TANSTAAFL

March 29, 2011

Full Moon view from earth In Belgium (Hamois).

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Some of us are old enough to remember when Robert Heinlein popularized the saying “There ain’t no such thing as a free lunch” in his novel The Moon is a Harsh Mistress. A new report out today from the Kaiser Family Foundation proves the old adage still holds true. According to the report, if the Medicare age were raised to 67 as many deficit-reducing proposals suggest, the federal government would save $7.6 billion. Good news, right?  Unfortunately, such a change would cause costs to  individuals for out-of-pocket expenses, employers for retiree health care benefits, and state governments for Medicaid, to increase by about $10 billion.

The fact is, in spite of massive fraud and sometimes inefficient care delivery,  Medicare is the most cost-effective way to deliver medical care to seniors. Medicare’s Medical Loss Ratio (MLR) is about 3% – that is, 97% of the money spent on Medicare goes to cover medical expenses, not administrative functions. Compare that to private insurers, whose MLR varies but is seldom under 15%.

So here’s the question: does the federal deficit reduction that might result from raising the Medicare age bring benefits that are worth the costs it will charge to individuals, employers, and state governments? Doesn’t seem like such a great trade-off to us – but we’d like to hear your take on it.

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It’s been a year since President Obama signed the Patient Protection and Affordable Care Act (PPACA) into law. While it’s not perfect, we at Extend Health expect that over the long term the Affordable Care Act will help moderate health care insurance premiums and put downward pressure on health care costs. One thing hasn’t change since the bill’s passage: people’s opinions remain either strongly for or against the current health care legislation, and that doesn’t look like it’s going to change much any time soon. With that in mind, we’ve rounded up a few of what we think are the more informed and least biased opinions expressed in this week’s news articles and blog posts commemorating the anniversary. We thought you might enjoy reading and commenting on them.

The Washington Post, The Fix
The health care stalemate
By Rachel Weiner

One full year after President Obama signed the Affordable Care Act (aka the health care bill) into law, public opinion on it has been remarkably unaffected by the massive amounts of spin put out by both sides over the last 365 days. Read the rest of this entry »

Back in May 2010, HHS announced a $5 billion program to help employers fund health care for their early retirees – people who are not yet eligible for Medicare. The fund was much talked about in the news, and pundits predicted it would all be gone within two years if not before. That meant it wouldn’t last until 2014, when early retirees can get guaranteed issue insurance on state health benefit exchanges.

Well, it looks like those predictions may have been a little pessimistic. To date, according to U.S. News & World Report, only $535 million of that $5 billion has been paid out. State and local governments and non-profits make up the majority of employers who’ve applied for and been granted funds.

At this rate the money will last for ten years. (If you’re interested in participating, go here for details.) So what about it, employers? Why has so little of this fund been used?

We always learn something new when we read these recommended blogs that focus on health care. 

 The Health Care Blog: In one place you can find fact, opinion, and free-wheeling discussion on all matters health care related, from a range of respected and knowledgable contributors. Case in point, a new post out this weekend from Robert Wachter, titled Why Berwick Matters, is an intelligent analysis of the political posturing that may prevent this eminently-qualified candidate from being confirmed as director of Medicare and Medicaid Services (CMS).

Robert Wachter has his own blog, Wachter’s World, which is also well worth reading. According to his bio, “Robert M. Wachter, MD is Professor and Associate Chairman of the Department of Medicine at the University of California, San Francisco, where he holds the Lynne and Marc Benioff Endowed Chair in Hospital Medicine.” He writes about health care reform and other health matters from the perspective of someone intimitely familiar with “the policy and practice issues that affect real docs and nurses – and real patients – in real hospitals and clinics.”

From the broker’s perspective, you can’t do much better than The Alan Katz Health Care Reform Blog. Alan Katz writes thoughtful, well-reasoned and informative pieces on all aspects of health care reform. For example, his recent post President Obama Endorses Earlier State Opt Out of PPACA provides an excellent guide to recent developments in the discussion between state governors and the administration around issues of state flexibility to control their own health care reform efforts.

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This week we released results of a survey of 460 seniors 65 and older.  The survey shows that 70% of respondents believe the Patient Protection and Affordable Care Act (PPACA) will reduce their Medicare benefits, despite the fact that the bill does not cut Medicare benefits and instead adds some, including a yearly free checkup and other free preventive care services.

We conducted the survey from December 10-17, 2010. The results are consistent with surveys from other third parties throughout 2010 showing that many Americans, including seniors, have strong opinions about the overall health care bill without knowing what is in the bill and that often contradict how they feel about its individual provisions, including the AP-GfK Poll on health care reform from January 2011;  the KFF/Harvard Poll on health care reform from January 2011; and the National Council on Aging on health care reform from July 2010 .

The survey also revealed the following views of seniors on the impact of the health care law:

  • 72% expect reductions in their choice of Medicare Advantage or Medigap insurance plans
  • 64% expect reductions in their choice of Part D prescription drug plans
  • 87% expect increases in the cost of their Medicare insurance premiums
  • 84% expect increases in their prescription drug premiums
  • 82% expect increases in their out-of-pocket prescription drug expenses.

More detailed survey results are available in the Extend Health Medicare Conference Report for 2010.

Salt Lake City

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CNBC ran a story this morning about slack in the job market – job vacancies that go unfilled because, in spite of high unemployment, there aren’t enough skilled workers in certain sectors to meet the demand. Extend Health’s Salt Lake City service center is prominently featured as a case in point, withCEO Bryce Williams explaining that we need certain skills in the people we hire and  it becomes a real challenge to find enough qualified candidates. That’s partly because, as Bertha Coombs tells her audience, we operate in the health care sector. Other sectors where jobs are going begging for lack of qualified candidates include computers and life sciences.

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