Health care fears not a new thing

9/30/2013

By KEN STEPHENS

By KEN STEPHENS

Special to The Telegram

When Medicare was launched in 1965, it wasn't at all clear that it would be as popular and valued as it is today.

Marilyn Moon, an Augusta native who now is a fellow at the American Institutes for Research and director of the Center on Aging in Maryland, said early opponents of Medicare warned it would be the end of health care as we knew it. Some doctors threatened to boycott Medicare and refuse to see patients who relied on it.

Hospitals, especially in the South, also threatened a boycott because Medicare required that they be racially integrated. The National Guard was put on notice to be prepared to integrate hospitals, much as it had Southern schools.

At the time, future President George H.W. Bush famously called it "socialized medicine," and Ronald Reagan ominously suggested that if Medicare wasn't stopped "you and I are going to spend our sunset years telling our children and our children's children what it was once like in America, when men were free."

But by 2011, a Harris Interactive poll found that Medicare and crime-fighting were the most popular federal programs, supported "a great deal" or "somewhat" by 88 percent of those polled, slightly ahead of Social Security.

"The irony of it is that it kind of happened with a whimper rather than a bang," Moon said. "It started and people suddenly began getting care and doctors found they were going to get paid for caring for people who in the past they often had to do with charity care."

Today, there's a similar furor leading up to full implementation of the Affordable Care Act, or Obamacare, on Oct. 1.

"I think there are some things that are very analogous and I think they reflect the fact that none of us likes change, and when it's something as important and complex as health insurance, that's scary to people," Moon said.

But Moon thinks that 10 or 15 years down the road, Obamacare will be just as accepted.

"I think one of the important lessons is that a lot of people talk about things that are going to happen that are scary, and they turn out not to be the case," said Moon, who spoke at the Sept. 24 Sunflower Fair, an event sponsored by the North Central-Flint Hills Area Agency on Aging.

Today, she said, Medicare is one of the two most popular federal programs. Its beneficiaries consistently give it higher ratings that the beneficiaries of private insurance, said Moon, who has a Ph.D. in economics from the University of Wisconsin and has been a public trustee for the Medicare and Social Security trust funds.

Medicare, Moon said, actually was a more revolutionary idea in 1965 than Obamacare is today.

"It was a major break from how people got insurance in the past because it was coming from the government when in the past only private insurance was possible," Moon said. "That's even more of a change than the Affordable Care Act. The irony of the Affordable Care Act is that the people who designed it designed it to try to be as undisruptive as possible. Part of the reason it's so complicated and clunky in ways is that the notion was to try to work around all the folks who currently have insurance and keep private insurers operating."

Under the ACA, most familiar private insurance companies, and some new ones, will offer their plans through the health care exchanges to consumers who don't have employer-sponsored insurance.

"What's really different in terms of the Affordable Care Act for people is that there's an exchange out there where you can get all the information in one place, not just from the person who is trying to sell it to you directly — i.e., the insurance company. There are requirements that they all have to play by similar rules."

In 10 to 15 years, she said, "People will look back and say some states were really chumps" because they didn't take the opportunity to set up their own insurance exchanges and expand Medicaid eligibility under the Affordable Care Act.

"The federal government is going to fully pay for that," she said of Medicaid expansion. "What is so terrible about making sure that very low-income people get access to insurance? I know hospitals are wildly in favor of that because they won't have to deal with so many uninsured (people)."

Colorado, for example, set up its own health care exchange and last month announced that 13 insurance companies would offer 150 individual plans and 92 for small businesses through the exchanges. Colorado also approved an additional 299 plans that can be purchased on the open market.

In Kansas, which chose not to create its own exchange, the federal exchange will offer about 150 total plans from four companies. While Kansans still wait to learn details of plans and premium costs, Colorado residents have known those details for more than a month.

Colorado launched a $2 million public awareness campaign in May. Kansas has had no public awareness campaign other than employees of the Kansas Insurance Department visiting cities for public question-and-answer sessions.

Like Florida, Kansas also did not expand Medicaid eligibility. Kansans generally are eligible for Medicaid only if they are extremely poor, making no more than 32 percent of the federal poverty level, or $7,500 for a family of four. The ACA raised eligibility to 133 percent of poverty level, or $31,322 for a family of four, but the U.S. Supreme Court said states could not be compelled to expand Medicaid eligibility, and the Kansas Legislature opted not to.

That will leave a substantial number of Kansans without insurance and without help to get it. The maximum income for Medicaid eligibility in Kansas is still far below the income level at which federal subsidies help offset insurance purchased through the exchanges: $11,490 for individuals and $23,550 for a family of four. That's because the Affordable Care Act, as written, didn't provide subsidies below those incomes because those families would get Medicaid instead.

Additionally, under Kansas regulations, single able-bodied adults are not eligible for Medicaid at any income level. Kansas Insurance Commissioner Sandy Praeger recently estimated that 130,000 to 150,000 Kansas adults would "fall between the cracks," too rich to qualify for Medicaid, too poor to qualify for subsidies for insurance.

Moon said that was "the saddest commentary on the Affordable Care Act."

"You have an individual making $10,000 or $11,000 a year, just scraping by, and they won't be able to afford medical insurance," Moon said. "They can be working full time. They can be just scraping by, and Kansas is not going to be offering them the option of having health insurance, all because of the big boogey man, the federal government, offering to expand Medicaid."

Many elderly people have taken a keen interest in Obamacare because they are worried about how it will affect their Medicare, the federal insurance for people over 65. That answer, Moon said, is not much. They don't have to do anything different. They are, however, getting some improved benefits since the Affordable Care Act became law in 2010.

ACA stipulates that many preventive care services are now fully paid for by Medicare. It also is shrinking the "doughnut hole" in prescription drug coverage a bit each year through 2020. For instance, Medicare enrollees now have prescriptions covered up to a certain level, then have to pay 79 percent of the cost of generic drugs, 47.5 percent of brand-name drugs, until they reach their annual maximum and Medicare begins paying for all the cost again.

Over the next seven years, the amount they will have to pay for generic drugs will be reduced 7 percent a year until it reaches 25 percent in 2020. The amount paid for brand-name drugs will drop 2.5 percent in 2015, then 5 percent a year until it also reaches 25 percent in 2020.

The Affordable Care Act may be "a very good deal" for retired couples where one partner is old enough to enroll in Medicare but the other is still too young and doesn't have access to employer-sponsored insurance. Heretofore, pre-existing conditions were used by insurance companies to deny coverage to those seeking individual policies or to price coverage beyond the ability of people to pay, and Cindy Hermes, the director of public outreach at the Kansas Insurance Department, noted in a recent public forum in Hutchinson that "by age 50, you usually have about three pre-existing conditions that would knock you out."

If one person has Medicare and a younger spouse doesn't, the one without insurance will be able to go on the exchange, shop for coverage and be assured that the insurance coverage is good and affordable.

"And believe me, if you're in your 60s, you better want decent coverage," Moon said. "You don't want to buy some fly-by-night coverage and hope you don't get sick. So there will be decent coverage you can buy and if they have modest incomes — i.e., they're retired and living on relatively low levels of income — there will be subsidies available for individuals in those cases. ... Those individuals should be much better off."

Medicare also will be better off if older people who don't currently have insurance get coverage through ACA in the years leading up to when they finally become eligible for Medicare.

"The research says that for people who come onto Medicare who have not had insurance the last few years before becoming eligible for Medicare, their costs of Medicare for up to 10 years are higher than for other people because they've delayed getting care, they've let things deteriorate and they've created health care problems for themselves and for the system," Moon said.

Moon also warned that people who have individually purchased insurance policies now should be wary of pressure from their insurance companies to renew their policies before Oct. 1, when you can start shopping for alternative coverage on the exchanges.

"A lot of insurance companies are wanting people not to go through exchanges and do other things," she said. "Sometimes they may be legit, but in a lot of cases they are trying to avoid the fact that there will be a better deal through the exchange. So people really ought to wait and see what the options are. They can still go with one of these 'plans' if they want, but chances are if the plan is really cheap it's not very good if it's not through the exchanges. The exchange requires you meet minimum conditions in terms of co-pays that aren't really high, that there's no upward bound limit on the benefits you get, etc."

The Affordable Care Act also includes a call for trying to identify ways to reduce Medicare costs to slow the rate of growth in federal health care spending. But Moon says that was going to happen regardless of whether the ACA became law.

"There was going to be pressure no matter what," she said. "And in this case, some of the savings are going to go to help expand coverage to other people, which makes it easier to do those things. If you're going to tell the hospital we're going to pay you a little less for Medicare, but we're going to make sure you have less charity care you have to absorb, they're a lot happier with that than if we say we're going to pay you less for Medicare and, oh, by the way, we have nothing for you on charity care."

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