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Friday, July 29, 2005


Eagle
highlights WIBA HSA plan


[Deb Gruver, "Help for small business," The Wichita Eagle, 29 July 2005.]

The Wichita Independent Business Association's decision to offer health savings accounts to its members is saving significant costs for some. Even better, about half of those enrolled were previously without insurance:

WIBA in June began offering two insurance plans featuring health savings accounts to its members.

The nonprofit group joined with Intrust Bank and Preferred Health Systems to offer the plans, which couple a pre-tax savings account with high-deductible health insurance.

Wichita real estate agent Myrna Haas already had health insurance, but when the Wichita Independent Business Association began offering a new plan earlier this year, she switched to save money.

"My premium was so high before," said Haas, an independent real estate agent.

Haas liked the concept because of the tax benefits.

The plan she chose has a $2,500 deductible, which is high but will save her money on premiums. WIBA's other plan has a $4,000 deductible.

She previously had a plan with a $500 deductible that cost about $670 a month. Her new plan's premium is $479 a month, and she's putting $200 a month into the savings account.

"It's a win-win situation, it seems like to me," she said.

Thursday, July 28, 2005

Mandate mania

["Avoiding Costly Mandated Benefits,", NCPA Daily Policy Digest, 28 July 2005.]

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NCPA just released "Health Insurance Choice," a great piece highlighting the spread of mandated health coverage benefits:

Mandated health insurance benefits are state regulations that require insurers to cover specific services and specific providers. Currently, there are 1,823 state-mandated benefits among the 50 states, and an additional 295 mandates are now being debated in state legislatures.

Mandates cover services ranging from acupuncture to in vitro fertilization. They cover providers ranging from chiropractors to naturopaths. They cover bone marrow transplants in New Jersey, hairpieces for chemotherapy patients in Minnesota, marriage counseling in Connecticut and pastoral counseling in Maine.

- Currently, 11 states require insurers to cover marriage counselors, four mandate coverage for naturopaths, three cover midwives, 11 cover acupuncturists and four require coverage for massage therapists.

- Other states have mandated such procedures as in vitro fertilization (15 states), port-wine stain birthmark removal (two states), and treatments for morbid obesity (four states).

- Compared to the costs of barebones insurance, these kinds of mandated benefits hike premiums considerably, thus pricing otherwise healthy people out of the market.

- In fact, studies estimate that as many as one of every four uninsured Americans has been priced out of the health insurance market by mandates.

If mandates do so much harm, then why do they exist? Very few mandates have been enacted because of patient pressure, says Strayer; almost all are the result of the lobbying power of special interest providers. And once a state-mandated health benefit is enacted, it is almost impossible to get it repealed.


[Matthew Hisrich, "State Mandates reduce insurance affordability," The Flint Hills Center, May 2004.
Matthew Hisrich, "Kansas Health Insurance Mandates Exceed National Average," The Flint Hills Center.]

Wednesday, July 27, 2005


Nebraska getting serious about Medicaid reform


["Panel Will Try to Curb Medicaid," RedNova News, 26 July 2005.]


Missouri recently made significant changes to its Medicaid program, and Kansas legislators are increasingly talking about the need to address the issue here. Nebraska is moving on the issue now, as well:

Ten Nebraskans will set out Wednesday on a quest to stop Medicaid from becoming the monster that ate the state government's budget.

"It's eating us alive," said State Sen. Don Pederson of North Platte, who has been asked to be chairman of the council. "Medicaid, at the present rate of growth, is outpacing our capacity to meet our other obligations."

Projections for the next 20 years show that Medicaid and state aid to schools would slowly squeeze out all other state needs.

This effort follows several previous attempts at Medicaid reform.

The most recent was a task force that ended a few years ago without issuing recommendations. In 2003, a consultant's study about long-term care reform produced recommendations but no action.


[Matthew Hisrich, "A Backgrounder on Kansas Medicaid," The Flint Hills Center, 19 July 2004.]

eHealthInsurance releases new HSA data

["Health Savings Accounts: The First Six Months of 2005," eHealthInsurance, 27 July 2005.]

eHealthInsurance just released an update to its earlier "HSAs: The First Year in Review." The update reveals that coverage is becoming even more affordable and a greater number of those with limited incomes and who were previously uninsured are taking advantage of HSAs:

This report...focuses on the comparison between the first half of 2005 and the previous twelve months of 2004 plan benefits, purchaser demographics and premiums for HSA-eligible plans in the individual and family markets.

[K]ey findings include:

- The percentage of HSA-eligible plan purchasers with incomes of less than $15K who were previously uninsured increased by over 5 percentage points.

- There has been a clear shift toward lower monthly premiums in the first six months of 2005 compared to 2004 with the proportion of those people paying $50 or less increasing by 75%.

- The average monthly premiums for HSA-eligible health plans have decreased by an average of 15% from 2004.


[Devon Herrick, "Health Savings Accounts: The Future Of Health Care For Kansans," The Flint Hills Center, 14 February 2005.]

Tuesday, July 26, 2005

WSJ praises Association Health Plans

[Editorial, "Cheaper Health Insurance," The Wall Street Journal, 25 July 2005.]


Previous posts on Kansas Health (here and here) have highlighted U.S. Representative John Shadegg's (R-Arizona) attempts to foster competition by creating a national health insurance market. His bill is now moving forward, and the editors at The Wall Street Journal - certainly no foes of competitive markets - display their affection for the concept in this recent column:

Republicans haven't been getting much credit on the health policy front, despite their misguided 2003 drug entitlement masquerading as Medicare "reform." That could change soon. Last week the House Energy and Commerce Committee approved a bill that could dramatically reduce the ranks of the uninsured and spur general economic growth -- all without costing a dime to the Treasury.

Right now Americans who aren't lucky enough to get insurance from large employers or poor enough to qualify for Medicaid find themselves at the mercy of the legislators and insurance commissioners of the state in which they happen to live. This can be OK in states that exercise this regulatory function judiciously. But in others, the young and working poor find themselves effectively priced out of the market by special-interest regulations dressed up as consumer protections.

Interstate commerce in health insurance would remove a huge barrier to the efficient allocation of human resources in our economy. Right now untold numbers of Americans fear moving, switching jobs or starting their own businesses for fear of losing their health insurance. That would change if they were able to shop nationwide for policies that would follow them wherever they go.

But the most important issue here is justice. It is simply immoral that millions should be exposed to the possibility of financial ruin because of the all-or-nothing choice offered by the insurance regulations of states like New York and New Jersey.

Progress on Medicaid reform in other states

[Susan Konig, "Medicaid Reform: Florida, South Carolina Lead the Way," Health Care News, The Heartland Institute, 1 August 2005.]

The Heartland Institute summarizes reform efforts on Medicaid at the state level in this recent column:

The nation's governors agree on at least one thing: They have a problem with Medicaid.

Medicaid reformers in several states are not waiting for the federal government to act. Some changes in state Medicaid programs "require a federal waiver, and others do not," according to Nina Owcharenko, senior policy analyst for health care in the Center for Health Policy Studies at The Heritage Foundation.

"State policymakers should take advantage of the current waiver structure, as cumbersome as it may be, and introduce reform into their programs," Owcharenko recommends in a June 2005 report, "A Roadmap for Medicaid Reform."

Policymakers should look to the states that are having success with reform for inspiration and guidance, said J. Robert McClure III, president and CEO of the James Madison Institute in Florida.


The Flint Hills Center has collected some of these key reform plans online for review:

- Reforming Medicaid: The South Carolina Plan

- Empowered Care: Florida Medicaid reform plan

- GraniteCare: New Hampshire Medicaid reform plan

Monday, July 25, 2005

Medicaid called "the 800-pound gorilla that's been eating our lunch"

[David Klepper, "Medicaid spending under scrutiny," The Kansas City Star, 24 July 2005.

John Hanna, "Medicaid issue looming," The Topeka Capital-Journal, 25 July 2005.

All of the sudden, Medicaid is making headlines. Either this means that Kansas policymakers are serious about tackling the issue next session or this is just something to talk about over the summer when nothing will be done:

The state’s new Health Policy Authority is looking to streamline the program with hope of finding savings by combining the state’s medical programs and purchasing power under a single umbrella. Gov. Kathleen Sebelius is pushing for more flexibility from Washington, and Senate President Steve Morris has formed a committee to study what he calls a Medicaid crisis.

“Medicaid is the most severe problem we have, bar none,” Morris said. “It’s the 800-pound gorilla that’s been eating our lunch, and it could conceivably eat every dollar we have in the state budget."

The state now spends nearly $2 billion a year on health care, more than three times the amount it did 10 years ago. Even with the economy showing signs of health, Medicaid costs continue to climb, even as Congress plans to cut its share of Medicaid by $10 billion over the next five years.

"Every governor in the country is trying to grapple with this rapidly growing part of the budget," Sebelius said.

Among the ideas right now:

- Reduce eligibility or institute a copay.

- Increase prevention efforts to curb the health problems most to blame for rising costs: smoking, heart disease and obesity.

- Work on making federal Medicaid rules more flexible.

- Go after expenses like administrative costs and Medicaid fraud.


[Matthew Hisrich, "Staying the Course: Medicaid Reform in Kansas," The Flint Hills Center for Public Policy, February 2004.]

Friday, July 22, 2005

Census Bureau: Uninsured on the rise

[Joel Mathis, "More Kansans doing without health insurance," The Lawrence Journal-World, 22 July 2005.]

The Journal-World reports on the distrurbing trend toward higher rates of uninsured Kansans in this article:

New figures released by the U.S. Census Bureau on Thursday also suggest a rise in the number of uninsured local and state residents. The bureau reported that 12.1 percent of Douglas Countians and 12 percent of Kansans lack coverage; both figures were lower than the national average, but higher than previous estimates.

State officials said the report signified the urgency of the health care problem.

“When you’ve got 300,000 of your citizens who are uninsured and don’t have access, that’s not acceptable,” said Charlene Bailey, a spokeswoman at the Kansas Insurance Department.


Worse, policymakers continue to offer the same tired approaches to health care that are unlikely to yield positive outcomes:

State officials say they’re working to tackle the issue.

Bailey said the insurance department was sponsoring a Health Care Cost Containment Commission to bring health costs under control. On the table: tax incentives to small businesses that provide insurance and streamlined processes for doctors to receive credentials from insurance companies.

Nicole Corcoran, a spokeswoman for Gov. Kathleen Sebelius, said the state was also working to enroll 40,000 children in the Medicaid and Health Wave programs and provide prescription assistance for low-income Kansans, among other efforts.


Keeping the focus on employer-based coverage and broken government programs may give politicians something to say to the press, but these are hardly long-term solutions. Earlier this week, The Pittsburgh Post-Gazette ran an article on how consumer-driven plans are saving people money and making coverage more accessible to the uninsured:

Gary Lauer, chief executive of eHealthInsurance Services Inc. based in Mountain View, Calif., said the new policies also are attractive to small businesses and the uninsured.

He said that of the new policies purchased through eHealthInsurance, where Standiford found his plan, more than 40 percent were purchased by people with annual incomes below $50,000, almost half were families and more than one-third had been uninsured.

"It's the affordability," he said. "They get a lower-cost premium. And the money they probably would have been spending anyway, they can run through a savings account to buy day-to-day medical services."


[Matthew Hisrich, "One size won't fit all," Letter to the editor, The Wichita Eagle, 2 June 2005.

Matthew Hisrich, "Insurance issue," The Lawrence Journal-World, 23 September 2004.]

New guide to Health Care Spending Accounts released

[Health Care Spending Accounts: What You Need to Know About HSAs, HRAs, FSAs, and MSAs, America's Health Insurance Plans, July 2005.]

The letter soup of acronyms currently associated with consumer-driven health care plans can get pretty confusing. Foruntately, America's Health Insurance Plans - a national trade association representing the health insurance industry - has come up with a handy guide:

In today's health care market, employers and consumers are looking for lower-cost health coverage, more control over their health care dollars, and broad choice among doctors and hospitals. Consumer health spending accounts are one of many product options that respond to these needs.

The major types of health care spending accounts are:
- Health savings accounts (HSAs) with high-deductible health plans (HDHPs)
- Health reimbursement arrangements (HRAs)
- Health flexible spending arrangements (FSAs)
- Archer medical savings accounts (MSAs)

All of these products have federal tax advantages, and they allow consumers to save money for health care. Each has a different design and is subject to a unique set of federal rules. This guide answers frequently asked questions about account-based health care products.


As Harvard Professor Regina Herzlinger recently commented at a Galen Institute briefing:

Buyers who don't know a piston from a valve can be effective buyers because of Consumer Reports and J.D. Power. And empowered consumers could make the same choices about their health care and health insurance purchases.

[John McClaughry, "Patient Power: A Health Care Reform Agenda for Kansas," The Flint Hills Center, May 2004.]

Thursday, July 21, 2005

Surprise - Consumer-driven health plans require people to be consumers

[Kaja Whitehouse, "Fees of Health-Savings Accounts Draw Scrutiny of Consumers," The Wall Street Journal, 20 July 2005.]


Here's an interesting concept: not all products are created equal. The tone of this article suggests almost complete surprise upon finding out that it pays to be a savvy customer:

While some providers offer HSAs free, others charge more than $100 in the first year. Higher fees don't necessarily guarantee higher savings rates or additional services. HSAFinder.com, a site that provides free information about HSAs, said it received so many complaints about fees that it compiled a list of the top 10 least- and most-expensive HSA providers. It released the list on its Web site this week.

Here comes the good part, though:

The good news, Mr. Mazzella says, is that competition is driving down costs. More than one million people were covered under an HSA as of March, more than double the number six months earlier, according to America's Health Insurance Plans, an industry organization in Washington, D.C.

HSAFinder.com's list of the least-expensive HSA providers, based on first-year fees, include American Chartered Bank of Schaumburg, Ill.; Capitol Bank of Madison, Wis.; and Blackhawk Bancorp Inc. of Beloit, Wis.

The most costly HSA providers, also based on first-year fees, include Equity Trust Co. of Elyria, Ohio; Datapath Inc. of Little Rock, Ark.; Sterling HSA of Oakland, Calif.; Trustar Retirement Services, a unit of Principal Financial Group Inc.; and First HSA Inc. of Reading, Pa.


[Devon Herrick, "Health Insurance Is Better To Own Than Rent," The Dodge City Globe, 23 March 2005.]

Wednesday, July 20, 2005

CDHC and the Internet make for a great combination

["Hunting For Hospitals That Measure Up," Business Week, 13 June 2005.]

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In a recent op-ed for The Flint Hills Center, Greg Scandlen had this to say about the way consumer-driven health care will impact the marketplace:

Now that people control their own resources, they will demand reliable information they can use to make good decisions.

There is a new world dawning. Employers, insurers and providers all will rethink the way they do business. As a result, the next 10 years likely will change our health care system forever, and for the better.


His prediction is already coming true:

[T]he Internet's role in health care is reaching a new stage. The 1990s brought general information sites such as WebMD and DrKoop.com. Now Subimo and a host of services provide specific data people can use to help them choose hospitals, doctors, and health plans. In April, Medicare launched its own site, Hospital Compare. Health Grades, based in Golden, Colo., offers detailed reports tracking performance in seven specialties from heart care to orthopedics at HealthGrades.com. The new sites use various grading systems, from HealthGrades' star-based ratings to Subimo's 0-to-100 scale, to simplify databases full of information, adjust hospitals' complication and mortality rates for the difficulty of the cases they treat, and let consumers turn a once-overwhelming decision into something they can handle confidently.

"These sites are a major, major step because people have not had access to any significant information about hospitals before," says Dr. Barry Straube, acting chief medical officer for the Centers for Medicare & Medicaid Services in Baltimore.

According to a survey by Solucient, a health-care data services company, 26% of adult consumers say they're "very likely" to use data on hospital quality. Two-thirds say they would switch hospitals over their doctor's objections to go to an excellent facility or avoid a below-average one.

To get the most out of resources such as these, use them in addition to consulting with your doctor and reviewing the medical literature. Most hospitals will have their medical library do research in journals or on the Web for patients -- if you know to ask for it. One of the most comprehensive health-education sites is Medline Plus, run by the National Library of Medicine and the National Institutes of Health (medlineplus.gov). Insurers, too, can be valuable resources. Many make nurses available to help patients interpret hospital-rating data, says UnitedHealthcare Executive Vice-President Dr. Lewis Sandy. "In addition to looking at Web sites, pick up the phone," he says.

The Net is emerging as a huge help in disseminating data on quality of care, reflecting a still-developing consensus on how to measure quality in the first place. The payoff: smarter consumers more in charge of their own care -- increasingly vital since changes to insurance plans mean patients are footing more of the bill. Not all doctors or hospitals like it. But they had better get used to it.


[Greg Scandlen, "Choice is revolutionizing health care," The Wichita Eagle, 28 September 2004.]

Tuesday, July 19, 2005

How does Kansas stack up on estate recovery?

[Ron Shawgo, "States vary on Medicaid recovery," The Fort Wayne Journal Gazette, 17 June 2005.]

When it comes to estate recovery, states have wide latitude in how aggressively they pursue the matter. And, despite recent federal legislation making the pursuit mandatory, some states are taking the federal rules with a grain of salt. All of this can impact not only how a state's Medicaid program fares financially in the short term, but ultimately whether it is perceived as a handout for all or a resource for those truly in need. Kansas legislators have taken steps in the right direction, but there is still likely more than can be done such as requesting a waiver to extend the lookback period for assets.

In an act of defiance, West Virginia sued the federal government over a 1993 law requiring states to recover Medicaid expenses by harvesting the estates of recipients who die.

The state lost.

Begrudgingly, West Virginia has started seeking repayments since that 2002 ruling. Michigan still has no recovery program, however, and Georgia and Texas are beginning programs, a testament to the emotions and politics that surround the issue.

Although the majority of states, including Indiana, have stepped up efforts to recoup expenses since the feds made it a requirement 12 years ago, a new survey has found the states have recovered only a fraction of the vast amounts the governments spend on long-term Medicaid care, and they differ significantly in what assets they pursue.


[Stephen A. Moses, "Project Proposal: Controlling Medicaid Long-Term Care Costs," The Flint Hills Center, January 2004.]

Monday, July 18, 2005

HSAs push health care into the electronic age

[Jennifer A. Kingson, "Health Care at the Swipe of a Card," The New York Times, 16 July 2005.]

The New York Times reports in this article on the trend toward making consumer-driven health care more consumer-friendly:

The paper-pushing method of paying medical bills, which has long been fairly resistant to the electronic age, is about to be challenged as new payment options like health savings accounts and prepaid medical cards gain wider acceptance in the workplace.

Beyond their practical aspects, these products - and health savings accounts in particular - represent a philosophical shift toward consumer-directed health care, with people taking a more active role in supervising their medical treatments and benefits.

Some employers have begun offering medical prepaid payment cards linked to flexible spending accounts. Instead of having to fill out a reimbursement form to cover eligible expenses, account holders can use a MasterCard or Visa card to pay a drugstore, doctor or other provider directly.

Since the card will work only for expenses that are authorized under the cardholder's flexible spending account plan - which typically include things like eyeglasses, child care and prescription drug co-payments - there is never a question of whether the outlay is covered.


[William C. Short, "HSAs Treat Ills of Health Care Payment System," The Flint Hills Center, 25 March 2005.]

More government = less bureaucracy?

[Roy Wenzl, "Doctors find selves buried in bureaucracy," The Wichita Eagle, 17 July 2005.]

It's understandable that physicians are growing weary of bureuacratic overhead whittling away at their time with patients as well as their bottom lines, but the idea that all of that will somehow improve if the federal government just took over is more difficult to comprehend:

In 20 years, they've watched their profession grow ill, choking on paperwork, insurance company nit-picking, and regulation that comes from good intentions gone awry. They spend two hours a day filling out forms, two hours they used to spend with patients.

They say bureaucracy is a menace to patients, that it will render medicine useless to all but the wealthy unless it gets fixed. They don't know how a lot of us deal with it. Bureaucracy expanded; costs increased.

A few years back, [Deborah Haynes] ran for president of The American Academy of Family Physicians.

Had she won, she would have pushed what they've pushed for, which doctors used to say sounds faintly socialistic, or maybe overtly socialistic: a form of universal health care. Meaning that everyone would be entitled to at least basic health care.

Not many years ago, saying "universal health care" out loud would have sounded like blasphemy, Haynes said.

"Or socialism."

She grinned. She and Klingman are registered Republicans, hardly socialist. Today all sorts of doctors speak of universal health care, the plan whose name that once they dared not speak.


According to economist Ludwig von Mises, government intervention is often touted as a solution to problems government intervention created in the first place. The flaw in this logic, of course, is that societies stray further and further from market realities and once minor problems compound into crises. Socialized medicine is not the answer to today's health care woes, it is merely an extension of the existing problem.

[Matthew Hisrich, "Additional Medicaid Spending is Irresponsible," The Flint Hills Center, 22 July 2004.]

Wednesday, July 13, 2005

Kansas Health Partners Benefit Association resigns, backs HSAs

[Kenneth Daniel, "Small Business Health Group Resigns," KsSmallBiz, 11 July 2005.]


Frustrated with inaction and poor leadership by the Kansas Business Health Policy Committee, The Kansas Health Partners Benefit Association has nullified their public-private partnership:

The KHPBA/KBHPC partnership was formed four years ago by the legislature to use public funds to help small businesses and their employees obtain health insurance. When no public funding was provided, KHPBA developed a private insurance solution and has been successful with it in spite of a lack of funding to market the product and operate the association.

William L. Kostar, volunteer Chairman of KHPBA, in the July 8 resignation letter to Commissioner Sandy Praeger, said:

"Health insurance continues to be a critical issue for Kansans, particularly small business, and KHPBA’s ability to creatively and nimbly contribute to the solution of this challenge can only be enhanced by our playing an independent role unencumbered by bureaucracy and organizational paralysis."


The group is now forging out on its own, and now sees HSAs as one of the better options for small business owners struggling to provide coverage to their employees:

David Hornick, Co-Executive Director of KHPBA, said "I’ve given my time for nearly four years to this effort, and the only success we’ve had has been with private-sector solutions. We do not believe the government approach is going to work. The Business Health Policy Committee is plowing the same ground it plowed three years ago, but with a different set of players. The types of efforts they are moving toward have been miserable failures in other states. They are just on the wrong track."

"We have a number of ideas for other private-sector solutions. We worked closely with Senator Barnett in the last legislative session to enhance Health Savings Accounts for Kansans, and will work to use HSAs to solve health insurance problems for more Kansas small businesses."


[Devon Herrick, "Health Savings Accounts: The Future Of Health Care For Kansans," The Flint Hills Center, 14 February 2005.]

Tuesday, July 12, 2005

Kansas Bioscience Authority a fancy name for corporate welfare

[Terry Rombeck, "Bioscience Authority up and running," The Lawrence Journal-World, 12 July 2005.]

Targeted tax breaks and incentives that put government in the business of picking winners and losers are a bad deal for taxpayers and undermine efforts to achieve a true competitive marketplace:

The Kansas Bioscience Authority is officially open for business.

Board members on Monday approved the organization’s first allocation of funds — $150,000 to help lure Prescription Solutions to Overland Park. That money, in turn, will be given by the company to researchers at a state university to help the company develop robotics to dispense drugs.

The Bioscience Authority, which held its quarterly meeting Monday at Kansas University’s Dole Institute of Politics, received its first installment of state funds earlier this month. It totaled nearly $6 million, with an estimated $15 million to $20 million available in the next year.

The board is charged with spending that money to attract life sciences firms, expand existing businesses, fund university research and help turn that research into spin-off companies.


If policymakers didn't have so much fun taxing and spending, they would follow the far better course of reducing the overall tax burden to foster business growth. This holds true no matter what industry is affected - health care is certainly no exception.

[Matthew Hisrich, "Biosciences 'investment' a risky scheme," Kansas Health archived entry, 23 September 2004.]


Estate recovery key to Medicaid solvency

["The Legal Responsibility of Adult Children to Care for Indigent Parents," NCPA Daily Policy Digest, 12 June 2005.]


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A new report from The National Center for Policy Analysis highlights the importance of states following through on their responsibility to see that taxpayers are not left to foot the bill of those who have assets but take advantage of Medicaid services. The other side of the coin, of course, is that this is not a long-term solution. Ultimately, individuals need to take greater responsibility for their needs later in life whether that be through savings, new tools such as HSAs, or simply using assets to cover expenses:

Less than one-third of older Americans are able to pay for two or three years of nursing home care, according to a recent study published by AARP. As baby boomers who have failed to adequately prepare for old age retire, there will be fewer seniors with the means to pay for such care says legal researcher Matthew Pakula.

Medicaid, the joint federal-state health care program for the poor, is the major funder of long-term care in the United States. For example, when seniors in nursing homes exhaust limited Medicare benefits, those who have not purchased long-term care insurance must pay for their care themselves. If they consume their financial assets and their incomes are low enough, they qualify for Medicaid coverage.

- Long-term care cost Medicaid $60 billion in 2002, according to Centers for Medicare and Medicaid Services data.

- Federal and state laws allow Medicaid to seek reimbursement from recipients’ estates, and under current laws the states now collect $350 million a year, according to the AARP.

Unfortunately, most Medicaid recipients have no estate when they die, and an increasing proportion of those who receive assistance are sheltering their financial assets to meet the definition of poor under the Medicaid statutes. So while their children receive the benefit of these assets, taxpayers pick up the tab for their care, says Pakula.

More than 30 states have statutes that make adult children responsible for the care of indigent elderly parents, but the laws are seldom enforced. Enforcement of filial responsibility statutes could discourage much of this asset shifting, says Pakula.


[Stephen Moses, "Nursing home system in need of reform," The Pittsburg Morning Sun, 22 May 2005.
Matthew Hisrich, "First Things First: Kansas Medicaid Program Must Get its House in Order Before Expanding Home-based Care," The Flint Hills Center, 20 August 2004.]

Friday, July 08, 2005

Boomers hit retirement milestone

[Albert B. Crenshaw, "Boomers hit retirement milestone," The Seattle Times, 3 July 2005.]


This recent piece highlights the corner American demographics is turning, and warns of the impact an aging population is likely to have on struggling entitlement programs:

This July 1 is the date when the very oldest members of the baby-boom generation turn 59 ½, the age at which they are allowed to begin making penalty-free withdrawals from their IRAs and other retirement savings accounts.

And in 2 ½ years, at age 62, they will be able to start drawing Social Security. Again, they don't have to, but they can. And with Social Security there is enough history to suggest that many if not most of them will.

The baby boom, which added an estimated 76 million Americans to the population, began in 1946 and ran until 1964. Boomers have been yanking the nation around almost from the beginning, starting when they swamped elementary schools in the 1950s, and their impending retirement is viewed by many experts as a plunge into the unknown.

[T]he net is already under enormous strain. Medicare outlays already exceed Medicare taxes, and the same will be true of Social Security beginning, current projections show, in 2018.


Kansas already has a higher-than-average senior citizen population and is losing its youth to other states. If the sustainability of programs such as Medicaid that provide for long term care is in question now, how will it fare once the boomers hit the system? Policymakers need to begin reforms to rein in spending and restore these programs to their original intent as last resort services for the truly needy, not guaranteed entitlements for all.

[Stephen A. Moses, "Project Proposal: Controlling Medicaid Long-Term Care Costs," The Flint Hills Center, January 2004.]

Thursday, July 07, 2005

WSJ recommends HSAs to combat high premiums

[Annelena Lobb, "Health-Care Premiums Vary For Young Singles," The Wall Street Journal, 5 July 2005.]


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The ranks of the uninsured include not only those without means, but many young singles who don't see the value of buying into a system that uses their money to subsidize the care of others. As younger people drop coverage, costs rise for everyone else. This article points out that more attractive options such as Health Savings Accounts may draw this segment of the population back into the market:

Ten million people between the ages of 25 to 34 lack health insurance, according to the U.S. Census Bureau.

Monthly private health-insurance premiums for young, healthy singles...vary by hundreds of dollars among the 50 most populous U.S. cities, according to a study released last week by eHealthInsurance.com, an online health-insurance agent for private individual and family policies run by insurance agency eHealthInsurance Services Inc. The company looked at all types of policies, including health-maintenance organizations and preferred-provider organizations.

Those in Long Beach, Calif., pay the lowest prices -- the lowest available monthly premium for a 30-year-old nonsmoker is $54 -- and the costliest insurance is in New York City, where similar coverage costs $334.

Someone with a high-deductible health-insurance plan could save money by opening a health-savings account, or HSA. Such an account allows individuals with certain high-deductible plans to save money in special accounts that grow tax-free. The money can then be withdrawn and used for most health expenses, such as eyeglasses and coinsurance, although it can't be used to pay for premiums. Contributions are tax-deductible. An individual with a $1,000 deductible, for example, could save that amount in an HSA and deduct it from his end-of-year tax bill.


[Matthew Hisrich, "HSAs Are Increasing Americans' Health Coverage," The Topeka Capital-Journal, 26 September 2004.

Matthew Hisrich, "State Mandates reduce insurance affordability," The Flint Hills Center, May 2004.
Matthew Hisrich, "Greatest Increase in Uninsured Found Among Wealthy," The Flint Hills Center, May 2004.]

Wednesday, July 06, 2005

Transition assistance with HSAs helps employees

[Sarah Rubenstein, "Using Health Savings Accounts Cuts Costs, but It's Not Easy," The Wall Street Journal, 5 July 2005.]

This article tends to play up some issues that having a good insurance agent could resolve, but it is important to keep in mind that employers can't simply switch to high-deductible insurance policies and HSAs without offering their employees some guidance:

Mr. Danusis, who is a firm believer in HSAs, says he encourages all of his clients to get involved. It's difficult to get employees to embrace HSAs, especially early on when they haven't built up funds in their accounts and aren't yet thinking about HSAs' potential as a savings vehicle, he says. "It's almost like the tough-love situation with your children," he says. "You have to believe so much that you're doing the right thing, that you're going to guide everyone down the right path."

As of March, about 14% of consumers nationwide with this type of plan had obtained it through a small-business employer, according to America's Health Insurance Plans, an insurance trade group.

There is a basic pitch that bosses can make, Mr. Danusis says: Employees can either have HSAs, or they can pay out of their own paychecks for the higher premiums that are typical of comprehensive insurance. It's also vital for bosses to put company money into the HSAs early on so that it's not quite so tough for employees to adjust to the deductible, he says.


[Devon Herrick, "Health Savings Accounts: The Future Of Health Care For Kansans," The Flint Hills Center, 14 February 2005.]

Friday, July 01, 2005

Canada to halt drug shipments / Frist calls for end to drug ads

[Beth Duff-Brown, "Canada: We're not the drugstore for the U.S.," The Chicago Sun-Times, 30 June 2005.
Kathy Kiely, "Senate leader seeks moratorium on ads for new prescription drugs," USA TODAY, 1 July 2005.]

Call it a win/lose for the pharmaceutical industry and (at least in the short term) a lose/lose for consumers.

First, Canada is moving to restrict sales of prescription drugs to the U.S. as a means to secure its own supply:

Canada's health minister threatened on Wednesday to overhaul the country's regulations on exporting prescription drugs, saying Canada would no longer be a cheap "drug store for the United States."

Health Minister Ujjal Dosanjh said Canada would ban the bulk export of prescription drugs when their supplies were low at home. But he left vague how the ban would be put into place -- and whether it would affect the thousands of individual purchases that take place across the U.S.-Canada border and over the Internet.

The ban is an attempt to head off an anticipated onslaught of drug demands from Americans if legislation pending in Congress legalizes Internet and bulk import of prescription drugs from Canada.

"Canada cannot be a drugstore for the United States of America; 280 million people cannot expect us to supply drugs to them on a continuous, uncontrolled basis," Dosanjh said at a news conference.

Canadians must be assured access to an adequate supply of safe and affordable prescription drugs, Dosanjh said.


This was really only a matter of time. Dosanjh is absolutely right to inject some reality into the importation debate. So far, state officials Kansas and other I-Save RX states are admitting nothing about how this will affect their ill-conceived plans, but there's no way this won't have an impact.

Right on the heels of this announcement is Bill Frist's call for a moratorium on drug ads to consumers. What a victory for the free market that would be. Of course, the spin is that this is a big business vs. principles deal, but restricting freedom is hardly a virtue. Frist makes some ridiculous claims to back up his intrusion of liberty:

Senate Majority Leader Bill Frist, a physician, is calling on the pharmaceutical industry to curtail the multibillion-dollar advertising campaigns used to peddle prescription drugs directly to consumers. His move puts one of the most powerful lobbies in town on notice that the Senate's top Republican expects curbs on drug ads in print and television.

In a speech prepared for delivery today, the Tennessee senator blames drug ads for contributing to rising health care costs. He's seeking a two-year moratorium on advertising for new drugs and a government audit to determine how drug ads have affected the way Americans are treated for illness.

"Drug advertisements are fuel to America's skyrocketing prescription-drug costs," Frist says in remarks prepared for delivery in the Senate. "They create an artificial demand. And they drive up our nation's overall health care costs."


Advertising creates artificial demand?!? If that's the case, why not ban advertising in every other sector? That's a great plan for securing a sound economy, Senator.

[Matthew Hisrich, "Sebelius Is Practicing Black-Market Politics," The Wichita Eagle, 10 December 2004.]

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