Thursday, July 19, 2007

Critics Continue to Reach for Arguments Against Healthy WI

If the critiques of it are any indication, Healthy Wisconsin (HW) must be one good fundamental health care plan.

Initially there were the critiques that came up short trying to attack the way the HW was structured. Now they're developing into shots at what might happen if the plan was instituted.

According to a number of conservatives in the past few days (here, here, and here), the HW plan will result in a tide of out-of-state people looking to scam the system by getting menial jobs just to meet the minimum requirements for insurance under the HW.

Christian Schneider sums up the conservative position with a question and warning:
Why would any poor person in Illinois or Minnesota with a serious illness not immediately pick up, move to Wisconsin, and get a job at Dairy Queen? How hard can it be to claim you’re “self employed” or work for a farm? OB/GYNs could be flooded with out of state pregnant women seeking free care, as they are immediately eligible.
To be honest, I'm surprised the flood of OB/GYNs out of the state hasn't already happened considering pregnant women under 185 percent of the FPL can already get free coverage through the state's Medicaid or BadgerCare programs.

And that's where the conservative charge falls woefully short. Since BadgerCare already picks up the health care tab for all low income families with kids, yet without a flood of them into the state, that really leaves childless adults as the big concern.

Of course, if a low income childless adult from Illinois or Minnesota wanted to come here now and get care without even getting a job, they could always move to Milwaukee County and wait 180 days to qualify for GAMP (and if you do land that gig at Dairy Queen, just make sure it doesn't pay you more than $902 per month). I'm sure there are a number of other medical programs out there for low income people in other areas of the state.

And even if the HW plan is scrapped, our concerns over a flood of poor childless adult scammers at our borders isn't over since it's really Doyle's BadgerCare Plus plan -- which is incorporated into the HW plan -- that's the driver of universal health care. It would get us up to 98 percent insured by increasing the current BadgerCare FPL maximums and extending care to, you guessed it, childless adults up to 200 percent of the FPL! Dairy Queen managers across the state aren't going to know what to do with all of those applications.

I don't mean to be glib about this, but I'm having a tough time putting a lot of stock in this argument.

Once you widdle down the population of potential flooders to sick and poor childless adults with the means to move across state lines -- a population that becomes virtually non-existent under BadgerCare Plus -- it appears to be quite a logical leap to frame this as a significant issue that could bankrupt the system. Add to that the somewhat obvious fact that health coverage is only one of many factors that could prompt someone to move across state lines, even if they have the economic ability to do so, which is why thousands of uninsured people remain in states with less generous Medicaid programs when they could move to another state and get covered.

Another argument against HW that is less of a logical leap, yet equally as unconvincing, is coming from a recent press release by Senate Minority Leader Scott Fitzgerald (R-Juneau) who is now dubbing the employee payroll assessment as the "Success Tax." As Fitzgerald sees it, "The $15.2 billion government-run health care plan included in the state budget by Senate Democrats would punish Wisconsin workers every time they received a pay raise or a promotion by forcing them to pay more for the same health care coverage."

It's true that as a flat tax on social security wages, the employee assessment would increase with any raise as long as the total salary remains under $97,500. This is no different than how the income tax works -- except the employee assessment is flat and has a cap -- which comprises the bulk of GPR dollars that go to fund all sorts of services that remain the same for people regardless of their earnings, including public education. Does that mean UW tuition should be income-rated so that wealthier residents pay less in tuition because they pay more in taxes?

A raise is still going to be a raise under the HW plan, and no one is going to mistake it for a bad thing because they'll pay more under the flat employee assessment.

In the end, I just can't believe these are some of the discussions we're having about the prospect of fundamental health care reform. It could be that HW is just that good of a plan, but I think the more likely culprit is that while conservatives will recognize health care as a significant problem, conservative ideology just doesn't allow them to offer a significant solution.

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20 Comments:

Anonymous Anonymous said...

First off, the helathy WI plan is getting a free ride in the media because they don't think it is a serious proposal. After all, they slid it in the budget, no current actuarial study, the Gov hates it and the Assembly Dems want no part of it except Richards.

So the media are not even researching the thing. We'll see how it plays out at conference committee, but with Doyle not wnating it, it doesn't stand a chance.

This is not about conservative ideaology, it is about reality. When you shift billions of dollars out of the private economy and run it through Madison, the average person is very leary. The marketing of the plan by the Dems has been decent, but the longer it is out there, the more it smells.

16 unelected people get to not only levy more taxes than the legislature, but can hire as many people as they want and pay them any salary they see fit - no limitations. I wonder how bloated that will become?

If the media finally start to take this seriously, the plan will be exposed for the silly campaign fodder that it is. This is not a serious policy proposal.

July 19, 2007  
Blogger Seth Zlotocha said...

You're right that Healthy WI doesn't have a serious chance at passing this legislative session, Anon, but you're completely wrong about it not being a serious proposal.

The Healthy WI plan is a combination of three Dem plans that were brought before the public at countless hearings this past spring. And now Dems are starting to hold public meetings on it this summer. Tossing it into the budget was a questionable move that was aimed at getting it exposure, which worked. Even when it's scrapped during this budget session, the push for it will continue.

The line that nothing substantive has been waged against it because the media just isn't looking at it seriously is crap. The media has done a wide number of articles on the plan, and conservatives have gone after it on numerous occasions, each one falling short.

Your line about shifting $15 billion out of private industry to Madison is a case in point of one of the false lines trumpeted by conservatives. This plan involves private payers and private providers -- that $15 billion is going to them, just like it is now. Well, actually it's $17 billion that's going to them now -- the HW plan would represent an estimated $1.3 billion cut in health care spending in the first year alone.

And that 16 member board you're so concerned about running amok is constrained by the limits set upon it by the legislature. To claim the board has the ability to levy more revenue than the legislature is a red herring since the board's authority to do so comes from the legislature, and if it wants to raise more than what's currently authorized it must get approval from the legislature.

And if this isn't about conservative ideology, explain why conservatives admit health care is a major problem, yet they can't come up with any solutions beyond making HSAs state tax deductible (which, I should add, has solved nothing in other states).

July 19, 2007  
Anonymous Sven said...

the average person is very leary

Average Person is Area Man's brother-in-law, doncha know.

July 19, 2007  
Anonymous Anonymous said...

The 16 member board has the authroity to levy up to 16% of all payroll taxes in the state. That is more money than the legislature has the authority to levy. The legislature does not have the ability to reduce that number - just give authority to raise it above 16%.

And all of that money does not stay in the provate sector. It is a tax. The governemnt collects it and distributes it back to the private sector. Once billions in new money start to flow through Madison, it will get siphend off for other spending. There is nothing in Healthy WI that would prevent such distribution.

And because it is a tax, it carries with it all the burdens that can be put on it - meaning - you pay the tax or you go to jail.

Additionally, since the AARP power point presentation is NOT an acutarial study on Healthy WI, the numbers you are quoting are based on nothing. There will be no cost savings with this plan and you have no credible documentation to prove it.

July 19, 2007  
Anonymous Sven said...

Yeth. Unlike the guvmint, the private thector alwayth has your betht interest at heart and ith mothst effithient with your health care dollar.

July 19, 2007  
Blogger Seth Zlotocha said...

As I said, Anon, the HW plan limits how much the board can levy -- up to 12 percent from employers and up to 4 percent from employees. If the board wants to raise more than those percentages, it needs to go through the legislature. (And the legislature could reduce it if it wanted -- all it needs to do is change the law -- but it's unlikely it could and still afford a reasonable level of coverage.)

Your worry that the legislature will siphon off money from the HW trust fund is another baseless critique about what just might happen under the HW, similar to the claims about sick poor people flooding the borders. It's convenient because, while you can't prove it will happen, others can't prove it won't. But, according to the legislation, there must be enough in the fund to pay the full cost of the lowest cost network in each region for every participant in the plan. And any siphoning by the legislature/governor during the budget process -- in addition to potentially violating the law by leaving it underfunded -- would be splashed all over the front pages, and there's just no way it would fly (people would care a little more about their health care fund than the transportation fund).

And the Lewin Group absolutely analyzed the Healthy WI plan -- it says so right in the citations of the AARP powerpoint, and their company logo is on every page. Do you really think Lewin would let that happen if they never reviewed the plan?

July 19, 2007  
Blogger Jack Lohman said...

Seth, there are serious faults in the above arguments. Dairy Queen or not, there is a 12 month residency requirement. But suppose they flock in from everywhere… can you imagine the housing boom that would develop? And the rest of our economy?

And the OBGYNs are not flocking out of the state because, if I'm not mistaken, they can still decline to treat those underpaying patients.

And the lambasting by Sen. Scott Fitzgerald, I wondered why until I looked at his campaign contributions…. Duh….


Health Professionals $46,445.00
Health Services/Institutions $19,125.00
Insurance $15,650.00
Labor Unions $1,140.00

Conveniently Fitzgerald omits that the $15.2 billion of taxes on wages will be offset by the 15% of wages in insurance premiums the employer will no longer pay. But wait, as I look at his campaign contributions I now understand the omission. Sorry Scott.

You are right Seth. The $15 billion replaces the $17 billion currently being spent. That's a $2 billion gain in my book. Apparently conservatives don't have calculators.

Fitzgerald and other opponents are flat wrong. Over 13,000 jobs will be created, according to a Families USA study. Other estimates have the number of jobs created as far higher.

And Seth, it is not conservative ideology that doesn't allow them to offer a significant solution. It is the campaign contributions they pocket from an insurance industry that likes the status quo. Our politicians should be ashamed that they are pocketing the cash and blocking reform. But they still seem to sleep at night.

July 19, 2007  
Anonymous Anonymous said...

"Your worry that the legislature will siphon off money from the HW trust fund is another baseless critique about what just might happen under the HW..."

Which is why you have public hearings on the actual legislation and not a conglomerate of plans. These details that you so easily cast off are the types of things that need to be addressed, but since it was rammed through in 24 hours - they were not.

And as for SVEN...doesn't the high-minded superiority ever get old? Being fearful of government and all of its trappings does mean my IQ is inherently lower than yours. It makes you feel better to think so because it enables you to discount anti-government arguments as coming from idiots and therefore not worth responding to. The ivory tower is a merely a place to avoid the actual arguments.

July 20, 2007  
Anonymous Anonymous said...

I am not an expert here, but I know that where I live in So. Eastern Wisconsin, many of the clinics and hospitals have people on BadgerCare and Medicaid that are originally from Northern Illinois now. In fact, I know Aurora started to turn away Medicaid patients at some of their clinics. So, under HW their will be many more patients to the mix. I have to wait to see my Primary care Doctor now, how is it going to be under this new program?

Seth, just because you do not agree with what some conservatives ( I am a moderate by the way) say does not mean that they are wrong. Dont act like a typical liberal. Also, dont give me that crap about political contributions, since I never hear it when the WEAC or the trial lawyers contribute money. But I guess that is okay, because it is for progressive causes. Why no tort reform with this plan for the medical community?

This is a proposal that will change health care in Wisconsin and many people are nervous about it. I know my family doctor is. His reimbursements have been cut by medicare and medicaid to the point that he is considering early retirement. Now we will have a government body, or trust deciding how much will be paid to the health care providers. At least with the insurance companies, a doctor can refuse to accept patients carrying that insurance. Under this plan, where is the choice. What if a doctor does not like the reimbursement rate?

We should be playing the what if games and discussing all of the potential unintended consequences.

Regarding the taxes, I agree with conservatives on this. Why if I am some one who is healthy should have to pay more just because I make more than some one who makes less and is unhealthy? A person who has an unhealty lifestyle and has more health risks should pay more. This is how auto insurance works.

This is just another entitlement program. You can pull out all of studies done by the Lewin Group, etc. But, tell me one large Government program that has not had cost overruns? Medicare is in trouble, education is always wanting more money.

July 20, 2007  
Blogger Jack Lohman said...

When WEAC or the trial lawyers or the unions give political cash, it is no better or worse than when WMC or the Right to Life groups give cash. It is political corruption in either case, and more politicians should go to jail because of it. But fundraising has been mastered more by the R's than the D's, and the (mostly R's but some D's) have blocked reform for years.

Of course a national Medicare-for-all plan would eliminate the argument used that people will come from other states, but then they'll argue that they'll come from other countries. Anything to avoid doing the right thing here. I'm also a moderate Republican, and voted for Bush twice. Regrettably, I admit. But this is not a liberal or conservative issue, it is an issue of humanity and good economic sense. When you have a systemic problem that drains 31% of the costs, you have to change that system. An in this case it means getting rid of "insurance" and instead providing "care." And though I have investments in the insurance industry, I know they'll find other places to make their money.

But you are absolutely right on tort reform. While that bureaucracy adds about 5% to overall costs, that system should be replaced by 3-judge medical courts and the "punitive" damages should go into the help fund the health care system rather than plaintiffs and attorneys that have already received economic damages.

As for doctors that may not like the rates (even when fair), they should become CEOs.

To put this as briefly as I can, Medicare is the most efficient health care delivery system we have out there, given that they almost exclusively treat seniors and end-of-lifers the private companies will not take. Fold in 100% of the population and the average will be less that it is today. Please see: http://www.businesscoalition.net/The%20high%20costs%20of%20medicine.pdf

July 20, 2007  
Blogger Dad29 said...

the employee assessment would increase with any raise as long as the total salary remains under $97,500. This is no different than how the income tax works

Huh? That's not quite true, Seth. The Income Tax has deductions and credits.

More accurate to say that 'this is no different from the way the SS tax works.'

July 20, 2007  
Anonymous Anonymous said...

Jack

I guess you have all of the answers then. By the way, what is fair reimbursement or compensation in your expert opinion? Why dont we just have the government take over everything, then we would not have any admin or marketing costs.

Your ideas are really out there. I guess when Doctors say screw this all of you know it alls will know how to fix it

July 20, 2007  
Blogger Seth Zlotocha said...

Anon 1,

The public hearings that are coming up in the next few weeks are on Healthy WI. As I said way above, adding the plan to the budget was a questionable move that was about publicity -- no one expected it to pass. But once it gets removed from the budget, which it will, Dems will keep pushing it and conservatives are going to need to come up with other ways to justify why it's not worth passing that don't hinge on its admittedly hasty introduction.

Anon 2,

I didn't just say conservatives are wrong because I disagree with them -- I gave clear evidence to support my position. I always have done that, so don't toss out that "typical liberal" garbage (as if lazy, uninformed arguments have a political ideology).

And I don't doubt there are some people who originally lived in Illiois (or Minnesota, or Iowa, or Michigan, etc.) who live in Wisconsin now and are under Medicaid. It's a totally different thing to say those people moved here solely to get access to health care, and that the numbers doing that are high enough to constitute a significant problem.

Based on the simple fact that the states with the least generous Medicaid programs tend to have the highest population of uninsureds, I would argue that the bulk of uninsured people who could get coverage if they moved to another more generous state don't for all sorts of reasons (no money, family connections in home state, job, community ties, fear of moving alone, etc.). Take Texas, for instance, which has the highest uninsured rate in the country at 24%. While children can get coverage up to 133% of the FPL if under 5 years old and up to 100% for 6-18 year olds, parents can't get coverage unless they're on TANF (which means they're making under 14% of the FPL). All those parents between that point and 185% of the FPL could move to Wisconsin -- or a number of other states offering more generous Medicaid benefits; Louisiana would be the closest -- today and get coverage for the entire family, yet the vast majority stay put in Texas. That's why I argue that the claim WI would be flooded with sick poor people under Healthy WI is bogus, not because it came from a conservative.

A good assessment of Medicaid programs, including eligibility, state-by-state can be found here.

Dad29,

You pay more in income taxes as your income goes up. You pay more in the employee assessment as your wages go up. So both taxes meet Fitzgerald's definition of a "success tax." How is that confusing or not quite true?

July 20, 2007  
Anonymous Anonymous said...

Jack:

I read the article that you linked to and I must admit some of the your ideas looked good. However, the WH plan seems to be purely political appointed by the Governor. My hang ups with this plan is that 1. Illegal Aliens will be covered. 2. Doctors will have their fees dictated to them by a political board. I am not a doctor and I do not know any, except for my own, and I feel that they should be well paid, well over $200,000. Nurses should be well paid also.
3. If the Docs are not well paid they will leave Wisconsin or retire.
4. Where is the patient responsibility.
5. Why is it based totally on ability to pay?

I have many other concerns also. This plan was introducted at the last minute by the Senate Democrats without any real public debate. In fact according to K. Carpenter's blog, some Democratic senators who voted for it do not even know the details of the plan. That is really sad.

July 20, 2007  
Blogger Seth Zlotocha said...

Anon,

I'll just reponsd to a couple of your points.

First, doctor fees wouldn't be determined by a political board under the HW. Private insurers would negotiate benefits with private providers and submit plan bids to the HW board. The lowest cost bids would become the lowest cost networks, and the higher cost bids would become the highest cost networks. This is virtually the same way it works under the state health plan today, and I've never heard of any docs complaining about getting short-changed under it. In fact, the Lewin Group has estimated (page 10) that the HW plan would increase provider reimbursements by $110, mostly driven by a $421 million drop in uncompensated care since virtually everyone would now have insurance.

Second, the patient responsibility comes in the form of cost-sharing. I wish the WHP cost-sharing plan for a partially state-funded HSA was included in the HW plan (I know Jack disagrees with me on that), and maybe that will happen at some point, but the cost sharing that does exist in the HW plan is significant. For starters, there's the $300-$600 deductible for non-preventive adult care, and there's also co-pays and co-insurances that could bring total out-of-pocket expenses up to $2000 a year. This also gets at your point about ability to pay; while the assessment is based on ability to pay, cost-sharing is not. Some would say that's good, others could argue it's bad. To me, mixing assessments determined by ability to pay with cost sharing that's equal for everyone -- while not being too much to essentially deny anyone care -- is a good route to go.

July 20, 2007  
Blogger Jack Lohman said...

Thanks for taking the time on the article, Anon, and your reasoned concerns.

1) Yes, illegal aliens will be covered and I believe that as long as they are in our country they should be. Their employers will be paying 10.5% on their wages and they another 4%. So they deserve the care they are paying for. That said, the illegal alien issue must be dealt with, but not by denying them care. But don't discount what they are already costing us when they show up at the emergency room. The difference is not that great.

2, 3) I don't know how much "dictating" of fees will go on. My recommendation would be that they use the already-established Medicare fee schedule, which in most cases is fair and in all cases guaranteed. But I do believe the board can adjust, and they will be sensitive to the possibility that if doctors are screwed over they will lose them. Frankly, if I were a doctor I'd be more concerned that the CEOs and shareholders are moving things toward managed care, which will surely negatively impact physician salaries. I too believe that doctors should be well paid, even more so than CEOs that in many cases have zero education (or societal worth, for that matter). They were just a bit more crafty to get where they did.

4) In this plan there are co-pays, but in my mind it reflects punishment rather than responsibility. I'd like to see co-pays range from zero (for the first six office visits per year) to a graduated level of 10-20% depending on a person's weight and smoking status. But I hasten to point out: That's my idea, not theirs.

5) On ability to pay? That's the American way. But it is also the subject of many complaints.

I don't doubt that many senators don't know the details of the plan, but the real blessing, as Seth points out, is that its entry into the budget has forced it to become discussed and reckoned with. And I have read other good criticisms that must also be addressed (though I don't put a lot of credibility in Carpenter's blog of everything the Dems do is treasonous).

What's interesting is that many Republicans don't even know the details but they are jumping on board to trash it.

Is it perfect, No. But that's because they tried compromises to get it past the Republicans. If they took my advice they'd simply implement a Medicare-for-all plan. You get sick, you get care, and the caregiver gets paid. Simple as that. And I also believe that it should be a general tax on wages, leaving the employer costs at zero so they can better compete with products coming from countries whose employers have no health care burden.

July 20, 2007  
Blogger Dad29 said...

The difference, Seth, is that the tax for health-care is directly proportional to the increase in income.

Neither Fed nor State income taxes are directly proportional to income increases, due to the usual special-interest influences, such as the Realtors'/Contractors' home mortgage-deduction, the preferential treatment of State income taxes paid (on the Federal return) and the tax-preferences for various retirement funds.

By the way, the plan's cost is grossly misunderestimated. See No Runny Eggs for the flaws which are monstrous.

July 21, 2007  
Blogger Seth Zlotocha said...

Dad29,

Deductions or not, when you're income goes up, so do the income taxes you pay. Are you trying to make the argument that the income tax, once deductions are factored in, is actually regressive?

And I checked out the post in question by No Runny Eggs, and it isn't very impressive. He notes some uncited WTA figures that question the savings predicted by the Lewin Group. Not exactly much to work with there. And he also figures out that health care costs are going to increase in the coming decade -- not exactly a shocker. That would happen regardless of whether Healthy WI would be put in place. The big difference is how much costs would increase -- Lewin says it'd be $10 billion less over the next decade under the HW plan. Unless conservatives have an independent study that says otherwise, I'd say the Lewin study is still the standard.

And as for the WEAC issues raised by No Runny Eggs, if conservatives are so worried about it, why don't they just push for dropping the langauge about affinity groups in the bill? I'd support that move. No Runny Eggs also mentions that public employees are the only group that can have the employer cover the cost of the employee assessment -- I have no idea where's he's getting that one from since it's not anywhere in the legislation. The legislation does allow any employer to cover the cost sharing portion of the plan (deductible, co-pays, and co-insurance), but that's not limited to public employees.

July 23, 2007  
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