Category: Health plans

The 98 percent solution

published date
April 12th, 2007 by

Looks like Massachusetts will exempt about 1 or 2 percent of the population from the requirement to buy insurance. Their income is considered too low to be able to afford coverage but too high to receive a subsidy. Business groups generally wanted few or no exemptions while some community activists wanted broader exemptions. According to the Boston Globe

The new proposal adopts some of the recommendations offered by a coalition of advocacy, labor, and medical groups, which had argued that applying the insurance mandate to people who couldn’t afford it would undermine public support. Some had threatened to lead protests against the law.

I can understand their point, but I’d prefer if there were no exemptions. The best thing would be to get universal coverage and then have “public support” to do what’s needed to reform the system in order to keep that coverage. Instead, we may be setting a precedent for further exemptions –after all premiums are likely to continue rising faster than wages.

Still, if we actually achieve 98 or 99 percent coverage, that’s effectively a universal level.

You can’t keep a good drug down

published date
April 11th, 2007 by

With generic Zocor (simvistatin) now on the market, payers are trying to take a chunk out of Lipitor (atorvastatin calcium) sales in the statin market. It’s not working as well as some had hoped. That’s because Lipitor is widely regarded as the best drug in the statin class –further evidence that not all follow-on drugs in a class should be dismissed as “me-too” products.

It’s still worthwhile for payers to push Zocor, even if the results are modest. Statins are a big expense for health plans, so even small share shifts are valuable. Plus even if Lipitor sales hold up, other statins such as Crestor (rosuvastatin calcium) and Vytorin (ezetimibe and simvastatin) may prove more vulnerable.

Are insurance company doctors evil?

published date
March 29th, 2007 by

An article in the Sunday Boston Globe really bothered me. In “Hippocritical” Doctors, an OB attacked physicians who work for health plans. He was unhappy that they didn’t make the health plan pay for all the therapy he wanted for his daughter with cerebral palsy:

This doctor and others like him are making money denying care – and they might as well hang up their white coats. They may believe that their administrative decisions are medically justifiable. However, it often appears that they are hired because their MD degrees lend a patina of legitimacy to administrative decisions that are based on interpretation of a health plan’s policies, not a chart, lab test, or CT scan…

A physician who works for the health insurance industry told me that these doctors view themselves as having “an advocacy role for patient care.” Health plan physicians will argue that without them consumers would have no voice within the company’s walls. But I say let the businesspeople be the ones to withhold care in the name of cost savings and profit margins. Physicians are needed in the clinic and at the bedside, advocating for more care, not less.

The author shrugs off other physicians’ financial relationships with drug companies and banks, because they just damage society, “not… individual patients.”

I think the author is way off base. Remember the earlier days of managed care when doctors complained, sometimes legitimately about “being told how to practice medicine by someone from the HMO with a GED”? Isn’t it better to have a physician to speak with? Meanwhile, contrary to his statement, it doesn’t always make sense for the patient to get “more care.” It can be expensive and wasteful.

I sympathize with the author, who wants what’s best for his daughter, but health plan physicians don’t deserve the abuse he dishes out.

“What are they doing messing with me?”

published date
March 27th, 2007 by

As John McDonough notes on A Healthy Blog, the Globe published a first-rate piece profiling four people affected by the new health insurance mandate. The headlines tell the story:

  • Osmani Rodriguez: Says the state should rethink the insurance options it is offering
  • Annabelle Blake: If she had a choice, she might opt to skip insurance
  • Betty Gitlin-Rich: It’s been a long time since she could afford peace of mind like this
  • James Charles Roy: His family’s longstanding health plan is no longer good enough

The truth is health care is too expensive in Massachusetts. A good feature of mandated coverage is that it will give more people a stake in seeing that health care remains/becomes affordable. My hope is that as universal coverage comes into force there will be pressure for a restructuring of health care financing and delivery in this state that reduces costs and improves service and quality.

Meanwhile, I can definitely relate to Mr. Roy. His current insurance plans lack drug coverage, which is a rational choice on his part as I’ve described before. The new mandate requires Rx coverage and that will cost Mr. Roy an extra $1300 per year. As he says:

“The goal of universal coverage, as I understand it, was to get poor people coverage,” he added. “What are they doing messing with me?”

When socialism is good for capitalism

published date
March 27th, 2007 by

A major barrier to entrepreneurship is the real fear of getting health insurance. How many people stay in stifling jobs just for this reason? It’s a cause of labor market rigidity, which is bad for the economy.
Massachusetts’ heavily regulated insurance market may keep premiums high, but guaranteed issue and community rating mean that insurance coverage is available and premiums don’t rise for the sick. People who are thinking of starting their own business often ask me about whether they’ll be able to get and keep health insurance. I tell them to relax –if they’re in Massachusetts.

But as an article in the Los Angeles Times explains, health insurance is becoming harder and harder for the self-employed to get, at least in other parts of the country:

A major source of health insurance for people who work for themselves is disappearing, casting thousands of contractors, freelancers and solo practitioners into the ranks of the uninsured with little hope of obtaining new coverage.

Health plans offered by professional associations were once havens for millions of people who couldn’t get coverage anywhere else. But as medical costs have soared, groups representing professions as varied as law and golf have been forced to stop offering the benefit or been dropped by insurers.

Among uninsured workers, nearly 63% are self-employed or work in small firms, Todd Stottlemyer, president of the National Federation of Independent Business, told Congress recently.

There’s a strong case to be made that  universal coverage would encourage business formation and increase economic growth.