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Previous U.S. health reform efforts

WASHINGTON (Reuters) - Congress is tackling an overhaul of the U.S. healthcare system, which President Barack Obama hopes to sign into law by the end of the year.

Following is a timeline of previous U.S. health-reform efforts:

*1912: Theodore Roosevelt endorses health insurance as part of his presidential bid on the Progressive Party ticket. Roosevelt, who served as a Republican president between 1901 and 1909, loses the election.

*1930-1939: President Franklin D. Roosevelt considers national health insurance as part of his New Deal reforms, but decides it is too politically risky to include in his Social Security Act, which sets up benefits for the elderly and the unemployed.

An effort to pass health insurance on its own falls short in Congress, which grew weary of federal government expansion.

*1943: The War Labor Board rules that a wage freeze designed to keep inflation in check during World War II does not apply to health insurance benefits, creating an incentive for employers to provide health insurance as a way to build worker loyalty.

*1945-1949: President Harry Truman's attempts to set up a national health program are thwarted by opponents who cite it as socialism and racial desegregation.

*1954: The Revenue Act of 1954 excludes employer contributions to health plans from taxable income, creating further incentives for employer-based health insurance.

*1965: In the most significant health reform of the century, President Lyndon Johnson signs into law the Medicare health program for the elderly and the Medicaid program for the poor and the disabled.

*1970s: Though support for greater healthcare coverage is widespread, momentum dissipates during the Watergate scandal. Soaring inflation, economic recession and rising healthcare costs further blunt reform.

*1993: President Bill Clinton crafts a detailed plan calling for universal coverage that relies largely on competition between private insurers, with government regulation to control costs. Clinton's fellow Democrats in Congress are divided and determined opposition from Republicans and business interests kill it.

*1997: The State Children's Health Insurance Program covers families with children who have modest incomes but are not poor enough to qualify for Medicaid. In the ensuing decade, President George W. Bush vetoes two attempts to expand funding for the program, but President Barack Obama signs an expansion into law in 2009.

*2003: The Republican-controlled Congress expands Medicare to cover prescription drug costs through private insurance. Health Savings Accounts allow those in high-deductible plans to set aside pretax dollars to pay for care.

*2007: Bush proposes replacing the current preference for employer-sponsored insurance with a standard healthcare deduction, but Congress does not act on the plan.

(Source: Henry J. Kaiser Family Foundation)

(Compiled by Andy Sullivan)

Is French health system a model for U.S.?

y JIM LANDERS / The Dallas Morning News
jlanders@dallasnews.com

PARIS – Houston native Jennifer Hua gave birth to her first two children in Texas, and her last two in France. The Houston hospital looked like a luxury hotel. The hospital in Paris was a converted prison.

Amenities aside, she prefers Paris.

The American health care model, she says, is too expensive and too insecure. France offers her family good medical treatment, better insurance, more convenience and no worries about how to pay medical bills if her husband's job changes.

"If we were to consider returning to the U.S., health care would be one of my top concerns," the Rice University alum said.

Dallas native Anna Marie Mattson heads the University of Texas alumni group in France (Texas Exes). She's lived in Paris since 1990 and has seen members of her family go through hospitalizations. Mattson says the French model encourages people to put health ahead of economic anxiety.

"Under the U.S. system, I never wanted to get sick, and when I did, I went to the pharmacy to try to find a way to treat myself," she said. "In France, you go to the doctor immediately."

As America seeks a better way to provide medical care, France offers an example of a system where everyone has government-provided, basic health insurance – citizens and immigrants alike. Expenses for such chronic illnesses as cancer, diabetes and multiple sclerosis are covered entirely by the state so patients can focus on treatment rather than financial ruin.

But if France is instructive on health security, it also shows how high, vexing medical bills push government into a constant reform struggle. Lately, the French are taking a page or two from the U.S. playbook to try to cope by exploring managed-care practices.

Rice University alum Elizabeth Dutertre, who's lived in France since 1968, has had good and bad experiences with French health care.

"Many liberal Americans are convinced that the French system is the be-all and end-all solution to health care costs in the United States," she said. "But the system is costly to both the workers and the state. In fact, it is going bankrupt."

Bankruptcy looms for America as well. Health care absorbs more than 17 percent of the U.S. economy, or $2.4 trillion. The French fork over 11 percent.

In 2006, U.S. spending averaged $6,714 per person. The average resident of France spent $3,450. This year, U.S. spending is expected to near $8,000 per person, while French officials estimate spending there will come in below $5,000. It's not that the French are younger. One in six of France's 61 million people are over the age of 65; one in eight Americans are over 65.

France and the United States pay for their health care in different ways. Most U.S. health care spending is private. The government's share – what you pay for in taxes for Medicare, Medicaid, military and other government employees – is 46 percent. The rest is paid through insurance split between employers and workers, and in out-of-pocket expenses borne by consumers.

In France, national health insurance pushes the government's share of health care spending to 80 percent. Consumers and their employers pay for the rest through supplemental, private insurance and out-of-pocket expenses.

In both countries, patients with the money to pay for more or better care not covered by insurance are able to buy it through private clinics and doctors. Health expenditures have grown faster than prices for nearly everything else in both countries for many years, despite decades of reforms aimed at capping prices, supply and demand.

President Barack Obama has made a priority of providing health insurance for all Americans while lowering health care inflation. France has insurance for all but battles health care costs in the National Assembly every year.

People in both countries tell pollsters that rationing health care is abhorrent, but both ration by price. American and French men and women who make too much money to qualify for indigent care, but too little to afford comprehensive insurance, often go without needed medical treatment.

France blends public and private insurers and hospitals with (mostly) self-employed doctors. There's a national insurance plan that covers between 60 and 70 percent of health care spending for everyone. (Forty-six million Americans do not have health insurance.)

In France, private companies and trade groups offer supplemental health insurance. Consumers use it to pay the charges not covered by national insurance.

Although U.S.-style managed care has started creeping in, the French insurance system leaves consumers free to choose their doctors and leaves French doctors free to make whatever prescriptions and treatment recommendations they think best.

Everyone who's lived in France for at least three months is covered by national health insurance.

People with chronic illnesses get continuing medical attention without facing a bill for it. Treatments and survival rates for cancers and other diseases are better in the United States, although French cancer patients routinely get access to experimental drugs.

Far more Americans get heart surgeries to clear clogged arteries, but the French death rate from heart attacks is about one third of the American rate.

The French live longer. They have more hospital beds and more doctors.

For health economist Didier Tabuteau, though, there is one overriding difference between the U.S. and French systems.

"The difference is the price, not the number of doctors or the number of hospitals," he said. "You pay a very high price for drugs and doctors."

The French government negotiates price ceilings with pharmaceutical companies. French doctors earn about 60 percent of what their American counterparts make, although they get free medical school tuition and don't face high malpractice insurance premiums.

Like us, however, the French have a looming problem with the cost of medical care. If the American way is generous to doctors and drug makers, the French way is generous to consumers. With no deductibles and with out-of-pocket expenses averaging less than $250 a year, the French visit their doctors about twice as often as Americans. The French lead the world in drug consumption.

Cost-control steps taken over the last 20 years have created a two-tier system where medical care is readily available to the very poor and those who are well off. It's harder to come by for the lower middle class who can't get comprehensive, supplemental health insurance through their employers and can't afford to buy such policies on their own.

Tabuteau says a third of French consumers complain they can't get the dental care, eyeglasses or other treatments they want because of cost.

Jennifer Hua and her French husband can choose any doctor they want. They've had their pediatrician come to the house on a Sunday to care for a sick child.

The Huas pay their doctors at the time of service for house calls and office visits, but their insurance deposits reimbursements into their checking account in a matter of days. All of their medical care is covered by two health insurance policies that together cost them 77 euros a month, or about $102. The Huas used to spend another $100 a month for a better supplemental insurance policy than the one offered by Mr. Hua's employer, but they dropped that policy after he switched to a job with better benefits.

Insurers and providers use a common electronic billing system tied to identity cards that carry a microchip containing reimbursement information. Health economist Gérard de Pouvourville said the system's efficiency reduces overhead to less than 4 percent of the plan's cost.

For several years, a team of researchers at Harvard Medical School has argued that up to a third of the U.S. medical bill goes toward overhead for insurance companies, marketing, hospital and physician billing departments, pharmaceutical advertising and the like.

(Insurance firms and others dispute that overhead estimate. Comparable estimates for France are hard to come by. The Paris-based Organization for Economic Cooperation and Development collects health care overhead estimates from governments showing France at 6.9 percent, and the U.S. at 7.5 percent. OECD health data expert Gaetan Lafortune says both estimates are too low.)

In France, the national insurance plan's trustees negotiate a fee schedule with physicians' unions and hospitals. An office visit with a general practitioner costs 23 euros, or about $30. Patients are expected to pay one euro of that cost out of their own pockets. Insurance reimburses them for the rest.

Most doctors stay within the plan, but about 30 percent have opted out and are free to charge what they like. (Leaving the plan cuts them out of a government-funded pension.)

Employers contribute 12.8 percent of employee compensation for national health insurance. Workers contribute 0.75 percent. Chronic deficits have forced the government to add large amounts of tax revenues to health insurance financing, including a 5.25 percent income tax surcharge.

Tabuteau, head of the Department of Health Policy and Management at the Institute of Political Studies in Paris, warns that this is an inadequate model that will force the French government to either raise employee contributions or limit national health insurance to the 10 million people with chronic illnesses.

Elizabeth Dutertre has had three surgeries to correct double vision. The first was at the Hôtel-Dieu, a public hospital across the street from Notre Dame Cathedral, where an unexpected opening in her surgeon's schedule let her get an operation within two months of diagnosis.

"At the end of it, I had nothing to pay," she said.

The second time, she was told it would take two years before her surgeon could schedule her at a public hospital. She went instead to a private hospital, where her surgeon operated within three weeks. At discharge, she got a bill for 350 euros, or about $465.

"They immediately wanted a check – no Visa card, no American Express," she said. "If you can afford the out-of-pocket expense, you get quicker, better care."

Dr. Marie-Laure Alby, a general practitioner in Paris who shares a practice with three other doctors, said government-set fees don't provide enough money to cover expenses. The practice where she works offers patients care six days a week, 12 hours a day, including house calls. The four doctors share the cost of two secretaries and one nurse.

General practitioners in France earned about $84,000 in 2004, or $62,000 less than their American counterparts, according to the latest estimates collected by the OECD.

"The solution would be to have more money if you offer a better service," she said.

Alby no longer works within the government fee schedule. Instead of charging $30 for an office visit, she charges $42.

"It's about one-tenth of what you pay in the States," she said.

Alby argues consumers are too used to the idea that health care should be free.

"In France, one specific problem is the emergency room of the hospital," she said. "Many people in France would think less about going there than they would to go to a café."

Patients who go to a public hospital emergency room aren't given a bill to pay at the end of their treatment.

None of this is free, of course. The share of taxes in the French economy is more than 40 percent. In the United States, it's just over 25 percent.

The French government knows about emergency room overuse but has not cracked down.

"It's a pure scandal," Alby said.

High Lab Costs Plague the Uninsured

Akron Beacon Journal
Cheryl Powell

One of his patients, Robert Knapp, 31, of Barberton, was getting blood tests every six months to monitor his cholesterol and triglyceride levels.

But after he lost his insurance when he was laid off in January, Knapp couldn't afford the tests, which could cost more than $100.

"When you're unemployed," he said, "you can't do that."

Representatives from Akron Children's Hospital, Akron General Medical Center and Summa Health System said they have programs to help people who can't afford their medical bills.

A state program provides free hospital care to anyone who earns less than 100 percent of the federal poverty level, or $10,830 for an individual.

Akron Children's Hospital offers a 25 percent discount for families who pay bills within 30 days, Director of Planning Bob Howard said.

Akron General provides interest-free payment plans and prompt-pay discounts, spokesman Jim Gosky said.

At Summa, the billed amount "is a starting point," said Kevin Theiss, vice president of revenue cycle.

Very few people end up paying the list price, he said.

Summa owns Akron City, Barberton, Cuyahoga Falls General, St. Thomas and Wadsworth-Rittman hospitals, as well as LabCare Plus.

"The key to that is the patients being willing to work with us and provide the information," Theiss said. "We will be willing to set up payment plans if we have to. Ultimately, we're going to provide the care, whether you have insurance or not."

Help for Patients

Both Summa and Akron General give discounts to people who make as much as 400 percent of the federal poverty level, or about $43,000 for an individual.

Likewise, at least two major labs in the Akron area said they help their patients.

In February, LabCorp launched its LabAccess Partnership Program to provide discounts for uninsured patients or those whose insurance doesn't cover the tests. People must pay at the time of service.

The company declined to reveal the amount it charges for the tests before the discounts.

One of his patients, Robert Knapp, 31, of Barberton, was getting blood tests every six months to monitor his cholesterol and triglyceride levels.

But after he lost his insurance when he was laid off in January, Knapp couldn't afford the tests, which could cost more than $100.

"When you're unemployed," he said, "you can't do that."

Representatives from Akron Children's Hospital, Akron General Medical Center and Summa Health System said they have programs to help people who can't afford their medical bills.

A state program provides free hospital care to anyone who earns less than 100 percent of the federal poverty level, or $10,830 for an individual.

Akron Children's Hospital offers a 25 percent discount for families who pay bills within 30 days, Director of Planning Bob Howard said.

Akron General provides interest-free payment plans and prompt-pay discounts, spokesman Jim Gosky said.

At Summa, the billed amount "is a starting point," said Kevin Theiss, vice president of revenue cycle.

Very few people end up paying the list price, he said.

Summa owns Akron City, Barberton, Cuyahoga Falls General, St. Thomas and Wadsworth-Rittman hospitals, as well as LabCare Plus.

"The key to that is the patients being willing to work with us and provide the information," Theiss said. "We will be willing to set up payment plans if we have to. Ultimately, we're going to provide the care, whether you have insurance or not."

Help for Patients

Both Summa and Akron General give discounts to people who make as much as 400 percent of the federal poverty level, or about $43,000 for an individual.

Likewise, at least two major labs in the Akron area said they help their patients.

In February, LabCorp launched its LabAccess Partnership Program to provide discounts for uninsured patients or those whose insurance doesn't cover the tests. People must pay at the time of service.

The company declined to reveal the amount it charges for the tests before the discounts.

Bill Bonello, senior vice president of investor relations for LabCorp, said the initiative is a discount program, not charity.

"It is intended to provide access at a discounted rate," he said. "Yes, we make money."

Bonello said the company's pricing "is appropriate and based on the value of the service that we're offering."

"In order to provide care to a select number of people who could not afford it otherwise, we are offering a discount in those limited instances," he said.

Quest Diagnostics (NYSE:DGX) writes off a portion of the bill if patients meet financial requirements, said Jerry Diffley, corporate director of patient advocacy and billing compliance.

"We don't want anybody to put their health at risk," he said. "We will work with everyone."

The company has a discount program for uninsured patients, but it's not available in Ohio.

Lab services aren't the only area where uninsured patients face higher bills.

In a study released several years ago, the State Employees International Union District 1199 found people without health insurance in Ohio pay twice as much as insured patients pay for the same hospital care.

Lefton said the medical society might expand its efforts to other services.

"You have to start somewhere," he said.

In the meantime, it pays to shop around.

An analysis of five commonly ordered blood tests showed the billed price for the same tests can vary by tens or even hundreds of dollars in the region.

Hospitals often have higher overhead because they see more complex cases and must provide care around-the-clock, Summa's Theiss said.

Akron's three health systems indicated they're willing to work with the Summit County Medical Society to develop more ways to help the uninsured.

"If you're paying a lot more out of pocket because you're uninsured, that's a problem," Children's Howard said. "It's a systemic problem, and it needs a systemic solution."

Malpractice damage caps not a cure for high health care costs

WASHINGTON – Capping malpractice damages is a health care reform idea that has swirled around Washington for years. But would it make health care less expensive?

The evidence doesn't show it.

For many years, doctors have complained that they pay huge insurance premiums to defend themselves from malpractice suits. They're right. The premiums are staggering. A gynecologist/obstetrician practicing in Miami has to pay nearly $200,000 a year for insurance coverage. In 2003, ob/gyn malpractice premiums in the Dallas area averaged about $75,000 a year.

Those sorts of expenses make doctors more expensive. On top of that, doctors say they order extra diagnostic tests and other procedures to avoid getting sued, a practice known as defensive medicine.

Voters amended the Texas Constitution in 2003 to cap medical malpractice lawsuits. Doctors remain liable for the loss of earnings and the medical expenses faced by patients harmed by their mistakes, but non-economic damages are limited to $250,000.

Life is now better for Texas doctors.

On average, their insurance premiums have fallen more than 30 percent since 2003, according to the Texas Medical Association. Thousands more doctors have moved to the state.

Expenses escalate

But the cost of health care still is rising. Consumers are paying higher insurance premiums, which continue to escalate faster than earnings.

And according to the Dartmouth Institute for Health Policy, Medicare spending in Texas rose 24 percent in the three years after the state capped malpractice awards. In Dallas, it went up 27 percent during the same period, 2003 to 2006.

Rep. Michael Burgess, a physician as well as a Republican congressman from Flower Mound, has championed caps on malpractice insurance since coming to Washington in 2002.

He argues that a $250,000 cap on "pain and suffering" damages would improve the national outlook for medical spending, even though things have not turned around in Texas.

"It's still early," he said of the Texas spending climate in the wake of liability caps. "Defensive medicine practices are learned early in a doctor's career. It takes awhile to change that."

A team at the University of Alabama looked into this last year. Their survey of studies related to malpractice insurance, defensive medicine and consumer health insurance premiums looked at 27 states with limits on non-economic damages, including Texas.

No savings

Their conclusion – "Tort reforms have not led to health care cost savings for consumers" – was published in the December issue of Health Sciences Review.

"It's had a really small effect, or else it doesn't seem to change defensive medicine," said Michael Morrisey, a professor of health economics and health insurance and the director of the university's Lister Hill Center for Health Policy.

Families USA, a consumer advocate group in Washington, found health care premiums in Texas increased 86.8 percent from 2000 to 2007.

The cost of the average family health insurance policy went from $6,638 to $12,403.

Employees don't typically see all of this increase because employers pay most of the tab.

But with this sort of compensation cost soaring, wage increases have been going up far more slowly. Median earnings in Texas were up 15 percent from 2000 to 2007.

Medicare spending rose as well.

From 1992 to 2006, spending increased an average of 3.53 percent a year.

In Texas, Medicare spending went up 4.5 percent a year, while in Dallas it rose 5.25 percent.

"Tort reform is not a panacea for health care costs," said Morrisey.

Health economists following the reform debate say none of the other ideas for curbing health care inflation is a silver bullet, either.

But it's important to keep in mind who gains and who loses in the trade-offs that will be part of reform.

As Morrisey and his colleagues put it:

"The results of this study suggest that there are no insurance premium savings that accrue to consumers. Are there other benefits to consumers? If these cannot be identified, it is difficult to see a justification for the loss of legal rights."

Hazardous health plans Coverage gaps can leave you in big trouble
UNDERINSURED  Janice and Gary Clausen thought their insurance coverage was enough. Their six-figure medical debt says otherwise. 

Many people who believe they have adequate health insurance actually have coverage so riddled with loopholes, limits, exclusions, and gotchas that it won’t come close to covering their expenses if they fall seriously ill, a Consumer Reports investigation has found.

At issue are so-called individual plans that consumers get on their own when, say, they’ve been laid off from a job but are too young for Medicare or too "affluent" for Medicaid. An estimated 14,000 Americans a day lose their job-based coverage, and many might be considering individual insurance for the first time in their lives.

But increasingly, individual insurance is a nightmare for consumers: more costly than the equivalent job-based coverage, and for those in less-than-perfect health, unaffordable at best and unavailable at worst. Moreover, the lack of effective consumer protections in most states allows insurers to sell plans with "affordable" premiums whose skimpy coverage can leave people who get very sick with the added burden of ruinous medical debt.

Just ask Janice and Gary Clausen of Audubon, Iowa. They told us they purchased a United Healthcare limited benefit plan sold through AARP that cost about $500 a month after Janice lost her accountant job and her work-based coverage when the auto dealership that employed her closed in 2004.

"I didn’t think it sounded bad," Janice said. "I knew it would only cover $50,000 a year, but I didn’t realize how much everything would cost." The plan proved hopelessly inadequate after Gary received a diagnosis of colon cancer. His 14-month treatment, including surgery and chemotherapy, cost well over $200,000. Janice, 64, and Gary, 65, expect to be paying off medical debt for the rest of their lives.

For our investigation, we hired a national expert to help us evaluate a range of real policies from many states and interviewed Americans who bought those policies. We talked to insurance experts and regulators to learn more. Here is what we found:

• Heath insurance policies with gaping holes are offered by insurers ranging from small companies to brand-name carriers such as Aetna and United Healthcare. And in most states, regulators are not tasked with evaluating overall coverage.
  
  
• Disclosure requirements about coverage gaps are weak or nonexistent. So it’s difficult for consumers to figure out in advance what a policy does or doesn’t cover, compare plans, or estimate their out-of-pocket liability for a medical catastrophe. It doesn’t help that many people who have never been seriously ill might have no idea how expensive medical care can be.
  
  
• People of modest means in many states might have no good options for individual coverage. Plans with affordable premiums can leave them with crushing medical debt if they fall seriously ill, and plans with adequate coverage may have huge premiums.
  
  
• There are some clues to a bad policy that consumers can spot. We tell you what they are, and how to avoid them if possible.
  
  
• Even as policymakers debate a major overhaul of the health-care system, government officials can take steps now to improve the current market.

Fixing a Broken Health Care System

How the Mayo Clinic Improved Patient Care and Lowered Health Care Costs

Instead of consulting with their primary care doctors, many patients in this country who need medical care wind up in the emergency room. Renowned hospital undergoes overhaul to cut costs and improve patient care.

Even the famed Mayo Clinic in Rochester, Minn., which provides quality health insurance to 130,000 employees and their families, was shocked to discover how many of them approached their own routine medical care.

"We just use the urgent care and the ER for whatever our needs were," said Cindy Hageman, a Mayo Clinic employee who works as a technician in the dialysis unit. For some Mayo employees, the reason was simple: The ER was more convenient than going through the hassle of scheduling an appointment with a primary care doctor. But it came at a huge price -- both to Mayo, which was footing the bills -- and to patients, who were not getting the benefits of primary care, which include regular follow-ups and good preventive medicine.

"We consider if our patient goes to the emergency room, that's a failure of our system," said Dr. David Herman, Mayo Clinic medical director of employee health.

Mayo's problem, like that of many clinics around the country, was that it offered primary care using the old-fashioned model of office hours restricted to Monday through Friday, 9 a.m. to 5 p.m. Overhauling the system, the clinic took steps to make care more accessible and to control costs.

Mayo started by setting up one new department for the whole family -- combining pediatrics, family medicine and internal medicine under one primary care umbrella. They built six new family medicine centers, opened up an express care clinic in a shopping mall and started staffing physicians assistants and nurse practitioners on nights and weekends to see patients and field questions on a 24-hour phone service.

It's a model that other health care systems might want to follow.

"If we get the right person in the right office at the right time, we can help reduce the cost of care, provide quality and provide access and appropriately get referred to the right specialist," said Dr. Ted Epperly, primary care specialist and president of the American Academy of Family Physicians.

Mayo Clinic Makes Major Improvements

Mayo has been able to make these sweeping changes in care without increasing their insurance costs per patient for the past two years.

"We can take better care of patients. We can provide them better value," said Herman. "We can decrease health care costs."

Compared to the national average of employer health insurance costs, which increased from 5 to almost 8 percent from 2006 to 2008, according to the Henry J. Kaiser Family Foundation, Mayo is proving that quality care and affordability are not mutually exclusive.

After the overhaul, Hageman now prefers to go to her family doctor, Dr. Margaret Gill. Thanks to the flexibility of quick appointments she sees Gill instead of the visiting the ER . And Hageman is getting consistent care for chronic ailments such as seasonal allergies -- something she was missing in the emergency room.

For Deb Lange, a receptionist at the clinic, and her husband Dan, Gill not only coordinates Dan's treatment for colon cancer but sets up cancer screenings for other at-risk family members. Her relationship with the Lange family provides a sense of trust and ensures comprehensive care.

"It's just familiarity and continuity," Lange said on working with Gill. "You have somebody on your side."

A Health Plan for All and the Concerns It Raises

Representative Henry Waxman questioning President Obama during a health care forum. Congress is trying to address the problem of the nearly 50 million people without health insurance.

It is one of the most contentious health care proposals President Obama has floated: offer a federal, Medicare-like insurance plan to anyone, at any age. And let commercial insurers offer their private health plans alongside it.

“It gives consumers more choices, and it helps keep the private sector honest, because there’s some competition out there,” Mr. Obama said this month at a health care forum in Washington.

But the insurance industry and others wary of too much government intervention vehemently oppose the idea. They say the heavy hand of the government will eventually push out the private insurers, leaving the government option as the only option. That is why the industry seems unwilling to give ground on the issue, even while making other concessions to national health reform — like the industry’s announcement on Tuesday that it might be willing to stop charging sick people higher rates than healthy customers.

The debate is over how best to provide coverage to the nearly 50 million people in the United States who do not have health insurance, while also trying to rein in the nation’s galloping health care costs. While the details of a federal insurance plan remain vague, a central question is whether it would function like Medicare — wielding the government’s size and clout to essentially dictate the prices it pays for medical care.

If so, the government’s main advantage over the private sector would be to demand much lower prices from doctors and hospitals than private insurers are able to negotiate. It could then pass those savings along to consumers in much lower premiums than the private plans might be able to offer. Critics say such a system would eventually force private insurers out of business.

“There’s no way to run a side-by-side competition within the current structure,” said Karen Ignagni, the chief executive of America’s Health Insurance Plans, the industry’s trade association. If the unstated and eventual goal of the public plan is to push private insurers out of the way — a de facto nationalization of health care — “let’s have a debate on a government-run system,” Ms. Ignagni said.

The president’s idea has been supported by many in Congress, including Senator Max Baucus, the Democrat from Montana who is chairman of the Finance Committee and has proposed a similar kind of public option. But across the aisle, some legislators who are considered critical to achieving bipartisan support for health reform have voiced concerns.

“There’s a lot of us that feel that the public option, that the government is an unfair competitor,” Senator Charles E. Grassley, a Republican from Iowa who is influential on health issues, said at the president’s meeting.

Even Mr. Obama has acknowledged that those concerns are valid, and it is unclear how the government plan could be set up to give insurers a fair chance to compete.

The main selling point for a government-run program would be its low cost. It would have a much lower overhead than private plans, with no need to make a profit or spend money on marketing or brokers’ commissions. And, if allowed to flex its muscle, the government would buy medical care at much lower prices.

Bryan Dowd, a health policy expert at the University of Minnesota, is critical of private insurers but does not necessarily favor a government plan. He agrees that the private insurers will never be able to match the steep discounts the government can demand. “If discount-getting is all you do, a large public plan is always going to clean your clock,” he said.

But supporters of a public plan say that its low price would impose greater discipline on insurers by forcing them to keep costs in check and make their policies affordable — something they say commercial insurers have seemed especially unable to do in providing coverage to small businesses and individuals.

“It would transform the market for private insurance,” said Karen Davis, the president of the Commonwealth Fund, a health policy research group. She estimates the average premium for a family of four would run around $9,000 a year under a public plan, in contrast to nearly $11,000 for a typical private alternative. The savings to the nation’s health care bill over the next decade could run into the trillions of dollars, she said.

And many supporters say the government must be able to curb costs if it is going to expand coverage for people who are not poor enough to qualify for Medicaid but might still require some sort of subsidy to buy insurance. The only way to control costs, they say, is to engage the purchasing power of a Medicare-like system.

“The Medicare program is a real success story,” said Jacob S. Hacker, a professor at the University of California, Berkeley, who is a longtime advocate of a federal plan.

While private health insurance premiums increased an average of 7.3 percent annually from 1997 to 2006, Mr. Hacker said, Medicare spending per enrollee rose only 4.6 percent a year for the same benefits.

Private insurers will be able to compete with a federal plan, he said, by offering a wider range of benefits and being more flexible in how they work with doctors and hospitals. “A lot of people are going to want to be in a private plan,” he said.

But many hospital executives object strenuously to the idea of a new program that would behave like Medicare.

“Medicare has systematically been underpaying for services,” said Dr. Denis A. Cortese, the chief executive of the Mayo Clinic, the highly regarded health system in Minnesota. If more patients are enrolled in a Medicare-like program, he predicted, “your very best providers will go out of business” or stop seeing patients covered by the government plan.

Doctors also worry about being underpaid. Dr. Nancy H. Nielsen, president of the American Medical Association, issued a statement saying in part: “Advocates for a public plan need to put a concrete proposal on the table so we can evaluate the details. We have a long history of public programs that are not adequately funded, resulting in cuts to those who provide health care.”

No consensus has yet emerged over exactly how a federal plan might work. Some proponents envision an expansion of the current Medicare program to those younger than 65 — although with fewer government subsidies.

Others argue that an entirely new government program should be created. And some contend that the only way a public plan would be viewed as fair to private insurers would be if the government did not try to use its pricing power.

“The definition of what a public plan option is is all over the place,” said Amanda Austin, senior manager for legislative affairs for the National Federation of Independent Business, which represents the interests of small businesses. Her group prefers to work with private insurers, she said, but is withholding judgment on whether to support some variation of a public option until the proposal has been made clear.

Some policy experts say a compromise can be struck. They advocate a public plan that would be required to negotiate with doctors and hospitals on a level playing field with commercial insurers, rather than have the government set prices à la Medicare.

Because the public plan would still have much lower overhead costs, it would encourage private insurers to work harder for customers, said Len Nichols, a health economist at the New America Foundation, a public policy institute that advocates health care changes.

“It puts pressure on the private sector status quo,” he said, but avoids using “the nuclear weapon” of government price controls — which he thinks is so controversial that it could derail the discussion.

But some wonder if there is any point in having the government play the insurance game at all if it cannot use its full advantage. “It isn’t a public plan, so why have it?” said Stuart M. Butler, a policy analyst at the Heritage Foundation, a policy research organization that advocates limited government involvement in the marketplace.

Finding Affordable Health Care in Foreign Hospitals

Ben Schreiner and his wife, Pamela Schreiner, traveled to Costa Rica in search of lower cost and better care for Mr. Schreiner's hernia surgery.

By WALECIA KONRAD

WHEN Ben Schreiner, a 62-year-old retired Bank of America executive, found out last year he would need surgery for a double hernia, he started evaluating possible doctors and hospitals. But he didn’t look into the medical center in his hometown of Camden, S.C., or the bigger hospitals in nearby Columbia. Instead, his search led him to consider surgery in such far-flung places as Ireland, Thailand and Turkey.

Ultimately he decided on San José, Costa Rica, where just a week or so after the outpatient procedure and initial recovery, he and his wife were sightseeing throughout the country, then relaxing at a lush resort on Costa Rica’s Pacific Coast. He was home four weeks later, with no complications.

Mr. Schreiner is what’s known in the health care world as a “medical tourist.” No longer covered under his former employer’s health insurance and too young to qualify for Medicare, Mr. Schreiner has a private health insurance policy with a steep $10,000 deductible. Not wanting to spend all of that on the $14,000 his operation would have cost stateside, he paid only $3,900 in hospital and doctor’s bills in Costa Rica.

“I didn’t have to fork over my entire deductible,” Mr. Schreiner said. “What’s more, they bent over backwards there to take care of me — no waiting, a friendly staff, everyone spoke English. “

At least 85,000 Americans choose to travel abroad for medical procedures each year, according to a recent report by the consulting firm McKinsey & Company. Treatment includes dental implants, hip and knee replacements, heart valve replacements and bypass surgery. The cost of surgery performed overseas can be as little as 20 percent of the price of the same procedure in the United States, according to a recent report by the American Medical Association.

Medical tourism is expected to expand quickly in the coming years because of rising health care costs in the United States, the increasing availability of international facilities with United States accreditation, and the fact that American insurers and employers are beginning to embrace the practice.

Blue Cross Blue Shield of South Carolina, for example, has started a subsidiary company, Companion Global Healthcare, to offer medical tourism services to individuals and businesses. Hannaford supermarkets in Maine recently added an international option for hip replacements to its health care plan, administered through Aetna.

At the moment, however, the bulk of medical tourism candidates are uninsured and underinsured individuals paying their own bills and looking for low-cost alternatives to American care. Medical tourism advocates argue that the quality of care overseas is often equal to or better than that of the United States. Many countries have high success rates, American-trained English-speaking doctors and the newest facilities, which are often built specifically to attract foreign patients.

But so far there are no comprehensive data that adequately compare overseas surgical outcomes or other quality measures to those used in the United States, said Dr. Sharon Kleefield of the Harvard Medical School and an expert on overseas health care quality measures.

“No matter how high your hospital is rated, there are issues with regard to quality and safety when you travel for medical treatment,” she said.

The American Medical Association, also worried about the risks associated with overseas medical travel and the difficulty in getting adequate follow-up care, issued guidelines on medical tourism last June.

With those cautions in mind, here’s what you need to know if you are considering an international medical option:

Determine whether you are a good candidate. “Traveling for surgery is a big deal,” said Josef Woodman, author of “Patients Beyond Borders: Everybody’s Guide to Affordable World-Class Medical Tourism.” Recovery time is often compressed, and a long flight home can cause complications like a blood clot. You’ll need to provide a thorough health history and have a physical stateside before you go to make sure you can withstand the trip.

Mr. Woodman also points out that not every condition should be treated overseas. “Orthopedic and nonemergency heart procedures have some of the highest success rates,” he said. “But with something like cancer, you need the ongoing relationship with your oncologist and health care team.”

Get a reliable middleman. Dozens of medical tourism facilitators and planners have sprung up in the past decade hoping to capitalize on the growing trend and simplify the process for consumers. “Unfortunately, plenty of unreliable firms have sprung up, too,” said Jonathan Edelheit, president of the Medical Tourism Association, a nonprofit organization made up of hospitals and facilitators that cater to traveling patients. .

Good firms, said Mr. Edelheit, will match your medical needs with the best overseas hospitals and physicians; make your travel, lodging, visa and local transportation arrangements; handle billing; and help arrange follow-up care when you return. Once you narrow down your search, ask each potential firm for references and former patients you can interview.

Check out quality yourself. Although medical tourism firms will say they work only with the highest quality international hospitals and physicians, you’ll still need to check the records for yourself. Don’t be swayed by the luxurious private hospital rooms, gourmet food and other amenities splashed on the Web sites. You want to be sure you’re going to a hospital accredited by the Joint Commission, the organization that reviews both American and international medical and dental facilities, using United State standards.

Be sure to read carefully, a commission spokeswoman, Elizabeth Zhani, warned. You may find a facility’s name on the accreditation list, but it may be that only an affiliated lab or ambulatory clinic is accredited, not the entire facility.

“Keep in mind that commission accreditation is the floor, not the ceiling,” said Dr. Kleefield. You’ll want to ask your own questions about the facility’s blood safety, medication safety, infection rates and unexpected morbidity rates for the procedure you’re undergoing, and discuss the data with your American doctor.

Just as you would in the United States, you’ll want to interview the physician handling your case before you arrive. Ask if he or she was trained in the United States and fluent in English, how often he or she has done the procedure you’re traveling for, and what the long-term outcomes have been. Conducting this interview on the phone or via e-mail beforehand will also help you establish a rapport with your doctor before you go under the knife.

Arrange your follow-up care in advance. “The biggest stumbling block with medical travel is getting care when you return,” said David Boucher, chief executive of Companion Global. Doctors will often balk at treating complications from an overseas surgery because they are unfamiliar with the procedures or prosthetics used or they are worried about liability.

Meet with your general practitioner and any specialist who may have been treating you before you go, said Dr. Ted Epperly, the president of the American Academy of Family Physicians: “They’ll be able to provide your medical records, either electronically or on paper, to your overseas doctors.”

Give your doctors in the United States specific details on where you are going for your procedure and contact information for your overseas doctors. And be sure to ask what medical records and information you need to bring home to complete your care.

Finally, before you leave, do your best to arrange a phone or e-mail conference between your doctors at home and abroad so communication will be established before a problem arises.

How to shop for health insurance

(CNN) -- After his sister nagged him for eight years to go to the doctor, Kurt Berger finally had a physical late last year. Then in January, he received a phone call from his doctor: Tests showed he had prostate cancer.

Short-term health insurance policies can be tricky to navigate, according to some experts.

He feared he was going to die. "I just put the phone down and went in my bedroom and started to cry," says Berger, 58. But he felt some relief that at least he had health insurance. Since Berger doesn't receive insurance through his job as a maintenance worker at a church in Baltimore, Maryland, he'd purchased a policy on his own.

"I thought at $76 a month, this is pretty good," Berger remembers. But now, weaknesses in the policy are beginning to emerge. For example, he just found out his insurance policy doesn't cover his radiation treatments, so he's using his savings to pay for them.

As Berger learned, picking out a good health insurance policy by yourself can be a daunting task. "When you are buying coverage on your own, you are walking through a minefield," says Karen Pollitz, project director of Georgetown University's Health Policy Institute. In order to understand the fine print, "you would need a lawyer sitting next to you.

As the economy worsens, more consumers find themselves walking through this minefield. In the past four months, 2.6 million jobs have evaporated, and analysts say half these people also lost their employer-sponsored health insurance.

So when you're out there shopping for insurance, how do you discern a good policy from a bad one? It can be very difficult, experts say. "I'm a 35-year veteran in insurance, and I still don't understand it," says Rex Bowden Sr., of Global Insurance Consultants. "It's fluid. Sometimes what you think it means, it may not mean."

To get started, you can look at ratings of health care plans by the National Committee for Quality Assurance, which, in conjunction with U.S. News & World Report, also puts out a list of the best commercial health plans.

You can also look at insurance guidance from America's Health Insurance Plans, Families USA and the Patient Advocate Foundation. For help in understanding insurance terms, consult this glossary from the NCQA, or this glossary from the state of New York.

On eHealthInsurance.com you can compare the basics of a variety of plans. While you're doing that, here are five crucial questions experts say you should always ask.

1. How much are my premiums and will they change?

Make sure you get the premiums in writing -- and find out how long you'll be paying that particular rate. Sometimes the rate you're quoted won't last long.

"Think of it like a credit card. Sometimes you get a nice, low introductory rate, then after a year, the rate skyrockets," says Steve Luptak, the executive director of Healthcare Advocacy.

2. What are my deductibles and co-pays?

Know what you're paying for. A deductible is how much you have to pay out of your own pocket each year before insurance kicks in. Even after you've met your deductible, you'll likely still have to fork over a co-pay whenever you see the doctor, get a procedure, or go to the hospital. For example, you might have to pay $25 for an office visit, or $50 for a hospital stay. Visit CNNhealth.com, your connection for better living

3. Is the insurance company licensed in my state?

Fraud happens, Luptak says. "Will the company be in business when you need it, or is it 'Shifting Sands Mutual'? "

According to government reports, both employers and individuals are vulnerable to unauthorized or bogus health insurance sales. In a 2003 Government Accountability Office report, there were at least 144 companies identified for selling fake coverage to more than 200,000 policyholders -- leaving a at least $252 million in unpaid medical claims.

To make sure the company you're about to send your money to is legit, go to the National Association of Insurance Commissioner's Web site and find state-by-state complaint and financial information about specific insurers. NAIC also has a list of licensed insurance companies.

Experts also recommend checking out whether the insurance company is financially secure. "There's nothing worse than getting insured only to find out they're going out of business," Bowden says. You can research the credit rating of a company for free on the Web sites A.M. Best or Standard and Poor's.

4. Am I buying a short-term or a long-term plan?

In a recent Time article, the magazine's national political correspondent Karen Tumulty wrote about her brother's struggle with an insurance company that refused to pay for his treatments for kidney disease. The problem: For six years, without realizing it, he'd purchased a series of six-month insurance policies rather than one long-term policy.

"Each successive policy treated him as a brand-new customer, " Tumulty explained in her article. "In looking back over Pat's medical records, the company noticed test results from December, eight months earlier. Though Pat's doctors didn't determine the precise cause of the problem until the following July, his kidney disease was nonetheless judged a "pre-existing condition" -- meaning his insurance wouldn't cover it, since he was now under a different six-month policy from the one he had when he got those first tests."

Health Library

• MayoClinic.com: Health A-Z

The solution: Be wary of short-term policies.

"Don't buy them," says Pollitz, project director of Georgetown University's Health Policy Institute. "If you get sick, they are going take your coverage away."

5. Should I consider going with COBRA?

If you're voluntarily or involuntarily laid off from your job, or if you experience a large reduction in work hours, you may be eligible for COBRA, a program that allows you to keep your employer's insurance. But there's one catch: You have to pay the premium in its entirety, which can sometimes be upwards of $1,000 per month.

Under the new stimulus plan recently passed by Congress, people who involuntarily lost their jobs can have the government pay 65 percent of their COBRA costs. There are several rules, including that you have to be laid off between September 1, 2008, and December 31, 2009, and your company still has to be offering health insurance to its employees.

For information on the new COBRA rules, go the Department of Labor's Web site. The Families USA guide mentioned above also has COBRA information.

And here's one rule to remember when you're shopping for health insurance: If it sounds too good to be true, it probably is. "In general, if you find cheap health insurance, there is probably a reason why," Pollitz says.

Berger says he learned that the hard way, as his initial satisfaction with his $76 a month insurance has turned into frustration. He's currently applying for charity care to help pay for his cancer treatment, and praying the out-of-pocket expenses won't destroy his savings.

CNN's Jennifer Pifer Bixler and Sabriya Rice

Tough Questions Dog Health-Care Overhaul

By LAURA MECKLER

WASHINGTON -- President Barack Obama launches his ambitious health-care effort with considerable agreement among diverse interests about the need for fundamental changes. But behind that broad consensus lie several tough questions that won't easily be resolved.

The White House is declining to stake out a position on most of these questions, though Mr. Obama took stands on them during the campaign. He hopes to work with Congress to find consensus -- a tall order, given that several of his predecessors failed in their efforts to overhaul the health-care system.

President Obama picked Kathleen Sebelius, center, for health and human services secretary, and Nancy-Ann DeParle, right, as his health czar.

Looking to move the process forward, the president on Monday nominated Kansas Gov. Kathleen Sebelius as secretary of health and human services. He also picked a new chief for his White House office on health reform: Nancy-Ann DeParle, a health-policy expert who served in the Clinton administration and now works for a private-equity firm. Ms. DeParle has also served on several corporate and nonprofit boards.

On Thursday, Mr. Obama will host a summit on health-care issues where a variety of stakeholders will come together with members of Congress.

Business, labor and consumer groups, as well as much of the health industry, have all said they want to see changes to the country's health-care system, both to reduce costs and to extend coverage to the 45 million people in the U.S. without health insurance.

But big differences exist between Republicans and Democrats over the approach, with Democrats favoring more government involvement and Republicans preferring market-oriented solutions.

During his presidential campaign, Mr. Obama proposed a system in which people could buy insurance through a government-organized marketplace, where private plans and a new government-run plan would compete. Subsidies would be available to many based on income.

But his vision prompts many tricky questions, among them:

Should large businesses be required to offer workers coverage?

Most big companies already offer coverage, so this might not seem like an onerous requirement. But the issue is more complicated.

If the government were to require businesses to offer insurance, it would have to set a standard for what counts as insurance. Would a bare-bones plan with limited coverage qualify? Businesses and others would likely wince at the idea of government setting standards for the benefits they must offer.

President Barack Obama taps Kansas Gov. Kathleen Sebelius as head of the Department of Health and Human Services who will look to overhaul a broken health-care system. Video courtesy of Fox News.

During his campaign, Mr. Obama proposed that large businesses be required to offer coverage or pay into a fund, while small businesses that offer coverage would get a tax credit.

Should individuals be required to buy insurance?

Many experts believe that in order to cover all Americans, there must be a mandate that people obtain insurance. Otherwise, some -- for instance, young, healthy people -- wouldn't bother. During the presidential campaign, Mr. Obama rejected that notion, saying people would buy insurance on their own if the cost came down.

At the same time, Mr. Obama and many Democrats want new rules that prohibit insurance companies from rejecting people who are already sick, or from charging them more. The industry argues that it can't be expected to accept many expensive new customers without also getting the business offered by new healthy, cheap-to-insure customers.

If the government were to require individuals to purchase insurance, it would have to make sure there is money to pay for subsidies for those who can't afford to pay the full cost on their own.

Should a public plan be created to compete with private insurers?

Many Democrats insist that there be a public option. Some say it would provide a test for whether Americans prefer a government-run system similar to what exists in Canada. But opponents say it would skew the playing field because government will always be able to undercut private insurers' prices.

How to pay for it all?

Mr. Obama has been vague about how the country's future health-care system should be structured, but he was detailed last week about how to pay for it. He proposed raising $634 billion over 10 years through tax increases on the wealthy and cuts to existing government health-care spending. Each of those provisions is likely to be controversial, and more funding will be needed if the government is to provide subsidies to all Americans who need them. Estimates put the full cost of Mr. Obama's health plan at more than $1 trillion over 10 years.

3 Biggest Health Insurance Myths

Posted February 24, 2009

Insurance often feels like a waste of money or a "hedge your bets" gamble that something bad will happen. While there may be a thousand ways to spend your hard earned cash, going without health insurance can be the costliest gamble you'll ever make. The law forces us to purchase car insurance, but health insurance is voluntary. Health insurance, however, protects our most valuable asset, our health. The question is, what is the best way to protect your most valuable asset?

Myth #1: It is always better to have employer-sponsored health insurance.
Traditionally, the majority of Americans receive health insurance through their employer. Including health benefits with a compensation package has always made sense because large groups can negotiate better prices than individuals, right? Well, maybe not. The cost of employer-sponsored coverage has been steadily increasing and employers are faced with fewer options. This is great for individuals with chronic medical conditions, but it means higher out-of-pocket costs for all employees, even the healthy ones who never go to the doctor. Due to double-digit increases in health care premiums [1], employers are facing a tough choice; either pass the costs onto employees or reduce benefit levels. Many employees have noticed copays and prescription drug costs increasing while simultaneously contributing more and more to cover themselves and their families. It can definitely feel like a waste of money if you hardly use your insurance, so why not look for a plan that meets your specific needs rather than overpaying for a group policy that includes coverage you wont use?

Myth #2: Health insurance is too expensive to buy on your own.
By identifying your medical needs, you can determine the level of coverage you should have need. Once you've determined how your health care money should be spent, you can comparison shop for plans from a variety of carriers. Employer sponsored insurance can be a pretty good deal for the employee, but the dependents tend to pay much more for that coverage. For most people, it has become a habit to periodically check on car insurance rates. Health insurance should be viewed the same way. You have to have it, but why spend more than you need to? By identifying your medical needs, you can decide if a more affordable plan is right for you. It makes sense to save the money you would have spent on high premiums to cover necessary medical expenses until your deductible is reached. If you never have medical expenses, that savings is just money in the bank! As health insurance costs continue to rise, you can save money by spending a few minutes researching insurance rates. You could be in for a surprise if you're overpaying for health insurance you don't use.

Myth #3: Health insurance is a waste of money for the young and healthy.
It is true that different people need different levels of insurance. It does not make sense to pay for prescription drug coverage or maternity benefits if you know you don't need it. A surprising number of people are paying for insurance benefits they don't need. Health insurance should be viewed like car insurance. Would you pay a high premium to insure a car that isn't worth very much money? Of course not! So why do people pay for "Cadillac" health insurance when all they really need is financial protection in case they get seriously injured? There are options. Younger and healthier people may benefit more from a low cost health plan with a high deductible. Emergency room services are extremely expensive and it makes sense to protect yourself from the financial havoc that can result from injuries beyond your control. For many people, the only reason to have health insurance is financial protection. Clearly, if you're in a car accident or injured while snowboarding or white water rafting or hiking, you are going to want medical attention. Don't let unexpected injuries from your favorite activities cost you your financial security; get the insurance you need to protect your future.

[1] "Employer Health Benefits 2004," Kaiser Family Foundation and Health Research and Education Trust, released September 9, 2004.

Copyright © 2009 eHealthInsurance Services, Inc.