Today, we focus on the Health Security Act, laying out the flaws with the current healthcare system & how the HSA would address them. Along with the Public Bank, this is a second transformational reform that will be before the legislature in 2021..
There are two game-changing pieces of legislation that will find their way to the Roundhouse in 2021, one will be to develop a NM State Public Bank and the other will be to implement the Health Security Act. For four years, we have worked to ensure that during the 2021 legislative session there would be a much different political calculus involved: a Democratic Governor and not just Democratic legislature, but one comprised of a solid majority of reliably Democratic legislators. Mission Accomplished.
Last week we focused on one of those important pieces of legislation, the Public Bank. Today, we shift focus and examine the Health Security Act, a concept that has been rejected repeatedly by a vastly different Roundhouse since 1993. No more. Read On!
Tuesday, July 7, 6:30-8 pm, Health Security Act in NM, A Dream That Could Become Reality in 2021 with leadership from the Health Security for New Mexicans Campaign. We we will be joined by Mary Feldblum, the Executive Director of Health Security for New Mexicans Campaign. So Mary is the definition of commitment and tenacity. She has been advocating for the HSA in one form or another since 1992. She won’t give up until we get there. Joining her on the panel will be Tyler Taylor, a Los Alamos physician and member of the Campaign’s Executive Committee. Also on the panel will be Shelley Mann-Lev, a Board Member for the NM Public Health Association and chair of its policy committee. Also don’t miss our radio interview with Mary Feldblum, Saturday July 4 at 8:30 am.
Why Do We Need the HSA?
Most all of us receive an ongoing stream of health insurance plan offers with high gloss photos of smiling doctors, happy patients, glistening facilities and glowing promises of how seamless their high quality plan is. You have found a home.
The experience never really plays out, we find long waits for care and high premiums that escalate every year. We find unexpected co-pays and deductibles that require us to pay additional fees before our coverage ever starts. In this context, it is impossible to project future health care costs especially in these uncertain times. How does this happen?
Well, first in the back of each of those glossy marketing pieces the font shifts from 16 to 6, the pictures disappear and a dizzying array of disclaimers, clarifications, exceptions, and hidden costs are described as confusingly as possible. The disclaimers are the reality of the plans offered, as you quickly discover whenever you need healthcare.
This is the reality of free market health coverage and healthcare. Currently, even with the ACA, healthcare coverage and healthcare itself are businesses that operate within a capitalist system where profits trump concerns about the customer, us. We must pay for those illusory glossy mailers, the huge marketing staff who prepare them; we must pay the high salaries of a tier of executives whose job is maintain a solid bottom line; we must pay for their lobbyists in Washington and in state capitols throughout the nation. And we must pay for their mistakes and their costly liability insurance because when you cut corners, you make mistakes and people die or become ill and lawyers sue.
We pay in another way, all of these competing plans compete to purchase pharmaceuticals, equipment, protective gear and other medical supplies. This deprives us of enjoying lower costs through centralized purchasing.
And then, along comes COVID and an unhealthy dose of both health uncertainty and coverage uncertainty converge as tens of thousands of New Mexicans have lost their jobs and with it, their coverage. So at the precise time that coverage is most needed, it is gone, along with your income. This is the definition of health insecurity.
But there is an alternative: The Health Security Act. What Is It? How Will It Fix Such a Flawed System?
Here is the good news the HSA won’t fix this system. We tried that with the ACA, but the same industry forces that stalk the halls of Washington to oppose bills like Medicare for All also work to undermine reform efforts like the ACA. With ACA millions of Americans obtained healthcare coverage. That was the good news. But the bad news is that the ACA did virtually nothing to fix the flaws we just described above. The HSA doesn’t try to fix this; it replaces it entirely.
While hundreds of thousands of New Mexicans currently have health coverage because of the Affordable Care Act (aka Obamacare), there are still problems to address: increases in premiums, deductibles, and co-pays; rising costs for prescription drugs; and smaller networks that limit patients’ choice of health care provider being just a few of them.
These problems are due to our complex private insurance system, which the Affordable Care Act relies on and which any GOP initiated “replacement” would maintain. Although “repeal and replace” legislation failed to pass Congress, the Affordable Care Act’s patient protections continue to be attacked, and the future of the Affordable Care Act as a whole is once again in the courts. But our state has a clear path forward–setting up its own health plan that would include most New Mexicans, regardless of age, health, and employment status.
The Health Security Plan is based on the old-fashioned concept of insurance, where the young, the old, the healthy, and the not-so-healthy are all in one large insurance pool. The risk is shared, while administrative costs are reduced. Our current segmented system of hundreds of insurance plans is complex and costly for all of us.
Under the HSA, there will be no deductibles. There will be no co-payments for preventive care. The Health Security commission, after public hearings, will determine under what conditions, if any, co-pays would be required, and how much those co-pays would be.
The Health Security Plan will buy pharmaceutical drugs and medical equipment in bulk to reduce costs.
Administration will be streamlined because almost everyone will be covered by the same health care plan, with one claims form. Million dollar executive salaries and stock options will be eliminated with those funds going back into the health care system. Savings will result from the elimination of duplicative administrative costs built into the present system of multiple insurance plans. And savings will be experienced both by the HSA administration who will manage a vastly simplified vendor processing system, but also on the doctors end.
Doctor administrative costs are currently estimated at 27.6% as they must deal with dozens of plans and variations on plans and maintain books on all of these payors and their differing allowances and disallowances. All of that would be gone with the HSA and your doctor and his staff would be able to focus on one thing: you. A side benefit to this is that doctors frustrated with the national health system may well find practice in NM an attractive option, as they can finally focus on what they went to med school for, caring for people, not accounting books.
Money that was formerly used for insurance company marketing, commissions, out-of-state investments, and profits will be made available for health care services. In the sixth year of operation, the administrative costs for the Health Security Plan will be limited to 5% of its annual budget.
The HSA Will Also Reduce Your Auto Insurance Premiums & Your Employer’s Worker Compensation Costs
If you are in a car accident and break your leg and your plan covers the care you need for the broken leg (which the Health Security Plan would do), you would not have to file a health claim with your auto insurance company. There is no need to pay for duplicate health coverage, so the health portion of your auto insurance premium can be reduced.
For employers participating in the Health Security Plan, commercial auto insurance and workers compensation premiums will be reduced, since the plan will be paying the health portion of these bills.
What Is Next?
A fiscal analysis is being done by KNG Health Consulting to determine whether the Health Security Plan will be affordable for the state.Unfortunately, as Thursday’s post will unravel, that report is deeply flawed. For now, we leave you with drafts of both the full KNG report and the two earlier reports that concluded the HSA would save NM millions every year. And it is worth noting that those reports were completed before the ACA and before NM had vastly expanded Medicaid, two factors that significantly increase the financial feasibility of the HSA. But before we sign off, a story that greatly simplifies the reality of the opportunity we have at hand.
About four years ago, I was chatting with Bill Ayers, a decades long activist from Chicago. He told me that he had a pile of plan options in front of him and a “guide” to Medicare that was over 100 pages in small print. He was trying to figure it out. He ha a friend visiting from Canada. At one point, Bill relayed to me how he just got frustrated, threw his hands up and comment to his friend: “This is utterly insane.”
His friend took out his wallet and pulled out his Canadian health card and commented: “This is the only decision I have to make. Take my card out of my wallet, give it to the secretary at the desk and see my doctor. No bills, no decisions.”
Sounds good to me. But for more dizzying statistics and analysis of plans, see below….or wait til Thursday when we try to distill and simplify..
Paul & Roxanne
KNG HEALTH CONSULTING PRELIMINARY REPORT (2020)
In early 2019, the New Mexico Legislature set aside funding to undertake a fiscal analysis of the Health Security Plan. The Legislative Finance Committee has contracted with KNG Health Consulting, LLC, to complete the analysis, and a final report is expected in summer 2020.
While the report does point out that the Health Security Plan will ensure that almost all New Mexicans have coverage and will reduce costs, we have serious concerns about the report’s technical integrity.
MATHEMATICA HEALTH REFORM COMPARISON STUDY (2007)
In fall 2006, Governor Bill Richardson’s Health Coverage for New Mexicans Committee commissioned a study of three health care reform models. Two of the models were based on the private insurance system, and the third was based on the Health Security Plan. The study, performed by Mathematica Policy Research, Inc., concluded that only the Health Security Plan would save money. The other proposals all cost more than the current system even when projections were made over a five-year period.
LEWIN HEALTH REFORM COMPARISON STUDY (1994)
The Lewin-VHI, Inc., study of 1994, which focused on New Mexico, found that covering all or most residents of a state under one health risk pool would result in hundreds of millions of dollars, if not billions of dollars, in savings over time. Numerous other studies from around the country have concluded the same thing.