The future of the health care plan, revisited

[']['ear]

Now What?
by Atul Gawande April 5, 2010

On July 30, 1965, President Lyndon Johnson signed Medicare into law. In public memory, what ensued was the smooth establishment of a popular program, but in fact Medicare faced a year of nearly crippling rearguard attacks. The American Medical Association had waged war to try to stop the program, and doctors weren’t about to abandon the fight against “socialized medicine” simply because it had passed into law. The Ohio Medical Association, with ten thousand physician members, declared that it would boycott Medicare, and a nationwide movement began. Race proved an even more explosive issue. Many hospitals, especially in the South, were segregated, and the law required them to integrate in order to receive Medicare dollars. Alabama’s Governor George Wallace was among those who encouraged resistance; just two months before coverage was to begin, half the hospitals in a dozen Southern states had still refused to meet Medicare certification.

Either boycott could have destroyed the program. Hundreds of thousands of elderly and black patients would have found their hospitals and doctors’ offices closed to them. But, as David Blumenthal and James A. Morone recount in “The Heart of Power,” their riveting history of health-care politics, Johnson recognized the threat and outmaneuvered his opponents. With the doctors, he cajoled and compromised, giving the A.M.A. a seat on an advisory council that oversaw the rules and regulations, and working with it on a series of thirty “improving” amendments to the legislation. With hospitals, however, the President brooked no compromise. He convened a battle council of top advisers; set Vice-President Hubert Humphrey phoning mayors to pressure resistant hospitals; and deployed hundreds of inspectors to make sure that participating hospitals integrated their wards. There was fury and acrimony. In the final weeks before Medicare’s start, though, the hospitals decided to abandon segregation rather than lose federal dollars. Only then was Medicare possible.

The health-reform bill that President Obama signed into law last week—the unmemorably named Patient Protection and Affordable Care Act—could prove as momentous as Medicare. Yet, because most of its provisions phase in more slowly than Medicare did, they are even more vulnerable to attack. The context, of course, is different. As Robert Blendon, of the Harvard School of Public Health, points out, the war against health reform in 2010 has not been an interest-group battle. The A.M.A. endorsed the legislation; hospital associations were supportive. {Also, almost all patient advocacy groups supported it, led by AARP. That speaks enormous volumes, and contradicts the scare tactics} Once the public option was dropped, most insurers favored the bill. The medical world will wage no civil resistance. This time, the threat comes from party politics. Conservatives are casting the November midterm elections as a vote on repealing the health-reform law. If they regain power, they are unlikely to repeal the whole thing. (No one is going to force children with preëxisting conditions back off their parents’ health plans.) Instead, they will try to strip out the critical but less straightforwardly appealing elements of reform—the requirement that larger employers provide health benefits and that uncovered individuals buy at least a basic policy; the subsidies to make sure that they can afford those policies; the significant new taxes on household incomes over two hundred and fifty thousand dollars—and thereby gut coverage for the uninsured.

Opponents may also exploit the administrative difficulties of creating state insurance exchanges. The states have four years to prepare, and creating an exchange is, in theory, no more complicated than what states do in providing health-benefit options to public employees. Massachusetts, which has achieved near-universal coverage this way, had its exchange working in six months. Still, with fourteen state attorneys general already suing to stop parts of the reform, some states may refuse to coöperate, forcing a showdown.

The major engine of opposition, however, remains the insistence that health-care reform is unaffordable. The best way to protect reform, in turn, is to prove the skeptics wrong. In 1965, health care consumed just six per cent of U.S. economic output; today, the figure is eighteen per cent. Nearly all the gains that wage earners made over the past three decades have gone to paying for health care. Its costs are curtailing all other investments in the economy, and, if they continue to rise as they have been doing—twice as fast as inflation—the reform’s subsidies, not to mention America’s prosperity, will indeed prove unsustainable.

But the reform package emerged with a clear recognition of what is driving costs up: a system that pays for the quantity of care rather than the value of it. This can’t continue. Recently, clinicians at Children’s Hospital Boston adopted a more systematic approach for managing inner-city children who suffer severe asthma attacks, by introducing a bundle of preventive measures. Insurance would cover just one: prescribing an inhaler. The hospital agreed to pay for the rest, which included nurses who would visit parents after discharge and make sure that they had their child’s medicine, knew how to administer it, and had a follow-up appointment with a pediatrician; home inspections for mold and pests; and vacuum cleaners for families without one (which is cheaper than medication). After a year, the hospital readmission rate for these patients dropped by more than eighty per cent, and costs plunged. But an empty hospital bed is a revenue loss, and asthma is Children’s Hospital’s leading source of admissions. Under the current system, this sensible program could threaten to bankrupt it. So far, neither the government nor the insurance companies have figured out a solution. {A perfect illustration of how FUBARed the system is.}

The most interesting, under-discussed, and potentially revolutionary aspect of the law is that it doesn’t pretend to have the answers. Instead, through a new Center for Medicare and Medicaid Innovation, it offers to free communities and local health systems from existing payment rules, and let them experiment with ways to deliver better care at lower costs. In large part, it entrusts the task of devising cost-saving health-care innovation to communities like Boise and Boston and Buffalo, rather than to the drug and device companies and the public and private insurers that have failed to do so. This is the way costs will come down—or not.

That’s the one truly scary thing about health reform: far from being a government takeover, it counts on local communities and clinicians for success. We are the ones to determine whether costs are controlled and health care improves—which is to say, whether reform survives and resistance is defeated. The voting is over, and the country has many other issues that clamor for attention. But, as L.B.J. would have recognized, the battle for health-care reform has only begun. ♦

Wondering which direction the Republican Hysterical Lie Machine will go to attack health care reform now. Because, you know, the system is breaking and they did such an exemplary job of promoting their own plan during their 6 years' control of all three branches of government.

[GGT]

The most interesting, under-discussed, and potentially revolutionary aspect of the law is that it doesn’t pretend to have the answers. Instead, through a new Center for Medicare and Medicaid Innovation, it offers to free communities and local health systems from existing payment rules, and let them experiment with ways to deliver better care at lower costs. In large part, it entrusts the task of devising cost-saving health-care innovation to communities like Boise and Boston and Buffalo, rather than to the drug and device companies and the public and private insurers that have failed to do so. This is the way costs will come down—or not.

This, plus the states' replacement option, but I don't know of any governor or legislature (let alone provider networks) that's paying attention. Four years to go, why are they dragging their feet? Portability inter-state is one potential problem.

MA has their own gig, with costs ~55% higher than national average. Not sure how much of that is concentrated university-based research and med school hospitals, or other reasons.

Their asthma example is misleading, though---they still get revenue by treating in the ED or clinics and not admitting. They save money by not admitting, and graduated to a mostly efficient out-patient system, but try telling the insurers that. Some of the best stuff is overlap social services and education (like vacuum cleaners and roach control to reduce childhood allergies. Also breastfeeding.)

We already have the "we can't afford it" argument going on in other threads, maybe they got buried?


Hi, Tear :waves:

[ar81]

Wondering which direction the Republican Hysterical Lie Machine will go to attack health care reform now. Because, you know, the system is breaking and they did such an exemplary job of promoting their own plan during their 6 years' control of all three branches of government.

Free spending sex themed republican parties to fight deficit perhaps...?

Top Republican resigns over "free-spending" party
Mahoney denounced the "out-of-touch, free-spending culture of Washington" that he said dominates Congress and said "the same mentality has seeped into our national party."

[EyeKhan]

Tear, welcome back. I can change my title now....

[Dreadnaught]

Will comment once I read it. But I have a fairly regimented reading schedule such that I read one New Yorker cover-to-cover on the Subway each week, just in time for the next one to come.

If I read an article ahead of schedule it screws things up. Then I have to fish around for other reading/magazines that's small and flexible for Subway reading.

[EyeKhan]

Will comment once I read it. But I have a fairly regimented reading schedule such that I read one New Yorker cover-to-cover on the Subway each week, just in time for the next one to come.

If I read an article ahead of schedule it screws things up. Then I have to fish around for other reading/magazines that's small and flexible for Subway reading.

There's something awesome about such discipline and routine. And something awful... Did you read Xenocide? Recall the genius woodgrain tracer's genius father had his office rearraged every day without his knowledge, just to keep himself from falling into routine. I believe Card got that exactly wrong. A genius ought to seek to automate everything that is routine to free his mind for real work.

[LittleFuzzy]

There's something awesome about such discipline and routine. And something awful...

I can't see anything awful about it. It's a pain in the ass to know you've got these lengthy metro or subway rides and not have anything readily at hand to read during them.

[GGT]

That's what man purses are for.

[Dreadnaught]

I only use my man purse on warm weekends when I have sunglasses/camera/notepad/water to carry. Not when I'm going to work. And even less these days because my phone can do so many of those things...but I won't reply here and make this off topic. Will reply once I've read the article.

[EyeKhan]

I can't see anything awful about it. It's a pain in the ass to know you've got these lengthy metro or subway rides and not have anything readily at hand to read during them.

That's not what I got from his post. Moret he top part than the scramble for reading material.

I only use my man purse on warm weekends when I have sunglasses/camera/notepad/water to carry. Not when I'm going to work. And even less these days because my phone can do so many of those things...but I won't reply here and make this off topic. Will reply once I've read the article.

You don't carry a briefcase or some analog of that? Or a laptop w/ bag?

[LittleFuzzy]

That's not what I got from his post. Moret he top part than the scramble for reading material.

But the top part is there because it's the convenient way to avoid the scramble.

[EyeKhan]

But the top part is there because it's the convenient way to avoid the scramble.

Convenient? He's delaying the reading of an article for discussion because he doesn't want to upset his weekly scheduled reading. I admire the routine but its also weirdly, inconveniently, inflexible.

[CitizenCain]

Convenient? He's delaying the reading of an article for discussion because he doesn't want to upset his weekly scheduled reading. I admire the routine but its also weirdly, inconveniently, inflexible.

He's just taking the path of least resistance to avoid either the boredom of sitting on the subway and admiring the scenic NYC underground or the pain in the ass of finding suitable reading material.

Personally, I'd just pack an mp3 player and pass the time by trolling strangers while listening to music, but Dread is apparently one of those dinosaurs who reads things. Paper things. <shudder>

Aside from his use of 15th century technology, and aversion to messing with strangers for amusement, I see nothing weird or inconvenient about it.

[GGT]

I bet you'd be fun to chat with on the subway, Cain.

[EyeKhan]

He's just taking the path of least resistance to avoid either the boredom of sitting on the subway and admiring the scenic NYC underground or the pain in the ass of finding suitable reading material.

...pain in the ass...? I've never had difficulty finding something to read for a train or plane ride.... in fact, its fun. The idea just seems odd.

Aside from his use of 15th century technology, and aversion to messing with strangers for amusement, I see nothing weird or inconvenient about it.

[CitizenCain]

...pain in the ass...? I've never had difficulty finding something to read for a train or plane ride.... in fact, its fun. The idea just seems odd.

Well, it's harder than you might think to find appropriate reading material for a short trip like the subway. Too short, and you finish before the trip's over, and you have to amuse yourself by mind-fucking other passengers for the remainder of your journey. Too long, and you end up with the problem of remembering what you were reading. You probably don't want something too intellectually stimulating, or you risk missing your stop or not seeing the strange Canadian sneaking up to give you a Wet Willie. But you don't want something so intellectually light that you're bored and end up resorting to the mind-fucking strangers thing. It really is a more complicated decision than you seem to be aware of -not easy to find something of the right depth and length for a regular, short commute like the subway.

Frankly, that's one of the reasons I don't read when I commute... though I do also find it difficult to steer and read at the same time, so that's part of it too.

[Hazir]

The Audio edition of the economist does it for me. If I stick to walking to work and back every day it lasts exactly one work week. The actual magazine usually winds up in the bathroom.

[EyeKhan]

Well, it's harder than you might think to find appropriate reading material for a short trip like the subway. Too short, and you finish before the trip's over, and you have to amuse yourself by mind-fucking other passengers for the remainder of your journey. Too long, and you end up with the problem of remembering what you were reading. You probably don't want something too intellectually stimulating, or you risk missing your stop or not seeing the strange Canadian sneaking up to give you a Wet Willie. But you don't want something so intellectually light that you're bored and end up resorting to the mind-fucking strangers thing. It really is a more complicated decision than you seem to be aware of -not easy to find something of the right depth and length for a regular, short commute like the subway.

Frankly, that's one of the reasons I don't read when I commute... though I do also find it difficult to steer and read at the same time, so that's part of it too.

god you must have been bored yesterday around 6:58pm.

[GGT]

http://www.nytimes.com/2010/04/13/us.../13health.html

Baffled by Health Plan? So Are Some Lawmakers

By ROBERT PEAR
Published: April 12, 2010

WASHINGTON — It is often said that the new health care law will affect almost every American in some way. And, perhaps fittingly if unintentionally, no one may be more affected than members of Congress themselves.

In a new report, the Congressional Research Service says the law may have significant unintended consequences for the “personal health insurance coverage” of senators, representatives and their staff members.

For example, it says, the law may “remove members of Congress and Congressional staff” from their current coverage, in the Federal Employees Health Benefits Program, before any alternatives are available.

The confusion raises the inevitable question: If they did not know exactly what they were doing to themselves, did lawmakers who wrote and passed the bill fully grasp the details of how it would influence the lives of other Americans?

The law promises that people can keep coverage they like, largely unchanged. For members of Congress and their aides, the federal employees health program offers much to like. But, the report says, the men and women who wrote the law may find that the guarantee of stability does not apply to them.

“It is unclear whether members of Congress and Congressional staff who are currently participating in F.E.H.B.P. may be able to retain this coverage,” the research service said in an 8,100-word memorandum.

And even if current members of Congress can stay in the popular program for federal employees, that option will probably not be available to newly elected lawmakers, the report says.

Moreover, it says, the strictures of the new law will apply to staff members who work in the personal office of a member of Congress. But they may or may not apply to people who work on the staff of Congressional committees and in “leadership offices” like those of the House speaker and the Democratic and Republican leaders and whips in the two chambers.

These seemingly technical questions will affect 535 members of Congress and thousands of Congressional employees. But the issue also has immense symbolic and political importance. Lawmakers of both parties have repeatedly said their goal is to provide all Americans with access to health insurance as good as what Congress has.

Congress must now decide what steps, if any, it can take to deal with the problem. It could try for a legislative fix, or it could adopt internal policies to minimize any disruptions.

In its painstaking analysis of the new law, the research service says the impact on Congress itself and the intent of Congress are difficult to ascertain.

The law apparently bars members of Congress from the federal employees health program, on the assumption that lawmakers should join many of their constituents in getting coverage through new state-based markets known as insurance exchanges.

But the research service found that this provision was written in an imprecise, confusing way, so it is not clear when it takes effect.

The new exchanges do not have to be in operation until 2014. But because of a possible “drafting error,” the report says, Congress did not specify an effective date for the section excluding lawmakers from the existing program.

Under well-established canons of statutory interpretation, the report said, “a law takes effect on the date of its enactment” unless Congress clearly specifies otherwise. And Congress did not specify any other effective date for this part of the health care law. The law was enacted when President Obama signed it three weeks ago.

In addition, the report says, Congress did not designate anyone to resolve these “ambiguities” or to help arrange health insurance for members of Congress in the future.

“This omission, whether intentional or inadvertent, raises questions regarding interpretation and implementation that cannot be definitively resolved by the Congressional Research Service,” the report says. “The statute does not appear to be self-executing, but rather seems to require an administrating or implementing authority that is not specifically provided for by the statutory text.”

The White House said last month that Mr. Obama would voluntarily participate in the health insurance exchange, though the law does not require him or other administration officials to do so. His participation as president may depend on his getting re-elected in 2012.

Representative Jason Chaffetz, Republican of Utah, said lawmakers were in the same boat as many Americans, trying to figure out what the new law meant for them.

“If members of Congress cannot explain how it’s going to work for them and their staff, how will they explain it to the rest of America?” Mr. Chaffetz asked in an interview.

The provision governing members of Congress can be traced to the Senate Finance Committee. When the panel was working on the legislation last September, Senator Charles E. Grassley, Republican of Iowa, proposed an amendment to require that elected federal officials and all federal employees buy coverage through an exchange, “rather than using the traditional Federal Employees Health Benefits Program.”

A scaled-back version of the amendment, applying to members of Congress and their aides, was accepted in the committee without objection.

The federal employees program, created in 1959, now provides coverage to eight million people and, according to the Congressional Research Service, is the largest employer-sponsored health insurance program in the country.

Congress could benefit from running the same maze as everyone else, to get a taste of what it's really like. It's not as if their premiums won't still be 'subsidized', they'll just have to do some shopping and legwork like the rest of us.

Maybe we could do without the whole FEHBP (federal employees to administer benefits to federal employees? ) and cut that 8 million number. While we're whittling budgets, do we really need MILLIONS of federal employees?

[GGT]

Double post, another angle. This one for all those who say they don't want to pay for other people's lifestyle illnesses, or that good health can simply be incentivized financially.

(Is that like paying kids to get good grades, paying parents to show up for parent-teacher conferences? Well, that didn't pan out too well, either.)

And what of genetic maladies that would pertain to people like Tear....or just plain normal aging.....or all the costs in injury-related sports medicine....?

No, marketing "insurance" is not the cure for what ails us, but it looks like we'll have to go through the motions first. Because we like to look at everything from a market and money-making perspective. Anything else would just be SSSocialism, right?

Could Health Overhaul Incentives Hurt Some?

By RONI CARYN RABIN
Published: April 12, 2010


The new health care law promises to extend coverage to millions of Americans and to cut costs by cultivating healthy habits and preventive care. But could its emphasis on wellness undermine one of its central achievements: putting an end to the practice of charging sick people more for health insurance?

Workplace wellness programs are becoming more and more popular as businesses try to rein in runaway health costs. At American Express, for instance, employees are offered a $100 reward just for coming in for a health assessment; the company also provides an array of free support services, including health coaching, maintenance drugs and preventive care.

The program helped Wade Hindell, 37, of Jersey City, a technology director at Amex’s New York City headquarters, lose more than 40 pounds last year after a cafeteria health check alerted him he was overweight — obese, actually — and had high cholesterol and triglycerides. “My wife was very happy about it,” he said. “I don’t snore anymore.”

The new law gives employers more leeway to offer workers an even more valuable incentive: steeply discounted health insurance for those who reach certain goals — for example, keeping their weight, blood pressure, blood sugar or cholesterol within normal range.

While advocates for people with chronic ailments like diabetes, cancer and heart disease say they welcome initiatives that enable employees to incorporate exercise or weight counseling into their workday, they warn that tying premium discounts to achieving certain health standards (which American Express does not do) will inevitably shift costs to less healthy employees.

“On the one hand, it’s a great idea — let’s encourage people to be healthy,” said Timothy Stoltzfus Jost, a law professor at Washington and Lee University specializing in health and a consumer representative to the National Association of Insurance Commissioners. “But if I have pretty serious asthma, there are a lot of wellness programs that I can’t be a part of. Isn’t this going to mean people who are already unhealthy are going to pay higher premiums?”

Though the law promises to end discrimination in coverage based on health status, Mr. Jost called the wellness provisions “a loophole big enough to drive a semi through,” adding, “Insurers know darn well this will allow them to continue to underwrite based on health status.” Many consumer advocates worry that premiums will be raised significantly across the board first, and then individual discounts will be applied.

The law does include several provisions intended to protect against discrimination in implementing wellness programs. The programs must have “a reasonable chance” of improving health or preventing disease, and cannot be “a subterfuge for discriminating based on a health status factor.”

If people have a medical condition that precludes them from achieving one goal, they must be offered a “reasonable alternative standard,” the law says.

But Bev Dochstader, a 48-year-old cancer survivor from Wellsboro, Pa., said she suffered so many complications from her breast surgery and reconstruction that she would not have been able to participate in any wellness program for many months. “I hobbled around for a long time,” she said.

Businesses are increasingly pointing to unhealthy habits, including tobacco use, poor diet and sedentary lifestyles, as the main reasons for rising health care costs, saying that people who don’t engage in those behaviors should not be paying the price for those who do.

“Right now, the employees who are healthy and living a healthy lifestyle are paying for those who are not,” said Helen Darling, president of the National Business Group on Health. “They are overpaying almost twice as much for the unhealthy: the obese, the smokers, people like that. You, an employee who is healthy and doesn’t smoke, are subsidizing the medical claims, with your premiums going up every month, to pay for someone who smokes, for someone who is obese.”

Premium discounts for people who achieve health objectives — or who are thin, have normal blood pressure or do not smoke to begin with — are minor adjustments, she said, adding, “All the employer would be doing is taking the numbers and doing a little bit of rebalancing of some of the imbalance.”

Currently, discounts pegged to specific health outcomes cannot exceed 20 percent of an employee’s premiums; the law lifts that cap in 2014, allowing for discounts of 30 percent and possibly up to 50 percent in the cost of individual or family health care premiums. It also calls for applying wellness discounts in the individual market; an initial demonstration project involving 10 states is to be started by July 2014.

The money at stake is substantial, according to an analysis by two Harvard researchers, Kristin Voigt and Harald Schmidt. A 30 percent discount translates to $1,447 a year on an average individual policy, or $4,013 for a family policy, they calculated; a 50 percent discount is worth $2,412 for an individual and $6,688 for a family. Dr. Schmidt and Dr. Voigt said they were concerned that workers with low incomes would be disproportionately affected by penalties, since they tend to suffer from more ill health; the policies might also have the effect of driving sicker people away from certain jobs.

Under the new law, employees who meet health benchmarks could also be rewarded with waivers of co-payments and deductibles, or the absence of surcharges that would presumably be charged to other workers.

Though those kinds of incentives are not currently widespread, a recent Hewitt Associates survey of 600 large employers found that almost half were in various stages of implementing them — exacting financial penalties like higher premiums from employees who smoke or refuse to undergo a health screening or participate in a disease management program. Some would penalize those who do not get their weight or blood pressure under control.

Studies have shown that when companies invest in well-designed comprehensive wellness programs, they can reduce workers’ compensation claims, increase productivity by reducing absenteeism and curb overall health care costs, said Dr. Clyde Yancy, president of the American Heart Association.

But he said that the programs would require long-term investment in comprehensive wellness care, not financial incentives tied to isolated risk factors. “It’s shortsighted,” Dr. Yancy said, “to take one particular domain and put a tariff on that.”

[ar81]

Reuters: Sweden, Canada outrank U.S. on healthcare

People living in countries with government-run healthcare systems like Sweden and Canada are far more confident than Americans that their families can get good, affordable care, according to a 22-nation survey released on Thursday.

[CitizenCain]

Reuters: Sweden, Canada outrank U.S. on healthcare

Probably because they've never experienced anything else.

I've yet to meet a Canadian who actually likes the Canadian system, after getting care in the US.

[Lewkowski]

The funny thing about wellness plans is that it really benefits people who are not lazy... who of course tend to be less likely to have self-made health risks.

My employer put together an *easy* wellness program that literally anyone could take advantage of to get $300.00 off their insurance premium for the year. This was not a "results" program where you had to meet objectives, this was a "try" program where all you needed to do is walk and record your steps (with a pedometer), get a health assessment done and track when your exercise. Easy. And yet a lot of employees didn't take advantage of it. Anecdotal isn't really evidence but guess which co-worker flat out said he wasn't going to do it? Oh yeah the smoker...

[EyeKhan]

The funny thing about wellness plans is that it really benefits people who are not lazy... who of course tend to be less likely to have self-made health risks.

My employer put together an *easy* wellness program that literally anyone could take advantage of to get $300.00 off their insurance premium for the year. This was not a "results" program where you had to meet objectives, this was a "try" program where all you needed to do is walk and record your steps (with a pedometer), get a health assessment done and track when your exercise. Easy. And yet a lot of employees didn't take advantage of it. Anecdotal isn't really evidence but guess which co-worker flat out said he wasn't going to do it? Oh yeah the smoker...

Fuckin' ZIGGY!

Anyway, that's a pretty invovled wellness thing compared to what I'm in. We have to get the annual health check and if you have any issues you and your doctor have to come up with a plan to address. As long as your doctor vouches that you have a plan and that you're trying, you're good. But counting your footsteps and keeping exercise records, that's kind of involved. What counts as tracking your exercise?

[Lewkowski]

Honor system. Input the date, the type of exercise (broad category). That is it. You got 3 points per work out, like 5k steps = 1 point (again easy to track just using a pedometer) and then 200 points for the assessment. Once you get 500 points in the year you get the premium deduction. Easy! But of course some people chose not to do it, one of which was my smoking co-worker.

[CitizenCain]

Way too much of a pain in the ass for 82 cents a day... especially when, as a smoker, he probably pays 6 bucks a day for nicotine.

[Ziggy Stardust]

Fuckin' ZIGGY! ?

Hey! I walk all over the place.

"Oh yeah, the smoker" says the fat rich kid.

[GGT]

Honor system. Input the date, the type of exercise (broad category). That is it. You got 3 points per work out, like 5k steps = 1 point (again easy to track just using a pedometer) and then 200 points for the assessment. Once you get 500 points in the year you get the premium deduction. Easy! But of course some people chose not to do it, one of which was my smoking co-worker.

Spoken like an insurance employee who thinks insurance companies do best at encouraging healthy habits.

[EyeKhan]

Honor system. Input the date, the type of exercise (broad category). That is it. You got 3 points per work out, like 5k steps = 1 point (again easy to track just using a pedometer) and then 200 points for the assessment. Once you get 500 points in the year you get the premium deduction. Easy! But of course some people chose not to do it, one of which was my smoking co-worker.

Where did you put the data? In a web page or did you have to keep a written log? Also - RE the lazy coworker, did she ever say why she wouldn't do it?

Hey! I walk all over the place.

"Oh yeah, the smoker" says the fat rich kid.

Who's the fat rich kid?

[Dreadnaught]

http://www.nytimes.com/2010/04/18/ny.../18insure.html


April 17, 2010
New York Offers Costly Lessons on Insurance
By ANEMONA HARTOCOLLIS

When her small executive search firm in New York City canceled its health insurance policy last year because of the recession and rising premiums, April Welles was able to buy her own plan and still be covered for her cancer and multiple sclerosis.

She was lucky to live in New York, one of the first states to require insurance companies to offer comprehensive coverage to all people regardless of pre-existing conditions. But Ms. Welles, 58, also pays dearly: Her premium is $17,876 a year.

“That’s a lot of groceries,” she said.

New York’s insurance system has been a working laboratory for the core provision of the new federal health care law — insurance even for those who are already sick and facing huge medical bills — and an expensive lesson in unplanned consequences. Premiums for individual and small group policies have risen so high that state officials and patients’ advocates say that New York’s extensive insurance safety net for people like Ms. Welles is falling apart.

The problem stems in part from the state’s high medical costs and in part from its stringent requirements for insurance companies in the individual and small group market. In 1993, motivated by stories of suffering AIDS patients, the state became one of the first to require insurers to extend individual or small group coverage to anyone with pre-existing illnesses.

New York also became one of the few states that require insurers within each region of the state to charge the same rates for the same benefits, regardless of whether people are old or young, male or female, smokers or nonsmokers, high risk or low risk.

Healthy people, in effect, began to subsidize people who needed more health care. The healthier customers soon discovered that the high premiums were not worth it and dropped out of the plans. The pool of insured people shrank to the point where most of them had high health care needs. Without healthier people to spread the risk, their premiums skyrocketed, a phenomenon known in the trade as the “adverse selection death spiral.”

“You have a mandate that’s accessible in theory, but not in practice, because it’s too expensive,” said Mark P. Scherzer, a consumer lawyer and counsel to New Yorkers for Accessible Health Coverage, an advocacy group. “What you get left clinging to the life raft is the population that tends to have pretty high health needs.”

Since 2001, the number of people who bought comprehensive individual policies through HMOs in New York has plummeted to about 31,000 from about 128,000, according to the State Insurance Department.

At the same time, New York has the highest average annual premiums for individual policies: $6,630 for single people and $13,296 for families in mid-2009, more than double the nationwide average, according to America’s Health Insurance Plans, an industry group.

Rates did not rise as high in small group plans, for businesses with up to 50 workers, because the companies had an incentive to provide insurance to keep employees happy, and so were able to keep healthier people in the plans, said Peter Newell, an analyst for the United Hospital Fund, a New York-based health care research organization.

While premiums for large group plans have risen, their risk pools tend to be large enough to avoid out-of-control rate hikes.

The new federal health care law tries to avoid the death spiral by requiring everyone to have insurance and penalizing those who do not, as well as offering subsidies to low-income customers. But analysts say that provision could prove meaningless if the government does not vigorously enforce the penalties, as insurance companies fear, or if too many people decide it is cheaper to pay the penalty and opt out.

Under the federal law, those who refuse coverage will have to pay an annual penalty of $695 per person, up to $2,085 per family, or 2.5 percent of their household income, whichever is greater. The penalty will be phased in from 2014 to 2016.

“In this new marketplace that we envision, this requirement that everybody be covered, that should draw better, healthier people into the insurance pool, which should bring down rates,” said Mark Hall, a professor of law and public health at Wake Forest University. But he added, “You have to sort of take a leap of faith that that’s going to happen.”

As part of the political bargain to get insurance companies to support insurance for all regardless of risk, called community rating, New York State deregulated the market, allowing insurers to charge as much as they wanted within certain profit margins. The state can require companies to retroactively refund overcharges to consumers, but it seldom does.

Now, Gov. David A. Paterson has proposed to reinstate prior approval by the state of rate increases for the small group and individual plans, as a way to reverse New York’s death spiral of healthy people fleeing the market. The change would affect about 3 million of the 10 million New Yorkers insured through private plans, according to the Insurance Department. Most of those are in small group plans, though the biggest beneficiaries might be those seeking individual coverage, where premiums are highest.

New York’s insurance companies are vigorously fighting prior approval. Mark L. Wagar, the president of Empire BlueCross BlueShield, said New York’s problem was not deregulation of rates, but the lack of an effective mandate for everyone to buy insurance. To illustrate, he offered a statistic on how many people in the 18-to-26 age group, who are largely healthy, have bought individual insurance coverage through his company: 88 people out of 6 million insured by his company statewide.

New York is “the bellwether,” Mr. Wagar said. “We have the federal health reform on steroids in terms of richness and strictness.”

The federal health care overhaul contains some protection for people who buy into the new insurance exchanges — organized marketplaces — created by the law. Beginning in 2014, states will be able to recommend that the Department of Health and Human Services ban companies from the exchanges if they impose rate increases the states consider unreasonable.

Mr. Wagar also said that New York’s medical costs, universally acknowledged as being among the highest in the country, were a factor in its high premiums. He noted that the state already regulated insurance company profit margins, allowing them to allocate no more than 25 cents of every dollar for profits and administration in small group plans and 20 cents for individual plans. The governor is proposing to lower both margins to 15 percent.

Troy Oechsner, deputy superintendent for health at the State Insurance Department, blamed the insurance companies for raising rates beyond what was necessary — by being off on their projections — thus accelerating the exodus of healthy people.

“What we saw them do is they really jacked up rates because they could,” Mr. Oechsner said.

To a large extent, insurance companies police themselves, according to Mr. Oechsner. From 2000 to 2007, insurance plans reported that they exceeded state profit allowances just 3 percent of the time, resulting in about $48 million in refunds to policyholders, Mr. Oechsner said. Yet subsequent Insurance Department investigations found that insurers should have refunded three times as much.

The governor’s budget projects that reinstating prior approval would help the state close its $9 billion deficit, saving taxpayers $70 million in the first year, and $150 million after that, by stemming the exodus of people from high-priced plans into state-subsidized plans.

An analysis of the governor’s plan released recently by the Business Council of New York State, whose membership includes insurance companies, contested the governor’s savings estimate, saying that it was “at best speculative,” and that the savings would probably be nominal.

Mr. Hall, the Wake Forest professor, said that with the risk spread over a bigger pool of insured people under federal changes, insurers would be expected to reduce their prices, especially in New York. But Mr. Hall said that insurers might hesitate to do that until they were sure people were going to buy coverage, which could lead to a sort of mutual paralysis.

“You can literally think of people standing around a swimming pool, saying let’s jump in at once,” he said.

As for Ms. Welles, she is not sure how much longer she can keep paying rising rates.

“This is not something that will be sustainable for the rest of my life,” she said. On the other hand, she added, “frankly, with the kind of cancer I have, I don’t think I’ll be paying this for too many years.”

http://www.nytimes.com/2010/04/18/ny.../18insure.html