Stanley Feld M.D.,FACP,MACE
The insurance industry is attempting to sound sympathetic to the plight of the uninsured. I think the attempt is an effort to diffuse their role as villain in our healthcare system.

“America’s Health Plans an association representing the healthcare insurance industry is saying their suggested steps are a way in which states and private insurers can work together to provide coverage in which insurers try to address shortcomings of the individual market.”

I would suggest the states proceed with caution. The states should carefully examine the details of the proposals and the motivation of the healthcare insurance industry.

The goal of the healthcare insurance industry is to increase its insurance roles with the state subsidizing the insurance policies. The defect is that it would be following the rules of the present healthcare insurance premium structure. It would not be creating incentives for the patients, physicians, or hospital systems.
Massachusetts recently reported a doubling of the insurance premium under the state Romney plan of universal coverage.

A self employed person between 50 and 65 years old can not buy affordable healthcare insurance with after tax dollars using the present actuarial rules for determining premiums.

“Currently, about 11 percent of all individuals who apply for coverage are not offered a policy after the insurers review their medical conditions, according to a new survey of the trade group’s members. And nearly 30 percent of individuals who are in their 60s but too young for Medicare are denied coverage.”

“To extend coverage to high-risk people with expensive medical problems, or likely to incur them, would cost money, and states might not go along. In states that already have programs for high-risk individuals, significant numbers of people still do not obtain coverage because the premiums are high.”
“Few states are willing to come up with the money to subsidize them so they can cover enough people,” Mr. Ginsburg said.

The states high risk pools have failed because of the premium structure and actuarial rules. The healthcare insurance industry refuses to adopted a community rating system. It would be unfavorable to its bottom line.

“In fact, only about 180,000 people around the country were covered by existing high-risk pools, said Katherine Swartz, a Harvard professor who studies health insurance issues. “

“The new proposals call for states to provide affordable coverage to anyone whose medical costs are expected to be at least twice the average. For other higher-risk patients who do not meet those criteria, the insurers would agree to cap the premiums at 150 percent of the market rate.”

There you go. The devil is in the details. The goal of the healthcare insurance industry is revealed.

“I have optimism that the states and the country will step up to the issue,” said Ronald A. Williams, the chief executive of Aetna, a large insurer in Hartford.”

I believe everyone is fed up with the healthcare systems’ structure. However, no one seems to be willing to relinquish his agenda in favor of the patients. The patients have to be responsible for their care and in control of their healthcare dollar.

“The trade association declined to provide any estimates for the cost of its proposals.”

“The insurance industry has backed health care change before. Insurers were at first supportive of the initiatives of President Bill Clinton in the mid-1990s, until they felt threatened and unleashed the memorable “Harry and Louise” advertising campaign that helped derail the effort.”

But Ms. Ignagni said her group was ready to push for change. “What’s different than in 1992 is we as an industry did not have a proposal of our own,”

I believe the healthcare insurance industry wants to sound as if it are going to help solve the problem of the uninsured. Patients’ ability to become insured might improve slightly. The healthcare insurance industry’s proposal will lead the states and federal government to create an entitlement with a single party payer system. This is exactly what the Democratic Party wants to accomplish.

I think the healthcare insurance industry is acting for short term maintenance of control over the healthcare system. When it realized the error in its ways in 1994 it introduced Harry and Louise to the healthcare system. I have a feeling we are going to be seeing Harry and Louise soon.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

Stanley Feld M.D. FACP,MACE

We have seen how inadequate the standards for eligibility for Medicaid are. The definition of poverty is inappropriate. The Bush administration talks a good game about our obligation to help the less fortunate. However his actions toward the less fortunate are not consistent with his words. Medicaid is a single party payer with poor benefits for patients and poor reimbursement for providers.

President Bush has vetoed the S-CHIP proposal twice. “The president had promised to veto it, saying the Democratic bill was too costly, took the program too far from its original intent of helping the poor, and would entice people now covered in the private sector to switch to government coverage.”
“Bush argued that the congressional plan would be a move toward socialized medicine by expanding the program to higher-income families.”

On one level the President is correct. It will expand another inefficient and ineffective bureaucracy (Medicaid). Medicaid needs to be restructured not expanded. The decisions for medical care will not be in the hands of the patients or the physician.

On the other hand people who can not afford healthcare insurance will not have healthcare coverage in are present system. The solution is not to expand the present single party payer system. The solution is to construct an effective system.

“Senate Majority Leader Harry Reid, D-Nev., decried Bush’s action as a “heartless veto.””

The basic principle in my concept of Repairing the Healthcare System is making patient responsible for their healthcare and healthcare dollar. A proactive consumer will create the market force environment needed to compete for the consumers’ healthcare dollar. This can be accomplished with my Ideal Medical Savings Account for employers, self employed and subsided needy. Our less fortunate citizens can be subsided on a sliding scale using a realistic means test.

Everyone would own his healthcare dollar and be responsible for its wise use. If people avoided the complications of chronic diseases they would receive a financial reward in addition to the reward of good health. The mechanisms for education and chronic disease management have to be supported financially. Financial incentives are effective.

Instead, neither President Bush nor his administration is thinking. They are not coordinating some of the good ideas for the repair of the system. He is focused on the enemy (the Democrats) and their attempt to sneak socialized medicine in through the back door.

S-Chip and Medicaid could be set up to avoid socialized medicine. Presently the government is the single party payer for S-Chip and Medicaid.

The new system should focus on insurance companies competing the patients’ healthcare dollar. The government should make the rules and then get out of the way. The government should enforce the rules in favor of the primary stakeholder the patient.

This is should be the focus of the presidential policy debates and not the issue that President Bush is heartless. The present bureaucratic institutions are heartless as demonstrated by the story of Moises and Medicaid. .

On the other hand, governors of many states are starting to understand that there has to be some effective benefits for the hard working less fortunate. We have seen the effort Mayor Bloomberg is making to redefine poverty to distribute aid more fairly and efficiently in New York City. We have seen the attempt that the State of Indiana is making. These are innovative. The problem in Indiana is the program is imbedded in the present system.

Rather than encouraging the development of these ideas the Bush administration seems to be doing everything it can to discourage innovation much to my disappointment.

“ The Bush administration is imposing restrictions on the ability of states to expand eligibility for Medicaid, in an effort to prevent them from offering coverage to families of modest incomes who, the administration argues, may have access to private health insurance.”

“The restrictions mirror those the administration placed on the State Children’s Health Insurance Program in August after states tried to broaden eligibility for it as well.”

Until now, states had generally been free to set their own Medicaid eligibility criteria.
The federal government is ignoring the threat the less fortunate pose to the local communities. The Bush administration should be able recognize the threat of terrorist activities and crime by the less fortunate from incidents the administration has seen worldwide.

“On Dec. 20, the Bush administration rejected a proposal by Ohio to expand its Medicaid program to cover 35,000 more children. Ohio now offers Medicaid to children with family incomes up to twice the poverty level, or about $41,000 a year for a family of four. The state had proposed increasing the limit to three times the poverty level, to about $62,000.”

As I have said over and over again the only thing that is going to be able to fix the system is consumer demand. In this Primary Season for presidential nominees we hear how powerful we the voters are. We should be demanding and debating the details of how they are going to fix the healthcare system rather than judging their sound bites

The Clinton and Obama race is fun to watch. Both candidates have created a smoke screen obscuring the eventual outcome of their pronounced policy on healthcare. Their resulting socialized medical system will intensify the dysfunction and cost of our healthcare systems.

Stanley Feld M.D.,FACP,MACE

President Bush keeps trying. I do not think he really understands the difference between poverty and unaffordability in America today. If he did his goal would be affordable healthcare insurance for all.

“The popularity of health savings accounts for the poor will be put to the test in Indiana under a program approved Friday by the Bush administration. Under the plan, someone making $20,000 a year could get health coverage for about $19 a week.”

Sounds good. However, the devil is in the details.

“Bush has long pushed health savings accounts as a way to slow the rising cost of medical care and extend basic coverage to the uninsured.

Under the Indiana program,eligible residents can pay up to 5 percent of their incomes into state-subsidized “Personal Wellness and Responsibility Accounts” that cover their initial medical expenses up to $1,100. Once that deductible is reached, private insurance purchased by the state kicks in.”

I have no quarrel so far. I see a few problems and questions. One problem is $1,100 does not get you much health coverage at retail prices. Private health insurance is still in charge of reimbursement and not a partner with the patient. What is the type of healthcare insurance coverage after $1,100? What are the co-pays? Only a few patients will have money remaining in their health savings account. There is nothing mentioned about giving patients incentives to stay well and potentially accumulate money for retirement.
Eligibility is limited to adults with incomes below twice the federal poverty level. The poverty level is now $10,210 for an individual and $20,650 for a family of four.

I looked up the actual eligibility criteria on their web site. I was curious to know if eligibility meant people making $41,300 a year would be qualified for the plan. The answer to this frequently asked question was;
The Healthy Indiana Plan (HIP) will provide health insurance for uninsured adult Hoosiers between 19-64 whose household income is between 22 – 200% of the federal poverty level (FPL), who are not eligible for Medicaid. Eligible participants must be uninsured for at least 6 months and cannot be eligible for employer-sponsored health insurance.

I was confused after reading this statement because of the absence of definitions. I asked the web site the following question.

Does this mean that people with a family of four making up to $41,300 a year can be eligible for this plan?
This feedback I got was as follows.

“The Healthy Indiana Plan (HIP) will provide health insurance for uninsured adult Hoosiers between 19-64 whose household income is between 22 – 200% of the federal poverty level (FPL), who are not eligible for Medicaid. Eligible participants must be uninsured for at least 6 months and cannot be eligible for employer-sponsored health insurance.”

The reply did not clarify a thing.

The eligibility limit is better than Medicaid but not as high as necessary to make it affordable. Moises would qualify in Indiana. He does not qualify in Texas. He makes $22,000 per year. An illness would destroy him and his family financially. He can not afford nor does he qualify to buy private insurance as an individual.

The limits for being qualified to receive benefits should be at least $50,000. The benefits packages should be developed by the insurance industry. The deductible must be higher than $1,100. Six thousand dollars is a realistic in order to provide patients with the appropriate incentive. It should be the Ideal Medical Saving Account formulation. It should be bought by citizens through the insurance industry on a competitive basis. It should not be run by the government as a single party payer. It should be subsided by the government for those who qualify for subsides. If the government finds that the insurance industry is taking advantage of patients or providers it should intervene and disqualify that insurance company from participating in the program. Patients of higher income should pay more for insurance than lower income people.

A mechanism for means testing should be developed. People below a certain income should receive government subsidies. Subsides should be regressive with lower income people receiving a higher subsidy than higher income people. The price of the insurance should be affordable and emphasize reward for good health, and prevention of disease. Both patients and providers should receive adequate incentive to achieve this goal. The Ideal Medical Savings Account could include both low income families and high income families. The high income families would pay a means tested surcharge to a certain amount.

“The waiver in Indiana is the first of its kind for the Medicaid program, a state-federal partnership that provides health coverage to the poor and disabled.”

The punishing criteria for eligibility for Medicaid still exist. On close study I have concluded that the Medicaid program is a way the state can obtain a subsidy from the federal government. The criteria for eligibility is simply too restrictive.

“Indiana officials said they’ve already received inquiries from more than 1,000 people interested in applying.
This sound bite implies impending success of the program. I think it is a long way from success.
The program will be monitored closely because of the philosophical divide among lawmakers about the value of health savings accounts for the poor. Many say such accounts work best for healthier and higher-income people with low medical expenses.”

The enemies of Health Savings Accounts have an excuse to react negatively. I believe that most lawmakers do not understand the goal of Health Savings Accounts. They also do not understand that Health Savings Accounts are a bastardize form of Medical Saving Accounts to keep the healthcare insurance industry in control and accumulate unconscionable profits

“Judith Solomon, senior fellow at the Center on Budget and Policy Priorities, said she doubts that many people making $10,000 a year can afford to pay $500 for health insurance. She said that about 50,000 people lost Medicaid coverage in Oregon after that state got permission to raise insurance premiums to $20 a month.”

“You can say it’s better than nothing, but I just don’t see how many of those folks will be able to afford it,” Solomon said.

Judith Solomon is absolutely correct. People making $10,000 dollars can barely afford to put food on the table or a roof over their head. So many well intended programs are built to fail.

“This is a big step forward that will lead to approximately 120,000 uninsured Hoosiers having the peace of mind of health insurance,” said Indiana Gov. Mitch Daniels, a Republican who once served as Bush’s director of the Office of Management and Budget.

I believe Governor Daniels should check to see how many of these 120,000 uninsured are living under the poverty level. I would guess less than 50%. It is fun to listen to Governor Daniels’ advertisement. , He makes a false promise and a false hope with false information.
If the state and federal government really wanted to do something they should expand the eligibility level to $50,000 a year. They should subsidize the Ideal Medical Savings Account with the incentive for patients’ to accumulate money in their retirement fund if they spend their healthcare dollars wisely.

Healthcare programs such as the Indiana program continue to appear and are destined to fail. The consumer must force lawmakers to get serious about Repairing The Healthcare System.

The opinions expressed in the blog “Repairing The Healthcare System” are mine and mine alone.

Stanley Feld M.D.,FACP,MACE

Healthy Indiana Plan: http://www.hip.in.gov

Stanley Feld M.D.,FACP,MACE

I could not understand why Moises and his wife were rejected for Medicaid coverage. He did not qualify by the Medicaid rules in the state of Texas. I was not aware of the qualifying rules but thought $22,000 income per year would certainly qualify him for Medicaid. It was a difficult internet search. The rules are not transparent.

“What are the minimum qualifications?

Medicaid is available to qualifying Texans of all ages and abilities. There are separate programs for families and children and for people who are elderly or have a disability. In general, you must:
• Be a Texas resident.
• Be a U.S. citizen or a non-citizen in certain recognized categories.
• Meet certain resource and income limits, which vary by eligibility group.”

There is nothing in the statement that mentions specific income. The government wants price transparency but does not have it on its website.

“How do my assets, such as my home and bank accounts, and my income affect whether I can receive Medicaid?

The amount of assets and income you’re allowed depends on the category you apply under. Contact your local Eligibility office for more information. You’ll need to provide proof of income and assets when you apply. In most cases, a homestead is not counted as an asset.”

An applicant for Medicaid is at the mercy and judgment of the case worker. The case worker has concrete rules. There does not seem to be any exceptions or appeals.

“If I have a job, can I still qualify for long-term care Medicaid?

That depends on how much you earn at your job. Having a job may not disqualify you, but the amount of money you can earn and still be eligible for Medicaid is low.”

Where is the logic? An economist told me that Moises should know the rules of the game. His goal should be to have an income below the poverty level. Is this the American way? I was taught you were supposed to work hard, be creative and innovative, increase your income and live a better life.

Where is the promise of affordable healthcare? It seems to be simply rhetoric by politicians.
Something is wrong. Does anyone think universal healthcare with a single party payer system and its bureaucracy would solve the experience Moises had with Medicaid? I don’t.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.
StanleyFeld M.D.,FACP,MACE

Stanley Feld M.D.,FACP,MACE

The media publishes sensational stories of abuse in the healthcare system. The goal is to sell newspapers. More valuable would be an analysis of the significance of the abuse. Additionally the media should stimulate discussion about remedies for the abuse.

The New York Times lead article about William McGuire’s excess pay from United Healthcare reached a settlement with the S.E.C. on December 8, 2007

“In one of the largest corporate pay give-backs ever, William W. McGuire, the former chief executive of UnitedHealth Group, has agreed to forfeit at least $418 million to settle claims related to back-dated stock options. William W. McGuire built UnitedHealth into a giant.”
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Mr. McGuire had previously returned $198 million dollars. The total amount of the excess payment was $1.6 billion.”

“As part of the settlement with the S.E.C., Mr. McGuire will pay a $7 million fine and will be barred from serving as a director of a public company for 10 years. He will, however, be allowed to keep stock options valued at more than $800 million, including many that have been sharply criticized.”

The retention of eight hundred million dollars is not a small change. The value of the $800 million in stock options could double in the next year.

Federal regulators are the protectors of the public and stockholders’ interest. They have claimed victory over corporate management abuse of the public and stockholders. They are stemming the abuse of the over use of backdate stock options. The regulators are presently investigating 120 companies.

“The developments are the most significant to date since federal regulators started looking into the backdating of stock options. More than 120 companies have come under scrutiny for granting options to executives on dates when the company’s share price was low, a tactic that guaranteed the maximum profit when the options were exercised.”

“The settlement comes a year after the furor over compensation forced Mr. McGuire’s resignation from UnitedHealth, the nation’s largest health insurer.”

“In a statement yesterday, Mr. McGuire said that he was pleased to put the controversy behind him.
“The last 18 months have been an extraordinarily challenging period for my family, and I am pleased to have reached a resolution,” he said.

I bet Mr. McGuire is happy to have this behind him. His liability for this abuse is over. He still owns $800 million dollars in backdated stock options that have a chance to appreciate further.

“UnitedHealth remains embroiled in the scandal over improperly granted options. The S.E.C. said its inquiry at UnitedHealth is continuing. So far, the company has restated its earnings by $1.5 billion and announced a $55 million settlement with the Internal Revenue Service.”

Let us think about this settlement of $55 million for a minute. Fifty five million dollars sounds like a lot of money. At the maximum corporate tax rate of 38% the corporate tax for $1.5 billion in profit would be $570 million. I would say United Healthcare received excellent settlement terms. The IRS only collected a little more than ten cents on the dollar. The settlement seems to be a pretty good way of avoiding corporate taxes. The $55 million settlement does not seem to me to be a deterrent to future corporate tax evasion.

What happens to the $515 million dollars United Healthcare saved by the settlement? I assume it is applied to United Healthcare bottom line and be subject to a future corporate tax payment. Nevertheless United Healthcare keeps increasing healthcare insurance premiums on large and small businesses. The premiums increase by up to 15% a year. The premium increases are justified by increasing costs and decreasing profits. The premium increases are putting healthcare insurance out of the range of most small companies and inaccessible to a single individual.

Shouldn’t there be some restraint on profit? The government has given United Healthcare a bye on their tax liability. Their executives have been judged to do illegal things. Has United Healthcare suffered? No! The consumer has suffered. Should consumers put this behavior out of business? An immediate question is how?

The simple answer to the consumer is; do not buy United Healthcare insurance. Additionally, every state has the ability to restrict the sale of insurance in their state by the issuance of licenses for insurance companies to sell insurance. This would be a deterrent to other healthcare insurance companies and regulate obscene profits and premium increases. The state governments have been hesitant to do this for some reason. Unfortunately it is going to take consumer pressure to force state government agencies to do their job and protect the consumer from this kind of abuse.

Citizens have been ripped off by the healthcare insurance industry long enough. The answer is not a single party payer because the same abuse would exist. The administration of Medicare is outsourced to the healthcare insurance industry.

The real point the media should be discussing is how we can correct the abuse. We have to make it clear that we are not interested in the abuse being a sensational spectator sport. We must have a serious debate on where the most significant abuses are and how are we as a nation can change the healthcare insurance industry’s behavior?

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