The American health care system is a puzzle you cannot understand unless you understand how income taxes worked from 1945 to 1987. This is not a topic most children learned at their mother's knee, since only the top earners ("the 1%," as we now know them) had to pay the top rates. If your grandfather was a multi-millionaire and a story-teller, you can skip the next three paragraphs. If you're like the rest of us, read on...
America won World War II by out-producing every other nation on the planet. By the end of the war, we were rolling one new ship out every day. But all that production cost money, and the money came from taxes--graduated income taxes that took more from people who made more. The top earners in 1944 paid 94% of each additional dollar in federal income taxes.
We don't talk much about this astonishingly high level of taxation nowadays, but I was reminded of it recently as I have been reading through the "Nero Wolfe" detective stories. Nero Wolfe is an obnoxious, overweight, orchid-growing genius who hates to work and never leaves his Manhattan home on business. Rex Stout, who wrote the Wolfe books, published his first detective story in 1933 and then turned out two or three books a year for decades. Reading all the Wolfe books in order is like reliving an entire generation of urban life, death... and taxes.
One gets to know a lot about taxes in the books. Wolfe only works when he has to, and charges "obscene" fees for his services. But he hardly ever takes a job in the last part of the year--as soon as he reaches the top bracket, he pretty much refuses to work.
Not all American workers after World War II were obese neurotic millionaires, but many people in the workforce had the same problem--the more they earned, the less they kept. Union members fought for higher wages, only to find a great big hole in their paycheck when they took it home. Labor and management put their heads together and discovered a loophole that would let them keep more of their money out of the hands of the government--instead of paying more in wages (which would be taxed), companies started providing health insurance benefits (which were not taxed). This made sense for top executives, who only took home pennies from each additional dollar, and it made sense for union members, too.
With business and labor both firmly in favor of tax-free employer-provided health insurance, Congress chose to leave the loophole open, and most of country ran right through it. The vast majority of Americans get their health insurance from their employer nowadays, even though the original reason for doing so has all but disappeared. The top tax rates are under 40% now, and half of all Americans pay nothing at all in federal income tax.
Congress "created" our current system of employer-provided health care by doing nothing while American ingenuity figured out how to save money despite the tax laws. I am now predicting five more years of political gridlock on the health care front--enough time for a whole new generation of Americans to figure out how to stay healthy and save money all over again.
Wednesday, March 19, 2014
Wednesday, March 5, 2014
The Buck Stops Later
Our President made the news this week--rebuking Russia for invading a neighboring country, submitting a "budget" spending money we don't have, and delaying another round of healthcare changes that might hurt people just before elections next November. In each of these cases, the President put today's bills on tomorrow's tab.
Hillary was in the White House last time we had a balanced budget, and hopes to be there again next time it happens--but Obama's latest "budget" makes that job several trillion dollars harder. He has loaded it up with election year goodies that may help a few endangered Democrats in 2014 but leaves the Democratic ticket in 2016 behind the economic eight-ball.
Dollars aren't the only kind of capital our President is spending, though. He's spending down our international influence even faster. Our nation has invested trillions in defense since we entered World War II in 1941, making us the world's only superpower when the Soviet Union collapsed fifty years later, in 1991. Obama has traded that strength for global approval since the day he took office. He got a Nobel Peace Prize for this approach--but did he make the world a safer place? Events in the Ukraine say "no"--and Hillary, who was ordered to "reset" our relationship with Russia, now has to figure out how to re-reset if she becomes President. How do you put the Russian bear back in the cage that Obama dismantled?
That job would be easier if we didn't need the "bear" to like us--but Obama asked for Russia's help to solve our other problems. Obama's "red line" painted him into a corner in Syria until Russia bailed him out. Obama insists that he will never let Iran get nuclear weapons--but Russia seems to be all that stands between the world and that particular nightmare.
The problem with Russia is big, but it's just part of the problem. China has been rattling swords as well, leaving Taiwan nervous and Tibet hopeless. Saudi Arabia and Israel have well-nigh given up on America's power to keep the peace, making the Middle East a much more dangerous place. After all Obama's efforts to "be nice," Iraq and Afghanistan prefer Al Qaeda and the Taliban to America. Back in 1998, all that President Bill Clinton could do about terrorist training camps in Afghanistan was fire drones at them. In 2018, twenty years later, President Hillary Clinton may be right back where her husband was.
But this assumes that Hillary gets elected. The third objectionable way Obama pays his bills is purely political. How many times has the President taken credit for the popular parts of his signature achievement while pushing the pain down until after the next election? This week's "surprise" was that insurance companies can keep offering "junk policies" a little longer--just long enough to keep the bad news out of voters' mailboxes until after this November's elections. That's just long enough to give the President a chance at saving Democratic control of the US Senate for another cycle, but it comes at a cost to the next Democrat who wants to be President. When all those Obamacare bills finally come due, it won't be this President who pays the political price.
When Obama ran for office in 2008, young Americans responded to his vision with unprecedented enthusiasm. When he ran in 2012, Hispanics surged to the polls for him. Some political observers concluded that Republicans were doomed to be the declining party of old, white, English speaking men. Since October 1, 2013, however, "HealthCare.gov" has shredded his support among young and Hispanic voters. Where are the "young invincibles" who were supposed to sign up for new (and more expensive) government-mandated health insurance? Hispanics have been alienated by the laughable, late "Spanglish" website that was supposed to help them to get government benefits that are only available for citizens without asking nosey questions about their immigration status. With tax penalties just around the corner, these young and Hispanic Americans have no good reason to vote for Democrats.
When Obama took over from President George W. Bush in January, 2009, he promised a "transparent administration" that would protect our privacy. Five years later, the government knows much more about Americans--and Americans know much less about their government. The public's trust is any President's most precious asset--ask George H. W. Bush, whose "read my lips" line cost him a second term in office. What will Obama's "lie of the year" cost the next Democratic candidate for his office?
Obama is burning through capital--financial, diplomatic, and political--at everyone else's expense. Republicans may be able to reign in his spending if they take the Senate in November, but he still has three more years to make life miserable for his successor, whoever he or she may be.
If I were Hillary Clinton, I'd start complaining now!
Hillary was in the White House last time we had a balanced budget, and hopes to be there again next time it happens--but Obama's latest "budget" makes that job several trillion dollars harder. He has loaded it up with election year goodies that may help a few endangered Democrats in 2014 but leaves the Democratic ticket in 2016 behind the economic eight-ball.
Dollars aren't the only kind of capital our President is spending, though. He's spending down our international influence even faster. Our nation has invested trillions in defense since we entered World War II in 1941, making us the world's only superpower when the Soviet Union collapsed fifty years later, in 1991. Obama has traded that strength for global approval since the day he took office. He got a Nobel Peace Prize for this approach--but did he make the world a safer place? Events in the Ukraine say "no"--and Hillary, who was ordered to "reset" our relationship with Russia, now has to figure out how to re-reset if she becomes President. How do you put the Russian bear back in the cage that Obama dismantled?
That job would be easier if we didn't need the "bear" to like us--but Obama asked for Russia's help to solve our other problems. Obama's "red line" painted him into a corner in Syria until Russia bailed him out. Obama insists that he will never let Iran get nuclear weapons--but Russia seems to be all that stands between the world and that particular nightmare.
The problem with Russia is big, but it's just part of the problem. China has been rattling swords as well, leaving Taiwan nervous and Tibet hopeless. Saudi Arabia and Israel have well-nigh given up on America's power to keep the peace, making the Middle East a much more dangerous place. After all Obama's efforts to "be nice," Iraq and Afghanistan prefer Al Qaeda and the Taliban to America. Back in 1998, all that President Bill Clinton could do about terrorist training camps in Afghanistan was fire drones at them. In 2018, twenty years later, President Hillary Clinton may be right back where her husband was.
But this assumes that Hillary gets elected. The third objectionable way Obama pays his bills is purely political. How many times has the President taken credit for the popular parts of his signature achievement while pushing the pain down until after the next election? This week's "surprise" was that insurance companies can keep offering "junk policies" a little longer--just long enough to keep the bad news out of voters' mailboxes until after this November's elections. That's just long enough to give the President a chance at saving Democratic control of the US Senate for another cycle, but it comes at a cost to the next Democrat who wants to be President. When all those Obamacare bills finally come due, it won't be this President who pays the political price.
When Obama ran for office in 2008, young Americans responded to his vision with unprecedented enthusiasm. When he ran in 2012, Hispanics surged to the polls for him. Some political observers concluded that Republicans were doomed to be the declining party of old, white, English speaking men. Since October 1, 2013, however, "HealthCare.gov" has shredded his support among young and Hispanic voters. Where are the "young invincibles" who were supposed to sign up for new (and more expensive) government-mandated health insurance? Hispanics have been alienated by the laughable, late "Spanglish" website that was supposed to help them to get government benefits that are only available for citizens without asking nosey questions about their immigration status. With tax penalties just around the corner, these young and Hispanic Americans have no good reason to vote for Democrats.
When Obama took over from President George W. Bush in January, 2009, he promised a "transparent administration" that would protect our privacy. Five years later, the government knows much more about Americans--and Americans know much less about their government. The public's trust is any President's most precious asset--ask George H. W. Bush, whose "read my lips" line cost him a second term in office. What will Obama's "lie of the year" cost the next Democratic candidate for his office?
Obama is burning through capital--financial, diplomatic, and political--at everyone else's expense. Republicans may be able to reign in his spending if they take the Senate in November, but he still has three more years to make life miserable for his successor, whoever he or she may be.
If I were Hillary Clinton, I'd start complaining now!
Friday, February 28, 2014
Of Cakes and Consciences
The week's big news comes out of Arizona, where Governor Jan Brewer vetoed a bill that would allow religious business owners to refuse to serve customers if such service would compromise their consciences. Religious liberty came under fire when a judge in neighboring New Mexico ruled against a photographer who refused to take pictures at a same-sex wedding ceremony. Then a baker in Colorado refused to bake a cake for a similar celebration in Denver and got sued. Although the baker believes that creating same-sex wedding cakes would be "displeasing God and acting contrary to the teachings of the Bible," the judge ruled against him.
Rulings like these troubled Christians across the country, including neighboring Arizona, and the legislature there responded with a law to protect conscientious objectors in that state. The Republican governor vetoed it, however, arguing that the "legislation seeks to protect businesses, yet the business community is overwhelmingly opposed to the law."
It is no wonder that the Arizona business community is "overwhelmingly" opposed to the law. They know what happened to "Duck Dynasty" when Phil Robertson quoted a Bible verse about sexual sins. Arizona is a beautiful, desolate state that depends heavily on tourism--and the Governor knows that a public backlash against Arizona might send the whole state back into recession. If one baker refuses to bake a cake for one couple for religious reasons, that couple suffers. If every politically-correct corporation cancels next year's Arizona convention for political reasons, the whole state suffers. Given the choice between protecting Christian bakers and keeping the Super Bowl in Phoenix, the Arizona business community is clear on its priorities. "Culture wars" are bad for business!
The Arizona law wasn't specifically written to protect Christians or punish homosexuals. It applied to any believer who could not comply with an otherwise-valid law for conscientious reasons. It would help the Muslim barber who refused to give a woman a man's haircut or the Orthodox Jew who closes his liquor store all day Saturday and then can't sell his wares until 1:00 p.m. Sunday. It wouldn't do much for McDonald's or Microsoft (big businesses don't have consciences), but it would do a lot for Roman Catholics who believe that oral contraceptives flush a living human being from the womb, and therefore cannot pay for insurance that provides the Pill to their employees.
The argument against religious freedom is simple--if your personal beliefs prevent you from doing one job, do another. If you don't like killing people, don't join the Army. If you don't eat pork, don't apply at the sausage factory. If you don't approve of same-sex marriages, try baking pies instead of cakes. It may be a good argument in theory, but it fails in practice. How does it work for the widow whose only income comes from rent from apartments she owns, which she only rents to married couples? How does it work for the photographer, whose only marketable skill is selling pictures that people mostly only buy for weddings?
Let's apply the Arizona situation to our own region. Our economy here in the Potomac Highlands is heavily dependent on tourism and turkeys. All it takes is one ruling from some government agency and our poultry farmers could find themselves facing impossible costs--and we're just one court case away from same-sex weddings here in West Virginia. It may not be that long before folks who rent cabins out to honeymooners have to decide how they feel about this issue.
So--what do West Virginians think about religious freedom? If you had to choose between a West Virginia Super Bowl and some stubborn fundamentalist who will not serve a same-sex couple, which would you pick? What about the Muslim parent who won't let her daughter wear shorts in gym class? What about the Jehovah's Witness who insists on knocking on your door when you're sleeping late on Saturday?
It's easy to fight for popular freedoms. That's what politicians do--that's why they keep on getting elected. That's what happened in Arizona--they were all for freedom until they realized it might cost them something.
Is that what we want in West Virginia?
Arizona can have the Super Bowl. I'll take our mountains and our people, all of them--hillbillies, hippies, prosperous poultry farmers, poor widows. I'll take the same-sex couple raising goats up the hollow, and the Primitive Baptist who can't sleep at night at the thought of all that sin. The right to do what you think is right includes the right to oppose what you think is wrong--even if the rest of the world disagrees with you. That's what freedom means--and mountaineers are always free.
Rulings like these troubled Christians across the country, including neighboring Arizona, and the legislature there responded with a law to protect conscientious objectors in that state. The Republican governor vetoed it, however, arguing that the "legislation seeks to protect businesses, yet the business community is overwhelmingly opposed to the law."
It is no wonder that the Arizona business community is "overwhelmingly" opposed to the law. They know what happened to "Duck Dynasty" when Phil Robertson quoted a Bible verse about sexual sins. Arizona is a beautiful, desolate state that depends heavily on tourism--and the Governor knows that a public backlash against Arizona might send the whole state back into recession. If one baker refuses to bake a cake for one couple for religious reasons, that couple suffers. If every politically-correct corporation cancels next year's Arizona convention for political reasons, the whole state suffers. Given the choice between protecting Christian bakers and keeping the Super Bowl in Phoenix, the Arizona business community is clear on its priorities. "Culture wars" are bad for business!
The Arizona law wasn't specifically written to protect Christians or punish homosexuals. It applied to any believer who could not comply with an otherwise-valid law for conscientious reasons. It would help the Muslim barber who refused to give a woman a man's haircut or the Orthodox Jew who closes his liquor store all day Saturday and then can't sell his wares until 1:00 p.m. Sunday. It wouldn't do much for McDonald's or Microsoft (big businesses don't have consciences), but it would do a lot for Roman Catholics who believe that oral contraceptives flush a living human being from the womb, and therefore cannot pay for insurance that provides the Pill to their employees.
The argument against religious freedom is simple--if your personal beliefs prevent you from doing one job, do another. If you don't like killing people, don't join the Army. If you don't eat pork, don't apply at the sausage factory. If you don't approve of same-sex marriages, try baking pies instead of cakes. It may be a good argument in theory, but it fails in practice. How does it work for the widow whose only income comes from rent from apartments she owns, which she only rents to married couples? How does it work for the photographer, whose only marketable skill is selling pictures that people mostly only buy for weddings?
Let's apply the Arizona situation to our own region. Our economy here in the Potomac Highlands is heavily dependent on tourism and turkeys. All it takes is one ruling from some government agency and our poultry farmers could find themselves facing impossible costs--and we're just one court case away from same-sex weddings here in West Virginia. It may not be that long before folks who rent cabins out to honeymooners have to decide how they feel about this issue.
So--what do West Virginians think about religious freedom? If you had to choose between a West Virginia Super Bowl and some stubborn fundamentalist who will not serve a same-sex couple, which would you pick? What about the Muslim parent who won't let her daughter wear shorts in gym class? What about the Jehovah's Witness who insists on knocking on your door when you're sleeping late on Saturday?
It's easy to fight for popular freedoms. That's what politicians do--that's why they keep on getting elected. That's what happened in Arizona--they were all for freedom until they realized it might cost them something.
Is that what we want in West Virginia?
Arizona can have the Super Bowl. I'll take our mountains and our people, all of them--hillbillies, hippies, prosperous poultry farmers, poor widows. I'll take the same-sex couple raising goats up the hollow, and the Primitive Baptist who can't sleep at night at the thought of all that sin. The right to do what you think is right includes the right to oppose what you think is wrong--even if the rest of the world disagrees with you. That's what freedom means--and mountaineers are always free.
Wednesday, January 22, 2014
Student Loans or Health Insurance?
The logic of the new healthcare law is that "young invincibles" have a patriotic duty to pay for older or sicker Americans. The idea is that people with lower risks should pay higher premiums as long as we offer subsidies (or Medicaid) for people who really can't afford insurance. There may be more of a problem with this reasoning than we recognize--due to the new dynamics of student debt.
Here's the bottom line: the new law computes subsidies based on income, not discretionary income. For a lot of young graduates, that turns out to be a big problem. If you like math, read on.
Professor Glenn Reynolds of Instapundit has been writing about the "higher education bubble" for some time now. This somewhat-controversial hypothesis claims that the value of a college degree is going down even as the cost of a degree is going up, and that the entire system of higher education in the United States is due for a "correction," much like the housing market bubble that popped in 2007.
Whether the "bubble" is sound economic theory or not, it focuses attention on how school debt burdens young people in an underperforming economy. A recent graduate who borrowed $50,000 for her BA in sociology may find nothing better than Starbucks--unless she's willing to borrow even more to get a masters degree.
Student debt is different from mortgage debt--and every difference disadvantages younger people. Student loans are paid out of after-tax dollars; home loans are paid from pre-tax dollars. Home loans vanish after bankruptcy, student loans stay with you until you die.
So let's put these facts together and see how they apply to the "young invincibles" who are supposed to sign up on the exchanges. A 26-year-old who makes 29,000 in Frederick, Maryland pays $168.00 per month for a "silver" plan, which has a $1,300 deductible and a $6,350 out-of-pocket maximum. A ten year loan for $50,000 at 6.8% costs $575 per month. Rent for a single person in Frederick is over $600 a month. Federal income tax on a person with no dependents or deductions is over $200 per month. Adding it up, we get:
What if this particular graduate is one of those "young invincibles" that the law depends upon? We have to add a few items:
All that is for a student loan of $50,000 for a graduate with a pretty good job. What about the graduate in the next cubicle with the same salary and a $75,000 loan? His interest payment is just about $3600 more each year, leaving him with less than $200 a month after basic food and gas.
Bottom line? The new law wasn't written by a recent graduate, and things may get worse before they get better. The kind of job you need to pay off the kind of debt you need to get the kind of job you need is too high for subsidies but too low to get ahead in life. And don't forget--this lifestyle of "unsubsidized subsistence" is considered success for the recent graduate.
Is it any wonder that "millenials" aren't excited about the new healthcare law?
Here's the bottom line: the new law computes subsidies based on income, not discretionary income. For a lot of young graduates, that turns out to be a big problem. If you like math, read on.
Professor Glenn Reynolds of Instapundit has been writing about the "higher education bubble" for some time now. This somewhat-controversial hypothesis claims that the value of a college degree is going down even as the cost of a degree is going up, and that the entire system of higher education in the United States is due for a "correction," much like the housing market bubble that popped in 2007.
Whether the "bubble" is sound economic theory or not, it focuses attention on how school debt burdens young people in an underperforming economy. A recent graduate who borrowed $50,000 for her BA in sociology may find nothing better than Starbucks--unless she's willing to borrow even more to get a masters degree.
Student debt is different from mortgage debt--and every difference disadvantages younger people. Student loans are paid out of after-tax dollars; home loans are paid from pre-tax dollars. Home loans vanish after bankruptcy, student loans stay with you until you die.
So let's put these facts together and see how they apply to the "young invincibles" who are supposed to sign up on the exchanges. A 26-year-old who makes 29,000 in Frederick, Maryland pays $168.00 per month for a "silver" plan, which has a $1,300 deductible and a $6,350 out-of-pocket maximum. A ten year loan for $50,000 at 6.8% costs $575 per month. Rent for a single person in Frederick is over $600 a month. Federal income tax on a person with no dependents or deductions is over $200 per month. Adding it up, we get:
- Income: $29,000
- Fixed Expenses: $21,600
- Federal taxes: $2,400
- Rent: $7,200
- Student loan: $6,900
- Insurance: $2000
- Car loan (4 years on $5000): $1500
- Cell phone (basic plan): $600
- Living Expenses: $2800
- Food ($100 a month for basics): $1200
- Gas (40 miles per day at 22 mpg): $1600
- Discretionary income: $5600
What if this particular graduate is one of those "young invincibles" that the law depends upon? We have to add a few items:
- Young invincible expenses:
- Fast food
- Beer
- Sports
- Cable television
- A real car
- Etc.
All that is for a student loan of $50,000 for a graduate with a pretty good job. What about the graduate in the next cubicle with the same salary and a $75,000 loan? His interest payment is just about $3600 more each year, leaving him with less than $200 a month after basic food and gas.
Bottom line? The new law wasn't written by a recent graduate, and things may get worse before they get better. The kind of job you need to pay off the kind of debt you need to get the kind of job you need is too high for subsidies but too low to get ahead in life. And don't forget--this lifestyle of "unsubsidized subsistence" is considered success for the recent graduate.
Is it any wonder that "millenials" aren't excited about the new healthcare law?
Tuesday, January 14, 2014
A HealthShare Pilgrimage
I am on the road today, visiting Samaritan Ministries in Peoria, IL, and the Alliance of Healthcare Sharing Ministries in Washington, IL. Tomorrow I will be meeting with Christian Healthcare Ministries in Barberton, OH. I hope to visit Medi-Share in Melbourne, FL in March.
I feel a little like the Apostle Paul, who submitted his message of a Gospel to the Gentiles to the church leaders in Jerusalem in Acts 15. I believe that "bearing one anothers' burdens" is a beautifully biblical way to pay for modern health care. I want to do what I can to persuade my brothers and sisters to explore the healthshare model. But I also know that the people who actually serve Christ by running healthshare ministries have been doing this humble, faithful work for decades--and they don't need me to come in and disrupt things.
So I'm on the road to find out how to combine enthusiasm with humility; energy with wisdom. Pray for me today!
I feel a little like the Apostle Paul, who submitted his message of a Gospel to the Gentiles to the church leaders in Jerusalem in Acts 15. I believe that "bearing one anothers' burdens" is a beautifully biblical way to pay for modern health care. I want to do what I can to persuade my brothers and sisters to explore the healthshare model. But I also know that the people who actually serve Christ by running healthshare ministries have been doing this humble, faithful work for decades--and they don't need me to come in and disrupt things.
So I'm on the road to find out how to combine enthusiasm with humility; energy with wisdom. Pray for me today!
Monday, January 6, 2014
Puzzling Over Medicaid
I have proposed a 50% federal tax credit for paying for someone else's health insurance. Payments to an insurance company or 501(c)(3) charity would be reported to the IRS, and the IRS would apply half the amount reported to federal income taxes owed. This tax credit would:
- double what some people now pay in taxes,
- reduce the burden on doctors who accept Medicaid, and
- extend the solvency of the Medicaid fund, which is expected to go into the red by 2024 at the latest.
- Parents of low-income children over 26 who live in "Medicaid gap" states.
- Children of low-income parents over 55 who do not want the Medicaid estate recovery program (MERP) to take the family assets after death.
- Church members who want to help the poor people in their congregation.
- Women's rights activists who want to give low-income women access to all reproductive choices despite Medicaid restrictions.
- Immigrant groups that want to help Medicaid-eligible individuals get coverage without disclosing the immigration status of their family members.
- "You just want to privilege church-goers." (Rebuttal: I think many church-goers would be willing to pay twice what they now pay in taxes. Maybe I'm trying to exploit church-goers!)
- "Why shouldn't the state claim all the assets from a person who goes on Medicaid?" (Rebuttal: the so-called "Death Tax" only takes 40% of the assets from billionaires. Why take 100% from the working class?)
- "This doesn't help the people who don't have wealthy family and friends." (Rebuttal: overloading the Medicaid system hurts the people who need it most. This frees it up as a true safety net for the truly destitute.)
- "It's a tax break for the rich." (Rebuttal: no, it's a tax break for the working class. Tax deductions are fairly valuable to people in the top tax brackets, because they can save about 39 cents on the dollar by giving money away. People in the lowest bracket are just as generous, but they get 10 cents of the dollar for their donations. A tax credit levels the playing field for altruism.)
- "Medicaid may be cheaper than insurance." (Rebuttal: yes, and you get what you pay for. Why not help people get better medical care at lower overall cost to the taxpayer?)
Friday, January 3, 2014
Elder Law Opportunity
Approximately one million Americans are now at risk of losing their homes, farms, and small businesses to Medicaid's estate recovery program ("MERP"), but as of today there have been less than 20 news stories about the problem--and most of those have been published in the "local news" section. That is a problem for older, poorer Americans but a terrific opportunity for elder law attorneys.
Attention, attorneys: would you like more business? Here's your recipe for free advertising:
Attention, attorneys: would you like more business? Here's your recipe for free advertising:
- Find a person who is:
- over 55
- with an income below 138% of the federal poverty line
- who owns a home, farm, small business, substantial savings, or other assets.
- Research MERP in your state (if you don't already know the law).
- Find the webpage where your state explains MERP.
- Find the newspaper(s) that serve your area and look for their "submit a story" button. (If they don't have a "submit a story" button, search for "health" and find the reporter who covers health issues.) Explain the problem, the solution, and offer to put them in touch with your client. Make sure they include the name of your firm in the story!
Monday, December 30, 2013
Sell Your Assets to Save Them
Low-income Americans are now eligible for expanded Medicaid, including a million or more who own homes, farms, small businesses, or other significant assets. People with incomes below 138% of the federal poverty line are not eligible for subsidies at HealthCare.gov and are being routed straight to Medicaid--but the federal website doesn't warn people over 55 that Medicaid is a healthcare loan, not health insurance. Federal law requires states to recover the costs of long-term care and related medical expenses from the estates of Medicaid recipients who die after the age of 55, and many states have expanded that rule to recover all Medicaid expenses. This means that many older, poorer Americans are poised to lose their farms, homes, or small businesses.
A farmer cannot pass his land on to the next generation, because Medicaid "looks back" five years to see if whether assets have been given away. Mom and Pop can't deed the corner store to their daughter; Nana can't give the house to her son. Medicaid was designed to serve the truly poor, not to offer tax-funded benefits to people with assets. The problem older Americans now face is an "unexpected human-caused event" with no easy answers.
Some people have suggested that low-income seniors lie about their income to get above the Medicaid threshold. If people over 55 can qualify for the maximum subsidy, health insurance costs them almost nothing. Lying is no solution, however--not only does it involve perjury, it commits a fraud on the insurance companies, and the insurers have no obligation to provide (very expensive) care to people who lie to get their coverage. People who claim income they don't have are likely to lose everything.
There is one way to save these assets--sell them. To be more precise--sell an undivided interest in them. A 64-year-old individual in Maryland qualifies for maximum subsidies with an income of just $12,000 per year. Grandpa can sell the farm to his son over time for $1,000 per month. Nana can get a reverse mortgage on her home. Mom and Pop can take on a partner who will buy them out on an installment basis. Selling part of your property may be the only way to keep the rest.
Remember--Medicaid is not insurance. When you pay insurance premiums, some company assumes the risk that you will get sick and need care. When you sign up for Medicaid, the government effectively co-signs your medical loans. When you die, the government recoups as much of its investment as it can.
If you like your farm, you can keep it--by paying for insurance instead of Medicaid.
A farmer cannot pass his land on to the next generation, because Medicaid "looks back" five years to see if whether assets have been given away. Mom and Pop can't deed the corner store to their daughter; Nana can't give the house to her son. Medicaid was designed to serve the truly poor, not to offer tax-funded benefits to people with assets. The problem older Americans now face is an "unexpected human-caused event" with no easy answers.
Some people have suggested that low-income seniors lie about their income to get above the Medicaid threshold. If people over 55 can qualify for the maximum subsidy, health insurance costs them almost nothing. Lying is no solution, however--not only does it involve perjury, it commits a fraud on the insurance companies, and the insurers have no obligation to provide (very expensive) care to people who lie to get their coverage. People who claim income they don't have are likely to lose everything.
There is one way to save these assets--sell them. To be more precise--sell an undivided interest in them. A 64-year-old individual in Maryland qualifies for maximum subsidies with an income of just $12,000 per year. Grandpa can sell the farm to his son over time for $1,000 per month. Nana can get a reverse mortgage on her home. Mom and Pop can take on a partner who will buy them out on an installment basis. Selling part of your property may be the only way to keep the rest.
Remember--Medicaid is not insurance. When you pay insurance premiums, some company assumes the risk that you will get sick and need care. When you sign up for Medicaid, the government effectively co-signs your medical loans. When you die, the government recoups as much of its investment as it can.
If you like your farm, you can keep it--by paying for insurance instead of Medicaid.
Saturday, December 28, 2013
My Medicaid Nightmare
Did you ever have that dream where you are screaming as loud as you can and no sound comes out? Medicaid's "estate recovery" rule has me screaming, but my super-partisan audience isn't listening.
The "estate recovery" rule says that states must recover the costs of long-term care and related Medicaid expenses from the estates of Medicaid recipients who die after the age of 55. This rule has been on the books for twenty years, and elder law attorneys specialize in helping older Americans pass on their assets to their children and grandchildren so that nobody has to lose the family farm or corner store because they get old and sick.
The problem is that half the states have expanded Medicaid without thinking about how this rule is going to affect their citizens. Before the changes to healthcare, Medicaid was hard to get onto and people had years to prepare. Now, anybody with income below 138% of the federal poverty line is eligible with no limits on the assets they may own. Many of the family farms in my county belong to people who are not eligible for federal subsidies because their incomes are too low. That means they are signing up for Medicaid without understanding the implications.
My nightmare is that partisan Republicans treat this as "merely" another monstrous failure of the new law, while partisan Democrats don't want to deal with it. The gridlock in Washington leaves families at risk, but since this particular time-bomb won't blow up for years, nobody cares. By the time the Washington Post tells how one family lost the farm they had tilled for six generations, tens of thousands of family farms will have become the collateral for billions of dollars worth of medical expenses they can never pay.
I hereby invite Americans of every political persuasion to help address this problem. If you are a true-blue Democrat who celebrates the Patient Protection and Affordable Care Act, please join me in protecting these patients. If you are a red-hot Republican who despises Obamacare, please help me warn the people most affected. If you don't belong to either party, this isn't political--it's neighbors helping neighbors get ready for an "unexpected human-caused event."
What can you do to help? Click two hyperlinks and send one email. Use this link to find an elder law attorney in your state, click that link to find their contact information, and paste this into an email:
The "estate recovery" rule says that states must recover the costs of long-term care and related Medicaid expenses from the estates of Medicaid recipients who die after the age of 55. This rule has been on the books for twenty years, and elder law attorneys specialize in helping older Americans pass on their assets to their children and grandchildren so that nobody has to lose the family farm or corner store because they get old and sick.
The problem is that half the states have expanded Medicaid without thinking about how this rule is going to affect their citizens. Before the changes to healthcare, Medicaid was hard to get onto and people had years to prepare. Now, anybody with income below 138% of the federal poverty line is eligible with no limits on the assets they may own. Many of the family farms in my county belong to people who are not eligible for federal subsidies because their incomes are too low. That means they are signing up for Medicaid without understanding the implications.
My nightmare is that partisan Republicans treat this as "merely" another monstrous failure of the new law, while partisan Democrats don't want to deal with it. The gridlock in Washington leaves families at risk, but since this particular time-bomb won't blow up for years, nobody cares. By the time the Washington Post tells how one family lost the farm they had tilled for six generations, tens of thousands of family farms will have become the collateral for billions of dollars worth of medical expenses they can never pay.
I hereby invite Americans of every political persuasion to help address this problem. If you are a true-blue Democrat who celebrates the Patient Protection and Affordable Care Act, please join me in protecting these patients. If you are a red-hot Republican who despises Obamacare, please help me warn the people most affected. If you don't belong to either party, this isn't political--it's neighbors helping neighbors get ready for an "unexpected human-caused event."
What can you do to help? Click two hyperlinks and send one email. Use this link to find an elder law attorney in your state, click that link to find their contact information, and paste this into an email:
How does Medicaid's estate recovery rule apply to expanded Medicaid under the Affordable Care Act? See:http://healthshareadvocates.com/2013/12/help.htmlWith help from elder law attorneys across America, we can get the word out in time to save the family farm.
Friday, December 27, 2013
Iowa and the Medicaid Trap
Washington and Oregon have noted the "Medicaid Trap," which threatens sole proprietorships and family farms in states which have expanded Medicaid. I had hoped that Iowa, Arkansas, and Utah might dodge this bullet because those three states are trying to provide actual insurance for low income citizens rather than enroll them in Medicaid as such. I contacted the Iowa Department of Human Services to find out more.
Unfortunately, the news goes from bad to worse. First, Iowa's low-income citizen remain subject to Medicaid's estate recovery rule. Congress required every state to recover the costs of "long-term care and related Medicaid expenses" from the estates of Medicaid recipients who died after the age of 55, and Iowa's novel approach to providing coverage to low-income citizens does not get around that.
Unfortunately, Iowa recovers all medical expenses, not just "long term care" and expenses directly attributed to such care. According to a personal email I just received from DHS,
Here's one silver lining for Iowa farmers. Iowa Senator Charles Grassley asked Senator Max Baucus to make sure that several well-established Christian healthcare sharing ministries could continue to operate, and 26 USC 5000A(d)(2)(b) expressly recognizes their right to exist. Samaritan Ministries, Christian Healthcare Ministries, and Medi-Share all help non-smoking, church-going Christians pay their bills by sharing medical costs among their members--and the cost of a monthly "share" is surprisingly low.
The next generation of Iowa farmers may choose to help Mom and Dad sign up for healthshare for the next five years. That way they may be able to pay their medical bills and keep the family farm!
Unfortunately, the news goes from bad to worse. First, Iowa's low-income citizen remain subject to Medicaid's estate recovery rule. Congress required every state to recover the costs of "long-term care and related Medicaid expenses" from the estates of Medicaid recipients who died after the age of 55, and Iowa's novel approach to providing coverage to low-income citizens does not get around that.
Unfortunately, Iowa recovers all medical expenses, not just "long term care" and expenses directly attributed to such care. According to a personal email I just received from DHS,
Estate recovery applies to those persons who receive assistance funded by Medicaid who are 55 years of age or older. Iowa law does not limit the recovery of Medicaid expenditures to long-term care and related Medicaid expenses, as Iowa applies this program equitably to all Medicaid members who meet the requirements of federal law.What this means is that many family farms across Iowa are now threatened by any medical event. If Iowans had been given more time get ready, the new law might not affect them much, but federal law imposes a five-year "look back" rule to keep Medicaid recipients from hiding their assets. That means Grampa and Nana can't just deed the farm over to the next generation--they have to stay out of the hospital for five years if they want to keep the farm in the family.
Here's one silver lining for Iowa farmers. Iowa Senator Charles Grassley asked Senator Max Baucus to make sure that several well-established Christian healthcare sharing ministries could continue to operate, and 26 USC 5000A(d)(2)(b) expressly recognizes their right to exist. Samaritan Ministries, Christian Healthcare Ministries, and Medi-Share all help non-smoking, church-going Christians pay their bills by sharing medical costs among their members--and the cost of a monthly "share" is surprisingly low.
The next generation of Iowa farmers may choose to help Mom and Dad sign up for healthshare for the next five years. That way they may be able to pay their medical bills and keep the family farm!
Monday, December 16, 2013
Oregon Waives the Medicaid Death Tax
The federal government requires states to recover medical costs from the estates of Medicaid recipients who die after the age of 55. The Act Formerly Known as Obamacare expands Medicaid eligibility so dramatically that many Americans could now forfeit everything they own without even realizing it. When Oregon discovered this problem, the Oregon Health Authority swiftly attempted to reassure its citizens:
For any coverage that starts October 1, 2013 or later, members of OHP [the Oregon Health Plan] who are not receiving long-term care services will not be subject to estate recovery. This policy change affects all current and future enrollees on OHP.
Federal law requires all 50 states to attempt to recover the costs of long-term care and related Medicaid services, but the states have considerable leeway as to how they go about the task. Apparently, nobody considered exactly what would happen in states that chose to Medicaid to cover citizens with low incomes but significant assets.
Oregon is the first state to officially address the "if you like your house you can keep your house" problem, but it won't be the last. Every state that has expanded Medicaid coverage will have to examine its own statutes, regulations, policies and procedures to make sure that citizens don't sign away their homes when they sign up for Medicaid.
Sunday, December 15, 2013
If You Like Your House, You Can Keep Your House
President Obama recently help up a sign that said, "Get Covered: Because Nobody Should Go Broke Just Because They Get Sick." He wouldn't be smiling if he read DailyKos.
On October 17, Beverly Woods asked a disturbing question on the DailyKos.com website. What happens to the assets of people who now meet the expanded criteria for Medicaid? Medicaid was designed to ensure healthcare for the truly destitute, and existing state and federal laws, regulations, policies, and procedures are based on the assumption that people on Medicaid have essentially no disposable assets. The Act Formerly Known as Obamacare changes that.
In "Medicaid Estate Recovery+ACA: Unintended Consequences," Ms. Woods explains the problem:
If you buy insurance, you pay a certain amount each month to protect yourself from bills too big to pay. If you don't have insurance but wind up in the hospital, you are stuck with the bills. If you can't pay them off before you die, your heirs are stuck. The executor of your will (if you have one) must sell off your assets (if you have any) to pay off your bills before anybody gets anything from your estate. Medicaid does not insure Americans against medical expenses--it loans them the money to pay expenses, and takes it all back when they die.
You could call it a "death tax," if that term hadn't been taken. Next year, Americans who die with more than five million dollars in assets will pay 40% in taxes. Americans who die on Medicaid will pay 100% of their Medicaid expenses before their heirs get one penny.
Family farm? Gone. Mom and Pop shop? Gone. Nana's house, with her snow-white picket fence around her prize-winning garden? Gone, gone, gone.
Is there a way around this problem? There is not supposed to be, for long-term care expenses. The system is designed to loan money to people who have no assets, and to recover as much government money as possible from people who do have assets. Lots of people have tried to hide their assets from the government, with limited success. In particular, parents may not deed their houses over to their children to evade their debts--if they do, and incur medical expenses any time during the next 60 months, the children will be required to pay Medicaid back.
Federal law requires states to recover the costs of long-term care and related Medicaid expenses, but left it up the states to implement that recovery. No state legislation was written with today's situation in mind, and every state that has expanded Medicaid must now review its laws and policies to protect seniors from unintended consequences. Oregon has taken the first step to assure its citizens that it only intends to collect money for "long-term care" and not for ordinary medical expenses.
The problem with Oregon's response to date is that "long-term care" does not just mean "putting granny in the nursing home." Any Medicaid patient who is in a hospital for three days becomes eligible for "long term care" in a "skilled nursing facility," and "long term care" is any stay over 30 days. Thus, a bad case of pneumonia could send a 60-year-old into the hospital, on to "skilled nursing," and into "long-term care."
The Act Formerly Known as Obamacare has just turned into a full-employment act for attorneys who specialize in "elder law" in the states that have expanded Medicaid. Citizens of limited means who are over 49 should run, not walk, to an expert who can help them shield their homes from the unintended consequences of this law.
On October 17, Beverly Woods asked a disturbing question on the DailyKos.com website. What happens to the assets of people who now meet the expanded criteria for Medicaid? Medicaid was designed to ensure healthcare for the truly destitute, and existing state and federal laws, regulations, policies, and procedures are based on the assumption that people on Medicaid have essentially no disposable assets. The Act Formerly Known as Obamacare changes that.
In "Medicaid Estate Recovery+ACA: Unintended Consequences," Ms. Woods explains the problem:
We haven't had lots of people younger than 65 on Medicaid, because in most states simply earning less than the Federal Poverty Level did not qualify one for Medicaid.
And we haven't had many people with lots of assets on Medicaid, because in most places you have to have less than around $2400 to your name before Medicaid will cover you. You can keep your house and your car, but Medicaid reserves the right to put liens on them and take them when you die.
But now we have the Affordable Care Act, and its expectation that everyone in the lower tier of income will end up in the Medicaid system. To accomplish this, they have dropped the asset test. So now we will have lots of people ages 55-64, who have assets but not a lot of income right now, for whatever reason, on Medicaid.
The kicker of it is, if you make the right amount to qualify for a subsidized health insurance plan, your costs are going to be shared and subsidized by the government. But if you go on Medicaid, you owe the entire amount that Medicaid spends on you from the day you turn 55.As she ended her October 17 entry, Ms. Woods noted, "The fact that practically no one is talking about this makes me uneasy." Four days later, she was back, with "Estate Recovery: It's Worse Than You Thought." The bottom line: Medicaid is not insurance, it's a loan.
If you buy insurance, you pay a certain amount each month to protect yourself from bills too big to pay. If you don't have insurance but wind up in the hospital, you are stuck with the bills. If you can't pay them off before you die, your heirs are stuck. The executor of your will (if you have one) must sell off your assets (if you have any) to pay off your bills before anybody gets anything from your estate. Medicaid does not insure Americans against medical expenses--it loans them the money to pay expenses, and takes it all back when they die.
You could call it a "death tax," if that term hadn't been taken. Next year, Americans who die with more than five million dollars in assets will pay 40% in taxes. Americans who die on Medicaid will pay 100% of their Medicaid expenses before their heirs get one penny.
Family farm? Gone. Mom and Pop shop? Gone. Nana's house, with her snow-white picket fence around her prize-winning garden? Gone, gone, gone.
Is there a way around this problem? There is not supposed to be, for long-term care expenses. The system is designed to loan money to people who have no assets, and to recover as much government money as possible from people who do have assets. Lots of people have tried to hide their assets from the government, with limited success. In particular, parents may not deed their houses over to their children to evade their debts--if they do, and incur medical expenses any time during the next 60 months, the children will be required to pay Medicaid back.
Federal law requires states to recover the costs of long-term care and related Medicaid expenses, but left it up the states to implement that recovery. No state legislation was written with today's situation in mind, and every state that has expanded Medicaid must now review its laws and policies to protect seniors from unintended consequences. Oregon has taken the first step to assure its citizens that it only intends to collect money for "long-term care" and not for ordinary medical expenses.
The problem with Oregon's response to date is that "long-term care" does not just mean "putting granny in the nursing home." Any Medicaid patient who is in a hospital for three days becomes eligible for "long term care" in a "skilled nursing facility," and "long term care" is any stay over 30 days. Thus, a bad case of pneumonia could send a 60-year-old into the hospital, on to "skilled nursing," and into "long-term care."
The Act Formerly Known as Obamacare has just turned into a full-employment act for attorneys who specialize in "elder law" in the states that have expanded Medicaid. Citizens of limited means who are over 49 should run, not walk, to an expert who can help them shield their homes from the unintended consequences of this law.
Saturday, December 14, 2013
Healthcare D-Day or Dunkirk
Reading over my last few posts, one would think I hated our President. I apologize for giving that impression. I don't. I donated money to his primary campaign, wept at the thought of Martin Luther King, Jr's dream come true, and receive his daily emails. He and I went to law school together (for one brief year--we never met). I pray for him as sincerely as I have ever prayed for any president, and that's a lot.
But I have been pretty hard on him lately, for a reason. He turned something as big as D-Day into the Bay of Pigs. When General Eisenhower gave the orders to invade Europe, he wrote a speech to give if things went badly. President Obama didn't write that speech. He borrowed one from Sergeant Schultz:
The soldiers trapped at Dunkirk were not saved by the invincible British Navy (because big ships couldn't get close enough to the beach), but by the astounding courage, ingenuity and sacrifice of ordinary Britons along the southern coast of England. If you don't know the story, I cannot do it justice here. Read "The Snow Goose," by Paul Gallico--a lovely little story that moves me to tears as I type.
There are millions of Americans "trapped on the beach" right now, and tens of millions more to come. As of this moment, there is no realistic hope that Republicans and Democrats will decide to paper over their differences to stop the suffering--the political war that got us into this situation is raging hotter than ever, and there is no reason to think it will be over before January, 2017, when a new President takes office. Between now and then, the best hope our suffering neighbors has will come from us.
That's why I'm promoting the Federal Health Union Act of 2014--a bill that does not replace or repeal the Act Formerly Known as Obamacare. It doesn't promise affordable care for all Americans--but it does offer affordable care for more Americans. It's a bill that lets neighbors help out neighbors until big business and big government can get their act together.
For more information on the FHUA, click here. There's one man in Washington who could sponsor this bill and make it happen. If he agrees to take a look at it, I'll let you know. Until then, may God help those who can't help themselves tonight.
But I have been pretty hard on him lately, for a reason. He turned something as big as D-Day into the Bay of Pigs. When General Eisenhower gave the orders to invade Europe, he wrote a speech to give if things went badly. President Obama didn't write that speech. He borrowed one from Sergeant Schultz:
"I was not informed directly that the website would not be working the way it was supposed to. I’m accused of a lot of things. I don’t think I’m stupid enough to go around saying this is going to be like shopping on Amazon or Travelocity a week before the website opens if I thought that it wasn’t going to work," Mr. Obama said during a press conference at the White House. "Clearly we, and I, did not have enough awareness about the problems with the website."Two weeks before the new year, there is every reason to believe that the net result of all this will leave millions of previously insured Americans exposed to physical and financial ruin. Instead of D-Day, where the forces of freedom pushed tyranny back across a continent, we are re-enacting the Battle of Dunkirk, where the Allied armies lay trapped between Hitler's devils and the deep blue sea.
The soldiers trapped at Dunkirk were not saved by the invincible British Navy (because big ships couldn't get close enough to the beach), but by the astounding courage, ingenuity and sacrifice of ordinary Britons along the southern coast of England. If you don't know the story, I cannot do it justice here. Read "The Snow Goose," by Paul Gallico--a lovely little story that moves me to tears as I type.
There are millions of Americans "trapped on the beach" right now, and tens of millions more to come. As of this moment, there is no realistic hope that Republicans and Democrats will decide to paper over their differences to stop the suffering--the political war that got us into this situation is raging hotter than ever, and there is no reason to think it will be over before January, 2017, when a new President takes office. Between now and then, the best hope our suffering neighbors has will come from us.
That's why I'm promoting the Federal Health Union Act of 2014--a bill that does not replace or repeal the Act Formerly Known as Obamacare. It doesn't promise affordable care for all Americans--but it does offer affordable care for more Americans. It's a bill that lets neighbors help out neighbors until big business and big government can get their act together.
For more information on the FHUA, click here. There's one man in Washington who could sponsor this bill and make it happen. If he agrees to take a look at it, I'll let you know. Until then, may God help those who can't help themselves tonight.
Obama's Science of Change
It wasn't supposed to be work like this. Obama "scientific approach" to change was glowingly featured in Time Magazine in 2009. (No access to Time's premium-content? Try "Obama's efforts to change us carry a clear political risk.") Here's his "science of change" in a nutshell:
That's why I think we need the Federal Health Union Act of 2014, and need it now!
- make it clear,
- make it easy,
- make it popular,
- make it mandatory.
The "clear" part was,"If you like your plan, you can keep your plan. Period." As Albert Einstein famously noted, "Make everything as simple as possible, but no simpler." Obama is no Einstein--his oversimplification of the Act Formerly Known as Obamacare won him Politifact's "Lie of the Year."
The "easy" part was, "Just visit healthcare.gov, and there you can compare insurance plans, side by side, the same way you’d shop for a plane ticket on Kayak or a TV on Amazon." (Barack Obama, Oct. 1, 2013.) Six weeks later, the same man admitted that "what we're also discovering is that insurance is complicated to buy." (Barack Obama, Nov. 14, 2013.)
The "popular" part was taken for granted. The assumption that the Act Formerly Known as Obamacare would be popular was why it was formerly known as Obamacare. All Obama needed to do was hold up a sign that says, "Get Covered Because Nobody Should Go Broke Just Because They Get Sick."
But "Obama holding a sign" was a punchline just waiting for its joke. Within ten minutes, the Senate's most outspoken Obamacare opponent "cruz-ified" the President's tweet:
The "mandatory" part was written into the law--and then written out of it by the same Supreme Court Justice who declared Obamacare constitutional. Military service in Vietnam was mandatory, and burning a draft card could send a healthy young man to jail... or Canada. Health insurance, by contrast, is no more mandatory than a solar hot water heater, for the consumer. The government can "nudge" you to buy the one or buy the other, and raise (or lower) your taxes according to your choice, but it cannot put you in jail or drive you to Canada if you don't buy insurance.
Whether you agree with Obama or not, he had a four-point plan to "nudge" Americans into his new system. And whether you agree with Obama or not, that plan has now failed on all four points. This has big implications for all Americans, especially Democrats. While Republicans may embrace "the fierce urgency of shutting up" for now, too many of our neighbors are in real distress for us to wait for a new President to offer us something different in January, 2017.The "easy" part was, "Just visit healthcare.gov, and there you can compare insurance plans, side by side, the same way you’d shop for a plane ticket on Kayak or a TV on Amazon." (Barack Obama, Oct. 1, 2013.) Six weeks later, the same man admitted that "what we're also discovering is that insurance is complicated to buy." (Barack Obama, Nov. 14, 2013.)
The "popular" part was taken for granted. The assumption that the Act Formerly Known as Obamacare would be popular was why it was formerly known as Obamacare. All Obama needed to do was hold up a sign that says, "Get Covered Because Nobody Should Go Broke Just Because They Get Sick."
But "Obama holding a sign" was a punchline just waiting for its joke. Within ten minutes, the Senate's most outspoken Obamacare opponent "cruz-ified" the President's tweet:
The "mandatory" part was written into the law--and then written out of it by the same Supreme Court Justice who declared Obamacare constitutional. Military service in Vietnam was mandatory, and burning a draft card could send a healthy young man to jail... or Canada. Health insurance, by contrast, is no more mandatory than a solar hot water heater, for the consumer. The government can "nudge" you to buy the one or buy the other, and raise (or lower) your taxes according to your choice, but it cannot put you in jail or drive you to Canada if you don't buy insurance.
That's why I think we need the Federal Health Union Act of 2014, and need it now!
Not Enough Carrot, Not Enough Stick
The Washington Post editorial board has weighed in on the Act Previously Known as Obamacare. Today's editorial, "Two Problems That Could Undermine the Affordable Care Act," can be summed up in six words:
In early November, after the website's first disastrous month, our President went before the cameras to explain, "Now, this is like having a really good product in the store and the cash registers don't work and there aren't enough parking spots and nobody can get through the door." By early December, Secretary Sebelius testified to the effect that the doors now work and the parking lot is open. The administration official who is actually in charge of the website, Henry Chao, admitted that the "cash registers" aren't just "not working"--they haven't been built yet. That's why nobody is using the number of paid-up, covered customers (the only number that might actually measure "success"). That's why what the Post calls "lagging" enrollment merely refers to the number of people who have put a product in their cart--whether they have paid or not.
If the product was good but the price was bad, people might put it in their cart while they dug around the couch for extra change. If the product was bad but the alternatives were nonexistent, people might put it in their cart while they search for something else. But if the product was good and the price was good and the cash register (or good-enough-for-government-work equivalent) actually worked, we'd see enrollment catching up to at least the number of people who lost their policies--five million and more.
Enrollment is so far below that mark that the only people who actually do know the numbers are begging insurance companies to cover people who haven't paid (yet). This product just isn't selling.
So--there isn't enough carrot. Which brings us to the Post's second criticism--there's not enough stick, either.
The "stick" (Penalty? Tax? Mandate? Suggestion? Ask a lawyer, accountant, or mystic--the answer depends on the problem Obama is trying to solve today!) is $95 or 1% of income for every unininsured person. That's $95 for the "young invincibles," the bungee-jumping, keg-standing party animals who got a free ride on their parents' policy until they turned 26 and now have to choose between actually paying premiums ("I thought Obamacare was free?!") and paying $95. Is that enough of a "stick" to get them to sign up?
Not yet.
The Post may be exactly right in its diagnosis, but what is its prescription? More gain? More pain? Given the irreconcilable differences between Republicans and Democrats between now and the 2014 elections, America may be doomed to suffer the worst of both worlds. That's why I think the Federal Health Union Act of 2014 is worth pursuing. Maybe I can get the Post to endorse it!
- Not enough carrot
- Not enough stick
The article begins with an admission that "enrollment is lagging."
To work well, the law’s new insurance marketplaces need millions to sign up and enough healthy people paying into the system to offset the medical costs of the sick. But this week the Department of Health and Human Services admitted that enrollment is lagging.Calling this enrollment "lagging" libels laggards everywhere. We still don't have meaningful numbers of people who have searched for a plan on HealthCare.gov, found a plan, selected that plan, and sent their full first month's premium into the provider. We do know that the numbers are so far short of the Administration's definition of "success" (seven million people by March 31st) that we're reduced to hoping they are somewhere above "epic fail" (less Americans insured on Jan. 1st than before the law kicked in, including Medicaid signups).
In early November, after the website's first disastrous month, our President went before the cameras to explain, "Now, this is like having a really good product in the store and the cash registers don't work and there aren't enough parking spots and nobody can get through the door." By early December, Secretary Sebelius testified to the effect that the doors now work and the parking lot is open. The administration official who is actually in charge of the website, Henry Chao, admitted that the "cash registers" aren't just "not working"--they haven't been built yet. That's why nobody is using the number of paid-up, covered customers (the only number that might actually measure "success"). That's why what the Post calls "lagging" enrollment merely refers to the number of people who have put a product in their cart--whether they have paid or not.
If the product was good but the price was bad, people might put it in their cart while they dug around the couch for extra change. If the product was bad but the alternatives were nonexistent, people might put it in their cart while they search for something else. But if the product was good and the price was good and the cash register (or good-enough-for-government-work equivalent) actually worked, we'd see enrollment catching up to at least the number of people who lost their policies--five million and more.
Enrollment is so far below that mark that the only people who actually do know the numbers are begging insurance companies to cover people who haven't paid (yet). This product just isn't selling.
So--there isn't enough carrot. Which brings us to the Post's second criticism--there's not enough stick, either.
The "stick" (Penalty? Tax? Mandate? Suggestion? Ask a lawyer, accountant, or mystic--the answer depends on the problem Obama is trying to solve today!) is $95 or 1% of income for every unininsured person. That's $95 for the "young invincibles," the bungee-jumping, keg-standing party animals who got a free ride on their parents' policy until they turned 26 and now have to choose between actually paying premiums ("I thought Obamacare was free?!") and paying $95. Is that enough of a "stick" to get them to sign up?
Not yet.
The Post may be exactly right in its diagnosis, but what is its prescription? More gain? More pain? Given the irreconcilable differences between Republicans and Democrats between now and the 2014 elections, America may be doomed to suffer the worst of both worlds. That's why I think the Federal Health Union Act of 2014 is worth pursuing. Maybe I can get the Post to endorse it!
Friday, December 13, 2013
Exercise, Estrogen, Cancer, and... Jello?
Headlines across the country today announce, "Exercise Can Ease Pain from Breast Cancer Drugs" (USA Today), "Exercise Helps Women Tolerate Breast Cancer Drugs (Boston Globe), "Exercise Eases Common Breast Cancer Treatment Side Effect" (Huffington Post). Dr. Jennifer Ligibel, at the Susan F. Smith for Women's Cancers at Dana-Farber, just presented her findings on exercise at a major breast cancer symposium. The study is good news for women with breast cancer or at high risk of cancer--and for Dr. Joel Brind, who has a double interest in the results.
The study explored whether regular, supervised exercise might help reduce the aches and pains that tempt so many breast cancer patients to stop taking the estrogen-blocking drugs they need to fight tumors. Women who exercised regularly claimed 20% less joint pain, while a control group that followed normal daily activities claimed 3% less pain. Less pain equals more gain for women whose lives may depend on their ability to gag down a drug that makes them ache all over.
The science behind these cancer drugs is simple--estrogen is the "gasoline" of female physiology. On the one hand, it's what keeps the human race alive--but it has its dangers. In particular, estrogen causes certain types of breast tissue to reproduce rapidly. Women with estrogen-sensitive tumors (as well as women who have no tumors yet but are at high risk of developing them) can be helped with drugs which the body from using estrogen (such as Tamoxifen) or that keep estrogen from being produced in the first place ("aromatase inhibitors" like Letrozole).
That is no surprise to Dr. Brind, who made headlines of his own in 1993 when he claimed that women who choose abortion are more likely to develop breast cancer. Abortion leaves women awash in the estrogen of early pregnancy without the protective effects of third-trimester hormones. (If estrogen is like gasoline, third-trimester hormones are like rain that puts out the fires.) Brind (a professor of human biology and endocrinology at Baruch College of the City University of New York) thought he was just doing science when he connected the dots between research on rats, research on humans, and increasing breast cancer rates around the world. To his dismay, the vast majority of endocrinologists, breast cancer researchers, and women's health advocates rejected his reasoning, even though study after study shows a modest increase in breast cancer risk after induced abortion.
Dr. Brind found himself back in the news recently when Chinese researchers reported a statistically significant 44% increase in breast cancer risk after one or more abortions. Dr.Yubei Huang's "meta-analysis" aggregated data from 37 different studies in China, and found a consistent "dose-response relationship" that greatly strengthens the importance of the findings. Pro-life groups spread the word to their audiences, but the report got little play in big media.
What mainstream coverage that there was downplayed the link, insisting that the Chinese team used a "notoriously misleading method" that depended on women's personal accounts of their abortion history instead of official abortion records. The "recall bias" argument claims that women with cancer are more likely to tell the truth about something as personal as abortion, whereas healthy women might be tempted to conceal their past. This hypothetical bias has been put to the test by Dr. Janet Daling, of Fred Hutchinson Cancer Research Center in Seattle, who included a "control group" of women with cervical cancer to find out whether they showed a link to abortion. If "recall bias" created a false association between abortion and breast cancer, it should create the same mirage with cervical cancer. Dr. Daling found no relationship between abortion and cervical cancer (proving that in her study, at least, healthy women were not lying about their abortions), and a 50% increase in breast cancer risk among young women who chose abortion.
That should have put the so-called "recall bias" argument to rest--but when it comes to abortion, science takes a back seat to politics. Brind was mocked, attacked, and eventually outvoted at a 2003 conference at the National Institute of Health. The abortion/breast cancer link was dead. The science was settled. Those who argue that abortion increases the risk of breast cancer are now in the same category as those who deny that humans cause global warming.
So--what does a professional endocrinologist do after the National Institute of Health tells him to sit down, shut up, and stop talking about the effect of estrogen on breast tissue? In Brind's case, he keeps on researching. Dr. Brind started studying amino acid metabolism and discovered that a single amino acid--glycine--has a big effect on aches and pains. As it turns out, chicken soup is good for more than the soul--the proteins in chicken broth are rich in glycine, and they really do relieve the symptoms of the common cold. Brind encourages people with chronic pain to eat more jello, drink more soup, or use "Sweetamine," his own glycine-based supplement.
Which brings us back to today's news. Several hours of exercise each week may help women take their cancer drugs because it reduces joint pain by 20%. What if a daily dose of sweetamine reduces joint pain even more? Exercise is good in its own right, but if it is only a means to the end of helping women tolerate their medication, sweetamine might be far better. It's easy to make sure women take their sweetamine each day. It's hard to crack the whip to make them exercise!
It should be obvious what the next research project ought to be. Somebody needs to compare three groups of women: some taking sweetamine, some who exercise, and a "control group" of women who do neither. If sweetamine reduces joint pain more than exercise does, it may well be prescribed along with the estrogen-blockers it enables women to take.
This world is a funny place. We might yet see the very experts who mocked Brind's claim that estrogen raises the risk of cancer prescribe his remedy for the aches caused by estrogen-blockers!
The study explored whether regular, supervised exercise might help reduce the aches and pains that tempt so many breast cancer patients to stop taking the estrogen-blocking drugs they need to fight tumors. Women who exercised regularly claimed 20% less joint pain, while a control group that followed normal daily activities claimed 3% less pain. Less pain equals more gain for women whose lives may depend on their ability to gag down a drug that makes them ache all over.
The science behind these cancer drugs is simple--estrogen is the "gasoline" of female physiology. On the one hand, it's what keeps the human race alive--but it has its dangers. In particular, estrogen causes certain types of breast tissue to reproduce rapidly. Women with estrogen-sensitive tumors (as well as women who have no tumors yet but are at high risk of developing them) can be helped with drugs which the body from using estrogen (such as Tamoxifen) or that keep estrogen from being produced in the first place ("aromatase inhibitors" like Letrozole).
That is no surprise to Dr. Brind, who made headlines of his own in 1993 when he claimed that women who choose abortion are more likely to develop breast cancer. Abortion leaves women awash in the estrogen of early pregnancy without the protective effects of third-trimester hormones. (If estrogen is like gasoline, third-trimester hormones are like rain that puts out the fires.) Brind (a professor of human biology and endocrinology at Baruch College of the City University of New York) thought he was just doing science when he connected the dots between research on rats, research on humans, and increasing breast cancer rates around the world. To his dismay, the vast majority of endocrinologists, breast cancer researchers, and women's health advocates rejected his reasoning, even though study after study shows a modest increase in breast cancer risk after induced abortion.
Dr. Brind found himself back in the news recently when Chinese researchers reported a statistically significant 44% increase in breast cancer risk after one or more abortions. Dr.Yubei Huang's "meta-analysis" aggregated data from 37 different studies in China, and found a consistent "dose-response relationship" that greatly strengthens the importance of the findings. Pro-life groups spread the word to their audiences, but the report got little play in big media.
What mainstream coverage that there was downplayed the link, insisting that the Chinese team used a "notoriously misleading method" that depended on women's personal accounts of their abortion history instead of official abortion records. The "recall bias" argument claims that women with cancer are more likely to tell the truth about something as personal as abortion, whereas healthy women might be tempted to conceal their past. This hypothetical bias has been put to the test by Dr. Janet Daling, of Fred Hutchinson Cancer Research Center in Seattle, who included a "control group" of women with cervical cancer to find out whether they showed a link to abortion. If "recall bias" created a false association between abortion and breast cancer, it should create the same mirage with cervical cancer. Dr. Daling found no relationship between abortion and cervical cancer (proving that in her study, at least, healthy women were not lying about their abortions), and a 50% increase in breast cancer risk among young women who chose abortion.
That should have put the so-called "recall bias" argument to rest--but when it comes to abortion, science takes a back seat to politics. Brind was mocked, attacked, and eventually outvoted at a 2003 conference at the National Institute of Health. The abortion/breast cancer link was dead. The science was settled. Those who argue that abortion increases the risk of breast cancer are now in the same category as those who deny that humans cause global warming.
So--what does a professional endocrinologist do after the National Institute of Health tells him to sit down, shut up, and stop talking about the effect of estrogen on breast tissue? In Brind's case, he keeps on researching. Dr. Brind started studying amino acid metabolism and discovered that a single amino acid--glycine--has a big effect on aches and pains. As it turns out, chicken soup is good for more than the soul--the proteins in chicken broth are rich in glycine, and they really do relieve the symptoms of the common cold. Brind encourages people with chronic pain to eat more jello, drink more soup, or use "Sweetamine," his own glycine-based supplement.
Which brings us back to today's news. Several hours of exercise each week may help women take their cancer drugs because it reduces joint pain by 20%. What if a daily dose of sweetamine reduces joint pain even more? Exercise is good in its own right, but if it is only a means to the end of helping women tolerate their medication, sweetamine might be far better. It's easy to make sure women take their sweetamine each day. It's hard to crack the whip to make them exercise!
It should be obvious what the next research project ought to be. Somebody needs to compare three groups of women: some taking sweetamine, some who exercise, and a "control group" of women who do neither. If sweetamine reduces joint pain more than exercise does, it may well be prescribed along with the estrogen-blockers it enables women to take.
This world is a funny place. We might yet see the very experts who mocked Brind's claim that estrogen raises the risk of cancer prescribe his remedy for the aches caused by estrogen-blockers!
Wednesday, December 11, 2013
Affordable Care for More Americans
This blog has explored how Obamacare affects Americans with serious illnesses such as multiple sclerosis, end-stage kidney disease, and AIDS, and earlier discussed its effect on Medicaid recipients. I'm tired of complaining about what doesn't work. How about a post on what would?
We've tried meeting America's health care needs through big business (any company that can insure millions against a risk as expensive as cancer is "big" by any definition). Now we're trying to meet America's needs through a loveless marriage between big business and big government--but the honeymoon is over and the bride is talking to her lawyer. Progressives who held their noses to support Obamacare are now pushing for big government to do the job alone, through a single-payer system. While that makes sense (to them) in theory, the latest polls suggest that putting it into practice could be impossible for the time being.
Those polls suggest that neither the Republicans nor Democrats will have a commanding majority before 2016, leaving Obamacare the law of the land no matter how many "glitches" affect how many Americans. Big goals (repeal and replace! Switch to single payer!) will fire up the base on the left and right, but that won't help middle-of-the-road, middle-class folks for the next three years. We aren't going to get anything that can guarantee affordable care for all Americans--so how about finding something that would provide affordable care for more Americans? Especially if all we have to do is find something that works and make it work better?
There is already something that works. Obamacare provides an explicit exemption for healthcare sharing ministries ("healthshares"). Senator Max Baucus of Montana included a provision that recognizes not-for-profit healthshares as a valid way to comply with the Patient Protection and Affordable Care Act. That provision, which can be found at 26 USC 5000A(d)(2)(b), allows certain tax-deductible charities to share the costs of medical care among people with shared religious or ethical beliefs. More than 170,000 families currently participate in the three groups that were intentionally grandfathered in (Medi-Share, Samaritan Ministries, and Christian Healthcare Ministries) and membership seems to be rising since the new law took effect.
Healthshares aren't big business or big government, but they have been successful at meeting needs for more than thirty years. Between what members share and donors give, they have paid the bills for hundreds of thousands of patients--despite the fact that they are prohibited by law from paying salesmen, setting specific underwriting amounts, or using many of the other tools that the insurance industry has developed to serve their customers. Healthshares have succeeded with no direct government assistance and without the tools that insurance companies use--because members helping members is a better way to pay.
The Secular Coalition for America opposed Senator Baucus' plan to include healthshares in the law--but not because they disagree with healthshares. They wrote:
Expanding healthshares to Vegans and smokers would make the law more just, but to make it more effective we need two additional changes. First, healthshares need to be able to use the same tools that health insurance companies need without apologizing for it or dancing around state regulations. Healthshares need to be expressly exempt from state insurance regulations in the same way that federal credit unions are exempt from state banking regulations.
That is why the Federal Health Union Act would be directly modeled on the Federal Credit Union Act of 1934, which created federally-chartered not-for-profit credit unions during the banking crisis of the Great Depression. The National Credit Union Association has been able to keep credit unions serving customers for many years--and a National HealthShare Association could ensure financial stability and consumer protection for not-for-profit health cooperatives.
The problem with allowing healthshares to compete directly with for-profit plans is that insurance companies are now required to accept all comers, even those with pre-existing conditions. This drives up the cost of healthcare, but low-income Americans are offered subsidies to help them cover the cost of these "free-market plans." If healthshares don't have to pay for pre-existing conditions, they won't be competing with for-profit plans--they'll be taking advantage of them. On the other hand, if plans sold on the exchange get subsidies and healthshares don't, it's the insurance companies that are taking the advantage.
The Federal Health Union Act funds pre-existing conditions and low-income insurance without forcing anybody to buy anything they don't want or pay for anything they detest. It does so through a "matching-funds" approach to fund-raising. Taxpayers who donate money to a federally-chartered healthshare will be eligible for a 50% tax credit for their gift. This saves taxpayers money (it costs taxpayers 50 cents to subsidize the poor and sick) and takes the politics out of healthcare. The Susan G. Komen Foundation could raise a lot more money for breast cancer in a very short time--and so could patients with less politically-prominent diseases, like Lyme Disease and multiple sclerosis.
Changing the tax law is not a simple matter--but in this case, it would be worth it. Medicare is a financial time bomb, and Medicaid has even more problems. Among other things, changes to Medicaid are raising the demand for healthcare while cutting the supply. Tax credits for healthshares could move millions of people off Medicaid onto non-profit plans, especially if not-for-profit hospitals can operate their own healthshare. A hospital healthshare could dramatically reduce the number of uninsured patients in a service area, reducing the amount that other patients pay. With a 50-cent-on-the-dollar tax credit, local businesses would have every reason to build good will by helping out their neighbors.
That's all it takes to provide affordable care for more Americans, including the poor, sick, and elderly. All we have to do is (a) expand healthshares, (b) allow them to compete directly with for-profit insurers, and (c) save 50 cents on donated dollars. It's a plan that Americans can understand, politicians can support, and the President can sign.
I hope to share this with my Senator (Joe Manchin of West Virginia) and Congresswoman (Shelley Moore Capito) at the earliest opportunity. If you think your representative might be interested in co-sponsoring such legislation, leave a comment explaining why. If we all work hard and work together, we can help millions of our neighbors in distress.
We've tried meeting America's health care needs through big business (any company that can insure millions against a risk as expensive as cancer is "big" by any definition). Now we're trying to meet America's needs through a loveless marriage between big business and big government--but the honeymoon is over and the bride is talking to her lawyer. Progressives who held their noses to support Obamacare are now pushing for big government to do the job alone, through a single-payer system. While that makes sense (to them) in theory, the latest polls suggest that putting it into practice could be impossible for the time being.
Those polls suggest that neither the Republicans nor Democrats will have a commanding majority before 2016, leaving Obamacare the law of the land no matter how many "glitches" affect how many Americans. Big goals (repeal and replace! Switch to single payer!) will fire up the base on the left and right, but that won't help middle-of-the-road, middle-class folks for the next three years. We aren't going to get anything that can guarantee affordable care for all Americans--so how about finding something that would provide affordable care for more Americans? Especially if all we have to do is find something that works and make it work better?
There is already something that works. Obamacare provides an explicit exemption for healthcare sharing ministries ("healthshares"). Senator Max Baucus of Montana included a provision that recognizes not-for-profit healthshares as a valid way to comply with the Patient Protection and Affordable Care Act. That provision, which can be found at 26 USC 5000A(d)(2)(b), allows certain tax-deductible charities to share the costs of medical care among people with shared religious or ethical beliefs. More than 170,000 families currently participate in the three groups that were intentionally grandfathered in (Medi-Share, Samaritan Ministries, and Christian Healthcare Ministries) and membership seems to be rising since the new law took effect.
Healthshares aren't big business or big government, but they have been successful at meeting needs for more than thirty years. Between what members share and donors give, they have paid the bills for hundreds of thousands of patients--despite the fact that they are prohibited by law from paying salesmen, setting specific underwriting amounts, or using many of the other tools that the insurance industry has developed to serve their customers. Healthshares have succeeded with no direct government assistance and without the tools that insurance companies use--because members helping members is a better way to pay.
The Secular Coalition for America opposed Senator Baucus' plan to include healthshares in the law--but not because they disagree with healthshares. They wrote:
For centuries, numerous mutual aid societies in the United States have sponsored insurance and social services organized around a shared ethnic background, occupation, geographical region or religion. For example, in 1787 African Americans released from slavery organized a nondenominational benefit society called the "Free African Society of Philadelphia." By stating that only people belonging to religious mutual aid societies can be exempt from mandated health insurance this provision privileges Christian Americans over non-Christian Americans.I couldn't agree more. That's why we need a Federal Health Union Act, which would amend the language of 26 USC 5000A(d)(2)(b) to include any not-for-profit organization united by any shared interests with an objective effect on health. Under such a law, Vegans as well as Hindus could share the health savings of a meat-free diet, while smokers could band together to cover their care without paying the 50% penalty Obamacare imposes.
Expanding healthshares to Vegans and smokers would make the law more just, but to make it more effective we need two additional changes. First, healthshares need to be able to use the same tools that health insurance companies need without apologizing for it or dancing around state regulations. Healthshares need to be expressly exempt from state insurance regulations in the same way that federal credit unions are exempt from state banking regulations.
That is why the Federal Health Union Act would be directly modeled on the Federal Credit Union Act of 1934, which created federally-chartered not-for-profit credit unions during the banking crisis of the Great Depression. The National Credit Union Association has been able to keep credit unions serving customers for many years--and a National HealthShare Association could ensure financial stability and consumer protection for not-for-profit health cooperatives.
The problem with allowing healthshares to compete directly with for-profit plans is that insurance companies are now required to accept all comers, even those with pre-existing conditions. This drives up the cost of healthcare, but low-income Americans are offered subsidies to help them cover the cost of these "free-market plans." If healthshares don't have to pay for pre-existing conditions, they won't be competing with for-profit plans--they'll be taking advantage of them. On the other hand, if plans sold on the exchange get subsidies and healthshares don't, it's the insurance companies that are taking the advantage.
The Federal Health Union Act funds pre-existing conditions and low-income insurance without forcing anybody to buy anything they don't want or pay for anything they detest. It does so through a "matching-funds" approach to fund-raising. Taxpayers who donate money to a federally-chartered healthshare will be eligible for a 50% tax credit for their gift. This saves taxpayers money (it costs taxpayers 50 cents to subsidize the poor and sick) and takes the politics out of healthcare. The Susan G. Komen Foundation could raise a lot more money for breast cancer in a very short time--and so could patients with less politically-prominent diseases, like Lyme Disease and multiple sclerosis.
Changing the tax law is not a simple matter--but in this case, it would be worth it. Medicare is a financial time bomb, and Medicaid has even more problems. Among other things, changes to Medicaid are raising the demand for healthcare while cutting the supply. Tax credits for healthshares could move millions of people off Medicaid onto non-profit plans, especially if not-for-profit hospitals can operate their own healthshare. A hospital healthshare could dramatically reduce the number of uninsured patients in a service area, reducing the amount that other patients pay. With a 50-cent-on-the-dollar tax credit, local businesses would have every reason to build good will by helping out their neighbors.
That's all it takes to provide affordable care for more Americans, including the poor, sick, and elderly. All we have to do is (a) expand healthshares, (b) allow them to compete directly with for-profit insurers, and (c) save 50 cents on donated dollars. It's a plan that Americans can understand, politicians can support, and the President can sign.
I hope to share this with my Senator (Joe Manchin of West Virginia) and Congresswoman (Shelley Moore Capito) at the earliest opportunity. If you think your representative might be interested in co-sponsoring such legislation, leave a comment explaining why. If we all work hard and work together, we can help millions of our neighbors in distress.
Tuesday, December 10, 2013
Obamacare and AIDS
One would assume that if anybody should benefit from Obama's changes to the healthcare laws, it would be people with AIDS. HIV positive people have been lobbying for government assistance since the nature of the disease first became evident in the 1980s, and Democratic politicians have led the charge to find a cure--or at least a treatment--for a disease that now affects millions of people, heterosexual and homosexual alike, around the world.
So it comes as something of a shock to learn that AIDS advocates are unhappy with Obamacare, as the Washington Post notes today:
If you care about someone with AIDS, read the Washington Post article and pass it on.
If you care about someone with cancer, multiple sclerosis, rheumatoid arthritis, autoimmune disease, or another disease that involves expensive medications, you may want to subscribe to this blog.
So it comes as something of a shock to learn that AIDS advocates are unhappy with Obamacare, as the Washington Post notes today:
But people who expected the new plans to provide pharmaceutical coverage comparable with that of employer-sponsored plans have been disappointed. In recent years, employers have compelled workers to pick up a growing share of the costs, especially for brand-name drugs. But insurers selling policies on the exchanges have pared their drug benefits significantly more, according to health advocates, patients and industry analysts. The plans are curbing their lists of covered drugs and limiting quantities, requiring prior authorizations and insisting on “fail first” or “step therapy” protocols that compel doctors to prescribe a certain drug first before moving on to another — even if it’s not the physician’s and patient’s drug of choice.The disruption to the existing market leaves many AIDS patients who were covered worse off than they were before:
Paul Prince, 52, a former information technology manager from Houston, said he was surprised that some of the health plans in the new federal marketplace wouldn’t pay for one or more of his HIV medications. The policy that seemed to provide the best coverage, he said, would cover only about two-thirds of his monthly $2,400 drug tab, leaving him responsible for $840.
“There was no way I could pay that,” said Prince, who is studying to become a teacher after being laid off from his previous job and losing his insurance.Insurers have responded Obamacare's prohibition against discrimination on the basis of pre-existing conditions by cutting costly benefits--like expensive drugs. The Post cites a study by Avalere Health:
A new analysis of health plans sold in the federal exchange — which covers 36 states — and 14 state exchanges found that the benefits tend to be skimpier than in most other private insurance in the United States, with drug benefits a particular weak spot.Right now, this only affects the 5% of Americans who get their insurance on the individual market, but the Post reports that many employers are already thinking about cutting costs the same way.
Dan Mendelson, Avalere’s chief executive, predicted that employers may soon adapt some of the benefit designs in the exchanges’ health plans. “We are already seeing interest,” he said, because they are less expensive for companies, shifting more of the expense to patients.The Washington Post article makes it clear that (a) this problem affects a larger group of illnesses, including cancer, multiple sclerosis, rheumatoid arthritis and autoimmune disease and (b) AIDS activists are working hard to change the rules to solve the problem--for people with HIV.
If you care about someone with AIDS, read the Washington Post article and pass it on.
If you care about someone with cancer, multiple sclerosis, rheumatoid arthritis, autoimmune disease, or another disease that involves expensive medications, you may want to subscribe to this blog.
Healthcare and Kidney Failure
America is the most generous nation on earth. Of course, we are also the richest nation on earth, so we ought to be. How about giving until hurts? How about giving something money can't buy--like a kidney?
Over 600,000 Americans suffered from end stage kidney disease in 2008, and the number is rising. Kidneys are the body's toxic waste disposal units--a mission so critical that God gave us two of them. If one fails, the other is there for back-up. If both kidneys fail, the only option is to pipe the blood out of the body through a dialysis machine that does the filtering for them or get a kidney transplant. More than 50,000 living people have given a kidney to save a life. I am proud to claim one of them in my own extended family. My niece's brother-in-law has one less kidney and one more brother than he would have had without modern medicine. Thanks to that heroism, my nephew hopes to live as long as any other American.
With only 6,000 living donors each year and 10,000 kidneys from other sources, most end-stage kidney disease patients depend on dialysis. According to official figures reported in the New York Times, in 2008 over 380,000 Americans were receiving dialysis, at a cost of just under $40 billion.
Kidney failure is the only chronic disease that automatically qualifies an individual for Medicare, regardless of age. According to the American Kidney Fund, other Medicare patients can choose to continue their own private insurance as long as they are willing to pay for it, but dialysis patients are limited to 30 months of coverage under an employer-provided plan even if that plan offers better care than Medicare.
It gets worse for transplant patients. The American Kidney Fund reports:
It isn't clear.
I visited HealthCare.gov to see whether kidney patients who are currently on Medicare can sign up for private insurance through the new exchanges. The online search tools told me all about Medicare and assured me that the new law would not take away my Medicare but had nothing to say about people who want off Medicare and on to private insurance that can no longer discriminate against people with pre-existing conditions.
So I called the 800 number and got the automated menu as I expected. One push of the "0" button broke me out of my robocall and I quickly got a very pleasant person who looked up the same articles I had been reading as she tried to figure out the answer with me. "Amanda" (not her real name) was able to tell me that it is illegal to sell insurance to somebody who is on Medicare (except for supplemental policies like Medicare Advantage). She figured out that a person who is eligible for Medicare (such as a kidney patient) is not eligible for any of the Obamacare subsidies. She couldn't say whether the system would allow a person who is currently on Medicare to pay their own way for a private plan.
Medicare.gov assures me that Obamacare won't take away my Medicare and offers me free colonoscopies. Their website indirectly alludes to $700 billion in cuts in Medicare through this optimistic paragraph:
Searching for "Can Medicare patients choose Obamacare" gives me tons of hits--and they all promise me that I won't lose my Medicare. As far as I can tell, somebody at the very top made it clear that if you like your Medicare, you can keep your Medicare. (With so many people making the same promise, it sounds like this could turn into a post of its own, but that's for another day.)
How about Medicare supplemental insurance? That's usually the right answer for a person who wants more than Medicare. Now things get more troubling. According to "Beth" (not her real name), there are no options for "end of life treatment" for kidney failure in Minnesota. I'm hoping that doesn't mean what I think it means. Perhaps Beth got confused--it's a confusing situation. Fortunately, Beth's doctor in Saint Paul (who is as shocked as I am) is trying to find the answers.
I hope there's a better answer for kidney patients than I've found yet. If you think I've stumbled onto the famous "death panels" here, you're wrong. Somebody is going to have to reduce the costs of all this care some time, and "death panels" may be the most accurate description of the body that tackles that terrible task, but this is just bureaucracy as usual. There should be a right answer to this question--we just haven't found it yet.
I appeal to readers from all points on the political spectrum to help out Beth. How does a patient with end-stage kidney disease take advantage of the new law? If Obamacare doesn't help them, are there private alternatives that do? Let's put our brains together, people, and make this world a better place!
Over 600,000 Americans suffered from end stage kidney disease in 2008, and the number is rising. Kidneys are the body's toxic waste disposal units--a mission so critical that God gave us two of them. If one fails, the other is there for back-up. If both kidneys fail, the only option is to pipe the blood out of the body through a dialysis machine that does the filtering for them or get a kidney transplant. More than 50,000 living people have given a kidney to save a life. I am proud to claim one of them in my own extended family. My niece's brother-in-law has one less kidney and one more brother than he would have had without modern medicine. Thanks to that heroism, my nephew hopes to live as long as any other American.
With only 6,000 living donors each year and 10,000 kidneys from other sources, most end-stage kidney disease patients depend on dialysis. According to official figures reported in the New York Times, in 2008 over 380,000 Americans were receiving dialysis, at a cost of just under $40 billion.
Kidney failure is the only chronic disease that automatically qualifies an individual for Medicare, regardless of age. According to the American Kidney Fund, other Medicare patients can choose to continue their own private insurance as long as they are willing to pay for it, but dialysis patients are limited to 30 months of coverage under an employer-provided plan even if that plan offers better care than Medicare.
It gets worse for transplant patients. The American Kidney Fund reports:
That's rough on my nephew, but now there's Obamacare--or is there? Millions of Americans who were expecting more security and better care have been unsettled by the spectacular failure of HealthCare.gov. How does the new system work for kidney patients?
Patients who receive a kidney transplant must take anti-rejection or immunosuppressive drugs for the life of their kidney transplant. However, Medicare will only pay for these drugs--which average $17,000 per year--for the first 36 months after a patient receives their transplant. Patients who are unable to pay for the medications are often forced to discontinue their use, resulting in kidney rejection and a return to Medicare-covered dialysis treatments at an annual cost of nearly $71,000 per patient.
It isn't clear.
I visited HealthCare.gov to see whether kidney patients who are currently on Medicare can sign up for private insurance through the new exchanges. The online search tools told me all about Medicare and assured me that the new law would not take away my Medicare but had nothing to say about people who want off Medicare and on to private insurance that can no longer discriminate against people with pre-existing conditions.
So I called the 800 number and got the automated menu as I expected. One push of the "0" button broke me out of my robocall and I quickly got a very pleasant person who looked up the same articles I had been reading as she tried to figure out the answer with me. "Amanda" (not her real name) was able to tell me that it is illegal to sell insurance to somebody who is on Medicare (except for supplemental policies like Medicare Advantage). She figured out that a person who is eligible for Medicare (such as a kidney patient) is not eligible for any of the Obamacare subsidies. She couldn't say whether the system would allow a person who is currently on Medicare to pay their own way for a private plan.
Medicare.gov assures me that Obamacare won't take away my Medicare and offers me free colonoscopies. Their website indirectly alludes to $700 billion in cuts in Medicare through this optimistic paragraph:
The ACA ensures the protection of Medicare for years to come. The life of the Medicare Trust fund will be extended to at least 2029—a 12-year extension due to reductions in waste, fraud and abuse, and Medicare costs, which will provide you with future savings on your premiums and coinsurance.Medicare's 800 number employs more robots than HealthCare.gov and insists that I type in my Medicare number. I could cheat and use my Mom's number, but that would be wrong. "If you do not have your Medicare number, you may wish to hang up." I hang up.
Searching for "Can Medicare patients choose Obamacare" gives me tons of hits--and they all promise me that I won't lose my Medicare. As far as I can tell, somebody at the very top made it clear that if you like your Medicare, you can keep your Medicare. (With so many people making the same promise, it sounds like this could turn into a post of its own, but that's for another day.)
How about Medicare supplemental insurance? That's usually the right answer for a person who wants more than Medicare. Now things get more troubling. According to "Beth" (not her real name), there are no options for "end of life treatment" for kidney failure in Minnesota. I'm hoping that doesn't mean what I think it means. Perhaps Beth got confused--it's a confusing situation. Fortunately, Beth's doctor in Saint Paul (who is as shocked as I am) is trying to find the answers.
I hope there's a better answer for kidney patients than I've found yet. If you think I've stumbled onto the famous "death panels" here, you're wrong. Somebody is going to have to reduce the costs of all this care some time, and "death panels" may be the most accurate description of the body that tackles that terrible task, but this is just bureaucracy as usual. There should be a right answer to this question--we just haven't found it yet.
I appeal to readers from all points on the political spectrum to help out Beth. How does a patient with end-stage kidney disease take advantage of the new law? If Obamacare doesn't help them, are there private alternatives that do? Let's put our brains together, people, and make this world a better place!
Monday, December 9, 2013
Obamacare and Multiple Sclerosis
Obamacare was always expected to result in some "winners" and some
"losers." The argument for the new law was that some people (especially
the young and healthy) should pay a little more so that other people
(the old and sick) could get the help they need. It's troubling to
discover that some of the people who may get hurt the worst are those
who are the sickest.
Approximately five percent of multiple sclerosis sufferers (those who were covered by individual insurance policies) have begun to discover how Obamacare affects them personally. Whitney Johnson had a policy that covered her medical bills even though they added up to $350,000 per year. Her existing insurance was cancelled and she was invited to pick a new policy from HealthCare.gov. She had not been able to get what she needed through the Exchange, so she went directly to her insurer--only to discover that all her new options were unaffordable. She writes:
Forbes Magazine worked through the cost of MS medications in today's article, "No, You Can't Keep Your Drugs Either Under Obamacare."
Not one single elected official wants you to lose coverage--but it's up to people with MS and the people who love them to help busy politicians understand the implications of this law. Whether you're Republican, Democrat, or terminally-turned-off by all things political, please speak out and spread the word!
Approximately five percent of multiple sclerosis sufferers (those who were covered by individual insurance policies) have begun to discover how Obamacare affects them personally. Whitney Johnson had a policy that covered her medical bills even though they added up to $350,000 per year. Her existing insurance was cancelled and she was invited to pick a new policy from HealthCare.gov. She had not been able to get what she needed through the Exchange, so she went directly to her insurer--only to discover that all her new options were unaffordable. She writes:
I know I have five more IVIG treatments coming up over the next six months that cost $40,000 each. My insurance coverage ends in December, and I have to have these treatments. As a mother with a brand new baby, it’s a little unnerving to know that I may not be able to receive the care I need. It’s a little unnerving to know my health insurance that was working just fine for me was taken from me. The doctors I have used for years that have kept me this healthy will be taken from me.Whitney is one of "small percentage" who have had their policies cancelled, but many more Americans with MS will be affected next November, when employer-provided policies must comply with the new law. The Multiple Scerosis Association of America highlights the particular questions MS patients need to consider. These include:
- Are my needed medications covered, and what are my costs?
- Can I keep my doctor and are there restrictions on which doctors I can choose?
- What plans can I afford and am eligible for?
- Can I afford my deductible?
- What are my expected out-of-pocket costs for equipment I may need?
- Do I have to try lower-cost medications before I will be approved for the drugs I use now?
Forbes Magazine worked through the cost of MS medications in today's article, "No, You Can't Keep Your Drugs Either Under Obamacare."
Take, for example, the drug Copaxone for multiple sclerosis.
Someone on a bronze plan would be responsible for paying about 40% of the drug’s costs out of pocket, on average. That comes out to about $1,980 a month.
If you buy the highest cost platinum plan, the out of pocket costs drop to $792 a month.
But you’re probably better off with the cheaper bronze plan anyway. Since you’re going to hit your out of pocket cap regardless of your plan, you might as well save money on the premium (which doesn’t count against your deductible or out of pocket limits) and race to the $12,700 spending cap as quickly as your family can.
After all, the provider networks used by low cost bronze and high cost platinum plans are often the same. The only thing that varies between different “metal” plans is often the co-pay structure. The benefits are similar. So why pay higher premiums just to lower your co-pays when you know you’ll hit the out of pocket limits anyway.
By purchasing a costlier, gold or platinum plan, you typically can’t buy up the benefit much, if at all. What you’re doing is just prepaying the cost sharing.That's assuming the drug you use is on the government's "formulary list, the list of drugs that are included in Obamacare. Even if it is on the government list, it may not be on your plan's list. Betaseron, for example, will not be available through ExpressScripts starting January 1. Forbes notes the out-of-pocket effects:
If the drug isn’t on this formulary list, then the patient could be responsible for its full cost (with little or no co-insurance to help offset that cost). Moreover, the money they spend won’t count against their deductibles or out of pocket limits ($12,700 for a family, $6,350 for an individual).If you are an MS patient who has adequate employer-provided insurance today, don't wait until next November to find out how this works for you. Talk to your human resources department soon! If your employer is even thinking about changing your plan, call Washington! (All you need is your zipcode to find your Congressman, and you can find your Senators here.)
Not one single elected official wants you to lose coverage--but it's up to people with MS and the people who love them to help busy politicians understand the implications of this law. Whether you're Republican, Democrat, or terminally-turned-off by all things political, please speak out and spread the word!
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