people paying 3X as much in premiums

Hospitals and Health Networks--The Four Americas

http://www.hhnmag.com/hhnmag/HHNDaily/HHNDailyDisplay.dhtml?id=6270005407
Health insurance exchanges could have a major impact on the health care marketplace.

Here are some things to watch for.

* We are all turning bronze. There is a growing body of evidence--from actuaries, academics, consultants and researchers--that when consumers in the exchange select insurance options, they will pick the bronze plan (a 60 percent actuarial value). By definition, these plans will have high out-of-pocket costs and may not cover as wide a range of benefits as the health reform enthusiasts intended.

Some in the health care delivery business see exchanges as a new source of patients with commercial insurance similar to the benefits that schoolteachers and firefighters enjoy. Not so fast. Not only will those schoolteachers and firefighters get their benefits rolled back as part of the global backlash against public employees, but those of us in the exchanges will be operating with skinny network, high-deductible plans.

* Exchanges could be a non-event or become the exchange that ate Manhattan. Depending on how exchanges are structured at the state level, they could have limited pickup. The proposed insurance exchanges have two huge advantages over some of the failed insurance exchanges across the country, such as California's PacAdvantage program for small business. First, the proposed exchanges have subsidies. Second, they have enabling rules. However, there is still a huge opportunity for states to make exchanges highly dysfunctional by not regulating the behavior in the nonsubsidized individual and small group market.

What killed PacAdvantage was brokers taking good risks outside the exchange and dumping bad risks into the exchange. Unless state legislation prevents this, it is highly possible that exchanges get selected against and spiral downward. Conversely, if exchanges are up and functioning and acceptable, there could be massive growth over time as employers see the benefit of giving their employees incentives to move to the exchange. This won't happen initially in 2014, but in a Cadillac tax world and with high-functioning exchanges, there could be massive growth. (And remember, we would all be pretty bronzed.)


Comment by Don McCanne of PNHP: If the stewards of the ACA-mandated state insurance exchanges are diligent, they may be able to avoid problems such as the death spiral of adverse selection. With careful design, they should be able to establish a functioning market of private health plans. What can we expect of this market?

The overwhelming majority of insurance shoppers will be purchasing their plans based on price, whether or not they qualify for subsidies. Since most will be relatively healthy, it will be the price of the insurance plans that will drive their purchasing decisions, rather than the unanticipated but potential out-of-pocket expenses that they would face only if they were unfortunate enough to develop significant medical problems. For the price discount, most purchasers will take a chance, gambling that they will stay healthy.

What plans in the exchanges will offer the lowest prices? The bronze plans. These plans cover an average of 60 percent of the medical costs and the patient is responsible for the remaining 40 percent. Although many would be eligible for subsidies, a recent Commonwealth Fund analysis (Gruber and Perry) demonstrated that one-fourth of middle-income individuals with medical needs would not be able to afford the out-of-pocket medical costs after meeting other necessary expenditures in their budgets. Thus choosing these plans is definitely a gamble, but one they must take since they cannot afford the higher costs plans - especially the gold and platinum plans (which are not Cadillac plans since about all they do is reduce out-of-pocket spending for relatively standard benefits).

What innovations will insurers use to keep their premiums competitive within the exchanges? Although they will have to provide a basic set of regulated benefits, they will be able to keep premiums priced at the lower end of the market by requiring large deductible and coinsurance payments, and by limiting provider contracting to a narrow network of the cheapest physicians and hospitals. This is what Ian Morrison is referring to when he says, "those of us in the exchanges will be operating with skinny network, high-deductible plans."

If the stewards do their job well and the exchanges are very successful in achieving massive growth - "the exchanges that ate Manhattan" - then, as Ian Morrison states, "we would all be pretty bronzed."

So if the exchanges work like they're designed to, what will we get, at best? Unaffordable deductible and coinsurance payments, with skinny networks which take away our choices of physicians, hospitals, and other health care providers, unless we're eligible for Medicare by being over 65 or permanently disabled.

Say, did anyone ever think that maybe it would be better to improve Medicare and provide it to everyone? That way we would have our choices of our health care professionals and health facilities, and we wouldn't have to face unaffordable out-of-pocket costs. This seems like an idea that maybe we should work on.

My comment: OFA messaging for 2012 on health care has so far consisted of charts and graphs and laundry lists of microconstituencies who have benefitted from ACA, which does not in the slighest resemble the values messaging of 2008. No surprise there, as the basic value underlying ACA is that your worth as a human being is directly proportional to how much money you have.

How France, Germany and Japan provide universal health care using private insurance based on the underlying value that EVERYONE deserves good health care.

--They treat insurance companies as public utilities.
--They absolutely forbid denying any claims whatsoever.
--They have fees directly set by the government for health care services.
--They have just one universal benefit plan in which items to be covered and costs are specified by the government--no platinum, gold, silver and bronze people allowed. (Private companies are usually allowed to offer supplemental plans covering items not in the basic plan, in some countries for profit.)
--They do not allow age rating.
--They have no deductibles, though co-pays are required in some countries.

[BzaDem]

5. Even on the bronze plan, the max anyone would have to pay (assuming they maxed out their deductible

and cost sharing) is FAR below what they would have to pay without the PPACA.

Furthermore, age rating tends to only apply to people above 400% of the poverty level who wouldn't get subsidies (since for those who get subsidies, their premium as a percentage of their income is capped at 9.5% or lower regardless of their age). But for people who wouldn't get subsidies (and even for people who do), 3x age rating is much, much better than the 12x (or much higher) age rating that existed in the previous unregulated market.

The truth is that the PPACA is a tremendous improvement over the status quo, and it makes future reform much easier. Now, to reduce age rating in the future, all one has to do is adjust a number, rather than creating an entire new exchange system and then adjusting the number. Furthermore, once plans are in an exchange with defined benefit packages, it is much easier to control the prices of such plans than it would be in the previous unregulated market where every plan is different. In fact, most of the differences between the other private-insurance countries you mention and our country are MUCH easier to enact with the PPACA than without.

You mention single payer, but that ignores the fact that single payer isn't going to be enacted nationwide in the US in any timeframe even remotely close to now (if ever). Singing its praises isn't going to change that. It is better to make the current system better than refrain from doing so in the misguided hope that single payer will eventually be enacted.

[eridani]

6. All you have to do is look at MA

Medical bankruptcies have increased there. And age rating applies across the board--cut the bullshit here, please. The subsidies don't come until after you have incurred the costs, which is far too late. And the bureaucracy required to track eligibility over rapidly changing income/employment situations is ridiculous. How are people supposed to survive the wait flipping between Medicaid eligibility while unemployed and differing levels of subsidy for skimpy "bronze" coverage when re=employed?

And 9.5% of income for people making less than $50K is a disaster in anyone's book.

The notion that there is actual regulation is a big joke, as evidenced by the commentary of Wall Street investment advisors, who were thrilled that PPACA has "no onerous cost controls." 15 states have already tried to control costs by adjusting MLR, and failed abysmally. If PPACA actually intended to regulate private insurance by instituting price controls, it would have done that.

[sendero]

7. Obamacare...

.... isn't going to much of anything for patients. It was written by the industry for the industry. Wait until folks find out that the vaunted "pre existing condition" exclusion is in effect non-existent.

[mmonk]

8. That's the problem. It doesn't address costs from the correct angle.

It's a better than nothing improvement at getting more people covered, but at reducing benefits to the patient to get any premium cost down.. That is because it is a forced private for profit system.

[Vinca]

9. Here's my recent experience with the new healthcare bill.

I managed to get into the pre-existing condition coverage under a little known provision. If your doctor writes a note saying you need surgery or would benefit from something like physical therapy for a particular condition, you're in. I think virtually anyone could get in and it might be a path to the public option if it was common knowledge. But that's another story. I'm 62 and the premium is $600 a month which I could only pay for by taking my social security early. That's a hefty chunk of change for most people (although younger people would pay a fraction of that). I got in because I needed a hip replacement which I had about 2 months after enrolling. I'm very, very grateful, but was surprised by the number of things on the bills the insurance doesn't cover. I'm still on the hook for thousands of dollars I don't have and will have to either put on a credit card or work out payment arrangements for. In my particular case, I can see the light at the end of the tunnel. I know I'll eventually be able to pay the uncovered expenses off, but many people could not. They might be too ill or out of work or a million other things that happen in life. That's why we need a healthcare plan that is paid for out of the common funds like Canada. In this country, medical care is still only available to a portion of the population when it should be available to all. In short, the healthcare bill has helped me, but I understand entirely why medical bankruptcies are still happening for insured people. The coverage needs to be 100% whether it's a government plan or a private plan.

[eridani]

13. This matches the experience of the !2,000 who signed up for that pool

That's out of 6 million eligigle, so you are right in suspecting that most won't be able to cover extra costs. However, every little bit helps, as thos 12,000 undoubtedly realize.

[slipslidingaway]

10. knr nt

[JTFrog]

11. Without it,

three of my four children would not have healthcare and I'd probably have to repeat my 1997 bankruptcy.

[eridani]

14. Glad that they made it into the lucky 20%

Please think of all the others whose parents either are uninsured or can't afford to add them.

[JTFrog]

16. "lucky 20%"

So you're saying that 80% of this country doesn't have health insurance or access to health care?

I do think of people who don't have what my kids have now. Every. Single. Day. There is no way I could ever forget.

I am 100% for medicare for all, universal health care, single payer or public option or all of the above. It doesn't really do me much good to call and write my Senators, but I do. I sign the petitions. I march and protest in the streets.

Please quit painting those who point out that some people were helped by this law as uncaring or dismissive of those who still fall through the cracks. I care. I do what I can. I wish I could do more. Every. Single. Day.

By the way, just FYI, when I filed bankruptcy, I had medical and other bills that were over five years old. I'm not dismissing the numbers above, I just wonder how many people file for bankruptcy within two and a half years of accumulating their debt.

[eridani]

20. I am saying that 80% of the age 23-26 demographic is NOT on their parents' plan

Some have their own insurance through work, but others have parents who can't afford to add them. (I see nothing wrong with taking advantage of privileges you have--refusing to do that in and of itself doesn't gain the non-privileged a thing.)

[MisterP]

12. of course, now that Ryan's budget also has the individual mandate, all the lemmings

who said the mandate was the best thing evar will now see that it's a Republican program, and we can oppose it en masse again! yay!

[eridani]

15. Minus a lot of the subsidies, of course n/t

[woo me with science]

17. K&R nt

[woo me with science]

18. Kick. nt

[Shagbark Hickory]

19. So what are you saying??? That we should support a repeal of this?

[eridani]

21. No, I am saying that if a lifeboat picks up 20 our 100 drowning people--

--ferchrissakes don't expect the other 80 to stand up and cheer! On the other hand, we don't want the Repukes to put a hole in the boat either.

[Shagbark Hickory]

22. As usual, we should be grateful for the crumbs that we get.