25 Largely Untold Health Reform Stories

Before describing a few stories that have not received much play in the media, I'd like to mention a few publications by my Urban Institute colleagues that provide useful state and local information. One report shows, by Congressional district, the proportion of residents with various types of health coverage (uninsured, privately insured, or covered by Medicaid or other public programs). The other report forecasts, by state, likely future trends if reform legislation does not pass, including health care cost increases and the rising number of uninsured.

Following are some story ideas, organized in terms of policy (coverage and cost) and politics (Democratic and Republican).

Policy Coverage

1. If you build it, will they come?

Reform legislation offers subsidies for low-income people to obtain health coverage. But there is a long history of eligible people failing to take advantage of available assistance, for both health coverage and other benefits. How effective are the mechanisms in pending legislation that will facilitate enrollment by the uninsured who qualify for help?

2. What happens to people in good states?

In most states, low-income children covered through the Children's Health Insurance Program (CHIP) receive more generous assistance than will be provided by proposed tax credits or affordability credits under pending legislation. In some states, the same is true for low-income adults. What will happen to these low-income people? Will they experience reduced access to coverage and care? Or will reform legislation permit and/or encourage states to continue providing low-income people with more help than is offered under proposed federal legislation?

3. Missing elements from the Massachusetts model

Pending national reforms borrow much from Massachusetts 2006 reforms, which left only 2.6 percent of state residents uninsured after less than two years-the lowest such percentage ever recorded by an American state. An individual mandate to enroll in coverage unless it is unaffordable, subsidies to help low-income people buy insurance, and a health insurance exchange offering a range of health plans from which to choose are some of the key elements of both the Massachusetts reforms and pending national legislation. Yet the federal bills depart in significant ways from policy in Massachusetts. For example:

• In Massachusetts, affordability was left undefined in the legislation. The administrative agency developed a definition, which varies with household income. By contrast, the Senate Finance Committee bill defines affordability and applies it uniformly to all households, regardless of income. In general, the Massachusetts policy is much forgiving, allowing more households to go without insurance than is the case under Senate Finance Committee legislation.
• Massachusetts conducted a massive public education campaign to inform residents about new requirements and subsidies. Such a campaign does not seem to be contemplated and funded by pending legislation
• In Massachusetts, low-income subsidy recipients have been enrolled, not in the broad range of private plans furnishing unsubsidized coverage, but in the same health plans that serve Medicaid beneficiaries. As a result, if household income rises or falls, a low-income person can stay in the same health plan; only the premium and out-of-pocket cost-sharing amounts change. By contrast, federal legislation envisions that low-income subsidy recipients will enroll in a broad range of plans that also serve middle-class people. If income fluctuates and households move between Medicaid and other subsidies, people may need to change, not just their payments for health insurance, but their health plans.
• For low-income people, the subsidies in Massachusetts and the available coverage are substantially more generous than what is being contemplated under federal legislation.
• For more differences, stay tuned – some colleagues of mine and I will soon be releasing a paper on the subject of how Massachusetts managed to enroll such an extraordinary proportion of low-income residents into coverage.

4. Today's limited Medicaid

Even well-informed people believe that Medicaid covers the poor uninsured. In fact, unless a state obtains a federal waiver, federal law forbids Medicaid for anyone who falls outside specified categories (generally speaking, children, pregnant and post-partum women, parents currently caring for dependent children, the elderly, and the severely disabled). Childless adults and empty nesters, no matter how poor, are ineligible for coverage, as a general rule. As a result, such adults comprise more than 50 percent of the low-income uninsured.

And even for custodial parents caring for minor children, parents with incomes above 70 percent of the federal poverty level (FPL) are ineligible for Medicaid in the median state.

5. Do the young uninsured really think of themselves as invincible?

Much has been made of the so-called "young invincibles," adults in their 20s or early 30s who choose to go without insurance because they think they don't need it. But the prevalence of young adults among the uninsured may be more closely related to labor market economics than to a preference for i-phones over insurance coverage. When young adults start out in the working world, many begin in low-wage jobs without benefits. Among young adults, low income is highly correlated with a lack of insurance. Young adults offered coverage by employers tend to accept such offers, even if it means that they must reduce their take-home pay somewhat.

6. What happens after age 50?

While young adults are the age group most likely to be uninsured, people in their 50s or 60s can experience serious health coverage problems. A person with chronic illness who becomes uninsured can experience great difficulty obtaining coverage, placing health and even their survival at risk. One study found, for example, that roughly 17,000 adults age 55-64 die each year because they are uninsured, ranking uninsurance as the third-leading cause of death, after cancer and heart disease.

7. Do the insured benefit when the uninsured receive coverage?

In February 2009, the Institute of Medicine updated its earlier findings about the impact of uninsurance. One interesting finding suggested that, in geographic areas with high proportions of uninsured, the health care infrastructure generally suffers, so that even the privately insured experience impaired access to care.

8. Low-income coverage: mainstreaming vs. special protections

A recurring theme in reform proposals involves whether low-income people are "mainstreamed" into the same coverage that serves middle-class people or receive special assistance to make up for the lack of disposable income. A classic example is the above-described difference between Massachusetts and national reform proposals, where the former gives low-income people extra help in the same plans that serve Medicaid patients, but the latter enrolls them in the same plans that serve their middle-class neighbors.

Cost

9. What changed in the early 1980s?

Until the early 1980s, per capita health care costs in the U.S. did not depart radically from those in other advanced nations. In some years, German costs slightly exceeded ours. But beginning in the early 1980s, U.S. costs skyrocketed, relative to costs elsewhere. At the time, competition was all the rage in health policy circles. "Let's depart from antiquated regulatory strictures and use the market to control costs," was the battle cry. Could it be that the dismantling of health care regulation was an important cause of later health care cost increases?

10. The challenge of replication

Certain islands of high-quality, low-cost care have received considerable attention. Familiar examples that come to mind include the Mayo clinic, the Cleveland Clinic, Geisinger Health Plan, etc. But how do we expand these islands into a continent? Many reform proposals experiment with innovations and authorize the federal government to expand demonstrations and pilots if they succeed. Realistically, is that the most we can do right now?

11. Is Dartmouth right?

Informed by researchers at Dartmouth, the new conventional wisdom maintains that health care costs vary widely by geographic area, and that such high spending does not achieve any gains in terms of health. This presents a happy scenario through which health reform slows cost growth without hurting patients; if all of America can practice medicine as is done in the low-cost areas, we'll reduce spending while improving quality and access to care, the argument goes. But an emerging strand of health policy research disagrees with the Dartmouth consensus, maintaining that spending and outcomes are, in fact, correlated. Should lawmakers rely on the Dartmouth research to formulate national policy?

12. Transparency

Several features of pending legislation that have received little attention involve transparency. For example, drug companies are required to disclose large consulting contracts with doctors that many believe, in the past, have caused unnecessary use of expensive medications.

13. CBO and private sector costs

The "cost" of proposed legislation is typically assumed to refer to the federal budget cost. In part, that reflects the role of the Congressional Budget Office, which is responsible for estimating bills' effects on federal spending and revenue. But some of the most important effects of reform legislation involve cost increases or savings for employers or for households.

14. Supply-driven demand

Sometimes, supply creates demand in the health care industry. For example, if a hospital buys an expensive piece of diagnostic equipment, that capital investment is recouped only if the hospital can bill for the machine's use. This creates pressure on the hospital's physicians to use the machine, even if patients could do equally well with less costly services.

15. New York's "Medicare Commission"

Several years ago, New York implemented an innovative policy that, in some ways, foreshadowed current proposals for a "Medicare commission" in reform. The latter proposal would have a commission recommend reimbursement reforms for Medicare that would be voted up or down in Congress, without amendment. In New York, to address a dysfunctional hospital system with far too many beds, the Legislature created a blue ribbon commission that proposed to the legislation a detailed hospital restructuring plan (with facility-specific cuts and other changes) that received an up-or-down vote in the legislature, without amendment. The plan was proposed, approved, and signed into law.

16. Targeting care innovations

The new conventional wisdom is that care innovations rarely save money. For example, one promising innovation involves a "patient-centered medical home," through which a patient's primary care provider is responsible for, in addition to traditional medical care, care coordination, patient education, and 24-7 availability for consultation and urgent care. While such services furnished to all patients may or may not achieve net savings, there is good evidence that, when targeted to the severely chronically ill, these care innovations can slow the growth in health care costs.

17. Affordability of out-of-pocket costs

In analyzing the affordability of pending reform proposals, most discussion has focused on premium costs-the amount families at various income levels must pay to purchase coverage. Also important to analyze are out-of-pocket (OOP) costs, which patients incur as they meet applicable deductibles and pay co-insurance amounts and co-pays. When OOP costs do receive analysis, researchers often discuss the total financial burden on a family. But critically important-and rarely discussed-is the impact of OOP costs on access to care. For families who are not affluent, high deductibles and other high cost-sharing amounts often mean they go without necessary care.

Democratic Politics

18. How can Democrats survive the mid-terms?

The electorate for the 2010 elections will be different, in important ways, from the electorate in 2008. Seniors comprise a larger percentage of voters during off-year elections, and they are more strongly opposed to proposed health reforms than are voters in general. With reductions in Medicare spending growth as an important source of financing for reform, seniors are understandably nervous. Further, as often happens, the party out of power is much more emotionally engaged than is the party in power. Reflecting a strong role for the federal government encompassed in many Obama initiatives (not just health care, but also stimulus, energy, and education proposals), this engagement is accompanied by increasing disenchantment among independents worried about rising federal budget deficits. And above all, unemployment rates that are likely to remain high through the middle of 2010 leave many voters inclined to punish the party in power.

19. Why are the Congressional Black and Hispanic caucuses prioritizing the public option over low-income subsidies?

These caucuses have emphasized to House leadership the importance of including a strong public option in reform legislation. But an issue of much greater consequence to Latinos and African-Americans is the generosity of subsidies to low-income people.

20. The history of unwillingness to compromise on the left

Some progressive legislators and organizations maintain that, unless a strong public option is part of reform legislation, such legislation does not deserve support. Is this the latest of a series of refusals to compromise that have prevented substantial progress on health care issues? During the Nixon Administration, for example, President Nixon, Senator Kennedy, and House Ways and Means Chairman Wilbur Mills were within striking distance of consensus legislation that would have covered all Americans, financed by imposing responsibilities on all employers. Such legislation was scuttled, in significant part because of union opposition to any proposal that fell short of a single-payer system. Union leadership believed that single-payer legislation would soon be enacted, at worst during the subsequent two-year Congressional session.

Another, arguably less compelling example involves the Clinton Administration, which includes many alumni who dearly regret President Clinton's publicized promise to veto any legislation that left a single American uninsured. The Administration rejected compromise proposals that would have led to a significant increase in coverage, albeit falling short of universality.

21. Political math

President Obama's address to the joint session of Congress laid down a marker that reform legislation cannot spend more than $900 billion over 10 years. This may have been an attempt to avoid the "optics" of a health reform bill with a price tag that exceeds $1 trillion.

Many observers believe that such a cap will make it impossible to provide sufficient subsidies to make coverage affordable to low- and moderate-income Americans. In turn, this has created pressure to soften the individual mandate, rather than impose unaffordable costs on numerous households. The resulting increase in the expected number of uninsured has caused hospitals and insurers to oppose or threaten to oppose reform, causing some unraveling of the interest group coalition willing to support (or, at a minimum, accept) change. Further, this leaves in doubt the ability of reform legislation to enact insurance reforms forbidding discrimination against people with health problems, surely the most popular feature of proposed reforms. In short, the $900 million ceiling could create very serious political and policy problems.

This seems reminiscent of the Administration's desire, earlier this year, to keep the cost of the stimulus package below $900 billion. Some observers, including Paul Krugman, believe that the economic recovery is now stumbling because the stimulus legislation didn't include enough funding. Is there a pattern of politically-imposed dollar limits that prevent the accomplishment of important substantive goals?

22. Is a pyrrhic victory in the offing?

Peter Harbage has posed the following question: If reform legislation passes, will every problem in the health care industry be laid at President Obama's door? Will such blame be particularly plausible if rapidly-drafted legislative language creates unforeseen problems when statutes are translated into policy? Would lawmakers be well-advised to leave considerable discretion in the hands of federal (and perhaps state) administrators as they flesh out the policy details and implement reform?

Republican Politics

23. Have the Republicans undercut their own Medicare agenda?

In an understandable desire to gain short-term political advantage by enraging seniors about proposed policies that would slow the growth of Medicare, Republicans have made it much more difficult for legislators in either party to adopt such policies in the future. This is likely to limit policymakers' future ability to achieve substantial progress attacking the long-term federal budget deficit, which surely qualifies as a key Republican policy goal.

24. With the high representation of Latinos among the uninsured, will health reform be another issue alienating the fastest-growing group of voters in America?

Compared to all other racial and ethnic groups, Latinos are substantially more likely to be uninsured. Republicans have taken a number of policy positions that alienate many Hispanic voters, who are slated to grow substantially in number over time. Will Republican opposition to health reform constitute one more factor moving this important voting block to the Democratic side of the ledger?

25. The "vast, right-wing conspiracy"

Although the August townhalls are frequently portrayed as a spontaneous uprising, there is some evidence that they reflect careful planning and coordination that included the same groups responsible for the Kerry Swift Boat effort in 2004, the assault on vote counters in Florida in 2000, at least one insurance company, and key Republican leadership. See the story in Rolling Stone, 9/23/09.