Ten more things about the official Kennedy-Dodd health care bill
10 June
The Senate HELP Committee staff has filed an official copy of their draft legislation with the Senate clerk. A friend and I were discussing today two possible tactical scenarios:
- The weekend leak forced the majority staff to release their official text as damage control. Under this scenario, filing the official copy is a damage mitigation strategy: “If there’s going to be a version out there, let’s at least have it be a version we want.”
- The weekend leak was by the majority staff, and filing the official text is part of a gradual rollout strategy.
I’m guessing scenario 1 is right. Either way, we now have official text to chew on. This text is more expansive than the leaked version I posted Monday. It contains some new items, but is largely identical to the leaked draft.
More importantly, I have now had more time to read the 615 page bill. (I skimmed some parts.) Doing so turned up some things I missed the first time. So here are ten more things you should know about the official draft of the Kennedy-Dodd health care bill.
(Editorial note: I have made a page that will always have the latest version of this complete list, along with the comparison to the House Democrats’ bill. I will also post when I update that page.)
- The employer mandate section from the leaked draft has been replaced with “[Policy under discussion]”.
A few inside friends confirmed my guess – they think this is a tactical move by the majority staff to try to relieve blowback from the employer groups: Chamber of Commerce, Business Roundtable, NFIB (the small business lobby), etc. Until it is otherwise demonstrated, I will continue to assume that the Chairman’s mark will include language that will roughly parallel that in the leaked draft. - The bill gives the Secretary of Health and Human Services authority to limit premiums and profits of health plans by forcing plans to rebate to enrollees premiums above a certain margin.
Specifically, §2704(a) is the “Requirement to provide value for premium payments.” A health plan must report how much of their premium revenues are used for clinical services, how much for “activities that improve health care quality,” and how much for “all other non-claims costs.”§2704(b)(1) then tells the Secretary to look at how much other health plans spent on “all other non-claims costs,” and based on that survey, set an allowable percentage for this category. Plans are then required to rebate premiums if they go above this amount. This is direct (but confusing) regulation of premiums and profit margins.
I found the labeling of this section interesting. It appears that this section will be the justification for the claim that this bill reduces health care costs. Loosely phrased, it appears their argument will be “We’re reducing health care costs by forcing plans to lower their administrative costs and profits.”
- The bill mandates that health plans include and provide financial incentives for the “medical home model” for services, then gives a highly prescriptive description of this model, detailing the interactions among the health plan and different types of providers.
§3101(m) requires qualified health plans to develop and adopt a strategy “that provides increased reimbursement or other incentives for … improving health outcomes … including through the use of the medical home model defined in section 212 [of the] Affordable Health Choices Act, for treatment or services under the plan or coverage;”§212 then sets up the “medical home model” over seven pages of legislative text. I am far from an expert in plan-provider relationships, and am not familiar with the medical home model. But the language looks highly prescriptive, as if it is defining an extensive set of rules about the interactions among plans and different types of providers. I would love help from some commenters on what’s going on here, or some more education about the “medical home model.” My instinct is that, even if it is a good delivery model, the federal government should not be tilting the playing field for or against it.
- The bill requires health plans adopt Medicare and SCHIP’s “generally implemented incentive policy to promote high quality health care.”
- Employers must offer the same health insurance to all employees, independent of salary.
- Gateways can charge a tax of up to 3% of premiums to cover implementation and administrative costs.This is a huge deal. Take a typical $13,000 (employer-based) family health insurance policy. That means the State can add up to $390/year to the cost.
- The Secretary of Health and Human Services shall required that Gateways shall “ensure that [uninsured] individuals are directed to enroll in the program [that she deems] most appropriate.” This is in the context of whether they should enroll in a private health plan, or a government plan: Medicaid, SCHIP, or the new “public option.” The bill gives SecHHS authority to push/force State Gateways to push/encourage/force? the uninsured toward (or away from) particular types of plans. The danger is that a SecHHS could say, “It’s best to have all the uninsured in a government plan.”
- States (through Gateways) shall redistribute premiums from plans with low-risk individuals to those with high-risk individuals.
This gives the people running Gateways a tremendous amount of power over health plans. - States can opt out their state and local employee plans for the first four years. I’m trying to think of a reason why they should be treated differently. Otherwise, it looks like caving to pressure either from State governments, or from public employee unions.
- The bill creates a new $10 B “Reinsurance for Retirees” fund to subsidize costs for those between ages 55 and 64. The bill defines eligible “employers” to include “a voluntary employee benefit association.” This may include the UAW VEBA.
This looks like a fallback. Traditionally, health advocates on the Left have wanted to allow near-retirees (55-64) to “buy in early” to Medicare. And I need to be clear – I cannot conclude that this provision was written specifically to benefit the UAW VEBA. I just know that it allows a VEBA to apply as an employer for a share of this fund, and that the UAW VEBA is the most prominent one that might ask for such funds.
Remember, you can now always find an updated version of the complete list here.
While the list of two dozen items surely creates an impression of why I oppose this bill, I would like to put some structure on it. I hope to post in the next few days a higher-level view that crystallizes my biggest concerns with this bill in a structure that is easier to understand.
(photo credit: Wikipedia)
Related Posts
(best matches are listed first)- The belt-and-suspenders of the Kennedy-Dodd health care bill
- Understanding the Kennedy health care bill
- Understanding the House Democrats’ health care bill
- CBO scores the Kennedy-Dodd bill
- Parsing the President’s health care reform letter
- How to measure health care cost control
- Health insurance for poor kids
“Real per person spending on health care has been increasing rapidly, rising over 40 percent in the past decade alone. Between 1980 and 2007, the share of gross domestic product (GDP) devoted to health care almost doubled. In 2007, the United States spent a total of $2.2 trillion on health care, which represents $7,421 per person or 16 percent of GDP. [Health and Human Services, accessed 3/11/2009] This is nearly twice the average of other developed nations. [Organisation for Economic Cooperation and Development, 12/10/2008]”
And “The World Health Organization ranking puts the health care system of France at the top and the US arriving at number 37, just behind global heavyweights Dominica and Costa Rica.
What is a VEBA?
“$7,421 per person or 16 percent of GDP. [Health and Human Services, accessed 3/11/2009] This is nearly twice the average of other developed nations.”
Let’s do a little math.
Since Hillarycare was sent packing by the republicans in 94 and 8 year of Bush and the GOP doing nothing has cost each and every American.
$7,421/2 = $3,710 in 2007 alone
Multiply that times 1994 to 2009. 15 years.
15 years of paying twice what the rest of world pays. For the same level of care.
jharp, I refer you to Tyler Cowen’s ground rules for debating health-care policy: http://www.marginalrevolution.com/marginalrevolution/2007/10/how-to-debate-h.html
the medical home model language is prescriptive but still quite vague. It will eventually codify what I mostly already do and then reduce the reimbursement and increase the regulatory burden until I can no longer do it. Any increase in resources it makes available will be far outweighed by the bureaucratic burden.
It is unrealistic to assume that there will be adequate # of primary care docs to execute this to be available in the reasonable near future.
Mandatory provider participation must also be a part of this, otherwise the most able providers will opt out. One might also have to close the borders to physicians as there already heavy recruitment from areas such as Singapore, India, and Australia not to mention the overseas medical destination resorts that will spring up in response to this.
In a universal care environment, what is the justification for the existence of the $66b/yr not-for-profit healthcare providers?
This bill will make care more affordable and less accessable for all.
< redacted by kbh >
“I challenge the AMA leadership to cite a single example of an industry where involvement by the government has lead to the elimination of private enterprise. This has not been the case with the creation of public police forces in the second half of the 1800’s (private security companies still exist), we have a robust system of public and private colleges existing the same market, and bookstores still sell books despite the presence of public libraries. A mix of public and private enterprises in the market is a truly American solution to ensuring equal access, as well as competition to drive quality improvement. In fact, the creation of the public health insurance option will *increase* competition, as demonstrated by the AMA’s own studies showing that 94% of health insurance markets only have 1 or 2 providers in the market.”
The medical home idea can be read about at the IBM website here:
http://www.ibm.com/ibm/ideasfromibm/us/healthcare/20081203/index.shtml
Here is a quick synopsis
In the Medical Home model, the primary care physician acts as healthcare “coach”, leading the team that manages a patient’s wellness, preventative and chronic care needs. He or she spends more time with each patient in person, is available via email and phone for consultation; offers expanded hours and coordinates care across the individual’s entire care team.
The example they use is below:
For example, a diabetic in the Medical Home model could give daily blood test readings by phone, email or even a state-of-the-art remote monitoring device and get medical instructions the moment he needs them, rather than wait for an appointment. The care team would have a holistic health plan in place focusing on diet and exercise as well as monitoring glucose levels.
Here is the issue with this example. It assumes the patient will follow the instructions just because they are more in “real time”. Diabetes is a difficult disease to control not just because of the pathophysiology but because patients are unpredictable and can be non compliant with treatment even when it is detrimental to their person.
When you offer health care for free or at a severely discounted rate, compliance tends to be a greater problem because there is no shared reposnsibility for the disease.
The crux of government provided health care: government cost control is obtained through rationing of services and benefits. Period.
“it appears their argument will be “We’re reducing health care costs by forcing plans to lower their administrative costs and profits.””
Another way to drive private insurance out of the industry: forcing them to lower their profits while the govt can tax and print money to make its offerings as cheap as it wants (but you pay in taxes and inflation)
I assume the Gateway tax will be used to fund the below-market rate govt plans. I’m not a lawyer or expert on the Constitution, so I’m asking: can we call that a taking?
jharp, I posted links to health care statistics on the other thread, check them out. You do NOT get same level of care in the UK at all (unless – irony alert! – you have the money to pay for private ins over what you are taxed for the NHS, or to fly here or to India to get treated). if you are Canadian with a serious condition and you are on a waiting list, you only have to travel within the continent. (Once we are subjected to Obamacare I guess those of us who can afford it will fly to India too.)
“the AMA’s own studies showing that 94% of health insurance markets only have 1 or 2 providers in the market.” (Where’s the quote from btw?) One reason for that is that providers across state lines are not allowed to compete with each other. The various GOP proposals all include repealing those regulations so there is truly competition in the marketplace. Then you also have to get rid of the micromanaging regulations of the type Keith cites, which make it difficult for providers to innovate or respond to the market.
“8 year of Bush and the GOP doing nothing has cost each and every American.”
Um, SCHIP?
>This is far worse than the UK’s NHS that I left in the 70’s. Do they not anticipate the same “Brain Drain” of physician leaving the US in droves nor the effect on small businesses?
Leaving were? What country is there that does not have NHS, and I can get paid $250,000/year? Oh, please tell me. I think wording is vague, but it is expected until final draft. Reducing insurance cost is a good provision, because frankly they spend $.25 cents of every dollar. $.75 wasted on marketing, executive pay, buildings.
As best I can tell, “medical home” is new marketingspeak for the “managed care” of yore. The designated PCP will serve as gatekeeper for all health care, and going outside the system will not be allowed (as it would interfere with the concept of “the PCP as overall coordinator” for all medical care). This is primarily a financial control and the PCP may be offered incentives to reduce use of expensive medical resources by the patient.
There also tends to be an association with “pay for performance” – financial rewards for the PCP for keeping one’s numbers in the designated acceptable range – and with centralized tracking and medical surveillance, particularly of those with chronic medical conditions. (With the gradual shifts in allowable values for medical indices – for example, “hypertension”, “obesity”, and “diabetes” kick in at considerably lower levels than they did fifteen or twenty years ago – most people now have some sort of “chronic medical condition” by middle age.)
P4P and medical surveillance aren’t a necessary part of the Medical Home concept, but they are often mentioned in conjunction with it. I’m not seeing specifics on this in the bill, but I am seeing key terms such as “compliance initiatives” and “quality”.
So let me get this straight. They are willing to piss off 120 million americans with good to excellent health care, in order to gain a guaranteed 5 – 10 million permanent democratic voters who get free health care. No, I’m not going in for the 40 or 50 million uninsured number, since it includes illegals, people eligible but not signed up for insurance, and people who have no intention of ever signing up for health insurance.
So, subtract 120 million (more people than voted in the last election), then add 5 million guaranteed democratic votes. Who does their electoral math? How does this lead to a permanent democratic underclass that will reliably vote for their dear leader? I’m not seeing what they have to gain here, other than some loony left wing idiots wet dream.
That 60% of bankruptcies number is a canard. The proportion of bankruptcies due to medical costs has never exceeded 45% and has been steadily falling since the changes in the bankruptcy code have been implemented.
See the analysis here:
http://meganmcardle.theatlantic.com/archives/2009/06/elizabeth_warren_and_the_terri.php
One writer said we should say, “Show me to money first.” Well, they have shown us some of the money. They expect to harvest $500 billion in savings by ceasing to provide care to senior citizens. Sure tells you that congress will not have the same health care program that they are trying to force on us, huh? We had better stop this train wreck somehow or senior citizens (50 and above) and newborn babies with serious illnesses will start dropping like flies.
Right on Cub. Make the POTUS, COTUS, SCOTUS and all federal emplyees subject to the same plan.
I’m on board with this as well. We can’t have “two Americas” or “for thee but not for me” anymore. My first response to any health plan trotted out by Obama/Congress would be two simple words: “You first.”
That “good to excellent” health care might be not as secure as you think – witness studies like the one cited in this article. 60% of bankruptcies are heavily related to medical costs, and out of those bankruptcies:
1. Most of them were middle-class, and
2. More than three-quarters of them had health insurance at the outset.