One of the biggest selling points of the healthcare reform legislation — a reason why we are supposed to just accept the massive concessions to the insurance industry and drug companies — has been the promise that the private insurers would finally be banned from the disgraceful practices of denying coverage to people with pre-existing conditions.

Well, not so fast, says a report in the Washington Post Sunday.

Reporter David Hilzenrath interviews several policy wonks and concludes that the insurers will still have a variety of ways to violate the spirit and intent of the law. For example:

they could try to cherry-pick through more subtle means. For example, offering free health club memberships tends to attract people who can use the equipment

Or how about this scam:

to avoid patients with costly, complicated medical conditions, health plans could include in their networks relatively few doctors who specialize in treating those conditions

Some are aware of the problem and trying to find ways to neutralize the abuses.  But, Hilzenrath adds,

Unless lawmakers tackle the problem effectively, a reformed health-care system could continue to reward insurers for avoiding rather than treating illness

We already know how accomplished they are at that practice, as was evident in the report last month from the California Nurses Association/National Nurses Organizing Committee that in California six of the largest insurers have rejected on annual average nearly one-fourth of all claims since 2002.

Here’s CNA/NNOC representative Donna Smith debating an insurance executive on the data on CBS Friday.

The insurance trade lobby AHIP (America’s Health Insurance Plans) agreed to the idea of what is called “guaranteed issue”, the willingness to sell policies to people even if they did once have acne or a yeast infection.

But only in exchange for an individual mandate forcing everyone not covered to buy insurance. Big of them.

The mandate alone will be a massive bailout, especially as accompanied by the public subsidies for middle income people to buy private insurance and what are, at best, dubious controls on price gouging by the insurers.

It’s not just that the insurers are greedy — well maybe just a little — but that their first obligation is to make profits, not to guarantee care.

As Hilzenrath notes:

AHIP has been trying to shape the legislation in ways that could help insurers attract the healthy and avoid the sick

And, they have long perfected marketing techniques to do so —

From the messages they advertise to the overall level of coverage they provide and the smallest enticements they add to their benefits packages.

Techniques for which they will now have a lot more money to exploit in advertising.

If we should have learned anything about the insurance industry, it’s that they can not be reformed, and will find ways to abuse whatever regulations and restrictions the Congress may impose.

That’s exactly why many of us have continued to advocate for removing their choke hold over our health care system by adopting a single payer/Medicare for all reform.

Rep. Anthony Weiner is sponsoring a Medicare for all amendment that will come up on the House floor presumably sometime this month.  And with the travesty that has been unrolling in the Senate Finance Committee, wouldn’t it be nice to see the House leaders walk into a conference committee session with Baucus and company with a Medicare for all bill on the table.

Ask your Congress member to support Medicare for all, for the best reform. It might be the best vote they will ever make.

For anyone not interested in slogging through the debate on the 500-odd amendments to the Baucus bill, it has become increasingly and painfully apparent that the healthcare legislation soon to emerge from at least the Senate will fall far short in reigning in out of control health care costs.

That lapse is especially ironic in that “affordability” is perhaps the only goal that seems to top everyone’s to do list, from President Obama to the “keep the government hands off my (government-financed) Medicare” crowd.

But as long as our policy makers refuse to throw the elephant out of the room, the insurance company pirates and their predatory pricing practices,  all their subsidies and tweaking will amount to little more than an umbrella in a hurricane.  

First some ugly reminders as to why this is such a critical issue.

Annual family premiums now average $13,375. If current trends continue, by some accounts the average family plan is expected to hit $30,083 in just 10 years.

Over the past decade, premiums have increased by 138 percent, about three and a half times greater than inflation or incomes.

That, of course is just premiums. Most people now also have unsightly co-pays on office visits and other transactions, deductibles you must pay before your insurance pays anything, and co-insurance, such as a 20 percent charge on lab tests, outpatient procedures, and other medical services.

Those fees are especially large in high deductible plans, increasingly pushed by employers who face their own financial woes with rising premiums, and families juggling mortgage, food, and health insurance costs. Average deductibles for employer-sponsored high deductible plans were $1,973 for individuals and $3,883 for family policies in 2007.

Add it all up, and the results are tragic, if not predictable.

* The number of uninsured is up to 46 million; millions more are under-insured (people with limited plans that leave them vulnerable in the event of unexpected health emergencies).

* More employers are shifting costs to employees, or dropping coverage entirely.

* Medical bills are now the principle factor in 62 percent of personal bankruptcies.

* More than half of Americans, the majority of them people with insurance, are skipping needed care due to high out-of-pocket costs.

* Business is booming in emergency rooms for those who forgo needed primary care, increasing overall healthcare costs, not to mention the added pain and suffering.

A few examples of the self-rationing. The Los Angeles Times reported in April, mammography screenings among women in the vulnerable age group of 50-64 have declined 7 percent and dental business in Southern California is down 15 to 30 percent. The New York Times reported in March a drop in elective surgeries of nearly 50 percent in New Jersey and Georgia, and a drop in cataract surgeries of 5 percent in Ohio.

With their super majority now restored in the Senate, following the appointment today in Massachusetts, and a similar margin in the House, the Obama administration and Congress could have taken the strongest step to reverse these disastrous trends.

By eliminating the middle man role of the private insurance industry (as they are proposing to do with banks and student loans), and the insurers built-in incentive to continually raise prices and fees to increase profits and waste up to 30 cents of every healthcare dollar, much of it on paperwork to avoid paying claims for care that cut into those profits.

But, since our elected leaders decided not to pursue the most effective and efficient way to control costs through a single-payer system such as expanding Medicare to cover everyone, they have had to come up with some other convoluted and far less effective approaches, and ones with some ominous consequences.

1. Individual mandate.

Everyone not presently covered will be required to buy insurance under the dubious theory that giving the insurers a larger risk pool in which everyone has a health policy, the insurers will no longer have to continually raise premiums to cover the costs for the uninsured.

That assumes insurers will act conscientiously to limit price gouging. They won’t; in fact, under federal law, for-profit insurance companies have a fiduciary obligation to maximize profits for their shareholders.

While mandating everyone to buy insurance, Congress and the administration are not mandating insurers to stop price gouging or proposing price controls. To see how that will turn out, look at Massachusetts today, which has the model for this idea.

In Massachusetts, the number of uninsured is again rising, after it initially fell when the law was passed, as more people are opting to pay the penalty rather than pay the rising premiums they can’t afford. Some 42 percent of those buying policies through the state exchange (the same model proposed by Congress and Obama) are choosing plans with higher cost sharing requirements.

Moreover, Massachusetts lets insurers charge the 50 somethings, the pre-Medicare age group, more than younger people, with the result that demographic is gobbling up the bare bones, least comprehensive coverage just when they need medical care more; the Congressional bills repeat this disastrous flaw. Baucus initially wanted to let insurers charge this age bracket five times more, but has since relented and reduced it to four times more.

Further, without effective cost controls, Massachusetts has found the subsidies for low and moderate income are bankrupting the budget. To adjust, they have reduced covered services and groups eligible people, such as legal immigrants (for anyone who thinks the right wing will be satisfied with just eliminating coverage for the undocumented).

In sum, the entire individual mandate scam is a huge windfall for the insurance industry, tens of millions of new customers forced by the government to buy private policies, and public subsidies for some sub-section of the moderate income, another government bailout to a big industry.

Though a final bill is expected to include caps on what people will be expected to pay in out-of-pocket costs, and exemptions in co-pays for preventive care, both laudable ideas, the failure to stop the insurers pricing practices on the front end spells long term trouble, and probably failure for the “affordability” of the mandated insurance.

2. Taxing “Cadillac” plans.  

A centerpiece of the Baucus bill, taxing more expensive health policies under the again questionable thesis that a- insurers will lower overall charges if not selling policies that offer more coverage (who thought that up, Sponge Bob?) and b- patients will be more selective in seeking supposedly unnecessary medical care when they have cheaper plans that force them to spend more out of pocket.

Some in the media have already done a good job deconstructing this fiasco.  

Columbia Journalism Review’s Trudy Lieberman noted that more workers will have “less coverage for medical care which will mean they could be underinsured when serious illness strikes” and the looming prospect of medical bankruptcy “when the stack of bills gets too high.”

Some, and not just the nutters at Fox News, aren’t apparently troubled by this. Rightwing policy wonks have long cited over utilization of medical care  as the reason why health costs are so much higher in the U.S. than anywhere else in the world, as if we can’t wait for those colonoscopies and dental work and so abuse our “gold plated” insurance plans to get them more often.

Far too many liberals and progressives are in this camp as well, missing the point which is not to shift costs around but to actually control them.

Reed Abelson of the New York Times  pointed out another major flaw. The tax penalizes small employers who she noted:

“tend to pay more for their insurance than bigger employers that can negotiate better premiums. And because they do not have large pools of workers to help spread the risk, small employers tend to pay even higher amounts if they have older or sicker workers.”

Additionally, without strong price controls, premiums will continue to rise, pushing the cost of more plans every year into the bracket that will be taxed. The labor movement has, to their credit, understood the many flaws with this scam and led the attacks on it.

3. A variety of gimmicks to stop the dreaded overutilization and reduce costs through comparable research, information technology, best practices, and other lingo.

Some technology promotes better care when it complements and assists the work of care delivery, not replace it. A lot of it doesn’t. What has yet to be proven is that it is effective in substantially reducing overall healthcare costs.

Would enactment of a robust public option be sufficient to address all these myriad shortcomings? Perhaps. But not if all its levers, such as the ability to negotiate lower rates or open its doors to all comers, are stripped out, as several proposals do.

In any event, the larger question is will the reforms now proposed actually solve this healthcare crisis, even on the critical issue of cost?   Four years from now, our policy makers, and those who say pass a bill no matter what it contains can’t say they haven’t been told.

Thousands of people are lined up in front of a sports arena waiting to receive the health care they desperately need from a nonprofit that specializes in treating patients from the developing world. Some of their grateful patients stand outside hours past sunset waiting to be treated. Basic dental work for working mothers, glasses for young children, infections left to linger, procedures delayed because the cost of treatment is too great.  

No, I’m not recalling an incident from the years I volunteered for the Peace Corps in rural Ethiopia treating small pox. I’m talking about the Remote Area Medical Volunteer Corp’s weeklong clinic in Inglewood, a community near Los Angeles. For the first time in their 25 year history, they are offering their worthy service in a major metropolitan U.S. city. Where did we go wrong?

More over the flip…

17 years ago, Bill Clinton ran for president on a pledge to fix our broken health care system. The model he proposed – including universal access, an end to denial of treatment for pre-existing conditions, cost controls for prescription drugs, reductions in administrative overhead, and assistance for small businesses – was largely based on principles I drafted as California’s first elected State Insurance Commissioner. President Clinton and Congressional Democrats worked hard to pass health care reform, but we all know how it ultimately turned out. The insurance companies and their well-financed lobbyists scared the public and threw millions of dollars into the coffers of elected officials and organizations willing to spread lies about the important health care improvements proposed. Under President Barack Obama, with Democrats in charge of both houses of Congress, we can’t let the insurance companies win again.

I support universal single-payer health care, but I also recognize that is a long term fight. This year, we must stand for a robust public option. The insurance companies are up to their old tricks again, spreading lies and distortions. I know how the insurance industry operates. I regulated them for eight years, creating the most powerful consumer protection agency in the country. Congress needs a leader who understands the complexities of insurance policy, someone ready and able to fight back against the lies.

It’s time we stopped incentivizing denial of treatment and started incentivizing quality of treatment. Working families should not have to rely on remote clinics designed for the developing world. I’ve been involved in this fight for decades. I know the insurance industry, and believe me, they know me. In the debates over health care, my voice will be heard. Together, we can make the Remote Area Medical Volunteer Corp’s U.S. presence a remote memory.

John Garamendi is California’s Lieutenant Governor and a Democratic candidate for California’s 10th Congressional District. He was a twice elected State Insurance Commissioner and served as President Bill Clinton’s Deputy Interior Secretary. For more information, please visit http://wwww.garamendi.org

Nothing better symbolizes the corruption of the debate about healthcare reform than the rhetoric about “government-run” healthcare. Or, for that matter, the related argument that we need a “uniquely American” solution which precludes a public system like Medicare for all.

Two reports that notably received scant coverage from either the media or even those advocating the public plan “option” in Congress, reveal the seldom told truth.

Medicare is a “uniquely American” solution, and it works.

As we approach the 44th birthday of Medicare July 30th, nurses, doctors, and healthcare activists will gather in Washington to celebrate its successes and lobby to extend them by expanding Medicare to cover everyone.

The rally, sponsored by the Leadership Conference for Guaranteed Healthcare, is July 30, at 1 p.m. at Upper Senate Park across from Congress. Check here for more details:

Recent surveys, from the journal Health Affairs and from the Department of Health and Human Services, offer reminders of Medicare’s success.

In a May study reported in Health Affairs, Commonwealth Fund leaders found that:

compared to people with private insurance, Medicare enrollees have greater access to care, fewer problems with medical bills, and greater satisfaction with their health plans and the quality of care they receive.

Those findings are especially significant, the report notes, considering that Medicare patients are in the very demographic that has the highest likelihood of poor health, and also tend to have lower incomes.

Yet, only 15 percent of Medicare beneficiaries reported such problems as not being able to pay a medical bill or being hounded by a collection agency, compared to 26 percent of non-Medicare enrollees who have employer-paid health plans.

And, 61 percent of those on Medicare reported they received “excellent or very good quality of care” in the past year compared to less than half those with private insurance.

One of the biggest misleading attacks on Medicare by the anti-government crowd is that it restricts “choice.” But the study found that

Only 10 percent of Medicare beneficiaries said their physician would not take their insurance compared to 17 percent of those with employer coverage.  

Perhaps, most important,

“elderly Medicare beneficiaries were also significantly more likely to report being very confident that they could get high quality and safe medical care when needed, and very confident that they would be able to afford the care they need.”

Shouldn’t that be the goal of healthcare reform? Rather than forcing everyone to buy private health insurance they might not be able to afford, expanding the private insurance system that has repeatedly failed American patients. And thanks to Bill Moyers and former Cigna executive Wendell Potter for reminding us that Michael Moore had it right about the insurance industry in SiCKO.

There’s more. A HHS commissioned survey in June, also cited substantially higher satisfaction among Medicare or even Medicaid patients than among those with private insurance. It found:

56 percent of enrollees in traditional fee-for-service Medicare give Medicare a rating of 9 or 10 on a 0-10 scale. But according to the survey only 40 percent of Americans enrolled in private health insurance gave their plans a 9 or 10 rating.

Moreover, as the National Journal noted:

“The higher scores for Medicare are based on perceptions of better access to care. More than two thirds (70 percent) of traditional Medicare enrollees say they ‘always’ get access to needed care (appointments with specialists or other necessary tests and treatment), compared with 63 percent in Medicare managed care plans and only 51 percent of those with private insurance.”

Yet to listen to the talk shows or to follow the debate, you’d think the public is horrified by a public plan that guarantees access to care and choice of provider to everyone.

The Commonwealth Fund analysts, like the National Journal, conclude that these findings made a case for the public option.

“The choice of a Medicare-sponsored public plan with benefits similar to private employer or federal employee  plans would build on Medicare’s wide provider network and experience in making accessible care available to enrollees at lower cost.”

Those who fail to challenge head on the attacks on “government-run” healthcare or dismiss proposals for single payer because we need a “uniquely American” plan undermine their own campaign for the public “option”.

And, they devalue the tremendous and proud achievement we have made with our “uniquely American,” made in America health care plan, Medicare.

Nurses have a better idea. Why go half-way and risk the danger or likelihood of insurance company and conservative sabotage of the public plan? If Medicare is a better option, let’s extend it to everyone.  That proposal is known as single-payer, and we know it is a unique American program with a history of success.

Before you start celebrating the pending passage of a healthcare bill in Congress, you might want to make sure you have enough savings to offset the huge out of pocket costs coming your way.

Reports out of the Senate Finance Committee on what individuals and people would have to pay is not exactly a reason to pop those corks. Unless, of course, you’re a health insurance CEO already making the down payment on your seventh vacation home.

The Senate Finance Committee, considered to be the top dog on Capitol Hill on drafting the bill in the absence of Sen. Ted Kennedy,

“is considering an income threshold of 300 percent of the poverty level, or $54,930 in gross annual income for a family of three, to keep the legislation’s 10-year cost at $1 trillion.” Or $35,000 for a family of one.

Meaning if you are below that amount, you get a public subsidy to pay part of your premium. If you earn more, you’re on your own.  

Premiums averaged $12, 680 for family coverage in 2008, or $4,704 for an individual, according to the Kaiser Family Foundation. That’s a national average; ratchet the number much higher if you live in, say, New York, Los Angeles, or San Francisco.

Even in the heat of the current debate, the insurers are not exactly exercising restraint, as in the report today that Anthem Blue Cross wants  to raise rates an average 23 percent and as high as 32 percent on individual health insurance policies in Connecticut.

Next, remember these figures cover only premiums, not all the additional bills that are all-too-familiar for people with insurance now.

How much does that add? More than 17 percent of Americans under 65 already have high deductible plans, and the average deductible alone for those ranged from $1,923 for single policies to $3,883 for family policies, which for the most part you must pay before the insurer pays for anything.

That’s it, right? Not so fast. Then there’s the co-pays, doctor fees, lab fees, late fees if you miss your payment, bills that can literally nickel and dime you to death. Sound far fetched? Consider this added note from the Los Angeles Times:

“A co-pay as little as $10 can prevent a woman from getting a mammogram, according to a study published last year in the New England Journal of Medicine. Many other studies have shown that prescription drug co-pay increases of as little as $5 can dissuade older patients from filing prescriptions.”

Nurses can introduce you to a lot of those patients, people who won’t fill a prescription ordered by their doctor because of the cost, or who will take their meds every other day, or cut their pills in half to share with family members, reducing the effectiveness.

In fact, the story of the past year has been the crisis faced by families with insurance. As evidenced most recently in the study showing medical bills account for 62 percent of personal bankruptcies in the U.S., and three-fourths of those are people with insurance.

If you’re counting on the public option to hold down costs, the Wall Street Journal today quotes White House Chief of Staff reminding us that avenue remains highly tentative.

“The goal is to have a means and a mechanism to keep the private insurers honest,” he said in an interview. “The goal is non-negotiable; the path is” negotiable.

The upshot is the bill expected to pass can force people to buy insurance, but it won’t keep people from going broke when they have to go to the doctor. Or from paying their premium and skipping the needed doctor visits and waiting until they are so sick they end up in an emergency room. Or from just breaking the law and subjecting themselves to the fine.

All of these scenarios have occurred in Massachusetts, the laboratory for individual mandate where the state is reeling from the expense of subsidizing payments to the insurance giants, which responded by capping enrollment and limiting covered services.

There’s plenty of other danger points here as well. Also on the docket in the Senate Finance Committee bill, are:

provisions that could lead to higher insurance rates for adults in the 55-to-64 age category and higher out-of-pocket costs for certain people who buy their own insurance.

And, if you buy the cheapest plan, which you can bet many would, they may set a cap of covering only 65 percent of the premium.

But, don’t worry, they are offering “under one scenario” to limit out-of-pocket costs to “$11,600 for a family and $5,800 for an individual.”

Well, that will be a relief for all those women who already have to  because of the $10-co-pays, and the people with the cheap plans that don’t cover such frills as dental work, eye care, or long term care.

Notice that all the plans talk about people who are under 65. That’s because at 65 another option is available, Medicare, which guarantees you basic healthcare coverage regardless of your ability to pay.

Though not a perfect system, it works, and is about to celebrate its 44th anniversary at the end of this month. Too bad Congress and the President have taken the idea of extending Medicare to everyone off the table.

Enough already on the handwringing over the plan to start taxing employee healthcare benefits.

The tax is not a threat to the type of reform plan expected to emerge from Congress. It’s a central element — to pay for the massive public bailout of the health insurance industry and as a backdoor way to cut costs by discouraging people from seeking medical care.  

Here’s the basic scheme of how this complicated plan is supposed to work:

Everyone not presently covered will be forced to buy private insurance — the ostensible solution to the nettlesome problem of the 45 million uninsured Americans and the 20,000 people who die every year because they don’t have health coverage.

Forced insurance, also known as individual mandate, is the caveat for the insurance industry “concession” to stop refusing to sell policies to people with pre-existing conditions and dropping enrollees when they get really sick.

Never mind the dubious decision to bribe the insurance companies with public money. That’s just the way it is since the politicians calling the shots have already decided that any option that ends our dependence on profiteering insurance companies, such as single payer, is not fit for public debate.

Ordering everyone to buy insurance, however, is a little messy. Especially in a deep recession when many are losing their employer coverage, premiums have soared four times faster than incomes in the past decade, and 62 percent of personal bankruptcies are now linked to medical bills.

To offset the cost of all that insurance people are being forced to buy, our legislators will provide public subsidies to low and moderate income individuals and families, which become a pass-through to the private insurance industry.

How to pay for this sweeping insurance bailout is the conundrum. Especially when your bill is rather fuzzy on how it will restrain what the insurers can charge. That’s the problem vexing Massachusetts, the national model for this approach, which is now limiting enrollment and reducing covered services, such as dental care, because of the cost.

Presto —  the tax on employer benefits, a potential revenue stream of as much as $300 billion.

Despite the fact President Obama made his opposition to this tax a centerpiece of his campaign against John McCain. And despite the fact that taxing employer benefits just might prompt the massive disruption the Administration says is the reason for not considering single payer.

As the Boston Globe editorialized last fall, the tax would encourage young, healthy workers to reject their employers’ taxable benefit and plunge into the private market, leaving employers with a more costly insured base of older, less healthy workers which would drive up their cost. “The likely result is many companies would drop coverage altogether,” said the Globe. To which the Dallas Morning News added, quoting health policy wonks, this could “lead to the death of company-provided health plans.”

But, look on the bright side, as in whose pockets get lined. If we can bankroll the banks, why not insure the insurance companies.

For those keeping score at home, that’s another $300 billion for an fraternity whose 18 biggest members, such cuddly folks as Unitedhealth, Wellpoint, Aetna, Humana, and Cigna, made $44 billion in profits over the last three years. And whose 151 top executives collected just under a tidy $1.1 billion in total compensation (CNA/NNOC research based on SEC filings).

To soften the blow, the Democratic leadership says it will try to limit the tax to just the “Cadillac” plans, a euphemism for comprehensive coverage.

In other words, plans that are not skeletal, with thousands of dollars in deductibles and co-pays and massive gaps in coverage. The kind of plans that once taxed, younger, healthier workers are most likely to dump in favor of the bare bones, high deductible private plans while gambling they don’t get sick and need the actual comprehensive coverage.

Or to put it another way, a penalty on employers who have actually been good citizens and provided their workers with comprehensive health benefits.

Which brings us to the final policy argument for the tax. Using the tax code to discourage the availability of comprehensive health plans except for the wealthiest Americans will promote the proliferation of even more junk insurance plans.

And, what happens when people have plans with limited coverage and high out of pocket costs? They put off doctor visits, immunizations for their kids, defer dental work, and skip other needed care.

Implement the tax on benefits and the 53 percent of Americans who told pollsters earlier this year that they or a family member had self-rationed care because of the cost the past 12 years will be remembered fondly as the good old days.

But, to the experts and policy wonks, that’s a good thing. The reason for high healthcare costs, they say, is not insurance industry or drug company profiteering, it’s “over utilization” of medical care. Be patriotic, don’t go to the doctor.

So, by taxing healthcare benefits, we can all pitch in and contribute to healthcare reform. Don’t you feel better already?