FLORIDA HEALTH INSURANCE

Children's Health Insurance

July 18, 2007 -- Miami Lakes, Florida

A Senate committee approved a $35 billion expansion to a key children's health insurance program Thursday, despite a threat from President Bush to veto the legislation.

The bill aims to extend medical coverage under the State Children's Health Insurance Program (SCHIP) to some 3.3 million low-income children who currently qualify for government benefits but do not have them.

Supporters praised the bill's 17-4 approval in the Finance Committee as a sign of wide bipartisan support for extending the SCHIP program, which is set to expire Sept. 30. Committee leaders had scaled back their original aim of authorizing $50 billion in new spending in an effort to forge agreement between the parties on a five-year SCHIP plan.

"We exercised discipline and it worked," said Sen. John D. Rockefeller, D-W.Va., a key negotiator on the bill who had originally favored higher spending for the program. "We didn't do a lot of things we should have done. But then again if we'd done them there would be no underlying bill," he said in an interview.

The bill's 5-year, $35 billion price tag is financed through a 61-cent per-pack increase in federal cigarette taxes, with similar tax increases for other forms of tobacco.

That irritated lawmakers from tobacco-producing states, who argued that the tax put an unfair burden on one class of people -- smokers -- and said it would hurt farmers.

"It would be very unpopular in my state," said Sen. Mitch McConnell, R-Ky., the Minority Leader.

As many as 9 million U.S. children lack health coverage, a statistic many see as the most urgent sign of the need for reform in the U.S. healthcare system. While almost no one has voiced opposition to renewing the SCHIP program, some Republicans oppose the bill as a large expansion of government-run health care.

Chief among them is President Bush, who issued a veto threat Tuesday before the Finance Committee had officially unveiled its final proposal.

"If Congress continues to insist upon expanding health care through the SCHIP program -- which, by the way, would entail a huge tax increase for the American people -- I'll veto the bill," the president said.

Administration officials have criticized the Senate bill for allowing states to give SCHIP benefits to children in families living at more than 200 percent of the federal poverty level.

The House is expected to soon unveil an even more generous proposal, spending $50 billion over 5 years, funded with tobacco tax increases along with billions of dollars in cuts to the Medicare Advantage managed care program.

"We are ready to renew our commitment to low income children today, but we cannot agree to a gradual government take-over of healthcare -- and neither will the American people," Health and Human Services Secretary Michael Leavitt said in a statement Thursday.

The president's threat makes the future of the bill uncertain. House and Senate lawmakers will have to agree on a final, unified proposal before sending it to the White House. President Bush has said he favors a much smaller, $5 billion increase to the program.

Rockefeller described letters from the White House and Leavitt on lawmakers SCHIP proposals as "pretty belligerent."

Sen. Tom Harkin, D-Iowa, attacked the White House for "undermining" Congressional negotiations over the future of SCHIP. "I don't know what the president could be thinking. I always knew that 'compassionate conservatism' was on life support. It is now dead," he said.

Sen. Chuck Grassley, R-Iowa, called the adinistration's proposal "unrealistic," and said vetoing the bill would perpetuate undesirable aspects of the current SCHIP program.

"I would ask the White House to consider that we passed a $35 billion bill that overcomes a lot of bad policy," Grassley told reporters following the Finance Committee vote. "We're spending $35 billion to cover more kids (and) to have good policy, as opposed to doing nothing, extending bad policy and spending $21 billion in the process."

Committee Democrats said they're optimistic that the administration's stance won't cause Republicans to block the bill once it reaches the floor sometime next week.

"There are many Republicans on this issue who are voting their own conscience; they're going their own way," said Sen. Max Baucus, D-Mont. "Six members of this committee voted for this bill, and I expect there will be many more Republicans on the floor who will also vote for the bill. That's why it's clear to me this will not be filibustered."

But not all Republicans are jumping on the SCHIP bandwagon. Sen. Trent Lott, R-Miss., voted against the bill, calling it "Hillarycare through the back door."

"We tried to create a program targeted at low-income children, and it now it's been exploded into what will become government-run, Washington-bureaucratic healthcare," said Lott, the Republican whip.

The bill may not fare as well as Baucus predicted if Lott has his say.

"We won't let it go to conference," he said. "It might eventually, but (if it does) hopefully we can come up with something reasonable."

House leaders say they intend to act on a SCHIP bill before Congress adjourns for its August recess.

Florida Health Insurance
Health Consultation - SICKO

Thanks to Michael Moore's movie SiCKO the health care debate is now front and center. I praise his venture - while I have not seen the movie -- I firmly agree with the need to create some type of national health insurance. There are three primary reasons for this.

While I will almost always advocate for a market based economic approach to allocating resources, health care is not an area where the profit motive should dominate decision making. Simply put, the end product is a patient's health. Private health insurance has a conflict of interest between the insurance company and the insured which will be resolved in favor of the insurance company a majority of the time.

Let me paint a hypothetical picture to illustrate this point. Insured makes a claim with the insurance company, which is a publicly traded company. Because the insurance company is publicly traded they must turn a profit and increase their profits to maintain their share price. In order to make a profit they have every incentive to either

1. Deny the insured's claim, or
2. Delay payment to increase the possibility the insured will drop his claim

There are numerous stories about an insured making a routine claim only to be inundated with paperwork, or being told the policy doesn't cover that procedure, or being told the insurance company has to look into the claim to see if the insurance company can make a payment. In any of these situations the central idea of insurance -- to provide some safety for the insured at a specific cost -- is compromised.

In addition, insurance companies will seek to minimize the amount of money they would have to pay to the insured. Again, remember the product here is the patient's health. Supposed the insured has a disease where the cure is expensive but a cheaper alternative exists. However, the cheaper alternative would moderately or seriously compromise the insured's quality of life. Because the insurance company is profit-driven, it will probably opt for the cheaper treatment that compromises the insured's quality of life.

Secondly, private health care is more expensive the public health care. Here are three charts compiled from the Organization for Economic Cooperation and Development. The figures are from 2004.

First, the US spends the least amount of public money on health care. However, the US spends the most on health care as a percentage of GDP and on a per capita basis.

Notice the partially inverse relationship between public expenditures and total amount spent on health care. In short, publicly available health care is cheaper.

Finally there is the issue of competitiveness. I'll let General Motors of Canada make the argument for me.

"The Canadian plan has been a significant advantage for investing in Canada," says GM Canada spokesman David Patterson, noting that in the United States, GM spends $1,400 per car on health benefits. Indeed, with the provinces sharing 75 percent of the cost of Canadian healthcare, it's no surprise that GM, Ford and Chrysler have all been shifting car production across the border at such a rate that the name "Motor City" should belong to Windsor, not Detroit. Just two years ago, GM Canada's CEO Michael Grimaldi sent a letter co-signed by Canadian Autoworkers Union president Buzz Hargrave to a Crown Commission considering reforms of Canada's 35-year-old national health program that said, "The public healthcare system significantly reduces total labour costs for automobile manufacturing firms, compared to their cost of equivalent private insurance services purchased by U.S.-based automakers."

That letter also said it was "vitally important that the publicly funded healthcare system be preserved and renewed, on the existing principles of universality, accessibility, portability, comprehensiveness and public administration," and went on to call not just for preservation but for an "updated range of services." CEOs of the Canadian units of Ford and DaimlerChrysler wrote similar encomiums endorsing the national health system.

Health care costs are killing American business. Our international competitors don't have to deal with these costs. As a result, private health care is making US business less competitive.

So, public health eliminates a conflict of interest that compromises individual health, is cheaper and makes the US more competitive. And we don't have a public health system because?

Here are a few facts: Health Insurance Premiums Rose 11.2% in two years - Premiums Increased at Five Times The Rate of Growth in Workers’ Earnings and Inflation -- About Five Million Fewer Workers Covered By Their Own Employer’s Health Insurance Since 2001. In Washington, DC – Employer-sponsored health insurance premiums increased an average of 11.2% in 2004 -- less than last year’s 13.9% increase, but still the fourth consecutive year of double-digit growth, according to the 2004 Annual Employer Health Benefits Survey released by the Kaiser Family Foundation and Health Research and Educational Trust (HRET). Premiums for employer-sponsored health insurance rose at about five times the rate of inflation (2.3%) and workers’ earnings (2.2%).

In 2004, premiums reached an average of $9,950 annually for family coverage ($829 per month) and $3,695 ($308 per month) for single coverage, according to the new survey. Family premiums for PPOs, which cover most workers, rose to $10,217 annually ($851 per month) in 2004, up significantly from $9,317 annually ($776 per month) in 2003. Since 2000, premiums for family coverage have risen 59%.

The survey also found that the percentage of all workers receiving health coverage from their employer in 2004 is 61%, about the same as in 2003 (62%) but down significantly from the recent peak of 65% in 2001. As a consequence, there are at least 5 million fewer jobs providing health insurance in 2004 than 2001. A likely contributing factor is a decline in the percentage of small employers (three to 199 workers) offering health insurance over this period. In 2004, 63% of all small firms offer health benefits to their workers, down from 68% in 2001.

“The cost of family health insurance is rapidly approaching the gross earnings of a full-time minimum wage worker,” said Drew Altman, President and CEO of the Kaiser Family Foundation. “If these trends continue, workers and employers will find it increasingly difficult to pay for family health coverage and every year the share of Americans who have employer-sponsored health coverage will fall.”

“Since 2000, the cost of health insurance has risen 59 percent, while workers wages have increased only 12 percent. Since 2001, employee contributions increased 57 percent for single coverage and 49 percent for family coverage, while workers wages have increased only 12 percent. This is why fewer small employers are offering coverage, and why fewer workers are taking-up coverage,” said Jon Gabel, vice president for Health Systems Studies at the Health Research and Educational Trust.

The survey was conducted between January and May of 2004 and included 3,017 randomly selected public and private firms with three or more employees (1,925 of which responded to the full survey and 1,092 of which responded to an additional question about offering coverage). This is the sixth year the joint survey was conducted by Kaiser and HRET, and the 17th year this survey has been conducted overall. Findings appear in the September/October issue of the journal Health Affairs.

Survey highlights include:

• Worker contributions. This year, workers on average contribute $558 of the $3,695 annual premium cost of single coverage and $2,661 of the $9,950 cost of premiums for family coverage. Average employee contributions for single coverage are statistically unchanged from 2003, while average employee contributions for family coverage grew by 10% – a similar rate to the average overall premium increase. The percentage of premiums paid by workers is statistically unchanged over the last several years, at 16% for single coverage and 28% for family coverage.
• Cost-sharing. Cost sharing rose modestly in 2004 compared to the larger increases observed in recent years. Most covered workers are in health plans that require a deductible be met before most plan benefits are provided. In PPO plans, which cover more than half of all workers with health benefits, the average deductible for single coverage is $287 for services from preferred providers and $558 for services from non-preferred providers, about the same as in 2003. In addition, half of covered workers must either pay a separate deductible (average $224) or pay additional co-insurance (averaging 16% of the costs) when they are admitted to the hospital. The proportion of covered workers facing a $20 copayment for an office visit increased to 27% in 2004 from 19% in 2003.
• Consumer-driven plans. While about 10% of all firms offer a high-deductible plan to covered workers this year, only about 3.5% of those firms offer a personal or savings account option along with a high-deductible plan. These accounts permit employers (and sometimes employees) to make pre-tax contributions, which can be used by employees to pay for routine medical care. The survey finds that employers, particularly larger firms, are interested in high-deductible plans (a plan with a deductible of at least $1,000 for single coverage). About 6% of all firms (accounting for 13% of covered workers) say that they are “very likely” to offer such a plan within two years, and another 21% of all firms (accounting for 26% of covered workers) say that they are “somewhat likely” to do so.
• Type of insurance. In 2004, PPOs continue to be the most common form of health coverage, with more than half (55%) of all employees with health coverage enrolling in a PPO. HMOs, which cost significantly less than PPOs, cover about 25% of covered workers. Conventional, or indemnity, benefit plans have all but disappeared, covering just 5% of covered workers. These enrollment shares are statistically unchanged from 2003.

“You have to look over the past several years to really understand why Americans are so worried about health care costs. Just for premium contributions alone, families are paying $1,000 more this year for their health coverage than they paid in 2000,” Dr. Altman said. “More than any other factor, these out-of-pocket cost increases are what's driving voter concern about health.”

Facing continued premium increases, many employers say they looked to make cost-saving changes in the past year. Among firms offering coverage, 56% report that they shopped for a new plan in the past year. Of those firms, 31% (17% overall) report changing insurance carriers in the past year and 34% (19% overall) report changing the type of health plan offered.

When asked about future plans, about half (52%) of large firms (200 or more workers) say they are “very likely” to increase employee contributions in the next year. In contrast, just 15% of small firms (3 to 199 workers) say that they are “very likely” to increase employee contributions next year.

Across all firms offering coverage, relatively low percentages say that they are “very likely” in the next year to raise deductibles (9%), raise office visit cost-sharing (5%), raise prescription drug copayments (5%), introduce tiered networks for physicians or hospitals (2%), or restrict eligibility for benefits (1%). In addition, 3% of firms say they are “very likely” to drop health coverage entirely in the near future.

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