Health Care Now
Dr. Daniel Root testified before the New York Assembly Health Committee on December 4, 2014 about trying to care for the uninsured and underinsured in a rural county primary care practice. He describes a farmer, whom he has treated since childhood, losing his vision due to lack of access to basic preventive care; and another patient who had to barter free wood to pay off some of his medical bills after a heart attack. “This is a crime,” testified Dr. Root. Watch his testimony:
Gerald Friedman is Professor of Economics at the University of Massachusetts – Amherst. He has authored half-a-dozen economic analyses of state-single payer proposals, as well as a report on HR676, the national single-payer legislation sponsored by Rep. John Conyers. Below is Professor Friedman’s analysis of Governor Peter Shumlin’s announcement that single-payer reform is too expensive for taxpayers in Vermont, and that now is “not the time” to move ahead with reform in the state:
Less has changed in the economics of Vermont single payer than in the politics.
Assuming large administrative savings, Hsiao-Gruber had estimated that a single-payer program with comprehensive benefits (like the 94% actuarial value in the Governor’s statement) would require payroll tax of about 17% in 2017 to raise $2.7 b. Last year, I estimated that a single payer plan with a comprehensive package and administrative savings like those of Hsiao-Gruber would require a payroll tax of 10% and a tax on dividends, rents, profits of 10%; without the tax on non-wage income, it would require a payroll tax of 16%. My proposal (back-of-the-envelope) anticipated raising $2.3 b in 2015 and $2.5 b in 2017.
The Governor’s report discounts administrative savings by an unspecified amount, and anticipates less federal support than previous Green Mountain Care reports, albeit more than I had anticipated. It concludes that in 2017 the program would require $2.8 b to be raised from a payroll tax of 11.5% and a sliding scale income tax. While $300 million more than I would expect from my funding plan and $100 million more than Hsiao-Gruber anticipated. The Governor is abandoning Vermont’s single payer plan because it is slightly more expensive than expected.
The Governor also mentions various unspecified transition costs, notably the need to give discounts to small businesses during the transition. No details are given but there is talk of added costs of $500 m. While these would add 3-4 percentage points to the needed tax rate, they would also be savings in reduced payroll taxes to some Vermonters; while throwing around large numbers gives the Governor more political cover, these expenses are a wash economically.
The Governor’s decision is political not economic.
Since his election, he has avoided discussing financing and the need for a very large increase in state taxes to fund an enormous government program. He did nothing to prepare the public for a program that would replace larger private insurance premiums with smaller taxes.
Lessons for our movement.
- This does not mean that state single payer cannot be done. In terms of the economic analysis, nothing has changed; the Governor has abandoned Vermont’s single-payer plan on the basis of almost the same economic analysis that was used to support its enactment in the first place. Nothing has changed in the economics supporting single payer, either in Vermont or elsewhere.
- We cannot avoid discussing economics and costs. We can win public support on the virtues of universal coverage but we will still lose if we cannot match their arguments about the costs of coverage and the need for public taxes to support public spending.
Lieutenant Gary Pudup, a police officer for 30 years, testified to the New York Assembly Health Committee on December 8, 2014, about his haunting memories of investigating suicides – only to find out that the victims had ended their lives to protect their families from crushing medical expenses. In a just healthcare system, no officer would have this job – listen to Lt. Pudup’s testimony here:
We spoke with leaders of the Living Hope Wheelchair Association, based in Harris County (which includes Houston), Texas, which is a member of our affiliate Health Care for All Texas. Raymundo Mendoza (board secretary and Living Hope member), Francisco Cedillo (board treasurer and Living Hope member), and Francisco Arguelles (Executive Director of Living Hope Wheelchair Association) answered our questions. You can learn more about Living hope at www.lhwassociation.org or by calling 281-764-6251.
1. Why was the Living Hope Wheelchair Association formed, and can you tell us a bit about the situation faced by its members?
Living Hope is an organization formed by immigrants with spinal cord injuries working to improve our quality of life through services, advocacy, and community organizing. We formed in 2005 when the Harris County Hospital District decided to stop providing basic medical supplies to immigrants who were not eligible for Medicaid. We had to organize to find ways to help one another raise funds to buy catheters, diapers, and other supplies, and after some years evolved to become a small non–profit organization operated by us with the help of some volunteers.
Suffering a catastrophic spinal cord injury has a brutal impact on a person’s life. If this person is an immigrant or a low-wage worker in the United States then he or she is in an extremely vulnerable situation. During our existence as an organization we have been able to help each other first to survive the depression that comes after the accident, then to survive the problems that come with not having resources to buy medical supplies and equipment. We have learned to improve our quality of life through hope and solidarity, sharing what we have and organizing to get what we need.
2. What does the experience of Living Hope members tell us about the healthcare system in the United States?
Our experience with the healthcare system in the United States is a mixed one. We are grateful to doctors and nurses in the emergency services that took care of us after we were victims of a crime or suffered car or workplace accidents. We are grateful to therapists and rehabilitation specialists that have helped us along the years. On the other hand it is very frustrating not having access to regular healthcare. It is very painful to see our members needing attention and having to wait until they are in very bad shape because they can only be treated as emergencies. We have a member that needed dialysis treatment three times a week due to the kidney damage he suffered when he was shot in a drive-by shooting and he could only receive treatment every week or every ten days when his potassium reached critical levels; even though we were able to get him more regular treatment in a clinic, the damage to his health was devastating.
More recently one of our members, who is also our board treasurer, had to wait fourteen hours seated in his wheelchair in the waiting room at the county hospital before a doctor saw him. They didn’t even give him a bed during those fourteen hours so he could lie down and avoid developing a bedsore ulcer that can be very dangerous because they take months to heal. We know this is not the fault of doctors and nurses but a consequence of terrible public health policies that exclude so many people from having access to health care.
We believe that the fact that we are not included is a great injustice because we have contributed to the economy of this country and this is very frustrating. We want equality for all, health is a human right, and we don’t go to the emergency room because we enjoy it!
The situation in Texas is particularly bad, we are the state with more uninsured people and recently Governor Perry refused to take advantage of available resources to expand Medicaid, ignoring the negative impact this has on the whole system; we believe it is outrageous that he and other politicians don’t see that while they count the votes they win with these decisions, we have to count the hours we spend waiting in the emergency room, the hours we spend in severe pain because we don’t have access to treatment and medicine, and we count those who die and could have lived if their right to health care would be respected before the profits of insurance companies or the electoral interests of politicians that have never suffered like regular people.
3. Advocates for a single-payer healthcare system will often hear the question: “Will this cover undocumented immigrants?” How does Living Hope make the case that access to health services and goods should be available to all, regardless of documentation status? What can advocates for truly universal health care learn from Living Hope’s experience speaking with the broader community in Texas?
For us this is very simple: We are human beings, we have human rights, just like the rest of people in the U.S. Including undocumented immigrants in the healthcare system makes sense from a public health point of view and also from an economic point of view, it has been demonstrated by many different well respected studies; but that shouldn’t be the main reason why we are included: human dignity should be.
Texas is the state with more uninsured people and so many groups defending human rights in our state are working for a Medicaid expansion so we can have a better healthcare system. Ours is a very religious state and we think that those who want to deny our rights and humanity need to ask themselves: If we are not their brothers and sisters, how can they say that God is their Father?
So to advocates all over the country we have one advice: do not try to convince your opponents only with cost-benefit analysis, or seductive talking points; it is better to share stories that show the humanity, suffering and dignity of our communities and then let our opponents and the undecided do their homework with their consciences and beliefs, most people will do the right thing when they can connect with their own humanity and not just with ideological noise.
4. If a national, single-payer system was implemented that included all residents, how would that affect the lives of Living Hope members?
Having access to a single-payer system would have a great positive impact in our lives, it would mean opening the possibility of regular health care services that would help us prevent problems instead of having to live in a constant state of emergency. We are clear that a single-payer system would not solve all of our problems, we will still be in our wheelchairs, we will still have to face the discrimination we encounter both as immigrants and as persons with a disability, but what people who have health insurance and good health need to understand is that for us this is not an issue, this is a battle of life and death, and having access to health care will reduce the amount of pain we have to live with every day, it will help us live longer. So, paraphrasing our friend Ken Kenegos from the Health Care for All coalition here in Houston: those who prevent us from entering hospitals are today’s version of Alabama Governor George Wallace standing in the door of the University of Alabama in 1962. We know we are human beings and have rights and dignity; the question is if many of our current politicians in Texas are ready to acknowledge this and be on the right side of history.
John N. Lozier has been executive director of the National Health Care for the Homeless Council since its founding in January 1990. The Council is a network of more than 10,000 doctors, nurses, social workers, patients and advocates who share the mission to eliminate homelessness. John lives in Nashville, TN with his wife Joceline, and sits on the Board of Healthcare-NOW!
Question 1: Can you start off by talking about how people come to experience homelessness, and whether the healthcare industry plays a role in that?
Medical debt, deeply rooted in the current system, is a major and often overlooked contributor to homelessness. PNHP research shows that over 60% of personal bankruptcies in the US are the result of medical debt. From bankruptcy there is a well-worn path through eviction, followed by temporary stays with family or friends, to sleeping in a car, a shelter or outdoors.
Beyond that driver of homelessness, untreated illnesses play a huge role in selecting who will experience homelessness in an economy that is sorely lacking in affordable housing. Those who are most quickly squeezed out onto the streets tend to be those with so-called “behavioral health” problems – addictions and mental illnesses. Without minimizing the difficulties in treating these diseases, very helpful treatment approaches do exist, but are far from universally available. Uninsurance and underinsurance play a central role in excluding people who need and want treatment. Even when one has a payment source, system insufficiencies create wait lists for people who need to enter treatment at the point when they are ready.
Question 2: Does homelessness and housing insecurity create particular challenges for accessing needed healthcare?
Most assuredly. The Institute of Medicine of the National Academy of Sciences recognized this as early as 1988 in its seminal publication, Homelessness, Health and Human Needs. Beyond the very high uninsurance rates in the homeless population, competing survival priorities can take precedence over seeking health care. Just as people a bit higher in society’s pecking order might have to choose between paying for medicine and heating the house, people experiencing homelessness may have to choose between standing in line for a meal or a chance for a shelter bed and standing in line or waiting for a health care visit. Think about Maslow’s hierarchy of human needs, and what choice you would make.
Transportation is another problem. While public transportation and safety-net services sometimes help, may people without homes must walk to get places, and services are not always located close to areas where people stay. In Health Care for the Homeless, we see terrible foot problems, a result of all that walking, of sleeping sitting up (fluids pool in the lower extremities), and of high rates of diabetes.
Poor provider attitudes toward people who are obviously homeless and distressed – perhaps with poor personal hygiene (hard to control when you’re on the streets!), bad odors and strange behaviors – create new barriers to care. People are pushed away in ways ranging from subtle to brutal.
Question 3: If a single-payer healthcare system were implemented in the United States, how would that effect homelessness?
It would help to end mass homelessness by dramatically improving access to care. It would reduce immense human suffering.
Medical debt would be a thing of the past, closing a front door into homelessness. At the primary care level, the barrier of co-pays and deductibles (an oddly emerging barrier for dispossessed people as they become auto-enrolled in Medicaid managed care programs under the Affordable Care Act) would be eliminated. Specialty care and non-emergency procedures would become available – no longer would people living under bridges have to forego oncology services or cancer surgery for lack of a payer. And reasonable health planning would help ensure appropriate geographical distribution of services.
Question 4: Adequate housing and access to healthcare are both fundamental to quality of life and human dignity, but they are also two massive industries in the United States. Do you see parallels between the social movements to recognize healthcare and housing as rights? Are there spaces where these two movements could work together?
We do work together. We share the theoretical perspective that housing and health care are both human rights, and as such are interdependent and inseparable. Moreover, we recognize on a very practical level that housing is health care: one cannot expect to get well or stay well when living without housing, exposed to all sorts of infectious agents, the harsh elements, parasites, violence, poor nutrition, and poor rest.
One way that insight takes form is in the widely accepted “housing first” approach to homelessness interventions. Usually focusing on people whose health status makes them particularly vulnerable to homelessness, “housing first” moves homeless people into housing without expecting sobriety, employment or other indicators of “housing readiness.” Housing becomes the foundation upon which a person can begin to become healthy.
The National Health Care for the Homeless Council enthusiastically participates in the work of the National Low Income Housing Coalition for a National Affordable Housing Trust Fund to increase the actual supply of housing. The Corporation for Supportive Housing helps to bring our expertise in health care delivery into housing first developments.
Of course, I describe a relatively narrow focus on homelessness, the place where the extremes of poor housing and poor health intersect and offend the conscience. The collaborations among organizations are mostly focused on services and housing initiatives. The challenge is broadening this work to bring the human rights perspective to our well-intentioned colleagues who may have less expansive visions. Ultimately in a democracy, the strength of the profiteers in industry must succumb to a mobilized constituency insisting on basic human rights.
Question 5: Where can we learn more?
Below is testimony from Michael Lighty, Director of Public Policy for National Nurses United, to the California Assembly Health Committee regarding Ebola preparedness in a fragmented healthcare system with cost-barriers to care and declining investment in public health.
This is a proud moment for California Nurses Association/National Nurses United, whose members have taken the lead in blowing the whistle for Ebola preparedness. From a die-in on the Las Vegas Strip in September to the 50,000 strong national day of action on November 12th, the nurses of CNA/NNU have made history.
Contrary to what their hospital administrators have said about their adherence to the CDC guidelines—nurses reported quite the opposite in a survey of over 3500 nurses from every state in the US. So this new guidance in California creates a real level of security for nurses, and we thank Governor Brown and Director Baker, and the staff who worked so diligently to set this new national standard.
But what about the patients in a fragmented, under resourced “non-system” who are at the mercy of their insurance company’s high-deductible, minimal benefit, narrow network, sparse drug formulary health plan? And those on Medi-Cal who can’t find a doctor to accept them, or those undocumented workers and others who must rely solely on ER visits and a decimated public health system?
Funding for public health preparedness and response activities in the US was $1billion less in 2013, than in 2002, according to a CDC report from earlier this year.
According to CMS data collected in 2013, patients in California Emergency Departments faced waits that are 23 minutes longer than the national average. Specifically, California patients waited on average more than two-and-a-half hours in the ED.
Further, if a patient is admitted to the hospital, the average wait increased to:
- About five hours and 18 minutes from arrival to the time a patient is admitted; and
- Nearly an additional two hours before a patient is moved to a bed.
At least 5% of patients at 20 of the state’s EDs left before being treated because of the long waits, according to Center for Health Reporting/Daily News.
Let’s make a distinction between an integrated, well-resourced system that guarantees a single standard of care for all with a dedicated funding source and real public accountability – known as single-payer – verses the existing fragmented approach that seeks to regulate behavior sometimes with the force of law as in the case of this new guidance, and mostly as monetary incentives and voluntary guidance. Now, the treatment response to Ebola, for example, as other in other pandemics is largely governed by private healthcare corporations who are only accountable to their shareholders or board of directors, not the public.
Understaffing, access to treatment based on ability to pay, technology replacing hands-on care, difficulty gaining admission: it could and does happen everyday in our fragmented corporate health care system. All this happened to Ebola patient Thomas Eric Duncan in a Dallas hospital, and in his case, it was fatal and two nurses infected.
We know what works, Canada has done it: A province-based single-payer system and federal agency that has the responsibility and authority to ensure local, state and national coordination to detect, respond and treat outbreaks.
The Ebola epidemic reveals the fissures and fatal inadequacies of our healthcare “non-system.” Only greater integration, planned and directed resources, and authority to a public health system can protect people in California from the dangers of pandemics like Ebola.
This new guidance issued by Cal/OSHA stands out as a clear mandate for precaution and protection establishing a national standard. Let us a create system where that is the rule, rather than the exception.
The Health Committee of the New York Assembly has announced that it will be hosting a historic series of six public hearings across New York state to receive testimony on the “New York Health,” bill which would establish a single-payer healthcare system for the state. Below is the announcement from the NY Assembly Health Committee, along with the dates of the hearings:
“New York Health”, a universal “single payer” health coverage bill, would replace insurance company coverage, premiums, deductibles, co-pays, limited provider networks and out-of-network charges. Instead, it would provide comprehensive, universal health coverage for every New Yorker, with a benefit package more comprehensive than commercial or other health plans, with full choices of doctors and other providers. The program would be funded by broad-based taxes based on ability to pay. It would eliminate the local share of Medicaid (which would become part of New York Health). The bill, A.5389-A/S.2078-A, was introduced by Assembly Health Committee Chair Richard N. Gottfried and Senator Bill Perkins.
This series of public hearings around the state will review the effects and costs of the current health coverage system on patients, health care providers, employers, labor, taxpayers and health and health care. It will review how the single-payer system would work in New York.
The Campaign for New York Health – a coalition of organizations advocating for single-payer legislation in the state – is spearheading the grassroots campaign, and they’ve set up a new web-site here: www.nyhcampaign.orgSchedule of Hearings (UPDATED):
Thursday, Dec.4, 10 AM
Medical Alumni Auditorium, Weiskotten Hall
Upstate Medical University, 766 Irving Avenue
Monday, Dec. 8, 10 AM
City Council Chambers
Rochester City Hall
“A” Building, 3rd Floor
30 Church Street
Wednesday, Dec. 10, 10 AM
Roswell Park Cancer Institute
Research Studies Center
Elm & Carlton Street
NEW YORK CITY
Tuesday, Dec. 16, 10 AM
New York University
Grand Hall, 5th Floor
Global Center for Academic and Spiritual Life
238 Thompson Street
Wednesday, Dec. 17, 10 AM
Nassau County Legislative Chambers
Theodore Roosevelt Executive and Legislative Building
1550 Franklin Avenue
Tuesday, Jan. 13, 10 AM
Hearing Room B
Legislative Office Building
Patricia Wanderlich got insurance through the Affordable Care Act this year, and with good reason: She suffered a brain hemorrhage in 2011, spending weeks in a hospital intensive care unit, and has a second, smaller aneurysm that needs monitoring.
But her new plan has a $6,000 annual deductible, meaning that Ms. Wanderlich, who works part time at a landscaping company outside Chicago, has to pay for most of her medical services up to that amount. She is skipping this year’s brain scan and hoping for the best.
“To spend thousands of dollars just making sure it hasn’t grown?” said Ms. Wanderlich, 61. “I don’t have that money.”
About 7.3 million Americans are enrolled in private coverage through the Affordable Care Act marketplaces, and more than 80 percent qualified for federal subsidies to help with the cost of their monthly premiums. But many are still on the hook for deductibles that can top $5,000 for individuals and $10,000 for families — the trade-off, insurers say, for keeping premiums for the marketplace plans relatively low. The result is that some people — no firm data exists on how many — say they hesitate to use their new insurance because of the high out-of-pocket costs.
Insurers must cover certain preventive services, like immunizations, cholesterol checks and screening for breast and colon cancer, at no cost to the consumer if the provider is in their network. But for other services and items, like prescription drugs, marketplace customers often have to meet their deductible before insurance starts to help.
While high-deductible plans cover most of the costs of severe illnesses and lengthy hospital stays, protecting against catastrophic debt, those plans may compel people to forgo routine care that could prevent bigger, longer-term health issues, according to experts and research.
“They will cause some people to not get care they should get,” Katherine Hempstead, who directs research on health insurance coverage at the Robert Wood Johnson Foundation, said of high-deductible marketplace plans. “Unfortunately, the people who are attracted to the lower premiums tend to be the ones who are going to have the most trouble coming up with all the cost-sharing if in fact they want to use their health insurance.”
Deductibles for the most popular health plans sold through the new marketplaces are higher than those commonly found in employer-sponsored health plans, according to Margaret A. Nowak, the research director of Breakaway Policy Strategies, a health care consulting company. A survey by the Kaiser Family Foundation found that the average deductible for individual coverage in employer-sponsored plans was $1,217 this year.
In comparison, the average deductible for a bronze plan on the exchange — the least expensive coverage — was $5,081 for an individual and $10,386 for a family, according to HealthPocket, a consulting firm. Silver plans, which were the most popular option this year, had average deductibles of $2,907 for an individual and $6,078 for a family.
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Jon R. Gabel, a health economist at NORC, a research organization affiliated with the University of Chicago, said that employer-sponsored plans had lower deductibles, in part, because they provided more generous coverage than the most popular exchange plans. The typical employer-sponsored health plan would qualify as a gold-level policy under the standards of the Affordable Care Act, Mr. Gabel said.
The website for the federal insurance marketplace serving 36 states, HealthCare.gov, strongly encourages consumers to focus on premiums: When consumers search for a plan online, the results are ranked by premium price, with plans offering the lowest premiums listed first.
But insurance plans with lower premiums generally have higher deductibles. Gina Brown, 37, of Nashville, was paying about $155 a month for a Blue Cross Blue Shield of Tennessee plan, after taking account of her subsidy. But her deductible was $4,000, she said, and so she avoided going to the doctor even when she got an ear infection over the summer.
“I attempted to treat it with over-the-counter and homeopathic meds,” she said. “Eventually it went away.”
Ms. Brown recently got a job with health benefits, so she canceled the marketplace plan. Her new insurance has a deductible of $1,000, but primary care visits and prescriptions are not subject to the deductible.
“Now that I know I can go and safely just pay a co-pay,” she said, “it makes me feel better.”
Mark Yuschak, 57, of Jackson, N.J., said he had a silver plan with an annual deductible of $3,000. He discovered its limits in March.
“My wife had an incident, a digestive disorder, and we had to go to the emergency room of a hospital in Freehold, N.J.,” Mr. Yuschak said. “We presented our insurance card and filled out all the forms. They told us, ‘You don’t have a co-payment, you’re free to go.’ ”
Later, though, they received a bill “that could choke a horse,” Mr. Yuschak said — for more than $1,000. “Our insurance wouldn’t cover any of it because we had not met our deductible.”
Carol Payne, a respiratory therapist in Gilbert, Ariz., signed up through HealthCare.gov for a Blue Cross Blue Shield plan with a $6,000 deductible. She pays $91 toward her monthly premium and gets a subsidy of $353 to cover the rest.
The plans she could have chosen with lower deductibles were from insurers that “were not as reputable,” Ms. Payne said. She has used the insurance for preventive care and an emergency room visit after a car accident.
“I’m just doing what I can to keep myself healthy,” she added. “I mean, $6,000 — do they think I’ve just got that under my mattress?”
People with low incomes may qualify for subsidies that reduce their deductibles, co-payments and other out-of-pocket costs. The assistance is available to people with incomes from 100 percent to 250 percent of the poverty level (from $23,550 to $58,875 for a family of four), but only if they choose a silver plan.
Consumers also benefit from a provision of the Affordable Care Act that limits out-of-pocket costs, which include deductibles. The limit this year is $6,350 for an individual and $12,700 for a family plan. But in general, the limits apply only to care provided by doctors and hospitals in a plan’s network and do not cap charges for out-of-network care.
Dr. Rebecca Love, of Moab, Utah, is well on her way to passing that limit. Dr. Love, 63, who has degenerative arthritis and a host of other health problems, pays $422 a month in premiums for a plan that has a deductible of $6,000. But she has already paid more than $6,000 in medical costs this year that did not count toward her deductible because the doctors and hospitals — more than 100 miles away in Grand Junction, Colo. — were not in her network.
To see certain specialists in her network, Dr. Love said, she would have had to travel to Salt Lake City, which is much farther away and requires driving through a treacherous mountain pass.
“Medical care costs too much and health insurance as it stands doesn’t address this,” she said. “What have we become?”
Ms. Wanderlich, who had suffered the brain hemorrhage, was even avoiding preventive care until last month, when she had to get a prescription renewed and her doctor’s office required her to be seen first. Grudgingly, she went for an annual physical exam on Sept. 12. She was relieved to learn that she owed only $30 for the visit; the provider billed her insurer more than $1,200.
When the next open enrollment period begins on Nov. 15, Ms. Wanderlich said, she will probably switch to a plan with a narrower network of doctors and a smaller deductible. It will probably mean losing her specialists, she said, but at this point she is resigned.
“A $6,000 deductible — that’s just staggering,” she said. “I never thought I’d say this, but how many minutes until I get Medicare?”
After his recent herniated-disk surgery, Peter Drier was ready for the $56,000 hospital charge, the $4,300 anesthesiologist bill, and the $133,000 fee for orthopedist. All were either in-network under his insurance or had been previously negotiated. But as Elisabeth Rosenthal recently explained in her great New York Times piece, he wasn’t quite prepared for a $117,000 bill from an “assistant surgeon”—an out-of-network doctor that the hospital tacked on at the last minute.
It’s practices like these that contribute to Americans’ widespread medical-debt woes. Roughly 40 percent of Americans owe collectors money for times they were sick. U.S. adults are likelier than those in other developed countries to struggle to pay their medical bills or to forgo care because of cost.
California patients paid more than $291,000 for the procedure, while those in Arkansas paid just $5,400.
Earlier this year, the financial-advice company NerdWallet found that medical bankruptcy is the number-one cause of personal bankruptcy in the U.S. With a new report out today, the company dug into how, exactly, medical treatment leaves so many Americans broke.
Americans pay three times more for medical debt than they do for bank and credit-card debt combined, the report found. Nearly a fifth of us will hear from medical-debt collectors this year, and they’ll gather $21 billion from us, collectively.
Types of Debt Collected From Consumers in 2013
The company also found that 63 percent of Americans have received a medical bill that was more than they expected to pay. Some of that is a result of hospital errors: Nearly half of the Medicare insurance claims NerdWallet examined contained billing mistakes.
Another contributing factor is that hospitals charge wildly different amounts for the same procedures. In the most extreme example NerdWallet analyzed, the highest charge for an inpatient stay for severe intestinal bleeding was 54 times higher than the lowest charge. At most, California patients paid more than $291,000 for the procedure, while those in Arkansas paid just $5,400.
It’s worth noting that the Affordable Care Act’s individual mandate and Medicaid expansion might alleviate some of this debt strain over the coming years. But otherwise, patients have few options beyond attempting to research hospital charges ahead of time—which is probably the furthest thing from a person’s mind when they are most in need of a hospital.
Walmart Stores, the world’s largest retailer and the nation’s largest private employer, said on Tuesday that it would terminate health insurance coverage for about 30,000 part-time workers, joining a string of retailers that have rolled back benefits in response to the Affordable Care Act.
Starting on Jan. 1, Walmart will no longer offer insurance to employees working less than an average of 30 hours a week, a move the retailer said was in response to an unexpected rise in health care costs.
“This year, the expenses were significant and led us to make some tough decisions,” Sally Welborn, Walmart’s senior vice president for global benefits, said in a blog post announcing the changes.
The workers losing their coverage make up about 5 percent of the company’s part-time work force of about 600,000, including in-store, logistics and corporate workers, said Brooke Buchanan, a company spokeswoman. Walmart did not disclose what percentage of the part-time work force would be left without coverage. Many part-time employees were never covered for a variety of reasons.
Over all, Walmart employs about 1.3 million people in the United States, and provides health coverage to about 1.2 million workers and workers’ family members, Ms. Buchanan said.
In scaling back coverage for part-time employees, Walmart joins retailers including Home Depot, Target and Trader Joe’s, which have dropped benefits in response to the Affordable Care Act, the health care overhaul enacted by the Obama administration. In 2011, Walmart eliminated health insurance for employees working fewer than 24 hours a week.
The company said that the health law’s introduction had prompted larger-than-expected numbers of employees to enroll in its health plans, driving up expenses.
The retailer expects to spend an additional $500 million on health care costs in the United States this year, it said in a filing in August, far more than the $330 million increase it forecast in February.
The Affordable Care Act, the most comprehensive overhaul of the nation’s health care system in decades, requires most Americans to enroll in health insurance or face a tax penalty. From Jan. 1, 2015, it will require companies with 50 or more employees to offer health insurance coverage to employees working at least 30 hours a week, or pay a penalty.
Employees working less than that can apply for subsidies in new government-run insurance exchanges that opened last year. But some experts say that the exchanges make it easier for employers like Walmart to eliminate health care coverage for part-time workers.
Walmart said that it would work with a health coverage specialist to guide workers through the process of finding alternative coverage.
It also said that it would raise health insurance premiums in 2015. But it said that its premiums remained lower than the industry average, citing figures from the human resources consulting firm Aon Hewitt. Representatives at Aon Hewitt were not immediately available to confirm that.
Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, called Walmart’s move “shameful.”
“Not only do they deny their workers full-time jobs, now they’re denying them health care coverage,” Mr. Appelbaum said.
Still, health benefits for part-timers are the exception rather than the rule among retailers. Last year, 62 percent of large retail chains offered no health care benefits to their part-time workers, up from 56 percent in 2009, according to the New York-based consulting firm Mercer.
Beth Umland, Mercer’s director of research for health and benefits, said that more retailers were likely to eliminate health care coverage for part-timers. “Now employees can go somewhere else to get coverage,” she said. “It’s an easier decision to make than before.”
Nancy Reynolds, 67, who has worked part time at the Walmart store in Merritt Island, Fla., for the last six years, said she worried that losing her insurance would mean higher costs for treatment of her diabetes, glaucoma and arthritis. Ms. Reynolds is covered by Medicare, but she said that she relied on company coverage to supplement it.
“I depend on Walmart’s health care,” Ms. Reynolds said. “I’m not sure what I’m going to do.”
Note to politicians: Backing “Medicare for all” is looking less and less like electoral poison. If, deep in your heart, you believe American health care would be better off with a Canadian-style, single-payer system, you might now consider coming out of the closet. (In Democratic primaries in blue states, at least.)
That’s my suggested takeaway from the striking Massachusetts Democratic primary showing of Dr. Donald Berwick, who rocketed from near-zero name recognition among general voters to 21 percent at the polls. Catch him saying forcefully in the video above: “Let’s take the step in health care that the rest of the country hasn’t had the guts to take: single payer. Medicare for all.”
Now, Vermont not only has a mainstream politician who backed a single-payer system — Gov. Peter Shumlin — it’s actually translating the idea into practice as we speak. But let’s put it this way: This seems to be the first time that a candidate in a mainstream political party in a state that is not a verdant utopian duchy has run on a single-payer platform. And though he did not defeat the longtime familiar faces, he did surprisingly well.
Of course, we knew that Massachusetts voters tend to like the idea of single payer. As recently as 2010, 14 fairly middle-of-the-road districts voted in favor of a non-binding ballot measure calling for “creating a single payer health insurance system like Medicare that is comprehensive, cost effective, and publicly provided to all residents of Massachusetts.”
Analysts projected that the results meant a statewide majority in support of a single-payer system. The single-payer idea had polled well in non-binding ballot measures before, as well. But now we’ve seen that sentiment translated into support for a candidate.
Other politicians, including President Obama, have backed the general idea of a single-payer system, but they always add a “but,” said Dr. Steffi Woolhandler, who helped found Physicians for a National Health Program.
“And the ‘but’ usually has to do with the political situation,” she said. “But it’s actually important to say what’s the right thing to do and to really work toward the right solution, and that’s what Don [Berwick] has been willing to do, to say, ‘We need single payer and skip the ‘but,’ let’s just say we need single payer and that we need to start working toward it.’”
Will Berwick’s strong showing change the playing field for other candidates? Dr. Woolhandler says yes: “Politicians understand votes. Unfortunately, they also understand money. But they do understand votes, and I think other politicians will see that voters are behind the idea of single payer.”
I asked Dr. Berwick about the reaction to his single-payer position in his many campaign-season travels, and he said the biggest surprise was how positive the response had been from voters who would likely not call themselves progressives. They either already agreed with the idea, he said, or responded instantly after one sentence of explanation with, “That sounds right to me. Let me tell you my story.”
“I remember a carpenter in Hingham,” he said. “I don’t think he would have said he was a progressive — he was a somewhat older carpenter struggling to make ends meet, sitting on a sofa at a gathering, a meet-and-greet, and I started talking about this, and I guess — embarrassingly, to me — I was expecting some pushback. But he immediately said, ‘I’ve got to tell you a story.’ And he told me about his struggle to get health insurance.
“He very carefully went through the policy options, he had picked one that had a maximum deductible that was pretty stiff, and he was ready to swallow it. And he did, he signed up for that plan. And then, the problem was that he had three major illnesses the following year. And he discovered — to his dismay — that the deductible did not apply to the year, it applied to each separate episode. So this guy, who’s working with his hands and trying to just get through and have his family’s ends meet, suddenly found himself tens of thousands of dollars in debt, because of the complexity [of health insurance.] And he said, ‘Enough of this!’ He immediately understood and was fully on board, and that kind of experience has been pretty constant for me.”
Overall, Dr. Berwick said, “The response has been extremely positive beyond anything I would have anticipated. When I took the position, I had no polling information. I did it because I was looking at the state budget and seeing the erosive impact of rising health care costs on everything else we need to do. The numbers were stunning to me. I got briefed by the Mass. Budget Policy Center and they said — as I remember the numbers and have been quoting them — Parks and Recreation were down 25 percent, local aid was down 40 percent, higher education was down 30 percent.
You really can’t find a line item on the state budget that hasn’t been down in real terms in the last decade. Except health care is up 59 percent. That was the number that stuck in my mind when they briefed me. And as I went around the state and began to see what we need to do for schools, for transportation, for affordable housing — the term I’ve used, and it’s a bold term but it’s confiscation. It’s with benign intent, but health care is essentially taking away opportunities from public investment.”
“And then you meet with businesses and you get the same story. Businesses talk about how the continuing increase in health care costs is cutting opportunities for them to grow and develop their businesses. And then when you talk to labor — I remember meeting with the painters’ union, and I asked the person who was hosting me to show me their paychecks, and the union wage scales over the past few years — you can see it right there in black letters — the take-home pay per hour has not been going up. What is going up is contributions to health care. So the logic was strong.
“And the reactions have been consonant with those data. People are very frustrated. They don’t understand their health insurance. They can’t read their policy. They know it’s not transparent. And they are suffering from vastly increased costs.”
No anti-Canada, anti-England backlash against what could be seen as an attempt to “nationalize” or “socialize” health care?
Not really, Dr. Berwick said. “Initially, you have to explain it, like, ‘What exactly do you mean? Medicare is a federal program.’ If you say it’s Medicare for all, that doesn’t quite do it. But as I explain it to people, you take all the funds, put them in a single pool, make that pool publicly accountable, constantly subject to scrutiny and redefinition, stop the paperwork, stop the complexity, that could save 10 percent of the total bill over the first couple of years.”
“People do have questions, like, ‘Is this a government takeover of health care?’ And you explain, ‘No, no, no. It’s the same delivery system, your doctors and hospitals, this is not nationalization or the state taking over care, but it is a single payment system. So I would say, the reaction to this has been stunningly positive. Could this be catalytic? I certainly hope so. I’d hate to see Vermont lap Massachusetts on being the first to show what a rational payment system looks like.”
Neither of the Massachusetts primary winners — Democrat Martha Coakley and Republican Charlie Baker — backs a single-payer system, so it’s actually pretty well guaranteed that Vermont is going to lap Massachusetts in the single-payer realm.
But perhaps the question is whether Vermont and Massachusetts will follow the pattern of gay marriage: The Vermont Supreme Court broke the ice in late 1999 with its decision on “civil unions,” but it was — arguably — the 2003 decision by the highest court of Massachusetts that set gay marriage on the road to the big-time.
For the first time this year Healthcare-NOW! has set up a wiki for our annual Strategy Conference, held from August 22-24, 2014 in Oakland, CA with the Labor Campaign for Single-Payer Health Care and One Payer States.
Presenters, moderators, and attendees have uploaded their own notes, slideshows, photos, video, and sometimes even the full text of speeches for every single workshop and plenary.
You can keep coming back to the conference wiki as a great resource for the dozens of topics covered during the conference: state single-payer legislation, social media strategy, the health care is a human right model being pioneered in Vermont, getting to single-payer through the ballot, and much more.
Additionally, full video is available of the key plenary of the weekend: an in-depth strategy discussion of where the single-payer movement has been and where we need to get to, including John Nichols of The Nation, Vermont State Representative Kesha Ram, and Ethel Long-Scott of the Women’s Economic Agenda Project.
Steve Early worked for 27 years as an organizer and international representative for the Communication Workers of America. He is the author of a new book from Monthly Review Press titled Save Our Unions: Dispatches from a Movement in Distress. He is working on a book about political change and public policy innovation in Richmond, California.
Question 1: Both your new book Save Our Unions: Dispatches From a Movement in Distress - and your previous one, The Civil Wars in U.S. Labor - draw on your experience as a union negotiator and longtime single payer activist. In 2008, liberal foundations, major unions, and the AFL-CIO created and financed Health Care for American Now! (HCAN). This lobbying coalition had a name similar to ours but it soon distanced itself from the goal of single payer. In retrospect, what impact did HCAN have on labor’s quest for a better health care system?
I think HCAN “settled short” and was too compliant with Obama Administration goals. It also went in the wrong direction by embracing the notion that our system could be substantially improved by mandating and subsidizing the purchase of private insurance, maintaining employer plans where they still exist, and offering a “public option” as a not-for-profit alternative for the millions of new customers now shopping for coverage in our state-based insurance exchanges.
Even after the “public option” was eliminated from that package, HCAN over-sold Obamacare to its labor constituents. In retrospect, we would have been better off if the smaller bloc of pro-single payer unions and the more influential (but always overly pragmatic) organizational players in labor’s mainstream had united around the more modest goal of defending and expanding existing forms of publically-funded healthcare.
Labor’s top priority should have been reversing the partial privatization of Medicare–through the costly and inefficient Medicare Advantage program–which Obama criticized as a presidential candidate in 2008. Lowering the eligibility age for Medicare would have been a good incremental next step in the direction of single payer. Unions and their allies could also have tried to insure more of the low-income uninsured through Medicaid expansion—without the option of privatizing it, which the Obama Administration is now permitting in Arkansas, despite the bad track record of Medicare HMOs.
Labor should also have pushed for more federal support for state level experiments with single-payer—which the ACA has now complicated and delayed. Pre-emptive improvements and better funding of the VA system five years ago—instead of the current emergency intervention—might have strengthened that model of public healthcare delivery, which operates as a kind of British-style national health service for those eligible.
Unionized workers now face more, rather than fewer, health plan problems and cost shifting pressures. In frantic letters to Congressional leaders last year, the national presidents of the Teamsters, Laborers, Hotel Employees, and United Food and Commercial Workers unions warned that the ACA’s “unintended consequences” were multiplying to the point where millions of workers, retirees, and their families face “nightmare scenarios.”
Union members were told, correctly, that the ACA would expand Medicaid access for millions of lower-income Americans and make some important insurance market reforms. But organized labor also expected that this type of health care reform would aid union bargaining by leveling the playing field among all employers, much like the minimum wage and other protective labor legislation does.
Union officials believed, mistakenly, that the ACA would restrain medical cost inflation and corporate pressure for health care give-backs. Instead, those trends have continued to be a major cause of strikes and/or contract rejections at AT&T, Verizon, United Parcel Service, Boeing, and other big employers. In industries with multi-employer Taft-Hartley health care trusts, those are being undermined and put a competitive disadvantage by the ACA.
Some of the worst is yet to come. In both the private and public sector, employers are already citing the ACA’s 2018 tax on mis-named “Cadillac coverage” to justify further givebacks from workers who, in reality, only have a healthcare Chevy in their garage. And this is no “unintended consequence” of the law—it’s what it was designed to do.
According to MIT professor Jonathan Gruber, a top White House consultant, this impending 40 percent excise tax on higher cost plans “is intended to shift compensation away from excessively generous health insurance to wages.” Only someone completely disconnected from U.S. labor relations reality would claim that more premium sharing, higher deductibles and bigger co-pays will translate into better pay for workers, who will, instead, continue to suffer from little or no real wage growth because of such cost chifting.
Question 3: Does this crisis represent a new opportunity for single-payer activists to work with organized labor?
It’s a definitely a great opportunity to revive and strengthen the campaign for Medicare for All, but one fraught with some political dangers. That’s because the boomerang effect on labor and the ACA’s widely publicized implementation screw-ups may also end up discrediting health care reform in general.
Several hundred labor activists met in Chicago in early 2013 under the auspices of the Labor Campaign for Single-Payer Health Care. More than fifty unions and ten city or state labor councils were represented at this gathering. Everyone saw new openings to woo national and local unions previously more wedded to job-based health coverage and their own multi-employer welfare funds.
Later last year, the Labor Campaign collected hundreds of signatures on an “Open Letter to the AFL-CIO from Concerned Trade Unionists” that was distributed at the federation’s convention in Los Angeles. The letter criticized the ACA as the product of lobbying by a private insurance industry “whose business model relies on a failing employment-based system and whose profits depend on shifting costs onto the backs of workers while reducing choice and quality of care.”
However, even after some AFL-CIO convention delegates spent much time venting about President Obama’s failure to “fix” the ACA, only a few national unions have actually gone out, educated their members about this problem, and mobilized them accordingly. That job, as always, will have to be done at the grassroots, from the bottom up—every time a public or private sector union contract is up for renegotiation and management is seeking health care give-backs.
Question 4: For those who would like to learn more about fighting for health care as a human right within the labor movement or in solidarity with the labor movement, what further reading and resources would you recommend?
The Labor Campaign for Single Payer has produced invaluable material for union members on how to deal with the ACA, while fighting for something better at the state or national level, such as this briefing on the ACA for unions and union activists.
Other union critiques of the ACA include a recent UNITE-HERE research report, called The Irony of Obamacare: Making Inequality Worse.
To keep track of what’s happening in Vermont, to make health care a human right there, see the Vermont Workers Center.