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Opinion: Before You Go Whacking Medicaid…

With revenues reduced to a trickle, some states are considering drastic measures to balance their budgets. Gov. Rick Perry of Texas has proposed abandoning Medicaid, the federally mandated program that provides health care for the poor. That idea also has its advocates in Florida, Nevada and here in South Carolina.

But before ditching Medicaid, let’s do ourselves the favor of considering this cautionary tale from Indiana.

Indiana’s experiment with Medicaid a flop


Nov. 20, 2010, 3:59PM

The health policy world is in a tizzy. Texas is thinking about dropping Medicaid. Gov. Rick Perry thinks a private solution can work better. Several other states are paying close attention and considering doing the same.

Texas’ actions shouldn’t come as any surprise. Legislators and others in Texas, Florida, Nevada and elsewhere started threatening to drop Medicaid months ago, claiming they could create a better and cheaper program by providing subsidies for private coverage for the poor.

We’ve heard about how private business works better and cheaper than government for many years now. We’ve made a lot of public policy decisions based on this premise. Consequently, we also have some data on how well this has worked. How much better and cheaper has the private market in fact functioned in comparison with government programs?

In the case of Medicaid, we have a particularly good example from Indiana. The state’s Healthy Indiana Plan offers subsidies to help certain low income uninsured people purchase private health insurance plans, in lieu of offering them traditional Medicaid. The concept sounds irreproachable. Beneficiaries who otherwise wouldn’t be able to afford coverage get it, health care providers get better reimbursement than they would if the beneficiaries were covered via Medicaid, and the state pays less than it would if it offered the beneficiaries traditional Medicaid coverage. What’s not to like?

Unfortunately, lots. First, many beneficiaries have to pay a lot more out of pocket than they would if they had traditional Medicaid coverage. Nonpayment has been the No. 1 reason for terminating beneficiaries from Healthy Indiana since the program began in 2008, with up to 35 percent of beneficiaries in certain income levels failing to make their first payment.

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Factcheck.org Goes In-Depth On Anti-ACA Distortions

From factcheck.org:

The Truth About Health Insurance Premiums

The new law has brought increases for some. But GOP leaders exaggerate.

November 19, 2010


Leading Republicans in Congress are blaming the new health care law for double-digit rate increases being sought by insurance companies in Washington state, New York and Connecticut. But insurance regulators, leading health care experts and the companies themselves mostly blame an old culprit: rising medical costs.

Improved benefits required by the new law are responsible for a relatively small portion of the increases. Furthermore, the increases apply mostly to those buying policies individually, not the majority who get private insurance through employers. Those with employer-provided plans won’t see as much of an increase in premiums, since many of their policies already include the required benefits, a spokesman for an insurance trade association told us.

Some Republicans have claimed the law is responsible for “whopping” premium increases, but they have misrepresented the facts in the process. For example:

  • House Speaker-in-waiting John Boehner said premiums will “skyrocket” because of the law, citing a report on rising premiums by the Kaiser Family Foundation. But the Kaiser report covered increases that took effect before the law was signed.
  • Senate Minority Leader Mitch McConnell points to a news story about a Washington insurance provider that blamed premium increases on the health care law. But the state insurance commissioner says the increase had “absolutely nothing to do with health care reform,” and the insurance company later admitted the law is only partly at fault.
  • Both politicians refer to premiums for new plans on the individual market, where only about 6 percent of those with insurance now get their coverage.

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CHIP Assistance – Cover Your Kids, South Carolina

Need help getting your child covered? Contact our friends below and let them walk you through the CHIP application process.


Palmetto Children’s Health Initiative

Linking Every SC Child to an Affordable & Appropriate Medical Home

In November 2009, the Palmetto Project announced the launch of a new statewide initiative to link every child under age 18 to a medical home that is both affordable and appropriate.  There are 111,000 uninsured children in the state, most of whom are also eligible for the state’s SCHIP health insurance for children in families with incomes up to 200% of poverty.

“Children are falling through the cracks in a state where there is care that is available.  When they do get care, it is very often in an emergency room,” said Palmetto Project Executive Director Steve Skardon.  “We expect to see costs go down.  Having children go without medical care is far more expensive than having them under the care of a physician.”

The program will be a combination of roll-up-your-sleeves canvassing, state-of-the-art data collection and tracking, and public education.  The first year of the project will be concentrated in areas along the coast of where the largest numbers of uninsured children live.  After that the initiative will be expanded to all 46 counties.  The initiative is funded by a grant from the U.S. Department of Health & Human Services.

  • An estimated 111,000 SC children 17 and under are without health insurance of any kind.  Most of them are likely eligible for Medicaid or SCHIP coverage.


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Guess Who Loves The Individual Mandate, Big Profits?

It’s a political pickle, all right. The same health insurance goliaths that secretly bankrolled  anti-Obama campaigns in the midterm elections, while publicly proclaiming cooperation with the White House, now have to persuade their politicians to lay off the individual mandate, no matter what their Tea Party supporters say.

From Bloomberg Businessweek:

By Drew Armstrong

When the White House and Democratic lawmakers wrote the health-care overhaul bill, they concocted a sweet coating for the bitter medicine the health industry would have to swallow. In exchange for tighter regulation and numerous new directives, insurers, drugmakers, hospitals, and physicians got some 30 million new paying customers under the individual mandate requiring almost everyone to buy insurance starting in 2014 or pay a fine.

The individual mandate is now under attack in the courts and on Capitol Hill by Republicans, libertarians, and Tea Party enthusiasts who call it an affront to personal liberty. The industry, however, views it as the bedrock supporting the entire health reform law and is lobbying to keep it. The prospect of a vastly bigger market has helped spark a 7.4 percent rise since Jan. 1 in the Standard & Poor’s 500 Managed Health Care Index of publicly traded health-care companies.

For insurers, eliminating millions of potential customers while keeping other aspects of the overhaul would be a “nuclear nightmare,” says Robert Laszewski, president of Health Policy and Strategy Associates, a consulting firm that works with insurers. It would leave insurers without the extra revenue to cover higher costs from the law’s ban on the denial of coverage to people with pre-existing conditions or charging sicker patients higher premiums. “It’s the No. 1 lobby issue in the insurance industry right now,” says Laszewski.

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SCHA: Medicaid Is Our Only Decent Option

From our friends at the South Carolina Hospital Association:

By Thornton Kirby for The State

One of the common refrains of this campaign season was “They just don’t get it.” This was generally used by Republicans to refer to Democrats who were thought to be out of touch with mainstream America, outraged by their overreaching with stimulus, bailouts and health care. If the Democrats don’t “get it” after their recent trouncing, they need to have their heads examined. But before everyday Republicans split their sides laughing at the hapless Democrats, they’d better ask themselves if they get it: Do they understand what the newly elected Republicans believe they have been charged to do?

I recently had a conservative hospital trustee ask me: “You don’t think Nikki Haley will try to cut Medicaid, do you? South Carolina would be crazy to give up the three-to-one federal match.” My answer: “I think that’s exactly what she intends to do. Reducing government was her primary campaign platform.”

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Economist: Health Care = Jobs In South Carolina

From The State’s opinion page:

By Lynn Bailey

Gov.-elect Nikki Haley campaigned on increasing South Carolina’s jobs. In South Carolina, health care means jobs — 200,000 jobs. Jobs ranging from home health aides to nursing assistants to brain surgeons to insurance claims processors and hospital administrators. Jobs for people with only a high school diploma (or less) all the way up to years of post-graduate education. Health-care employment was one job sector that held steady during the worst recession since the Great Depression. Does anyone know an unemployed nurse? Or doctor?

In South Carolina, health care is a $31 billion economic activity. That’s $7,000 in spending for every man, woman and child in South Carolina. One in four dollars circulating in the state’s economy results from health care. Medicaid alone is $5 billion, and Medicare is another $10 billion in economic activity for our state. Medicaid’s annual spending is the equivalent of landing a Boeing plant every year.

Caring for our neighbors, healing the sick and restoring function to injured people is a valuable and noble livelihood. These are jobs that aren’t likely to be outsourced to Central America or Asia. Health-care research and manufacturing is a growing sector in South Carolina. Think Carolina Roche in Florence, B&D in Sumter and Zeus Manufacturing in Orangeburg.

But do we get the full value of this $31 billion in health expenditures? Probably not.

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Health Care Co-op Designed for SC’s Small Businesses

By Liv Osby for The Greenville News
For more than 60 years, Cline Hose & Hydraulics in Greenville has provided health insurance to its employees — but as the cost went up, the plans changed.

“When we first started, we had coverage for all our employees and their wife and children,” said Neb Cline Jr., an advisory board member of the company, which manufactures products for the automotive and industrial markets.

“But we had to decrease to just the employee over the years,” he said. “It’s been very difficult every year to re-budget our funds to compensate our employees as a benefit to them.”

Now Cline thinks he has an answer for the 37 workers at the Buncombe Street business — the South Carolina Health Cooperative.

The cooperative is a private nonprofit organization that aims to pool small businesses together to buy commercial insurance at lower rates than they can get individually.

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Health Insurance Giants On Track To Bust Profit Records

Attention consumers: The 4th paragraph here says it all. Meanwhile health insurers have funneled $86.2 million to the U.S. Chamber of Commerce to fight reforms that would contain consumer costs.

From Healthwatch, The Hill’s health care blog:

By Elise Viebeck

The six largest investor-owned health insurance companies saw a 22 percent increase in combined net income in the third quarter, putting them on pace to break profit records for 2010.

According to S.E.C. figures compiled by Health Care for America Now (HCAN), which lobbied Congress to pass March’s healthcare overhaul, the top six insurers made a total of $3.4 billion in profits during Q3, or $611 million more than they did during the same period last year.

The analysis looked at WellPoint Inc., UnitedHealth Group Inc., Aetna Inc., Humana Inc., Cigna Corp. and Coventry Health Care Inc., which had a combined enrollment of 85 million consumers as of Sept. 30. They saw an overall decrease in commercial enrollment of 3.4 million consumers between 2008 and 2010.

All but WellPoint, Inc., meanwhile, increased how much of each premium they allocate to administrative costs and profit.

On average, each of the six now devotes 20 cents on the dollar to non-medical services, compared to 16.5 cents last year and, according to HCAN, 5 cents in 1993.

March’s healthcare overhaul will require insurers to spend at least 85 cents of every premium dollar on patient care. Those changes take effect next year.

Health Insurers Paid Chamber $86.2 Million To Stop Reform

Karen Ignagni, CEO of AHIP, the insurers’ lobby through which money was funneled.
Today Bloomberg broke an eye-popping story on the true extent to which health insurers went to quietly undermine reform while publicly assuring us of their cooperation. See here where former insurance industry insider Wendell Potter predicted as much, that Big Insurance would employ front groups, third parties and scare tactics in order to maintain the failing status quo and keep Wall Street happy – all at the expense of 32 million uninsured Americans.
By Drew Armstrong – Nov 17, 2010

Health insurers last year gave the U.S. Chamber of Commerce $86.2 million that was used to oppose the health-care overhaul law, according to tax records and people familiar with the donation.

The insurance lobby, whose members include Minnetonka, Minnesota-based UnitedHealth Group Inc. and Philadelphia-based Cigna Corp., gave the money to the Chamber in 2009 as Democrats were increasing their criticism of the industry, according to one person who requested anonymity because laws don’t require identifying funding sources. The Chamber of Commerce received the money from the Washington-based America’s Health Insurance Plans when the industry was urging Congress to drop a plan to create a competing public insurance option.

The spending exceeded the insurer group’s entire budget from a year earlier and accounted for 40 percent of the Chamber’s $214.6 million in 2009 spending. The expenditures reflect the insurers’ attempts to influence the bill after Democrats in Congress and the White House put more focus on regulation of the insurance industry.

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Big-Insurance Whistleblower Tells All, Owns Up

Check out this 2009 clip from Bill Moyer’s Journal in which former CIGNA vice president and spin-guru Wendell Potter tells of his “road to Damascus” moment and the blood on his own hands, as well as the health insurance industry’s driving concern – “what they want is to enhance their profits, enhance shareholder value”.

Shocker – right? However, the last few minutes of the interview, during which Potter predicts the industry’s plans to blunt reform, are prophetic.

The [health insurance industry’s] strategy is, as it was in 1993-94, to conduct this charm offensive on the surface but behind the scenes to use front groups and third-party advocates and ideological allies and those on Capital Hill who are aligned with them philosophically to do the dirty work, to demean and scare people about a government-run plan, to try to make people not even remember that their Medicare program is a government-run plan that is operated a lot more efficiently, and also the people who are enrolled in the Medicare plan like it better. The satisfaction ratings are higher in our Medicare program, a government-run program, than in private insurance, but they don’t want you to know that or remember that and they want to scare you into thinking that, through the anecdotes they tell you, that any government-run system – particularly those in Canada, the UK and France – that the people are very unhappy and that these people will have to wait in long lines to get care or wait a long time to get care.

Potter’s new book, Deadly Spin, hit shelves this month. Expect to see him amid TV’s talking heads in coming weeks.