Insurance Pays for Health Care. Who’s Providing It?

Mar 28, 2014Rachel Goldfarb

Public funds for family planning services are essential to ensuring people have somewhere to access health care, not just the insurance to pay for it.

Public funds for family planning services are essential to ensuring people have somewhere to access health care, not just the insurance to pay for it.

As if somehow the case still needs to be made that family planning deserves federal funding (and apparently the case does need to be made), last week a panel of researchers, advocates, and family planning providers spoke at a Congressional briefing on the topic “The Publicly Funded Family Planning Network: An Essential Partner in the New Health Care Environment.” Among the panelists was Roosevelt Institute Fellow Andrea Flynn. She and the others explained how Title X, the only federally funded family planning program, fits into the health care landscape now so dramatically changed by the Affordable Care Act. On the heels of Flynn’s white paper on this topic, last Thursday’s panel marked the next step in Roosevelt’s approach to research and policy discussions – namely, to get ideas up and out to those, like the Congressional staffers who attended the briefing, that can convert them into action.

Some background: when Title X was signed into law in 1970, it was intended to ensure that more Americans had access to family planning services, including birth control, because of rising concerns about population growth and poverty. Title X funds patient services, staff salaries, infrastructure, and supplies at clinics across the country. The law had strong bipartisan support – Democrats worked alongside Congressman George H. W. Bush and President Richard Nixon to pass it. And it is pretty effective: according to Flynn, the program today provides care to 4.7 million individuals annually. From 1980 to 2000, Title X-funded clinics provided women with 54.4 million breast exams and 57.3 million Pap tests and prevented an estimated 20 million unintended pregnancies. It’s also cost effective: Flynn notes that in 2008 alone, services provided at Title X-supported clinics accounted for $3.4 billion in savings.

Opponents of federal family planning clinics argue that with full implementation of the Affordable Care Act, the need for funding will drop off. No, said Clare Coleman, President and CEO of the National Family Planning and Reproductive Health Association. Insurance, she pointed out, isn’t the same as access to care. Patients still need providers. Amanda Dennis of Ibis Reproductive Health, based in Cambridge, highlighted an Ibis study conducted after health care reform went into effect in Massachusetts, that found many women took their new insurance straight to Title X-funded clinics for family planning services. Patient numbers actually increased at these clinics and so did the number of insured patients. Women like the care they get at Title X clinics; having insurance doesn’t mean they want to switch providers.

The panel confirmed Flynn’s major conclusions on Title X: the Affordable Care Act doesn’t guarantee every American will be insured at all times, so there remains a need for publicly funded care providers. More federal funding for the Title X family planning network will be essential to ensure women can access reproductive health care. And Coleman drove home another invaluable point as we work on health care access: the Affordable Care Act creates a massive shift in the way many Americans actually go about getting their health care. As a child growing up with insurance, I had an annual physical that was scheduled months in advance, and my mom picked up our prescriptions at the pharmacy. Americans who grow up uninsured have a different experience. They go to public clinics, where they can expect long waits, and when they leave, they go with prescribed medication in hand, obtained at the on-site dispensary.

In other words, signing up for health insurance on healthcare.gov won’t on its own teach anyone how to use insurance. That will take a generational shift. Besides which, you don’t get health care from your insurance – you get health care from your doctor, and cover the costs with insurance. That’s why Title X clinics must remain an option. Public funding for family planning does increase access to providers. Advocates: keep driving this point home to legislators!

Rachel Goldfarb is the Communications Associate at the Roosevelt Institute.

 

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Daily Digest - March 25: Organizing Towards Shared Prosperity

Mar 25, 2014Rachel Goldfarb

Click here to receive the Daily Digest via email.

The New Deal Launched Unions as Key to Building Middle Class (Next New Deal)

Click here to receive the Daily Digest via email.

The New Deal Launched Unions as Key to Building Middle Class (Next New Deal)

In the first of a series of posts summarizing his new report, which explores possibilities for labor-organizing reform, Roosevelt Institute Senior Fellow Richard Kirsch looks at the history of union organizing as a source of shared prosperity.

The Next Health-Care Debate (WaPo)

The Affordable Care Act's success will prove that government is indispensable in fighting widespread inequality, writes E.J. Dionne, who sources Roosevelt Institute Fellow Mike Konczal's work on why charity can't tackle the problem.

The U.S. Cities Where the Poor Are Most Segregated From Everyone Else (The Atlantic Cities)

Noting that "moral cynicism" is among the corrosive "neighborhood effects" of grinding poverty, Richard Florida looks at the data concerning the segregation and concentration poor people, which is greater in large, dense metro areas and where wages are higher.  

Freelancers Piece Together a Living in the Temp Economy (NYT)

Planning for the future in an age of job insecurity is nearly impossible, writes Adriene Hill. She reports on a Las Vegas woman who knows her current assortment of appearance-based gigs can't last forever.

Forces of Divergence (The New Yorker)

John Cassidy reviews Thomas Pikkety's Capital in the Twenty-first Century, which considers the swing back towards capital accumulation over wages in today's economy. Cassidy deems it a must-read for anyone interested in inequality.

The NLRB Must Restore Democracy in Chattanooga (Truthout)

John Logan calls on the National Labor Relations Board to overturn the recent United Auto Workers vote in Tennessee, because otherwise the NLRB will set a precedent that accepts outside interference.

The Law That Could Sink Birth Control Coverage (MSNBC)

In the context of today's Supreme Court hearing on the contraception mandate in the Affordable Care Act, Adam Serwer and Irin Carmon explain the history of the 1993 Religious Freedom Restoration Act.

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Memo to Congress: Family Planning Needs More Funding

Mar 21, 2014Andrea Flynn

On Thursday, March 20, Roosevelt Institute Fellow Andrea Flynn joined the National Family Planning and Reproductive Health Association for a briefing on "The Publicly Funded Family Planning Network: An Essential Partner in the New Health Care Environment." Her prepared remarks are below.

On Thursday, March 20, Roosevelt Institute Fellow Andrea Flynn joined the National Family Planning and Reproductive Health Association for a briefing on "The Publicly Funded Family Planning Network: An Essential Partner in the New Health Care Environment." Her prepared remarks are below.

The Affordable Care Act represents an historic investment in the health of American women and girls. It has already improved the lives of millions of Americans and will make health care accessible for many more as rollout continues. Fulfilling the promise of the ACA, however, depends on the continued support of existing programs, such as Title X, which must remain as pillars of the country’s public health infrastructure.

For more than 40 years, Title X has provided critical medical care to low-income women, immigrant women, and young women across the country.  Some have suggested that the ACA’s expanded coverage of women’s health care will obviate the need for Title X. In fact, the opposite is true. Title X will play a number of important functions in the coming years.

First, Title X will support a network of qualified family planning and reproductive health care providers who will deliver care and services to the growing ranks of insured. Clinics funded by Title X will become an even more critical building block of our nation's health system. Even when individuals obtain coverage, many will continue to choose publicly funded clinics as their main source of care. As one of my colleagues here will further explain, during the four years following the implementation of Massachusetts’ health care reform patients continued to rely on Title X centers even after they gained insurance coverage. 

Women who are already fully insured will also continue to rely on Title X clinics because they can access care with complete confidence. Issues such as intimate partner violence and religious beliefs of employers, family members, and partners, cause many women to circumvent their insurance plans when accessing family planning services. Sadly, these concerns will persist regardless of the coverage status of American women.

Second, Title X will guarantee family planning access to those still uninsured. The ACA was intended to provide a path to health insurance for most Americans. However, because of the Supreme Court’s decision to allow states to opt-out of Medicaid expansion, fewer uninsured Americans will gain coverage than originally planned.  As Clare mentioned,  today, 22 states are still refusing to expand Medicaid, leaving more than 3.5 million low-income women without coverage. As a result, two-thirds of poor black and single mothers, and more than half of uninsured, low-wage workers, remain without coverage. Title X clinics will continue to be a trusted place of care for these women.

Moreover, even in states that participate in Medicaid expansion, many low-income individuals may still remain uninsured. Estimates suggest that between 25-35 percent of those eligible for Medicaid still do not know it, and are failing to enroll.  Many immigrants will also remain uninsured, given the federal 5-year eligibility requirement for Medicaid. And millions of others will churn among coverage plans. One study estimates that up to 29 million people under age 65 will be forced to change coverage systems from one year to the next. Individuals who fall into these categories will rely on the Title X network for quality, affordable, and confidential care.

Third, and equally important, Title X will continue to set a comprehensive standard of care for family planning and reproductive health services.

Finally, Title X clinics are a primary and trusted point of entry into the health system. Six in ten women who receive services at a publicly funded family-planning center consider it their primary source of medical care. As such, the Title X network will continue to play an important role in ACA outreach and enrollment efforts to ensure that health coverage is realized by as many Americans as possible.

Title X is particularly important given the health challenges facing many women in the United States. However, current funding for U.S. public family planning programs extends care and services to just over half of the women in need. Per capita, the United States spends two and a half times more on health care than other developed countries, yet Americans overall have less access to services and experience worse health outcomes. The United States reports among the highest rates of teen birth, unintended pregnancy, and maternal and infant mortality of any industrialized country. Almost half of all U.S. pregnancies – approximately 3.2 million annually – are unintended. Poor women, women of color, and immigrant women bear a disproportionate burden in this regard. They are also more likely to experience chronic disease, maternal mortality and have a lower life expectancy than women with higher incomes.

Unintended pregnancy and teen pregnancy remain persistent issues in the United States, ones that Title X has been tackling for decades. Unintended pregnancies have a number of larger health implications. Women who have unintended pregnancies are more likely to develop complications and face worse outcomes themselves and for their infants. They often receive inadequate prenatal care, and the care they do receive begins later in pregnancy. Research has shown that pregnancies that occur in rapid succession pose additional risks for both mother and child.

The U.S. teen pregnancy rate has declined dramatically over the last decade, thanks to services offered by programs like Title X. However, it is still considerably higher than in any other developed country, where rates are generally 5 to 10 births per 1,000, compared to the current U.S. rate of 29.4 per 1,000. Racial disparities are especially pronounced in relation to teen pregnancy, with teen birth rates for white women hovering around 21.8 per 1,000, while the rates for Hispanic, Black, and American Indian teens are at least twice that. Research has shown that increased access to comprehensive reproductive health information, care, and services, including a broad range of contraceptive methods, reduces rates of unplanned pregnancy among teens.

Title X has prevented these various health disparities from becoming even more troubling. With an increased investment the program could replicate its incredible results many times over, leading to significant health improvements for American women.

In times of economic uncertainty the demand for publicly funded family planning services increases. Since the 2008 financial crisis and the ensuing recession, the need for Title X has grown dramatically, while funding levels have declined or remained flat. Over the past few years the Title X budget has been cut by $40 million. To make matters worse, the anti-family planning and overall austerity sentiments that have since prevailed reduced and restricted family planning budgets in many states. There have been fewer state and federal funds for women’s health during the very time that women have also lost jobs and insurance coverage.

When Title X centers lose funding, they are forced to make cuts in three places: services and supplies, hours, and staff. As a result of funding challenges, six in ten Title X clinics have been unable to stock the most costly contraceptives, particularly long-acting reversible contraceptives (LARCs) such as the IUD and implants, methods considered highly effective and most desirable among women wanting to avoid pregnancy.

Family planning is first and foremost a matter of women’s health and rights. But it is also central to women’s economic security. The continued fragility of the U.S. economy and the recession’s devastating impact on low-income families requires an increased investment in family planning. American families, many of them now headed by single women, face enormous challenges. Access to affordable contraception enables women to pursue educational and professional opportunities that strengthen their families and their communities. The majority of women who participated in a recent Guttmacher Institute study report that birth control enables them to support themselves financially, complete their education, and get or keep a job. 

Given the tenuous state of the U.S. economy, the vulnerability of women’s health programs in the face of unrelenting political attacks, and the fraying social safety net more broadly, public funding for family planning is more critical than ever. Continued – indeed, increased – funding of Title X will maximize the impact and reach of the ACA and ensure continued quality care for those who remain uninsured.

Thank you. 

Andrea Flynn is a Fellow at the Roosevelt Institute. She researches and writes about access to reproductive health care in the United States. You can follow her on Twitter @dreaflynn.

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Florida Election Shows Danger and Promise in Obamacare Debate

Mar 17, 2014Richard Kirsch

Democrats may have lost the special election for Florida's 13th congressional district, but the polling shows a path to success in 2014 with the Affordable Care Act.

Democrats may have lost the special election for Florida's 13th congressional district, but the polling shows a path to success in 2014 with the Affordable Care Act.

As pundits debate the impact of Obamacare on the special Congressional election held in Florida on March 11, a headline from a new Bloomberg national poll actually does as good as any describing what happened in the Sunshine State: “Americans Stick with Obamacare as Opposition Burns Bright.” That national finding also describes what happened in Florida, where swing voters supported the ACA, but more opponents turned out to vote.

The Bloomberg survey found the “highest level of acceptance for the law yet” in Bloomberg’s polling, with almost two out of three (64 percent) of those surveyed saying they supported either retaining the Affordable Care Act (ACA) with “small modifications” (51 percent) or as it is (13 percent).

The troubling result in the survey for the political prospects of the ACA is that the one-third (34 percent) who want to repeal the law are much more likely to vote. No news here. We’ve known that the ACA is a highly motivating issue for Republican voters, who turn out at a much higher rate in off-year elections than Democrats and independents.

The real news is in the first set of findings, the growing popularity of Obamacare outside the Republican base. These findings were confirmed in the Florida election, when Alex Sink, the Democratic candidate, pushed back against attacks on the ACA from David Jolly, the Republican candidate, and independent groups supporting him.

Jolly’s position was clear:  “I’m fighting to repeal Obamacare, right away.” So was Sink’s: “We can’t go back to insurance companies doing whatever they want. Instead of repealing the health care law, we need to keep what’s right and fix what’s wrong.”

The key part of Sink’s message was to remind voters why people wanted health care reform in the first place. As one of Sink’s TV ads said, “Jolly would go back to letting insurance companies deny coverage.” That’s an effective reminder of the huge problems Americans have had for decades, when insurance companies could deny care because of a pre-existing condition, charge people higher rates because they were sick, even charge women higher rates than men. The ACA ended all that.

As would be expected in Florida – and even more so in a special election – the candidates worked especially hard for the votes of seniors. In their ads for Jolly, the Republican Congressional Campaign Committee repeated their misleading charge from 2010, trying to scare seniors into opposing the ACA by saying that it cut $716 billion from Medicare. But unlike 2010, when Democrats did not respond to attacks on the ACA, Sink pushed back. She reminded seniors that the ACA actually provides important new Medicare benefits, including closing the infamous prescription drug “donut hole.” Sink’s ads accurately said, “His [Jolly’s] plan would even force seniors to pay thousands more for prescription drugs.”

By Election Day, voters had a clear contrast between the positions of the candidates on the ACA. It was a close election, with Jolly winning by a small margin (48.4% to 46.5%) in a district with an 11-point Republican advantage, one that has been represented by the GOP for nearly 60 years. But polling found that independent voters in the district supported the “keep and fix” position over the “repeal” position by a margin of 57% to 31%. Sink actually gained ground over Jolly during the election on the question of which candidate had a better position on the ACA.

The narrow margin is encouraging in a district with this large a Republican voter advantage, but still falls short of the turnout in 2012, when President Obama narrowly carried the district. Democrats will need to do better in November, if they are going to hold on to contested Senate races and have a chance of picking up House seats.

Fortunately, unlike in 2010, the Democratic Senate and Congressional campaign committees at least understand that they can’t run away from Obamacare. Doing so will cede independent voters to Republicans, just when those voters are becoming very supportive of the “keep and fix” message. While Democrats would prefer to keep the focus on the economic pressures being faced by American families – highlighting issues like the minimum wage – they’ll only be heard if they also engage aggressively in the fight over the ACA.

In fact, the ACA is an economic issue; just ask anyone who has lost her job and her health coverage. Or the millions of low-wage workers who can’t afford to go to the doctor, or are trying to pay back medical bills from the visit they could not put off. As millions more Americans get coverage – 11 million as of the end of February between the new exchanges, the expansion of Medicaid and young people under 26 – Democrats should incorporate the ACA into their overall economic message.

Supporters of the ACA have consistently believed that once the ACA began to be implemented, it would become more popular. We’re starting to see that shift. The challenge now will be turning that popularity into votes in November. 

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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The Story of Atalissa Highlights America's Long-Term Care Problem

Mar 11, 2014Sarah Galli

America's health care system neglects people who require long-term care and denies them the opportunity to lead full, rewarding lives.

Since the moment my brother was rendered a quadriplegic in a diving accident when we were teenagers, I have maintained a constant, silent stress in my body. I am worried about health complications inherent in a paralysis injury, terrified for what happens when my parents are no longer able to serve as Jeff’s primary caregivers.

America's health care system neglects people who require long-term care and denies them the opportunity to lead full, rewarding lives.

Since the moment my brother was rendered a quadriplegic in a diving accident when we were teenagers, I have maintained a constant, silent stress in my body. I am worried about health complications inherent in a paralysis injury, terrified for what happens when my parents are no longer able to serve as Jeff’s primary caregivers.

My brother is, aside from requiring constant care for his injury, in good health. My parents have done an exceptional job of keeping his life, unlike his cervical vertebrae, stable.

We are, in many ways, lucky.

The same cannot be said for a group of men my father’s age in Atalissa, Iowa.

In a groundbreaking feature released last weekendThe New York Times profiled a group of Iowan men with intellectual disabilities who were forced to perform backbreaking hard labor for more than 30 years, housed in filth by "caregivers" who did nothing of the kind. These men, who worked in a slaughterhouse for hours on end, with no treatment or support for their disabilities, lived in a schoolhouse so squalid they had to cover their dinner plates to protect them from cockroaches. Many still have chronic health issues resulting from such neglect.

Wrote Times reporter Dan Barry, “Every morning before dawn, they were sent to eviscerate turkeys at a processing plant, in return for food, lodging, the occasional diversion and $65 a month. For more than 30 years. Their supervisors never received specialized training; never tapped into Iowa’s social service system; never gave the men the choices in life granted by decades of advancement in disability civil rights. Increasingly neglected and abused, the men remained in heartland servitude for most of their adult lives.”

Since they were discovered in 2009, advocates and social workers have worked to give these men a sense of freedom seemingly granted to everyone but individuals with disabilities. These men each lost over 30 years of their lives because Iowa failed to protect them from their designated protectors. Families were told Henry’s Turkey Service was the best option for their sons and brothers. Instead, these men were as much prisoners as the turkeys they were told to tear apart.

Reports of barbaric conditions surfaced every few years; no action was taken.

A few men tried to escape; one, Alford Busby Jr., ran away during a 1987 snowstorm: “Local officials searched the wintry landscape without success. Three months later, during the spring thaw, a farmer found a body along a field’s fence row, a quarter-mile from the main road. Mr. Busby was 37, or maybe 43. 'Mentally retarded man wandered away from home in subzero temperature,' his death certificate says, citing hypothermia.”

The men were rescued five years ago. They now receive Social Security and Medicaid, they have homes to live in and care for them, and they are paid wages for jobs worked. They have the freedom to meet new people, date, and live a life they’ve chosen.

The Times piece exposed my greatest fear: what will happen when my parents are no longer able to provide for Jeff, when my brother will have to join the ranks of thousands of Americans who require 24/7 care and lodging somewhere separate from their chosen home.

My father spent the summer as an embedded journalist in Baghdad a few years ago, and because my mother couldn’t work her full time job and also fill the holes in nursing care normally covered by my dad, my brother was forced to stay temporarily in a nursing home. I would travel from Manhattan to see him in Rhode Island, and attempt to hide my tears until after I’d left. A nurse came over at the end of one such visit, and in what she intended to be a moment of trust between us, gave Jeff a kiss on the cheek. I wanted to tackle her to the ground, furious that this stranger was playing at false intimacy with a young man she knew nothing about.

Instead, I choked back tears and left my twentysomething brother in his room, a bright young man relegated to living in a home with elderly residents in a system that treats them all as if they're just waiting to die.

President Obama proposed the Community Living Assistance Services and Supports (CLASS) program as part of the Affordable Care Act, which offered voluntary long-term care insurance. But that support (granted to eligible workers after five years, not taking into account exceptions for those whose disabilities preclude employment) capped out at a lifetime cash benefit of $75 a day/$27,000 per year. According to the National Spinal Cord Injury Statistical Center, the average yearly expenses for someone with a high-level spinal cord injury run an average of $181,328, not including indirect costs.

The CLASS Act has since been repealed and replaced with a long-term care commission; there is no word on what recommendations will come, nor when.

The Christopher & Dana Reeve Paralysis Act, passed in 2009, aimed to further scientific research and improve “quality of life” and rehabilitation options for individuals living with paralysis. But there has not yet been comprehensive legislation to protect Americans with chronic spinal cord injuries as their caregiving options change over time. There is no mechanism to support independent living for someone with a high-level injury, and no understanding that an otherwise healthy, capable person should not be relegated to the same care granted to the elderly. 

Curt Decker of the National Disability Rights Network said the Iowa story “is what happens when we don’t pay attention.” I read about the men of Atalissa and I mourn for the years lost, taken away from these sons and brothers.

And I wonder who will care for mine.

Sarah Galli is the Political Action co-chair of Women’s Information Network (WIN.NYC). She is also the Founder & Executive Producer of Born for Broadway, whose mission is to raise funds for paralysis research through special events, education, and advocacy. For more information, please visit www.sarahgalli.com.

Image via Thinkstock

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The Simple Solution to Obamacare's Employer Mandate Problems

Mar 3, 2014Richard Kirsch

Requiring employers to offer insurance to all employees or pay an additional payroll tax would eliminate the problems with the employer mandate, and start a shift toward broad tax-based coverage.

Requiring employers to offer insurance to all employees or pay an additional payroll tax would eliminate the problems with the employer mandate, and start a shift toward broad tax-based coverage.

In the last month, two more misleading headlines – one on lost jobs and the other on premiums for small businesses – have further roiled the overheated debate about the impact of the Affordable Care Act (ACA) on business and jobs. The question of how to deal with our employer-based health system continues to provide fodder for attacks on Obamacare. And it has proven to be  – and promises to continue to be – the basis for the most potent attacks against Republican proposals to replace the ACA. But in terms of policy, there is a simple solution, which would rationalize the contradictions in the Affordable Care Act and ease the way for the long-term goal shared on the left and right of separating health coverage from employment.

The general approach taken in the Affordable Care Act was to require most employers to provide coverage. The specific proposal in the final legislation, shaped by compromises with and pressure from both small and big business lobbying groups, required employers with more than the equivalent of 50 full-time workers to pay a portion of health coverage for employees who work 30 hours a week, or pay a fine. This is the employer mandate, which was delayed a year by the Obama administration and will be phased in starting in 2015.

The employer mandate does accomplish much of the prime goal of reform. Most employers have incentives to continue to provide coverage, or expand coverage. New coverage options are available for most people who do not get coverage at work, which was virtually all of the 50 million people who were uninsured when the ACA became law in 2010. People are not locked into jobs just because of health coverage, which was the real finding of the Congressional Budget Office report projecting 2.3 million people would retire or reduce their hours of work. Ending job lock opens up those hours to people who want to work and is a huge boon to entrepreneurship.

But the problems with the structure of the employer mandate are obvious. The law creates incentives for employers to keep workers’ hours under 30. It also establishes the potential for a business with a growing number of employees, when it exceeds the 50-employee threshold, to suddenly have to pay for health coverage.

The existence of incentives to cut hours or limit employees does not at all mean that employers will adjust for them. The accusations that the ACA is creating a part-time economy are belied by the facts: part-time employment is going down as the economy accelerates. In addition, employers that are adding workers rapidly as their businesses grow are not going to stop expanding  – or establish dozens of very small corporations – to avoid paying for health coverage. Still, we are seeing examples of some employers, including public employers and universities, limiting workers’ hours to less than 30. Others, like Trader Joe’s, are establishing different employment tracks for part and full time employees, with health care as a key factor. As this is all new – with the mandate not yet in effect – it is impossible to measure the future impact, but the incentives are certain to shape some business decisions.

There is a simple solution, one that was included in the version of the ACA enacted by the House in 2009. Employers that decide not to provide health coverage for their employees would be required to pay a percentage of payroll as a tax to cover health care, just like employers do now for FICA (Social Security and Medicare). Instantly, the cliff impact is gone, both in terms of hours and number of employees. Employers could either provide coverage to all employees, or pay for health coverage in the same manner as FICA, a regular cost of adding an employee, with a marginal increase in cost for each hour someone works. There is no advantage to hiring someone for less than 30 hours or keeping under 50 employees.

Paying a percentage of payroll also has another huge advantage over both the ACA and the current system of employer-provided coverage. Right now, the cost of health insurance premiums does not vary with an employee’s income. This creates a much bigger disincentive to hiring lower-wage workers. For example, a $6,000-a-year policy is 20% of the wages of a $30,000 a year employee but only 5% of the pay of a $120,000 a year employee. Paying a percentage of payroll instead would make it much more affordable to hire low-and-middle income wage earners than it is now. And while it would make it more expensive to employ higher-wage workers, most employers with high-wage workforces already provide health coverage and would be likely to continue to do so, rather than pay the payroll tax. If they did choose to pay, the cost is more easily absorbed for high-wage employees. Besides, that is not where we have an employment problem in the U.S.

This solution mimics the structure of union-employer benefit funds, which are typically found in industries where workers have fluctuating hours. Under these “Taft-Hartley” funds, employers and workers pay into the fund based on the number of hours an employee works. The loudest opponents from the left of the employer mandate in the ACA have been unions whose members get health coverage through such funds now. The unions have said that the ACA encourages employers to stop paying into the funds, now that government will provide subsidies for many workers. But if the current employer mandate were replaced by a payroll tax, the status quo that has worked well for these funds would be maintained.

Historically, the biggest opponent of a payroll tax for coverage has been the small business lobby, which is why the ACA does not require small employers to provide coverage. That is why the House version of the ACA phased in the payroll contribution based on payroll size, with no contributions required for payrolls under $500,000, increasing gradually to an 8% contribution for payrolls over $750,000.  This eases the burden on small employers.

Slowly, the employer-based health coverage system in the United States is dissolving. Over the past 30 years, the share of workers with ESI has shrunk from 70% to 57%. Recently we have seen employers who traditionally have wanted to take responsibility for structuring employee coverage begin to use private exchanges, in which their workers get a fixed amount of money to choose from a choice of health plans. These trends hasten the broadly shared goal of separating employment from health coverage.

As the debate over the ACA turns from repeal to fixing the law, progressives should make the payroll contribution proposal a central focus, our response to problems with the employer mandate. If enacted, as more employers choose to pay into the fund rather than provide their own coverage, we would move closer to ideal of a broad-based tax for coverage, not tied to an individual employer. And while a payroll tax is not progressive – it is proportional – it is much more progressive than the very regressive system we have now of fixed premiums regardless of income. The result would be evolution toward a relatively broadly based tax for health coverage, a key to making health coverage a right. 

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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AOL's CEO Proves Women and Children Make Easy Scapegoats in the Workplace

Feb 14, 2014Andrea Flynn

The law has put maternity care on an equal footing with other health benefits for decades -- but some executives still haven't caught up.

The law has put maternity care on an equal footing with other health benefits for decades -- but some executives still haven't caught up.

AOL CEO Tim Armstrong recently ignited a firestorm of criticism when he announced the company would be restructuring its retirement benefits. Armstrong explained that the financial burden of Obamacare and the deliveries of two “distressed babies”, which cost the company $1 million each, had forced the company to reduce 401(k) matching contributions:

We had to decide, do we pass the $7.1 million of Obamacare costs to our employees? Or do we try to eat as much of that as possible and cut other benefits? …Two things that happened in 2012. We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general. And those are the things that add up into our benefits cost.

Sorry, AOL employees: you can either get your expensive babies or your retirement benefits, but you can’t get both.

Armstrong has since issued a public apology and, amidst uproar from his employees, reversed the benefits decision. But his remarks remain significant, illustrating the readiness of employers to use maternity costs and the new health law as scapegoats for other business decisions that affect company profits. His comments also reflect the extent to which pregnancy, childbirth, and childcare are considered lower priorities in the workplace than other health benefits.

In an era of ever-rising health costs, it is certainly reasonable for AOL to seek ways to reduce health spending. But why single out premature births instead of, say, cancer or diabetes cases? Apparently in American corporate culture maternity coverage is still considered a “bonus” benefit that employees should feel lucky to have. You’d think this wouldn’t be the case at AOL, whose decade-old Well Baby program provides education and support for employees throughout the pre-natal and post-partum stages. Armstrong’s comments run counter to AOL’s public persona of being a company truly invested in the health and wellness of its parents and their families.

Maternity coverage should be considered a routine component of employee benefits, especially since they have been mandated in employer health plans for more than three decades. In 1978, Congress passed the Pregnancy Discrimination Act (PDA) – an amendment to the 1964 Civil Rights Act – in an effort to end pregnancy-based discrimination in the workplace. Benefits required by the PDA are both ethically sound and financially prudent. Research has shown that every dollar spent on prenatal care saves employers $3.33 in postnatal care expenses and $4.63 in long-term morbidity costs.

Based on Armstrong’s comments one might assume $1 million births a commonplace occurrence, but they aren’t. It’s true that one in every eight infants in the United States is born pre-term, but the average cost of care for the majority of those babies doesn’t come close to seven figures. Approximately 70 percent of infants admitted to the NICU stay for longer than 20 days, which typically costs between $40,000 and $80,000. The high costs associated with the two pre-term births to which Anderson refers are not the norm.

Why should the economic security of employees be first on the chopping block? Armstrong might have been a bit more introspective before publicly pointing his finger at his employees’ pre-term babies. After all, shortly before his gaffe went viral, he was in the harsh glare of the media spotlight for the overwhelming failure of Patch, a media venture he championed that lost AOL $300 million (last month the company cut its losses and sold its majority stakes in the site).  Two million dollars in NICU expenses seems quite reasonable by comparison.  

AOL, like many large companies, is self-insured.  As such, it directly pays employee health costs and assumes that the risk of catastrophic health events is worth the expanded choices in health benefits and the increased savings that results when income from premiums exceeds health costs. It’s unfair for companies to sacrifice the economic security of their employees when those bets don’t pay off.

It is simply dishonest to lay the blame for such losses of maternity care and Obamacare expenses. After all, the new law will improve the health of employees and generally lower employer costs in the long run by mandating the full coverage of family planning, women’s preventive health care, and extended coverage for children of employees. These measures will reduce unplanned and mistimed pregnancies (which still account for nearly half of all U.S. pregnancies) and enable women and their families to prevent and treat health conditions long before they become emergencies.

We must not regard maternity coverage as a bonus benefit. It is indeed a benefit central to employee health coverage and essential to the economic security and overall wellbeing of American workers and their families. The inherent value in such coverage was enshrined in laws passed more than 30 years ago, and has been reaffirmed by Obamacare. It’s long past time for executives like Armstrong to live and speak those same values when making decisions that affect the health and security of their employees. 

Andrea Flynn is a Fellow at the Roosevelt Institute. She researches and writes about access to reproductive health care in the United States. You can follow her on Twitter @dreaflynn.

 

Images via Thinkstock

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A New Medicare Penalty Puts the Focus on Community Health

Feb 13, 2014Anisha Hegde

The Affordable Care Act could force the U.S. to expand community health programs, and that would be good for patients.

With the implementation of the Affordable Care Act (ACA), hospitals will be penalized if Medicare patients are readmitted within a month for several illnesses, including heart attacks and pneumonia, and private insurers are likely to follow suit. This component of health reform provides fertile ground for a fortification of community health, which focuses on improving the wellness of a geographic area largely through preventive measures.

The Affordable Care Act could force the U.S. to expand community health programs, and that would be good for patients.

With the implementation of the Affordable Care Act (ACA), hospitals will be penalized if Medicare patients are readmitted within a month for several illnesses, including heart attacks and pneumonia, and private insurers are likely to follow suit. This component of health reform provides fertile ground for a fortification of community health, which focuses on improving the wellness of a geographic area largely through preventive measures.

Before health reform, readmitting patients soon after their discharge allowed hospitals to fill beds and receive more money from Medicare by billing for the hospital stay and treatment. The New England Journal of Medicine estimated that this incentivizing of superfluous re-hospitalizations was costing Medicare $17.4 billion annually. Now, however, hospitals are encouraged more than ever to pay attention to what happens to their patients after they are discharged.

Although the punishment of unnecessary readmissions is an imperfect solution, as the burden of punishment may fall heavily and unfairly on hospitals that treat very sick and very poor patients, it does put the focus on bolstering primary health care for the country’s most vulnerable patients. In a law that includes stipulations such as paying physicians a flat rate for Medicare visits no matter the complexity of a patient’s illness – a stipulation that has forced many physicians to reduce the number of Medicare patients they treat – the penalizing of unnecessary readmissions could be one stipulation that revitalizes community health.

Thus far, this renewed focus on community health has taken the form of hospitals setting up follow-up appointments for patients who lack primary care physicians. or sending nurses to visit with patients at home. Funding and personnel support for these initiatives is coming largely from community health foundations and nonprofits such as Sun Health. As a New York Times article relates, nurse home visits reduce re-hospitalizations by explaining to patients in a more intimate setting the importance of their medications and the side effects they could experience and, if necessary, by recommending that the patients seek an alternative prescription. Nurses are also effective at sending patients back to the hospital when they truly do need to be readmitted. Additionally, hospitals are contracting with companies such as PreMedex, whose employees call patients post-discharge to ask important questions geared toward health maintenance, such as if the patients have had any fever or pain since they left the hospital.

As many millennials prepare to enter health professions, we have an opportunity to reshape the system. This means pursuing existing programs like PreMedex and continuing to amplify and support the primary care physician core, but also exploring novel ways of tracking and promoting community health. For instance, the U.S. could take a page from the playbook of developing countries like Ethiopia and Rwanda, where doctors and nurses train trusted members of a community to help individuals understand preventive care practices and cope with treatment plans. The U.S. has about 38,000 community health workers, but unlike in other countries, their roles are nebulous, they do not have to go through a standardized accreditation process, and they lack a clearly structured source of funding. A study by the American Public Health Association found that the intentional and structured employment of these workers would result in savings for both patients and providers.

As the Affordable Care Act is implemented and Medicare penalties are incrementally increased to their prescribed level by October 2015, policymakers at all levels must evaluate the gaps that health reform leaves to be filled – namely how to construct the bridge between the newly insured population and health actors whose roles have been redefined, such as hospitals now having a stake in preventive health and primary care clinics now serving a larger population. The success of organizations such as Sun Health in reducing re-hospitalization has already started to show that the feat of sustaining accessible yet quality health care can indeed be accomplished.

Anisha Hegde is the Roosevelt Institute | Campus Network Senior Fellow for Health Care.

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A CBO Report Shows How Obamacare Will Help the Working Poor

Feb 6, 2014Jeff Madrick

Never mind the conservative fear-mongering. The Affordable Care Act's subsidies will boost the economy and free workers who were locked into their jobs.

Never mind the conservative fear-mongering. The Affordable Care Act's subsidies will boost the economy and free workers who were locked into their jobs.

The attack on the Affordable Care Act by conservative Republicans after the release of the Congressional Budget Office's new report was desperate. Bravo to much of the media for setting the story straight almost immediately. But so strong is the anti-government bias involving social policy that critics hardly stopped to think.

No, businesses were not about to issue a couple of million pink slips, as Senate Republicans put it. Rather, because of the subsidy to buy health care, people could choose to quit their jobs or work fewer hours and lead a marginally better life. Heaven forbid.

And that’s the real rub. Republicans must think this is a new dole for the undeserving. But actually, it’s another example of how perverse and unfair the health care system in America is. In other words, according to CBO estimates, 2 million people or so were basically working so they could get insurance. Working makes acquiring health care cheaper because you are in a group plan and the employer will often help subsidize the price. (Of course, that subsidy partly results in lower wages for the worker.)

Because many Americans work just to get health care, they are locked into their jobs. And this may reduce their desire to bargain for higher wages out of fear of being fired.

A few points should be kept in mind. The determinedly objective CBO is by no means always right. It is a peculiar construction, in fact. The CBO is not allowed to make sensible assumptions about the economy, but instead has to stick to the current law. So it can’t anticipate, except as an exception to the main forecast, a change in tax rates or stimulus. The CBO builds in a recovery from a recession automatically—a clockwork interpretation of what economists know as Say’s law, which holds that economies will bounce back automatically as wages, prices, and interest rates stagnate or fall. This notion was anathema to John Maynard Keynes. The CBO makes absurdly precise projections of events 10, 20, and 30 years out. All the while, it wears the mask of objectivity.

The CBO’s estimate that Obamacare will result in 2 million people or so leaving the workforce, it admits, is “substantially uncertain.” There’s an understatement. Just a couple of years ago, it figured the number to be much less. But it says it did a more comprehensive analysis and included a few more recent studies, mostly about cuts in Medicaid. Some studies show that when a couple of states cut funding for Medicaid, people started looking for work. Other studies show little impact, however.

A subsidy for the poor, as Obamacare is, benefits the poor. As the working poor make more money, however, the subsidy diminishes. They may leave their jobs as a result, now able to afford health care on their own.

The CBO also said, however, that Obamacare “will boost overall demand for goods and services over the next few years because the people who will benefit from the expansion of Medicaid and from access to the exchange subsidies are predominantly in lower-income households and thus are likely to spend a considerable fraction of their additional resources on goods and services.” In contrast, people who will pay the modest increase in taxes to support the subsidies “are predominantly in higher-income households and are likely to change their spending to a lesser degree.”

Just what the doctored ordered for a sick economy!

In addition, the drop in total labor compensation as people quit their jobs will be less than the drop in the number of hours worked. Fewer hours worked but not as much lost in income. Pretty good policy. 

Jeff Madrick is a Senior Fellow at the Roosevelt Institute and Director of the Bernard L. Schwartz Rediscovering Government Initiative.

 

Image via Thinkstock

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Daily Digest - February 5: What the CBO Really Said About Health Care Reform

Feb 5, 2014Rachel Goldfarb

Click here to receive the Daily Digest via email.

‘Obamacare Bailout’ Does Not Exist, Confirms Government; House Republicans Demand Its Repeal Anyway (NY Mag)

Click here to receive the Daily Digest via email.

‘Obamacare Bailout’ Does Not Exist, Confirms Government; House Republicans Demand Its Repeal Anyway (NY Mag)

Jonathan Chait writes that the GOP insists that an Affordable Care Act provision that taxes and reimburses insurers based on the health of their customers must be another big government bailout, but the Congressional Budget Office and Roosevelt Institute Fellow Mike Konczal's definition of bailouts contradict them.

Obamacare Is Not a Job Killer (TNR)

Jonathan Cohn notes that while the CBO's analysis shows the Affordable Care Act will cause a decrease in labor output, that is actually a good thing. The reduction in hours won't be due to fewer jobs, but will primarily be people who are choosing to work less, retire earlier, or start their own businesses.

Can Marriage Cure Poverty? (NYT)

Annie Lowrey writes that Republicans like Marco Rubio have it backwards when they suggest that pushing marriage would solve all other social ills. In fact, she says, it's poverty that is getting in the way of stable, lasting marriages.

Congress Passes $8.7 Billion Food Stamp Cut (MSNBC)

Ned Resnikoff reports that the Senate has joined the House in passing a version of the Farm Bill that makes significant cuts to food stamps. The president is expected to sign this bill, which will cut about $90 a month in benefits for 850,000 households.

AOL is Leading the Way to Make 401(k)s Worse for Everyone (WaPo)

Jia Lynn Yang explains that by changing 401(k) matches to lump sums at the end of each year, AOL punishes employees who leave their job mid-year. That saves the company plenty of money, and if implemented more broadly, would be a major financial loss for workers.

New on Next New Deal

In 'Nuestro Texas,' A Call for Human Rights in Reproductive Health Care

Roosevelt Institute Fellow Andrea Flynn looks at a new report on access to reproductive health care in the Rio Grande Valley. New laws have turned circumstances in that region so dire that according to international standards, its a human rights violation.

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