FOR IMMEDIATE RELEASE
March 12, 2015
Despite claims by the Obama administration that the Affordable Care Act will reduce health insurance companies’ spending on overhead, thereby channeling a greater share of consumers’ premium dollars into actual patient care, insurers’ financial filings show the law had no impact on the percentage of insurer expenditures on such things as administration, marketing and profits.
That’s the chief finding of a team of researchers, including two prominent physicians on the faculties of the City University of New York’s School of Public Health and Harvard Medical School, in an article published Wednesday in the peer-reviewed International Journal of Health Services.
Examining U.S. Securities and Exchange Commission filings of nine large insurers, and using a constant definition of what constitutes an insurer’s “medical loss ratio” or MLR – i.e. actual spending on payments to doctors, hospitals, pharmacies, etc. – the researchers found that the weighted average MLR in the three years after the new ACA regulations took effect (2011-2013) was 83.05 percent, compared to 83.04 percent in the three years prior to the reform.
The ACA sets limits on insurers’ overhead, mandating an MLR of at least 80 percent in small-group markets and 85 percent in the large group market. However, the Obama administration changed the traditional yardstick by which the MLR is measured.
The new way of calculating the MLR allows insurers to classify most expenditures on “quality improvement” initiatives and the updating of coding systems as medical expenditures, and allows them to subtract most taxes, regulatory fees and “community benefit” spending.
“Rather than go along with the administration’s moving of the goal posts to the apparent advantage of the insurers, we stuck with the traditional way financial analysts and insurance firms calculate MLR, namely, by dividing total medical payments by total premium income,” said Benjamin Day, the study’s lead author.
“What we found is that there’s been no significant change in the insurers’ MLR since the implementation of the new regulations.”
MLRs fell at four firms – UnitedHealth, Humana, Aetna and WellCare – and increased slightly at four others and markedly at one (Centene, a major managed Medicaid contractor).
Day continued: “Although the MLR requirements forced insurers to pay rebates of $1.1 billion in 2011 and $504 million in 2012 – payments that were touted by the Department of Health and Human Services as a major boon to consumers – these rebates constituted less than 0.1 percent of private insurance company revenues and appear to have had no overall impact on MLRs.”
Day, whose published research includes articles on labor history and health care reform, currently serves as executive director at Healthcare-NOW, a national coalition of groups advocating for a single-payer health care system.
Senior author Dr. Steffie Woolhandler, professor at the City University of New York’s School of Public Health at Hunter College and co-founder of Physicians for a National Health Program, said a number of factors might explain why the ACA hasn’t raised MLRs.
“Most plans already met the MLR requirement from 2007-2009, even without the MLR redefinition in the ACA,” Woolhandler said. “Moreover, self-insured employer plans, which accounted for 60 percent of all covered workers in 2011, were entirely exempt from the MLR requirement. In addition, a number of exemptions and adjustments were granted to a wide spectrum of plans and to several states, temporarily nullifying the new mandate.”
Woolhandler observed that traditional Medicare’s overhead is about 2 percent, i.e. 98 percent of Medicare’s spending goes toward medical care. “The ACA is too lenient on private insurers, sets too low a bar for their payments for actual care, and provides them with too many loopholes.
“The lesson is clear,” she said. “We need to adopt a publicly financed, improved Medicare for All.”
“The Affordable Care Act and Medical Loss Ratios: No Impact in First Three Years,” Benjamin Day, M.A., David U. Himmelstein, M.D., Michael Broder, B.A., Steffie Woolhandler, M.D., M.P.H. International Journal of Health Services, Vol. 45, No. 1 (January 2015).
The full text of the article is available at the links above or from Mark Almberg at email@example.com.
The International Journal of Health Services (joh.sagepub.com) contains articles on health and social policy, political economy and sociology, history and philosophy, ethics and law in the areas of health and health care.
In 2010 the giant health insurance company WellPoint created an algorithm that searched its database, located breast cancer patients, and targeted them for cancellation of their policies.
A few years earlier Michael Moore’s stunning documentary, “Sicko,” showed an unending list of illnesses that had been used by insurers to refuse to sell people policies, to charge them much more, or to deny payment for “pre-existing conditions.”
The public became acutely aware of these harmful, widespread practices and sharply condemned them. So it was not by chance that this insistent popular support resulted in inclusion of a ban on these practices in the Affordable Care Act (ACA) that was passed in 2010.
The government website explains. “Your insurance company can’t turn you down or charge you morebecause of your pre-existing health or medical condition like asthma, back pain, diabetes, or cancer. Once you have insurance, they can’t refuse to cover treatment for your pre-existing condition.”
Even some Republicans who are trying to repeal the ACA insist that they stand for keeping a provision against such discrimination. “We would protect people with existing conditions,” say Reps. Paul Ryan, John Kline, and Fred Upton.
Regardless of opinions on mandates or the health reform law in general, the entire nation embraced the part of the legislation that outlawed discrimination on the basis of illness.
So we’ve won, right, at least this much reform? Sadly, no.
Last July, over 300 patient advocacy groups wrote to Sylvia Burwell, Secretary of Health and Human Services, to express their concerns. “…(W)e are increasingly aware of evidence that new enrollees, especially those with chronic health conditions, are still facing barriers to care,” the letter said.
The groups that signed the letter are well known. They include the American Lung Association, Epilepsy Foundation, The Leukemia and Lymphoma Society, National Alliance on Mental Illness, The Parkinson’s Association, Easter Seals, and the AIDS Institute. They praised the ACA for helping many of their members to finally get coverage. All of these groups supported the ACA prior to its passage and still do.
The letter urges action against discriminatory benefit designs that limit access for patients that were subjected to pre-existing conditions restrictions prior to the ACA. They spell it out. Some plans do not include all the drugs prescribed for enrollees. Some plans don’t cover critical medications including combination therapies. Plans can remove medications during the plan year. Some plans are restricting access to drugs by requiring prior authorization, step therapy, and quantity limits. The network of physicians and hospitals in some plans is so narrow as to deny patients the specialty care needed. Much of the information needed for patients to choose the most appropriate plan is not available.
The letter details the damage. High cost sharing means patients don’t get the drugs they need. Some plans sold on the exchanges require patients to pay 30, 40 or 50% for drugs that go for several thousand dollars a month. HIV drugs, certain cancer medications, and multiple sclerosis drugs are among them.
The Leukemia & Lymphoma Society found exchange plans in several states that charged patients with blood cancer as much as 50% co-insurance rates.
Charis Hill, a biking enthusiast from Sacramento, California, counted on the medication Enbrel to keep her moving despite her diagnosis of ankylosing spondylitis. But then the cost went up to $2,000, far more than she could afford. “Insurance companies are basically singling out certain conditions by placing some medications on high-cost tiers,” Ms. Hill said. She called it “pretty blatant discrimination.”
Julie Davis, a young wife and mother of two from Louisville, Kentucky, is struggling with the consequences of this failure to end the discrimination. Her epilepsy medication, Keppra, that had kept her stable and seizure free suddenly skyrocketed from $60 per month co-pay to $1,200. The high price forced her to change medications in spite of the professional judgment of her physician. The seizures returned. With the problem not yet solved, Ms. Davis has written an Op Ed and testified before the Kentucky Senate Health and Welfare Committee. She and her organization, the Epilepsy Foundation of Kentuckiana, are publicizing the injustice and working to pass state legislation to cap drug co-pays in Kentucky.
HIV/AIDS patients have had to struggle to obtain the drugs crucial to their survival. Carl Schmid, Deputy Executive Director of the AIDS Institute, asserted that “limited benefit coverage, cost-sharing for medications that can reach as high as 50%, and lack of transparency…mean many patients…are not receiving the care and medications they need.”
Even the insurance commissioner of the state of Washington, Mike Kreidler, said “there is no question” that “discrimination is creeping back.”
After spelling out the many ways in which patients with chronic conditions are denied access to medications and specialists, the letter concludes: “We believe these practices are highly discriminatory against patients with chronic health conditions and may, in fact, violate the ACA non-discrimination provisions.”
On October 27, 2014, Secretary Burwell responded to the letter. She said they would take a look at all of the issues and work to make it better for the future.
The dialog between Burwell and the patient advocacy groups continues. The advocacy groups urge a crackdown on the companies that continue to discriminate.
As of February, 2015, a study by Avalere Health found that some exchange plans place all drugs used to treat complex diseases – such as HIV, cancer, and multiple sclerosis – on the highest cost-sharing tier. In 2015 an even higher number of the plans in the exchanges have placed drugs necessary for special conditions on tiers out of reach for patients. “In spite of the pushback, it’s getting worse, not better,” said Don McCanne, MD, Physicians for a National Health Program policy expert.
When patients can see that their medication is not covered or is far too expensive, they will avoid those plans. That will allow those insurers to “lemon drop,” to keep those who have expensive chronic conditions out of their plans. The impact is the same as underwriting and rescission. Good for profits, bad for patients.
Insurance companies have more tricks than wily coyote. Their power at the center of our profit-based health care system leaves them in position to defy the law and call the shots. With most of the enforcement left to understaffed state regulators and violations ubiquitous, we can expect the insurance companies to continue to avoid the sick, to price care beyond their reach, and to find ways to refuse payment.
No other nation in the industrialized world allows insurance companies to run their health care system. Discrimination is inherent in for-profit health care. The United States has tried every solution that the insurance companies and their paid experts can devise. It’s now time to admit that to end the discrimination we must move to single payer public financing that frees our health care from the control of the insurance and drug industries.
All Unions Committee for Single Payer Health Care–HR 676
Kentuckians for Single Payer Health Care]]>
To answer these questions and more Healthcare-NOW! hosted a national webinar with Professor Gerald Friedman, economist at the University of Massachusetts – Amherst, and Matt McGrath, Campaign Coordinator at the Vermont Workers Center! Professor Friedman has authored economic analyses for almost half a dozen states as well as for HR676, the national Improved Medicare for All legislation. Matt McGrath and the Vermont Workers Center have been at the center of the campaign to win healthcare as a human right in Vermont.]]>
To start, it’s important to understand that there is no biological basis for race. Race is purely a social construct, and racial inequities in health all have social roots (although health impacts on a social group can lead to genetic consequences for that group’s descendents, such as in sickle cell or Tay-Sachs disease).
The Role of Race Politics in the Development of the U.S. Healthcare System
The history of race politics in the U.S. is deeply intertwined with the unique development of our inequitable healthcare system, in ways that may surprise you. Gerard Boychuk’s book National Health Insurance argues that a primary reason universal healthcare passed in Canada was the national government’s attempt to prevent Quebec from seceding by instituting essential national services. In the United States on the other hand, segregationist politics in Congress blocked national healthcare for much of the 20th century – not, as is often claimed, the growth of employer-based insurance during WWII.
Treating Healthcare as a Commodity Allows Broader Racial Inequities to Impact Health
The growth and political entrenchment of a healthcare system that links access to care with ability to pay creates a dangerous dynamic in the U.S. as other large systems characterized by racial discrimination – such as access to employment, income, family wealth, housing, loans, social services, and more – translate into healthcare barriers. The literature here is vast, but we recommend Ira Katznelson’s history of how large federal programs that created the middle-class in the U.S. (Social Security, the right to unionize, the GI Bill, etc) largely excluded people of color, leading to a massive wealth gap, as well as recent studies showing the continued prevalence of racial discrimination across all areas of life – affecting employers, salespeople, doctors, legislators, and others – often due to “implicit bias” as opposed to intentional discrimination.
Experience of Racism as a Determinant of Health
These barriers to healthcare are all the worse since racial discrimination leads to greater health needs for some communities of color. In particular, a new body of a research in the last decade is showing that the daily experience of racism and the stress/self-doubt it causes, is a major cause of poor health itself, particularly for African Americans. This “embodied inequality” may also explain why immigrants, who are generally much healthier than native U.S. residents, experience declining health outcomes the longer they live here.
Racial Injustice in Medical Research and the Delivery of Care
Finally, for those who are able to access the healthcare system, medical research and the practice of medicine in the U.S. are marked by deep histories of racism as well. The Congressionally-funded 2002 study Unequal Treatment was a damning summary of the evidence that people of color are treated differently for the same medical conditions: receiving less routine care, lower-quality care, and more undesirable treatments such as lower-limb amputations.
The most notorious example of racist medical research is the Tuskegee syphilis experiment, conducted on rural African American men over the course of four decades up through the 1970s, to observe the end-of-life impacts of the disease. The men were not told they had syphilis or treated for it. Harriet Washington’s book Medical Apartheid places the Tuskegee experiment in the longer and larger context of inhumane medical experimentation on people of color – often in attempts to prove the racial basis of social behavior – which continues today.
We Can End Racial Inequities in Healthcare
We can and must end racial inequities in health. PNHP researchers have found, for example, that single-payer healthcare has almost eliminated racial gaps in unmet medical needs in Canada. Equity in health will require more than an equitable healthcare system, though: it will also require equity in the social determinants of health, such as education, housing, a healthy environment, and the equitable delivery of healthcare!]]>
1. Why was the Living Hope Wheelchair Association formed, and can you tell us a bit about the situation faced by its members?
Living Hope is an organization formed by immigrants with spinal cord injuries working to improve our quality of life through services, advocacy, and community organizing. We formed in 2005 when the Harris County Hospital District decided to stop providing basic medical supplies to immigrants who were not eligible for Medicaid. We had to organize to find ways to help one another raise funds to buy catheters, diapers, and other supplies, and after some years evolved to become a small non–profit organization operated by us with the help of some volunteers.
Suffering a catastrophic spinal cord injury has a brutal impact on a person’s life. If this person is an immigrant or a low-wage worker in the United States then he or she is in an extremely vulnerable situation. During our existence as an organization we have been able to help each other first to survive the depression that comes after the accident, then to survive the problems that come with not having resources to buy medical supplies and equipment. We have learned to improve our quality of life through hope and solidarity, sharing what we have and organizing to get what we need.
2. What does the experience of Living Hope members tell us about the healthcare system in the United States?
Our experience with the healthcare system in the United States is a mixed one. We are grateful to doctors and nurses in the emergency services that took care of us after we were victims of a crime or suffered car or workplace accidents. We are grateful to therapists and rehabilitation specialists that have helped us along the years. On the other hand it is very frustrating not having access to regular healthcare. It is very painful to see our members needing attention and having to wait until they are in very bad shape because they can only be treated as emergencies. We have a member that needed dialysis treatment three times a week due to the kidney damage he suffered when he was shot in a drive-by shooting and he could only receive treatment every week or every ten days when his potassium reached critical levels; even though we were able to get him more regular treatment in a clinic, the damage to his health was devastating.
More recently one of our members, who is also our board treasurer, had to wait fourteen hours seated in his wheelchair in the waiting room at the county hospital before a doctor saw him. They didn’t even give him a bed during those fourteen hours so he could lie down and avoid developing a bedsore ulcer that can be very dangerous because they take months to heal. We know this is not the fault of doctors and nurses but a consequence of terrible public health policies that exclude so many people from having access to health care.
We believe that the fact that we are not included is a great injustice because we have contributed to the economy of this country and this is very frustrating. We want equality for all, health is a human right, and we don’t go to the emergency room because we enjoy it!
The situation in Texas is particularly bad, we are the state with more uninsured people and recently Governor Perry refused to take advantage of available resources to expand Medicaid, ignoring the negative impact this has on the whole system; we believe it is outrageous that he and other politicians don’t see that while they count the votes they win with these decisions, we have to count the hours we spend waiting in the emergency room, the hours we spend in severe pain because we don’t have access to treatment and medicine, and we count those who die and could have lived if their right to health care would be respected before the profits of insurance companies or the electoral interests of politicians that have never suffered like regular people.
3. Advocates for a single-payer healthcare system will often hear the question: “Will this cover undocumented immigrants?” How does Living Hope make the case that access to health services and goods should be available to all, regardless of documentation status? What can advocates for truly universal health care learn from Living Hope’s experience speaking with the broader community in Texas?
For us this is very simple: We are human beings, we have human rights, just like the rest of people in the U.S. Including undocumented immigrants in the healthcare system makes sense from a public health point of view and also from an economic point of view, it has been demonstrated by many different well respected studies; but that shouldn’t be the main reason why we are included: human dignity should be.
Texas is the state with more uninsured people and so many groups defending human rights in our state are working for a Medicaid expansion so we can have a better healthcare system. Ours is a very religious state and we think that those who want to deny our rights and humanity need to ask themselves: If we are not their brothers and sisters, how can they say that God is their Father?
So to advocates all over the country we have one advice: do not try to convince your opponents only with cost-benefit analysis, or seductive talking points; it is better to share stories that show the humanity, suffering and dignity of our communities and then let our opponents and the undecided do their homework with their consciences and beliefs, most people will do the right thing when they can connect with their own humanity and not just with ideological noise.
4. If a national, single-payer system was implemented that included all residents, how would that affect the lives of Living Hope members?
Having access to a single-payer system would have a great positive impact in our lives, it would mean opening the possibility of regular health care services that would help us prevent problems instead of having to live in a constant state of emergency. We are clear that a single-payer system would not solve all of our problems, we will still be in our wheelchairs, we will still have to face the discrimination we encounter both as immigrants and as persons with a disability, but what people who have health insurance and good health need to understand is that for us this is not an issue, this is a battle of life and death, and having access to health care will reduce the amount of pain we have to live with every day, it will help us live longer. So, paraphrasing our friend Ken Kenegos from the Health Care for All coalition here in Houston: those who prevent us from entering hospitals are today’s version of Alabama Governor George Wallace standing in the door of the University of Alabama in 1962. We know we are human beings and have rights and dignity; the question is if many of our current politicians in Texas are ready to acknowledge this and be on the right side of history.]]>
John N. Lozier has been executive director of the National Health Care for the Homeless Council since its founding in January 1990. The Council is a network of more than 10,000 doctors, nurses, social workers, patients and advocates who share the mission to eliminate homelessness. John lives in Nashville, TN with his wife Joceline, and sits on the Board of Healthcare-NOW!
Question 1: Can you start off by talking about how people come to experience homelessness, and whether the healthcare industry plays a role in that?
Medical debt, deeply rooted in the current system, is a major and often overlooked contributor to homelessness. PNHP research shows that over 60% of personal bankruptcies in the US are the result of medical debt. From bankruptcy there is a well-worn path through eviction, followed by temporary stays with family or friends, to sleeping in a car, a shelter or outdoors.
Beyond that driver of homelessness, untreated illnesses play a huge role in selecting who will experience homelessness in an economy that is sorely lacking in affordable housing. Those who are most quickly squeezed out onto the streets tend to be those with so-called “behavioral health” problems – addictions and mental illnesses. Without minimizing the difficulties in treating these diseases, very helpful treatment approaches do exist, but are far from universally available. Uninsurance and underinsurance play a central role in excluding people who need and want treatment. Even when one has a payment source, system insufficiencies create wait lists for people who need to enter treatment at the point when they are ready.
Question 2: Does homelessness and housing insecurity create particular challenges for accessing needed healthcare?
Most assuredly. The Institute of Medicine of the National Academy of Sciences recognized this as early as 1988 in its seminal publication, Homelessness, Health and Human Needs. Beyond the very high uninsurance rates in the homeless population, competing survival priorities can take precedence over seeking health care. Just as people a bit higher in society’s pecking order might have to choose between paying for medicine and heating the house, people experiencing homelessness may have to choose between standing in line for a meal or a chance for a shelter bed and standing in line or waiting for a health care visit. Think about Maslow’s hierarchy of human needs, and what choice you would make.
Transportation is another problem. While public transportation and safety-net services sometimes help, may people without homes must walk to get places, and services are not always located close to areas where people stay. In Health Care for the Homeless, we see terrible foot problems, a result of all that walking, of sleeping sitting up (fluids pool in the lower extremities), and of high rates of diabetes.
Poor provider attitudes toward people who are obviously homeless and distressed – perhaps with poor personal hygiene (hard to control when you’re on the streets!), bad odors and strange behaviors – create new barriers to care. People are pushed away in ways ranging from subtle to brutal.
Question 3: If a single-payer healthcare system were implemented in the United States, how would that effect homelessness?
It would help to end mass homelessness by dramatically improving access to care. It would reduce immense human suffering.
Medical debt would be a thing of the past, closing a front door into homelessness. At the primary care level, the barrier of co-pays and deductibles (an oddly emerging barrier for dispossessed people as they become auto-enrolled in Medicaid managed care programs under the Affordable Care Act) would be eliminated. Specialty care and non-emergency procedures would become available – no longer would people living under bridges have to forego oncology services or cancer surgery for lack of a payer. And reasonable health planning would help ensure appropriate geographical distribution of services.
Question 4: Adequate housing and access to healthcare are both fundamental to quality of life and human dignity, but they are also two massive industries in the United States. Do you see parallels between the social movements to recognize healthcare and housing as rights? Are there spaces where these two movements could work together?
We do work together. We share the theoretical perspective that housing and health care are both human rights, and as such are interdependent and inseparable. Moreover, we recognize on a very practical level that housing is health care: one cannot expect to get well or stay well when living without housing, exposed to all sorts of infectious agents, the harsh elements, parasites, violence, poor nutrition, and poor rest.
One way that insight takes form is in the widely accepted “housing first” approach to homelessness interventions. Usually focusing on people whose health status makes them particularly vulnerable to homelessness, “housing first” moves homeless people into housing without expecting sobriety, employment or other indicators of “housing readiness.” Housing becomes the foundation upon which a person can begin to become healthy.
The National Health Care for the Homeless Council enthusiastically participates in the work of the National Low Income Housing Coalition for a National Affordable Housing Trust Fund to increase the actual supply of housing. The Corporation for Supportive Housing helps to bring our expertise in health care delivery into housing first developments.
Of course, I describe a relatively narrow focus on homelessness, the place where the extremes of poor housing and poor health intersect and offend the conscience. The collaborations among organizations are mostly focused on services and housing initiatives. The challenge is broadening this work to bring the human rights perspective to our well-intentioned colleagues who may have less expansive visions. Ultimately in a democracy, the strength of the profiteers in industry must succumb to a mobilized constituency insisting on basic human rights.
Question 5: Where can we learn more?
Our website, the organizations mentioned above (National Low Income Housing Coalition and CSH), and the National Coalition for the Homeless are great places to start.]]>
This is a proud moment for California Nurses Association/National Nurses United, whose members have taken the lead in blowing the whistle for Ebola preparedness. From a die-in on the Las Vegas Strip in September to the 50,000 strong national day of action on November 12th, the nurses of CNA/NNU have made history.
Contrary to what their hospital administrators have said about their adherence to the CDC guidelines—nurses reported quite the opposite in a survey of over 3500 nurses from every state in the US. So this new guidance in California creates a real level of security for nurses, and we thank Governor Brown and Director Baker, and the staff who worked so diligently to set this new national standard.
But what about the patients in a fragmented, under resourced “non-system” who are at the mercy of their insurance company’s high-deductible, minimal benefit, narrow network, sparse drug formulary health plan? And those on Medi-Cal who can’t find a doctor to accept them, or those undocumented workers and others who must rely solely on ER visits and a decimated public health system?
Funding for public health preparedness and response activities in the US was $1billion less in 2013, than in 2002, according to a CDC report from earlier this year.
According to CMS data collected in 2013, patients in California Emergency Departments faced waits that are 23 minutes longer than the national average. Specifically, California patients waited on average more than two-and-a-half hours in the ED.
Further, if a patient is admitted to the hospital, the average wait increased to:
At least 5% of patients at 20 of the state’s EDs left before being treated because of the long waits, according to Center for Health Reporting/Daily News.
Let’s make a distinction between an integrated, well-resourced system that guarantees a single standard of care for all with a dedicated funding source and real public accountability – known as single-payer – verses the existing fragmented approach that seeks to regulate behavior sometimes with the force of law as in the case of this new guidance, and mostly as monetary incentives and voluntary guidance. Now, the treatment response to Ebola, for example, as other in other pandemics is largely governed by private healthcare corporations who are only accountable to their shareholders or board of directors, not the public.
Understaffing, access to treatment based on ability to pay, technology replacing hands-on care, difficulty gaining admission: it could and does happen everyday in our fragmented corporate health care system. All this happened to Ebola patient Thomas Eric Duncan in a Dallas hospital, and in his case, it was fatal and two nurses infected.
We know what works, Canada has done it: A province-based single-payer system and federal agency that has the responsibility and authority to ensure local, state and national coordination to detect, respond and treat outbreaks.
The Ebola epidemic reveals the fissures and fatal inadequacies of our healthcare “non-system.” Only greater integration, planned and directed resources, and authority to a public health system can protect people in California from the dangers of pandemics like Ebola.
This new guidance issued by Cal/OSHA stands out as a clear mandate for precaution and protection establishing a national standard. Let us a create system where that is the rule, rather than the exception.]]>