Saturday in the Wall Street Journal, Betsy McCaughey, well known for her distortion of health reform in 1993 as well as recently, made the following points about the health reform bill, HR 3962, which is being debated and voted on as I write this. As usual, she sprinkles some truth in among her assertions, which give them the patina of authenticity.
As I have done before, I am analyzing her points, one by one, so that you can better understand some of what is REALLY in this bill.
My rebuttal comments are in block format below.
OPINION - Wall Street Journal
NOVEMBER 7, 2009, 9:58 A.M. ET
By BETSY MCCAUGHEY
The health bill that House Speaker Nancy Pelosi is bringing to a vote (H.R. 3962) is 1,990 pages. Here are some of the details you need to know.
What the government will require you to do:
• Sec. 202 (p. 91-92) of the bill requires you to enroll in a "qualified plan." If you get your insurance at work, your employer will have a "grace period" to switch you to a "qualified plan," meaning a plan designed by the Secretary of Health and Human Services. If you buy your own insurance, there's no grace period. You'll have to enroll in a qualified plan as soon as any term in your contract changes, such as the co-pay, deductible or benefit.
•This provision is meant to protect individuals from price gouging and pre-existing condition requirements of the individual insurance market. The law does require all health plans, including employer provided plans, to abide by certain consumer protections, but most ERISA plans already meet those requirements. The plans are NOT designed by the Secretary of Health and Human Services. They are to be designed by an independently established public-private commission that includes patients, doctors, employers, and all stakeholders in health care.
• Sec. 224 (p. 118) provides that 18 months after the bill becomes law, the Secretary of Health and Human Services will decide what a "qualified plan" covers and how much you'll be legally required to pay for it. That's like a banker telling you to sign the loan agreement now, then filling in the interest rate and repayment terms 18 months later.
•Partly true. There is nothing in Section 224 (which begins on page 116 by the way) that addresses what you would be legally required to pay for a qualified plan. It is true that the Secretary will make a decision on what a qualified plan should cover, after recommendations from the advisory commission noted above.
•On Nov. 2, the Congressional Budget Office estimated what the plans will likely cost. An individual earning $44,000 before taxes who purchases his own insurance will have to pay a $5,300 premium and an estimated $2,000 in out-of-pocket expenses, for a total of $7,300 a year, which is 17% of his pre-tax income. A family earning $102,100 a year before taxes will have to pay a $15,000 premium plus an estimated $5,300 out-of-pocket, for a $20,300 total, or 20% of its pre-tax income. Individuals and families earning less than these amounts will be eligible for subsidies paid directly to their insurer.
•Partly true. As usual, Ms. McCaughey does not tell the whole story. The numbers quoted above are projected costs for the year 2016, which is 9 years away! The CBO piece referenced above actually says the following:
•"Under the House bill, the maximum share of income that enrollees would have to pay for the reference plan in 2013 would range from 1.5 percent for those with income less than or equal to 133 percent of the federal poverty level (FPL) to 12 percent for those with income equal to 400 percent of the FPL."
• Sec. 303 (pp. 167-168) makes it clear that, although the "qualified plan" is not yet designed, it will be of the "one size fits all" variety. The bill claims to offer choice--basic, enhanced and premium levels--but the benefits are the same. Only the co-pays and deductibles differ. You will have to enroll in the same plan, whether the government is paying for it or you and your employer are footing the bill.
•Again, only partly true. The qualified plans are "floors" for benefits, not ceilings. The one size fits all is not an accurate description. There are several types of plans that can be selected, but all plans will have to include the basic stuff - including hospitalization, physician services, laboratory and diagnostic services, etc. - all benefits that are currently included in most benefit plans. But this provision protects consumers from those hidden exceptions that you don't find about until you get sick - that is what a "floor" is all about. Medicare operates the same way today. There is one basic set of benefits for Medicare, and most seniors don't complain that they don't have adequate coverage or choice of plans.
• Sec. 59b (pp. 297-299) says that when you file your taxes, you must include proof that you are in a qualified plan. If not, you will be fined thousands of dollars. Illegal immigrants are exempt from this requirement.
•Partly true. But illegal immigrants can't be fined because they can't BUY this insurance under the House plan! And yes there is a penalty for not purchasing health insurance. It's called an "individual mandate" and America's Health Insurance Plans are pushing for this mandate, as are almost all other responsible analysts, since unless everyone is "in", those who select themselves out will end up in the ER anyway, and we will all pay for them as we do today. The tax penalty is not 2.5% of income, however, as many media outlets have reported. It's a more complicated formula and it will undoubtedly be revised in final legislation.
• Sec. 412 (p. 272) says that employers must provide a "qualified plan" for their employees and pay 72.5% of the cost, and a smaller share of family coverage, or incur an 8% payroll tax. Small businesses, with payrolls from $500,000 to $750,000, are fined less.
•Again, this is only part of the provision. Technically, the information above is correct, but employers with a payroll less than $500,000 are exempt from the employer mandate. There is no penalty for payrolls of less than $500,000. Also, the Senate Finance bill does not have an employer mandate included, so it is questionable as to whether this provision will survive the coming debate. Still it may be instructive to note that the majority of medium to large size employers already pay at least 70% of the costs of insurance for their workers
Eviscerating Medicare:
In addition to reducing future Medicare funding by an estimated $500 billion, the bill fundamentally changes how Medicare pays doctors and hospitals, permitting the government to dictate treatment decisions.
•Not true. The bill, sadly, does NOT fundamentally change how Medicare pays doctors and hospitals. Many providers wish it would! This is the type of "throw away "line that is calculated to get people riled up, but in no way educate them. There are "pilots" and "demonstrations" allowed for Medicare that would test payment approaches, but the only way those approaches would be more broadly applied is if they actually turn out to work to lower costs without affecting quality.
•AND, the government does not dictate treatment decisions. This is a flat out lie.
• Sec. 1302 (pp. 672-692) moves Medicare from a fee-for-service payment system, in which patients choose which doctors to see and doctors are paid for each service they provide, toward what's called a "medical home."
• Hallelujah. Finally we might get a medical home. Most of us go from one doctor to another, many times on our own, with almost no one to help us coordinate our care. However, the medical home concept is just a "pilot" not a widespread mandate. If it works to help coordinate care and increase quality, great. If it does not, it will not be expanded.
•The medical home is this decade's version of HMO-restrictions on care. A primary-care provider manages access to costly specialists and diagnostic tests for a flat monthly fee. The bill specifies that patients may have to settle for a nurse practitioner rather than a physician as the primary-care provider. Medical homes begin with demonstration projects, but the HHS secretary is authorized to "disseminate this approach rapidly on a national basis."
•Not true. Medical homes are not HMOs. The payment mechanism is not yet worked out, so it will not necessarily involve a flat fee. No one will be forced to settle for a nurse practitioner, but I must say that if you have ever worked with one, you would love it! This is pure scare tactics.
• A December 2008 Congressional Budget Office report noted that "medical homes" were likely to resemble the unpopular gatekeepers of 20 years ago if cost control was a priority.
•We all know medical care is too expensive. All Republicans do is talk about cost control. But somehow all of a sudden cost control should not be a priority? Where do people think cost control is going to come from? It will come from better ways to pay doctors that are not based on doing more in order to earn more.
• Sec. 1114 (pp. 391-393) replaces physicians with physician assistants in overseeing care for hospice patients.
•Mostly true but misleading. This section "allows" physician assistants to replace physicians for certain types of hospice care. The way this is phrased above suggests that there will be no physicians caring for hospice patients. That is absolutely untrue. The hospice law requires physician oversight and this does not change that. Since hospice patients have agreed to forego intensive medical care and most of their care is focused on making them comfortable, physician assistants are more than qualified to provide that care, and this provision allows hospice programs to expand their offerings by bringing in additional care providers like physician assistants and nurse practitioners.
• Secs. 1158-1160 (pp. 499-520) initiates programs to reduce payments for patient care to what it costs in the lowest cost regions of the country. This will reduce payments for care (and by implication the standard of care) for hospital patients in higher cost areas such as New York and Florida.
•Not true. This is way more complicated than the sound bite above. What is true is that the Institute of Medicine will study the geographic variations in cost around the country. There is a lot of evidence that paying more for care does not guarantee better care at all, and we need to know more about what those geographic differences mean. See article by Dr. Atul Gawande for more information on this.
• Sec. 1161 (pp. 520-545) cuts payments to Medicare Advantage plans (used by 20% of seniors). Advantage plans have warned this will result in reductions in optional benefits such as vision and dental care.
•Only partly true. Medicare Advantage plans have been receiving, on average, 14% more than traditional Medicare for treating Medicare beneficiaries for several years now. That is your tax money going to what is essentially an "overpayment." The government, which is responsible for these plans, has proposed that these plans "bid" for the right to get your business. The bidding process should help bring costs down and that's where the savings would come from. If MA plans have been overpaid by 14%, they should be able to do just as well with less. Of course the plans are upset about this. I am personally in a MA plan. I like it a lot. In fact, rather than providing me less benefits next year, my MA plan has INCREASED my benefits and lowered my deductible! Let the free market work and let these plans compete with each other for our business. There's no need to scare seniors about it.
• Sec. 1402 (p. 756) says that the results of comparative effectiveness research conducted by the government will be delivered to doctors electronically to guide their use of "medical items and services."
•There is nothing on page 756 that says "guide". This is what it actually says on page 756:
"The Center shall develop protocols and strategies for the appropriate dissemination of research findings in order to ensure effective communication of findings and the use and incorporation of such findings into relevant activities for the purpose of informing higher quality and more effective and efficient decisions regarding medical items and services." (page 756)
And it also says:
"Nothing in this section shall
be construed-- ''(A) to permit the Center or Commission
to mandate coverage, reimbursement, or other policies for any public or private payer" (page 758)
Questionable Priorities:
While the bill will slash Medicare funding, it will also direct billions of dollars to numerous inner-city social work and diversity programs with vague standards of accountability.
•Hyperbole. The bill does not "slash" Medicare funding, and there is no particular connection between the Medicare savings and these other programs.
• Sec. 399V (p. 1422) provides for grants to community "entities" with no required qualifications except having "documented community activity and experience with community healthcare workers" to "educate, guide, and provide experiential learning opportunities" aimed at drug abuse, poor nutrition, smoking and obesity. "Each community health worker program receiving funds under the grant will provide services in the cultural context most appropriate for the individual served by the program."
These programs will "enhance the capacity of individuals to utilize health services and health related social services under Federal, State and local programs by assisting individuals in establishing eligibility . . . and in receiving services and other benefits" including transportation and translation services.
•May I ask what is wrong with that? God forbid we should educate people about obesity and health at the local level. Is this some kind of not so subtle suggestion that ACORN might be providing these services?
• Sec. 222 (p. 617) provides reimbursement for culturally and linguistically appropriate services. This program will train health-care workers to inform Medicare beneficiaries of their "right" to have an interpreter at all times and with no co-pays for language services.
•This observation comes very close to nativist, anti-immigrant prejudice. From a pure economic standpoint, it would be helpful when we are treating people who don't speak English well, to be able to give them the appropriate care. If we don't it will cost more later on. There are citizens who do not speak English well, yet who will pay their premiums and obey all laws, but somehow it is "questionable" to help them answer their questions? Where is THAT coming from?
• Secs. 2521 and 2533 (pp. 1379 and 1437) establishes racial and ethnic preferences in awarding grants for training nurses and creating secondary-school health science programs. For example, grants for nursing schools should "give preference to programs that provide for improving the diversity of new nurse graduates to reflect changes in the demographics of the patient population." And secondary-school grants should go to schools "graduating students from disadvantaged backgrounds including racial and ethnic minorities."
•Questionable priority? We should have only white men (and maybe a few women) providing care in our health centers and hospitals?
• Sec. 305 (p. 189) Provides for automatic Medicaid enrollment of newborns who do not otherwise have insurance.
•Partly true. But only until the newborn in question is "deemed" to be eligible by the State or the Medicaid program. It's just a humane thing, Betsy. There's the newborn in the hospital, possibly needing additional care, and you would have them wait for days or weeks until their eligibility can be determined?
In summary, this is just one of many attacks there will be on the health care bills that will be voted on in the next few weeks. Ms. McCaughey has chosen elements that she considers controversial or troubling, and of course that is her right. But it is also our right as citizens who care about health reform to rebut these claims when they are not entirely true and try to help separate fact from interpretation.
And one more thing -- there is so much more in this bill that will help Americans get and keep affordable health insurance. There are subsidies for folks who cannot pay the full amount; there are prohibitions on those pesky lifetime maximums that run out just when you are the sickest; and there is preventive care to help you avoid being sick. Perhaps the reason those issues are not mentioned in the Wall Street Journal article is that it's just too hard to argue with good ideas.