Maybe a French-style National Healthcare System Might Be More Compatible With Ours?

A proposal for a Canada-style healthcare system has been floundering around our Congress for several months, (Rep. John Conyers National Health Insurance Act --HR 676) but shouldn’t we ask if a French-style system might be a less disruptive solution?
Let me compare the Canadian and French systems briefly --

Canada has a SINGLE-PAYER system, in which the government pays the bills according to a fee structure it negotiated with health care providers. Patients can still choose their own doctor. The doctor in turn may be either paid by the government or in private practice. (Patients who are in a hurry might choose a private-pay doctor; the government physicians are often overworked and months-long delays to get an appointment are common.) The United States’ Medicaid and Medicare are most similar to single-payer systems.

By contrast, in the British style of socialized medicine, the doctors are actually government employees. Hospitals are run by the government. Hospitals are run comparable to the Veterans Administration. Given the repeated VA scandals in healthcare and hospital conditions, one would much prefer any private hospital over the VA. This is a sad thing to say, although to be fair, the VA facilities are just showing their age and need a great deal of renovation.

The French system is called a non-profit MULTI-PAYER. Clinics and hospitals are all private, and may be either non-profit or for profit. Medical providers are paid according to a negotiated fee structure. The funds come from payroll contributions from both employers and employees.

This is somewhat similar to what we have now in the private sector. A major difference is that the French government has far better leverage in negotiating what the fees are than any single employer has, and unlike the U.S. federal government, it uses that leverage.
French payroll taxes replenish a sickness fund which covers 75% of the medical bills. The balance comes from patients, government and supplementary insurance.

Coverage is universal under all three templates -- British, Canadian, and French. By contrast, the current American system has nearly 50 million of us completely uninsured -- 9 million of the uninsured are children.

The patient has the ultimate power to choose his or her doctor under all three plans displayed here. Popular American plans commonly limits our choice of providers to those who are part of a given network.

The average cost of medical care per Briton is $2,389, and the average Briton ranks 24th on WHO‘s health ranking. For a Canadian it is $2,989, and he ranks 35th. For a Frenchman it comes to $2,902, who marches all the way up to 4th on WHO‘s list. And for an American, it comes to a whopping $5,711, and in return for that, he places 72nd on WHO’s ranking.

Recent years have seen several so-called reforms, with limited results. In 2004, consumers were given the option to create Health Savings Accounts. These allow pre-tax dollars to be set aside for any medical or health expense not reimbursed by insurance. The downsides: they require more paper handling by both consumers and insurance companies, and some discourage preventive care.

States such as Massachusetts have moved to require insurance coverage, with a government subsidy to those who cannot afford it. While it does not result in universal coverage, it has cut the numbers of uninsured by nearly two-thirds.

When you add up all the co-pays, premiums, deductibles, etc., even those with insurance often pay the full cost of the medical care. There is little downward pressure on medical expenses.
Allowing the poor to buy into Medicaid, Medicare, or SCHIP has become controversial even tho it seems very direct and logical. This proposal came from a plan studied by the National Coalition on Healthcare. Consumers pay in according to a sliding scale, with subsidies for the poor.

Everyone gets covered. The monetary savings can be significant. NCHC says in the first decade health care savings would total $320.5 billion; businesses that now provide health insurance would save $848 billion, and families who currently buy insurance would save $309 billion.

Since the end of the 1960s, the number of doctors in France increased from 60,000 to more than 185,000 at the beginning of the 21st century. There are three doctors for every 1,000 habitants, which is a superior ratio when compared to other Western nations (Great Britain 3:1800, USA 3:2700, Germany 3:3400 and Italy 3:5900).

A sector of the French healthcare system consists of not-for-profit private hospitals. Private hospitals were originally denominational and provide 14% of the inpatient services among French Medical Care Institutions. They are financed through endowments like public hospitals, but they still have the right to privacy like private clinics.

A positive feature of the French healthcare system is the cooperation between the public and private sector. The long waiting lists for surgery that everyone associates with socialized medicine are avoided here. Indeed, private medical care in France provides more than 50% of surgeries.
Yes Magazine has an online chart - http://www.yesmagazine.org/article.asp?ID=1515
More specifics of the French plan is at FrenchEntree.com -- http://www.frenchentree.com/fe-health/DisplayArticle.asp?ID=197

CARRIERS OF CRITICAL ILLNESS INSURANCE POLICIES

NAME OF CO. NAME OF POLICY STATES AMT
AFLAC.com -- Specified Health Event -- All except MA NY VT WA; $5K 1st occurrence with other amts. for specific bills; only issue age restrictions; 10 question application
AIG.com -- Group Critical Illness -- All except CT MT NY VT WA; $10K and up; issue ages 18-64; terminates age 70; simplified underwriting
AIGebs.com -- AIG Group Critical Care Ins. -- All except CT MN NY WA -- amt varies; issue ages 18-69; terminates age 75;
ALLSTATEatWork.com -- New Lifeline Critical Illness -- All except CT MD NH NY VT WA; issue ages 18+ payroll only; three levels of underwriting depending on benefit level
CAICworkSite.com -- Critical Illness -- All except CO CT MN NH ND RI WA; issue ages 18-69; benefits levels $5 to $50K; benefits reduce age 70; three underwriting questions
Century Benefits (TodaysMedicare.com) -- Medicare Plans -- In CA CT FL ME MA NH NJ NY PA SC TN TX; issue ages 64 and up; no health restrictions
ColonialLife.com -- Critical Illness -- All except CT; issue ages 16-69; choice of $5K to $50K indemnity or lump sum; benefits reduce at age 75; underwriting depends on benefit level (2-7 questions)
CBL-Life.com -- Timber Ridge Series of Critical Illness Ins. Plans -- All except CT NY VT; issue ages 18-64; benefits $10K to $250K; no age restrictions; underwriting restrictions on history of cancer, heart disease, insulin dependent, diabetes.
CONSECO.com -- C. worksite Critical Illness -- All except CA CT FL GA ID IL MD MA MN MS NH NJ NY NC ND SD TN VT WA; issue ages 18-69; lump sum up to $70K; no coverage for pre-existing conditions first year of policy
EMCnationalLife.com -- Worksite Critical Illness 3.0 -- All except CT DE MD MA NH NJ NY PA VT; issue ages 18-65; lump sum; policy expires age 70; simplified issue
EquiLife.com -- Life Guard -- All except AK CA CT DE DC FL GA HI ID LA ME MD MA MN NH NJ NY PA RI SD VT VA WA WI; issue ages 20-70; lump sum; reduces at age 65; underwriting restrictions
FDL-Life.com -- Critical Illness -- All except CA CT GA ID IA KY MN NH NY SC WA; issue ages 20-90; one-time payment, $5K to $50K; benefits reduce age 70; health restrictions
GUARDIANlife.com -- Critical Illness -- In AL AK AZ AR CO DE DC GA IL IN IA KS KY MI MO NE NM OH OK OR PA RI SC TX WI WY; attained age rating; lump sum from $5K to $50K; benefit reductions with age; simplified underwriting
HARBORins.com -- Simplified Critical Illness -- All except CT MD NH NJ VA WA; issue ages 18-59; policy guaranteed to age 75;
HARBORins.com -- Simplified Critical Illness Plus -- All except FL MA MN NY VT; issue ages 18-69; lump sum; pre-existing conditions not covered in first year of policy
HEALTHplan.com -- Group and Indiv. Critical Illness -- All except CT MA NJ NY; issue ages 18-69 (may vary by state); benefits reduced age 70; health restrictions vary per state
HUMANA.com -- Critical Advantage -- In AL AZ AR CO DE DC GA HI IL IA KS LA MA MI MS MO ME NC OH OK RI SC TX VA WV WI WY; issue ages 18-69; lump sum up to $50K; one year waiting period for pre-existing conditions
SETTLEMENTS101.com -- Viatical Settlements or Life Settlements -- All States; any age; must have short life expectancy (24 months)
MetLife.com -- Critical Illness -- All except CT FL WA; groups of 1000 or more; all ages; lump sum $1K to $100K; NO age restrictions; underwriting varies by plan
MHN.com -- EAP and Managed Behavioral Healthcare -- groups of 50 or more; any age; no age or health restrictions
CRITICALillnessCoach.com -- Critical Illness Plus -- All States; issue ages 18-64; individual product requires underwriting but only 3 questions
TRANSAMERICAworksite.com -- Critical Assistance Plus -- All except CT FL GA IN MD MA MN MT NJ NY TN UT VT; issue age 18 and up; must be actively at work; one year waiting period for pre-existing condition
TRUSTMARKsolutions.com -- Critical Illness -- All except CT; groups of 100 or more; issue ages 18-70; lump sum on diagnosis; no benefit reduction with age
UNITEDamerican.com -- Health Guard -- All except CT KY MA MN MT NH NJ NY SD; issue ages 18-64; one-time lump sum on diagnosis $10K $20K $30K $40K or $50K; benefits halved at age 65; ONLY COVERS heart attack, stroke, TIA, Migraine, Vertebrobasilar ischemia, Cerebral Injury due to trauma or hypoxia, vascular disease affecting eye or optic nerve.
UNUM.com -- Specified Critical Illness -- All except CT; issue ages 17-69; full payout except for coronary bypass surgery and carcinoma in situ (skin cancer) which are paid at 25 percent; only 3 questions in application

Erosion in Savings Helped Create Larger Numbers of UNDERinsured; Critical Illness Insurance Expected to Grow as People Seek to Fill the Gaps

While the growth in the numbers of uninsured Americans continues to garner the headlines (and the attention of political pundits), the growth in numbers of underinsured has been very similar but unheralded.

Consider the case of the “typical” family with an individual deductible of $2600 and a family deductible of $4800 or more. How is a family that is struggling to keep up with jumps in costs for food and fuel going to cover that cost if serious illness hits a member of the family?
Those high deductible plans can be devastating to a family if a wage earner is hit with a catastrophic injury or illness. The general rule of thumb is that if your deductible is more than 5% of your annual income -- you are underinsured! And this is a conservative definition.

This means that the need for critical illness insurance policies is probably higher now than ever before. A good critical illness policy has a lump sum or cap payment of $100K or more, either on diagnosis or paid out as the bills come in. If they are good, they will even pay a moderate amount on experimental drugs. Conventional insurance will pay zero on experimental drugs -- but the critical illness insurance is a different class of product, not bound by the usual restrictions found in a qualified health insurance plan.

Critical illness policies vary on which diseases are covered -- less expensive policies cover only cancer; their underwriting guidelines are usually less demanding, too. Other policies may cover a dozen diagnoses like heart attack, stroke, kidney failure, and the like.

Another difference with critical illness policies is that the payment is normally sent directly to the insured, and the insured can spend it either on the medical bills or on anything from food and utilities on up to the mortgage.

Forty percent of Americans do not have three months’ worth of cash on hand to cover basic bills if they are out of work. (from a 2006 bankrate.com survey)

Medical bills in the first few months after a heart attack can reach $25,000 -- some of that is paid by major medical insurance but the patient has to shoulder the rest of the bill.

If you are between the ages of 35 and 50, and have a high deductible plan, you are the type of person who is most vulnerable to a large financial hit from a major medical event. And you are also most likely to HAVE a major medical event like a stroke or heart attack.

Even those with dual incomes totaling over $50,000 a year -- or even $75,000 a year -- report that they have difficulty paying for health insurance and their portion of the healthcare bill. They often do not have any (or sufficient) disability coverage to make up for lost income while recuperating. How many are aware that disability insurance, if you qualify, only pays an average of 60 percent of your normal income?

A soft economy also means that your employer may not keep your job open if you file for disability -- or even lay you off outright.

Health Care: The Time Is NOW To Get Healthcare Equity Bill Thru Congress

We need your help to get MORE Sponsors and MORE support for The Health Equity and Accountability Act. This important proposal (H.R. 3014) will deal with the disparities and discrimination in our nation's health care system. It is sponsored by Rep. Hilda Solis (D-Calif.). While the issue of America’s record numbers of uninsured is complex and has many causes, this bill is an important first step to ensuring that everyone has health care.
Action is needed now!
We know that minorities have higher rates of infant mortality, cardiovascular disease, diabetes, HIV infection/AIDS, cancer, and lower rates of immunizations and cancer screening. LEGAL immigrant children are denied health care! Millions of families in poor, rural communities have little or no health care at all.
We cannot write off millions of children and adults, in rural areas and cities, among the poor and working classes and sometimes even among people who thought they were middle class. They all need the basics, and here they cannot even get an appointment because the clinics and doctor offices will not accept patients without insurance.
Where did this bill come from? Rep. Hilda Solis (D-Calif.) has introduced the Health Equity and Accountability Act (H.R. 3014), a bill to provide health care to the underserved and uninsured. Versions of this bill have been stalled for the last 6 years, but H.R. 3014 is now gaining support with recent hearings in the Health subcommittees of both the House Ways and Means and House Energy and Commerce Committees.
Keep the momentum going! Contact your Representative and ask them to cosponsor this bill NOW. If they are already one of the 113 cosponsors, ask them to take a leadership role in promoting and passing this legislation. The higher the visibility and the larger the support for this bill in the House, the better chance we have for getting it passed, for getting an identical counterpart in the U.S. Senate and then getting the bill signed into law.
It isn't only high cost that keeps people from having health insurance and getting health care. We have reports that as many as 25% of all Latinas haven't even seen a doctor in the past year! Health care is almost unavailable in rural areas because of the shortage of rural doctors combined with the long distances to find medical services.
Do you know that poor areas are often targeted as “ideal” sites for dumping grounds for hazardous materials and waste? Minorities and those living in poor rural areas suffer exposure to environmental health hazards far out of proportion to their numbers. All too often, power plants and waste dumps are built in low income areas; they expect that residents are too ignorant and weak to protest these health hazards. Frankly my dear, your zip code should not determine your life expectancy!
The Solis bill provides grants to eliminate racial and ethnic health care disparities. It requires health-related programs of the Department of Health and Human Services (HHS) to collect basic data on race, ethnicity, and primary language. Imagine -- HHS does not even know for sure how many of us Americans are at home in which language!
This bill will also establish “health empowerment zone” programs in at-risk communities. Plus it includes Immigrant Health Improvement Act (ICHIA) proposals; these provide health care to legal resident children of immigrant parents (who have been denied coverage under the SCHIP program).
Contact your Representative TODAY and urge them to sponsor and support this bill! You can go to NOW.org and they have an easy link to a contact form that goes to your representative. You can also go to https://forms.house.gov/wyr/welcome.shtml for a contact form.

IRS Rule Changes Sweeten HSA Pot for Employers, Employees

Health savings accounts (HSAs) will likely prove even more popular than ever due to a sweetening of favorable tax treatments and more funding options.

Readers may want to check with their financial advisor about the new IRS guidelines that allow a transfer of individual retirement account (IRA) funds to an HSA; this transfer is tax-free. Second, employees are no longer subject to the 10 percent additional tax if they use their IRA funds to pay for medical benefits -- referring to IRC Sec. 72(t). Thirdly, qualified employees may contribute IRA funds to their HSA without tax.

Q: If I already have an HSA for myself and want to put some money into a high-deductible health plan (HDHP) for my family, can I do that?
A: Yes. If you have an HSA for yourself and you buy a family HDHPan HSA owner has a self-only high deductible health plan (HDHP) and buys a family HDHP, you can make that second transfer during the same taxable year. The fund distribution will still be without tax. One big advantage to doing this is that you will reduce your tax liability AND lower your health insurance premium. That is potentially, at least -- it will all still depend on your total financial picture and for that, you ought to go in to see your own financial advisor.

Fourth, the IRS also raised the ceiling for individuals and families to their HSAs for the 2009 tax year. Individuals will now be able to contribute up to $3,000 per year; families can contribute a maximum of $5,800 per year. (NOTE: The current maximum limit is $2,900 for individuals and $5,650 for families. The catch-up contribution for people who are 55 years old and up is increasing to $1000, from the current $900.)

The IRS released other new guidelines expected to boost the HSA market by further increasing employers’ adoption of HSA-linked consumer-driven health-care plans (CDHP).

Employers received much-clamored-for clarifying guidelines such as these (and employees will probably have to get the full details from your Employee Benefits department):

-- ON-SITE CLINICS that provide free or low-cost services will NOT affect an employees’ eligibility for an HSA. ALLOWED SERVICES INCLUDE: treating on-the-job injuries, immunizations, annual exams.

-- HOWEVER, if the clinic provides more significant medical benefits, you, the employee, are not eligible for an HSA. Example: a hospital permits its employees to receive medical treatment at its facilities for all of their medical needs for either no cost or at a reduced rate. (I and probably millions of you would probably give our eyeteeth to have such a generous employer.)

-- If an employer mistakenly contributes to your HSA, the employer is allowed to retrieve the funds by asking the financial institution holding the account (ie the bank or other seller) to return them. Otherwise, the employer may treat this amount as part of your income. (ie that means this could raise your IRS obligation; you are probably better off returning the money to the employer!)

A special note to HSA holders age 65 and up: You may use money in your HSA to cover Medicare Part D prescription drug PREMIUMS. If your spouse is older than 65 but you yourself are younger than 65, the enrollee’s HSA funds can NOT be used to cover your spouse’s Medicare Part D premiums without being part of your taxable income.

Hybrid financing is new and is expected fuel further growth in HSA accounts. Under this strategy, your employer pays ALL of an HDHP for you and your fellow workers AND gives each employee a defined cash allowance. Employees can decide how to use that cash.

Example: an employer provides a $2,000 deductible HDHP. You (employee) pay all costs under $2,000 while the insurance company covers EVERYTHING above that -- ie, your maximum out-of-pocket amount is $2,000 if you need surgery or pay a hospital bill – an amount similar to many traditional PPO plans. (Actually a lot of PPOs or indemnity policies may have limits of $2500, $3000, or even $5000. That may seem like a lot, but often that is the only way to keep the premiums down.)

Your monthly cash allowance of $125 (or $1,500 a year) also from your employer? You may choose to put that into your HSA, OR use it to buy a better health plan.

An unnamed small company in the communications sector used this hybrid financing strategy to walk away from a traditional insurer that quoted monthly premiums of $1800 per employee. It is no wonder that the employer switched to a high-deductible plan and an HSA, is it? This company is very generous and provides a $10,000 deductible for their employees plus the HSA, which is owned by the company.

Employees who had high medical expenses and depleted their HSAs, were reimbursed up to the deductible out of the HRA. This company pays a premium of only about $600 a month per employee (family coverage). The employees do pay toward the premium; the amount varies depending on whether it is a single or family plan.

It is hoped that the IRS changes will help both employers and employees contain the cost of healthcare. As an example, the above employer calculated that even if every employee got sick, the company would still save 18 percent compared to traditional healthcare insurance. And HSAs are much less likely to suffer annual hikes in premiums like those that plagued small businesses in the past decade.

Industry statistics show that HSAs grew by 73 percent from late 2006 to the beginning of 2008. The total dollar amounts in those HSAs also increased by 140 percent during the same time frame. It is a bit of a mystery why this popularity has not been evenly expressed across the country.

For example, a study showed that only 2.4 percent of residents enrolled in private health insurance in Missouri, 2.1 percent in Oklahoma, and 3.2 percent in Kansas have used HSAs.

Possible reasons that people are not switching to HSAs or other high-deductible plans: 1) they opt to stay with traditional, low-deductible healthcare plans, 2) the HSA is still pretty new, and perhaps they do not have anyone to familiarize them with it.

Should We Change How Much Medicare Pays for Treatment vs. Prevention? --i.e. should smoking cessation cost more than cancer treatment?

The writer of the HealthBeat blog, Maggie Mahar, writes a very good and sometime provocative journal on healthcare in America. However, while I do see the merits of her recent column on pricing of healthcare services, questions have to be asked regarding how changing the pricing schedule would affect insurers’ behavior.

I can well imagine insurers’ reluctance to fund open-ended smoking cessation treatment even tho it may ultimately cost them less than treating the complications of smoking. The fact is, they are much more nervous about UNKNOWN total costs than they are about KNOWN costs for cancer treatment. For example, they can calculate to the dollar what a given course of treatment for a lung cancer is; they know how many radiation treatments will be requested, they know if chemo will also be part of the treatment protocol and how many chemo treatments, they know how many days of hospitalization will be involved. What makes them really nervous, again, is an unknown dollar amount for something like smoking cessation -- which does not end till the patient can actually give up cigs for good, and who knows how long that will take?

Look, Maggie Mahar, I agree with you completely on the relative worth of preventive or wellness interventions vs. treating the disease. But I think you have a real selling job to get the insurers behind any such pricing system.

It’s worth having a full and public discussion on these issues, tho, so I hope that this is not the last we hear of this idea.

When Medicare first created a fee schedule, critics suggested that it was a Marxist invention. Nevertheless, the schedule, which lists what Medicare is willing to pay for some 7,000 procedures, has become the master list for physician reimbursement in our health care system: most private insurers peg their payments to the Medicare schedule.
The notion of deciding the precise worth of some 7,000 diagnostic and therapeutic procedures is mind-boggling. How exactly does Medicare do it?
The process began in the late 1980s when officials at the Department of Health and Human Services decided that the way Medicare paid doctors should be overhauled. At the time, Medicare was reimbursing physicians based on what was considered “customary, prevailing and reasonable” in a particular market —in other words the “market value” of the service in that region.
Instead, reformers urged Congress to begin paying doctors in a way that reflected the real cost, to the doctor, of providing the service.

Please see her full article on this valuable issue at http://www.healthbeatblog.org/2008/08/today-we-pay-fo.html#more

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