Unemployment, Housing Crisis, Insurance and Health Care Reform

By Hootsbuddy

Every day brings more reports of lost jobs. Among the many footnotes to those stories is the loss of any health insurance connected with those jobs. COBRA regulations require employers to continue insurance for eighteen months after an employee is terminated, but the employer's portion of the premium is no longer required. Consequently the cost of insurance to the person who lost his job instantly goes up, typically almost double, the same moment that his earned income vanishes.

A swelling number of real estate foreclosures and walk-aways also has a health care footnote. When a family loses a home, even if by some blessing they still have health insurance, they face a life style adjustment including the bitter choice of whether or not they can afford to continue health insurance. If the family includes children or someone with a chronic condition that choice is straightforward. Insurance for them is as important as food n the table. But for a young, healty couple or individual without health issues, health insurance is sure to fall into the "optional" list. Add one or two more to that growing list of uninsured Americans.

Congress is having a hard time reaching agreement on health care reform, but the insurance industry has noticed. This from International Insurance News was posted in April.

While it�s nice to see that government programs are stepping in to fill the gap, the problem is that its old news. It does not even begin to take into account the massive shifts brought on by the recent recession. The consequences are beginning to take a heavy toll on thehealth of the country in a myriad of ways. Since the start of the downturn in December 2007, employers have cut 5.1 million jobs. The number of people currently on continuing unemployment benefits is at 6.13 million, bringing the national unemployment rate to 8.5%. Because many people in the US receive their medical insurance through their employers, lost jobs meanslost insurance . The Kaiser Family Foundation says that a 1% increase in the unemployment rate means an increase of 1 million enrollments in Medicaid and the ChildHealth Insurance Program (CHIP), and also a 1.1 million increase in uninsured people.



This high rate of lost jobs, estimated to be as high as 14,000 jobs per day, is pushing people out of their employer-based insurance and either into a governmenthealth insurance program or, if they are too young for Medicare or simply not poor enough to qualify for Medicaid, are forced to purchase private individual health insurance plans if they would like to have health insurance at all. An investigation by Consumer Reports has found this trend to carry problems of its own.



The investigation showed that personal health insurance is regularly more expensive than the equivalent cover would be through an employer-based plan. It is often extremely expensive or completely out of reach for people of meager income and less than stellar health. Consumer protection in this area is also an issue where, once again, America demonstrates the importance of appropriate regulation by not having it. Consumer Reports found that most state insurance regulators are not charged with evaluating the coverage these products offer and most disclosure requirements are decidedly limp-wristed at best. So, trying to compare plans, figure out prior to purchase what is and is not covered, or approximately calculating the out-of-pocket liability for any serious medical procedure is nigh impossible. While affordable, these low-end personal plans often come with extensive exclusions and loopholes which often leave people in serious medical debt if they suffer a medical catastrophe.



As everyday American consumers are continuing to feel financial pressure, recent polls have shown an increasing trend to put off medical care . A poll released by Thomson Reuters this month showed that over the past year, 20% of American households have either delayed or cancelled receiving medical care. Out of those who did cancel or delay care, 24.1 attributed it to the cost. The last time this poll was administered in 2006, the number of people delaying or canceling care was at 15.9% and the main reason for delays and cancellations was lack of time. Another chilling figure from the poll was that 21% of American adults were anticipating they would have difficulties paying for either health insurance or healthcare services within the next three months.



As the financial implications on healthcare snowball for the consumers, so too does it snowball for medical practitioners. One instance of this is in North Carolina, which has the fourth highest unemployment rate in the country at 10.7%. The increasing numbers of unemployed and uninsured people have led to a remarkable increase in traffic in free or discounted clinics and also emergency rooms, where hospitals are obliged to administer treatment to everyone, insurance or no. This often means hospitals are performing millions of dollars worth of healthcare services and not seeing any money from it. On top of this, people who do have insurance and actually pay the hospitals for their services are shying away from optional procedures and surgeries which would usually help generate income to keep the hospital running. At the moment, hospitals under financial pressure from both the shrinkage of revenue generating procedures and the amount of �uncompensated care � hospitals are offering to those in need, in some cases only staying functional through infusions of federal monies from the stimulus package.

Since then there has been a lot of discussion about what is being called a "public option." What that means is still not clear, but as far as I can tell that seems to be one of the flies in the political ointment, the other being a provision in the proposed plan that is not being discussed in polite company, how Medicare reimbursement rates are for too many elected officials a kind of pork, subject to tweaking more according to political influence than regional economic variables or other considerations having to do with actual health care.

Here is a recent snip (June 24) from the Commonwealth Fund, a private foundation that aims to promote a high performing health care system that achieves better access, improved quality, and greater efficiency, particularly for society's most vulnerable, including low-income people, the uninsured, minority Americans, young children, and elderly adults.

A controversial part of the health reform debate is whether a new public insurance plan choice should be offered to the under-65 population. This report analyzes alternative paths to reform and presents estimates of impacts onhealth spending. The approaches include: 1) a public health plan paying providers at Medicare rates, offered alongside private plans in a national health insurance exchange; 2) a public plan paying providers at rates set midway between Medicare and private plan rates, offered alongside private plans in an insurance exchange; and 3) no public plan, with only private plans offered to employers and individuals through an insurance exchange. All three approaches, if combined with Medicare payment and system reform, would produce substantial savings over time, but option 1 would yield the most�$3.0 trillion in cumulativehealth system savings over 2010 to 2020, compared with $2.0 trillion (option 2) and $1.2 trillion (option 3).

In a comprehensive report, replete with charts and supporting data, the three proposals are described in some detail. The article concludes with this:

...the presence of a public plan and the payment policies that it encompasses account for most of the total health system savings and federal budget cost differences among the alternative scenarios. Differing results reflect the relative aggressiveness and effectiveness of various cost-containment strategies and the creation of a new dynamic for transforming bothhealth insurance and the provision of health care . The choice of a public plan provides a less-expensive base for expanding coverage than private plans, because a public plan would, at least initially, be paying at lower rates than private plans currently do (but at higher rates than most providers now receive for uninsured and Medicaid patients). Adoption of a public plan would also enable more rapid spread of payment reforms, since more people would be covered under plans that adopt those reforms. The public plan also achieves economies through lower insurance administrative costs. Although the outcome is difficult to predict, private plans, too, could be expected to respond to the new competitive dynamic, by partnering with integrated delivery systems to provide incentives and tools for more effective care, as well as to eliminate ineffective, avoidable, or duplicative care and achieve economies in insurance administration.



Although spending growth would slow, most providers would experience rising revenues and opportunities for shared savings, as preventable hospitalizations and greater efficiency in delivery ofcare are realized. Coverage of the uninsured and improved benefits for them would reduce bad debts and infuse new revenues into the health system in the early years, benefitting in particular the safety-net providers that now offer charity care to those who cannot pay.



At this critical juncture, the national reform debate should stay focused on the key coverage, payment, and system reforms that are necessary to put the nation on a path to high performance inhealth care . Recently, debate has centered on which direction the nation should take to move forward. However coverage is provided, reforms should ensure that everyone has the benefit of insurance plans that serve as agents for the public by pooling risk, paying for effective care, and requiring accountability for outcomes. The key issues should be how best to provide access to high-quality, affordable care for all, now and into the future. That is the goal of comprehensive health reform, and we should be careful not to lose sight of it.



All three paths described here, combined with an integrated set of payment and system reforms, would represent major steps toward the goal of covering the uninsured. But with the nation�s economic and fiscal future at risk, health reform must pay particular attention to effective strategies for altering the future course of spending for health care and increasing value obtained for the resources devoted to the health system.

There is no polite way to say it. Our economy is in the toilet and conditions are getting worse. Whatever the reasons, even with what passes for "recovery," everyone's fortune has shrunk dramatically since this time last year and there is no reason to believe that good news about recovery will soon have any meaningful impact on everyday people. Without serious and meaningful health care reform the economy is headed for an avoidable train wreck.

A health care economic disaster is already here. Cost trends for the last decade indicate that a crisis in health care costs predated the current crisis in credit, jobs and housing. Why else would all the candidates talk about addressing this crisis during their campaigns?

The moment of truth is here. The voices of opposition are becoming louder and more irrational. As Barack Obama reaches deep into his pockets, reaching into a shrinking reserve of political capital, his opponents, like jackals in a National Geographic film, wait for an opportunity to attack. Now really is the time for all good men and women to come to the aid of their country.

Calls that say "Too much, too soon" are out of order. Those who complain that they haven't had time to read the bill are blowing smoke. Hell, I'm an old guy blogging and I've had plenty of time to do my homework. Where have they had their heads for the last couple of years?

Those who point to that Republican chart making fun of the health care plan's complexity strike me as ignorant as someone looking at an electrical schematic of a household applliance with no idea what they are looking at. Just because they are too ignorant to interpret it doesn't mean that it is gibberish. Besides, when is the last time you checked a government flow chart of any kind?

We have come too far to let another health care reform proposal get defeated by Congressional carping and inertia. I'm not a gamer, but a few years ago I came across a line that works well here. It's a greener slogan than "Damn the torpedoes! Full steam ahead!"

THE AVALANCHE HAS ALREADY STARTED; IT'S TOO LATE FOR THE PEBBLES TO VOTE.