interviews
Insurance Coverage Design
by Naomi Zewde
September 24, 2020
This interview with Naomi Zewde, an Assistant Professor in the Graduate School of Public Health & Health Policy at the City University of New York, and a research fellow at the Roosevelt Institute, was conducted and condensed by franknews.
Naomi | I focus on health insurance coverage and the economic and financial implications of insurance coverage design. I look at how these things affect household financial wellbeing.
franknews | We know that medical debt is rising. What is happening in the healthcare system that explains the increase?
The issue of consumer debt in general in America is almost like a slow fire.
If people don't have the resources to meet their basic needs healthcare, education, housing — these fundamental things end up being sources of debt.
In healthcare, people’s deductibles are growing at incredibly fast rates; deductibles are growing much faster than premiums, and certainly much faster than wages over the past decade. People are left exposed to a greater share of their medical expenses, and exposed to huge medical bills — typically more than what most people have in their savings. That creates a lot of stress and fear, and often the threat of that financial burden deters people from seeking care.
What drives the prices of care up?
We don’t know.
The United States spends more on healthcare, both in dollars and in percent of GDP, than any other OECD country, but it is not clear exactly what we are spending that on.
We have a lower life expectancy. We have fewer physician visits per capita. We have a higher rate of chronic conditions. Those who provide healthcare - physicians, nurses - are not necessarily reaping the benefits either. We know that the utilization rate of the healthcare system is not unique to the United States. So why are the prices so high? That is up for debate.
We do know a few things. One, we know that a lot of this money goes towards the vast administrative bureaucracy — something that is unique to the United States. We also know that the government in other countries set prices: they either operate as the sole purchaser and thus dictate prices or they dictate prices through legislation. In the United States, Medicaid has price controls, but private insurers can charge whatever they want. There is no real way for anyone to fight back. There's no designated person to say no, you're charging too much.
Based on your research, what effect does this have on households’ finances?
I have done work around housing evictions and medical debt. We found that Medicaid expansion reduces the rate of home eviction. Going into the research it was not necessarily clear what relationship the two would have, if any. It sounded plausible — people with chronic conditions, for example, end up having to choose between rent and care. But it is astounding to think about the fact that the design of our healthcare system can have these ramifications.
I also found, in a paper that came out last month, that for 25 percent of people who were uninsured before ACA, it's cheaper to file for bankruptcy than to reach a deductible of the subsidized ACA private insurance policy.
Wow.
It’s surprising right! But it makes sense and might explain why there is such low participation in ACA private insurance policies. The congressional budget office projected that 10 million more people would enroll in these plans than actually did; only 8 million people got these. They were way off. The paper investigates why.
And what did you find?
I suspected from the beginning that it was because the deductibles are so high. The median deductible for the silver tier coverage is $4,000. There is a sweet spot in terms of the subsidies that substantially lower your deductible and premium. If you make between $12,000 and $18,000 a year, subsidies will bring down the deductible to around $200. But once you make $24,000 a year as a single adult, you're facing between a deductible between $3,000 and $4,000. So in designing the policy, it was kind of like, we will give extra subsidies to lower-income households, but not in a way that reflects what it is actually it's like to live with these medical bills. It feels divorced from reality.
Our findings don’t necessarily mean the people have to declare bankruptcy. Bankruptcy sucks and hospitals also know that when you file for bankruptcy, they typically do not get anything out of it. So, they look to work with you. Neil Mahoney has a paper, Bankruptcy as Implicit Insurance, that essentially shows that hospitals tend to settle with consumers at their cost of filing for bankruptcy. Hospitals essentially say, whatever you were going to lose if you were to file for bankruptcy, just give that money to us instead.
That reminds me of what Deborah Thorne said in our interview with her: "As Americans, we often rely on credit cards to be our social safety net. And when that falls apart, we are left with bankruptcy.” What is your understanding of how we got to this place?
It's tied up with a social-political larger trend. I have been watching this show called the Black Journal from 1968 to 1977 with a bunch of progressive Black scholars.
I watched one that was right after Nixon got elected, and everyone was saying, "America is taking a turn towards facism. All of American’s white guilt money is gone.” I think that really well foretold this mass acculturation that happened under Nixon.
The United States is not unique in this march away from social egalitarianism over the last half of the 20th century, but we are living through the consequences.
How do we return protections?
There is this famous paper - It’s the Prices, Stupid. I think there needs to be some kind of direct effect on price.
You mentioned the government can do so by either acting as the sole buyer of care or passing legislation. What do you think is the best way to achieve fair prices?
Right. One way of doing so is through a single-payer system. I am actually working on a study now that is going to be published to the Roosevelt Institute that compares single-payer with a public option.
There are two things to know about single-payer that are useful in this context.
One, it would get rid of most of the bureaucracy involved in negotiating prices — the different insurance companies, the different kinds of billing, and different plans. Right now, every doctor's office has multiple people whose full-time job is to understand how to interact with every single different plan of every different insurance company. There are many people employed on the side of the insurance company as well. Under a single-payer system, that would be gone. There wouldn't be multiple different rules to understand, and that reduces the aggregate resource use that is allocated towards healthcare.
Two, a single-payer system is tax-financed. That is important in terms of equity. You get to decide what percentage of household income should be allocated towards healthcare. Basically, the way our healthcare system is designed now means that the more money you make, the smaller percentage of it you have to put towards healthcare.
It is regressive, and no one has a choice but to participate in it.
If we structure it as a tax-financed healthcare system, the way we fund most of our infrastructure, you just get to decide what percentage of household income you are going to take from each household along the income distribution.
interviews
In Conversation with Joe Paul Jr. Part One
by Joe Paul Jr.
June 6, 2018
This interview with Joe Paul Jr., the Vocational Services Administrator at SHIELDS for Families, was conducted and condensed by frank news. It took place May 23, 2018. This is part one of an ongoing conversation between frank and Joe Paul Jr.
How did you find yourself here, working at SHIELDS for Families?
Alright. I’m a formerly incarcerated person, E-22-8-4-2. I went to California State Prison. Sentenced June 22, 1989 for voluntary manslaughter; it was a drug related murder. I came home December 2, 1992 and that whole experience was the transforming moment of my life. Prison literally saved my life with no cliché. I found myself, I found the initial portion of my identity in that place. I recognized how disenfranchised my people, black men, were at that moment in time, and Latino men too. How blind we were to this deterioration we were in the middle of. I had the moral guilt that somebody died as a result of actions I was involved with. The converging of all these circumstances put me in this place where I said, "every day in my life moving forward I will do something to make a difference in improving the quality of life not only for myself and my family, but for the people around me –my community" – I was 24 years old when I came home. I'm 49 years old now and I've lived up to every single promise in terms of making sure that every day I'm doing something to improve the state and quality of our community.
I've always been involved from the time I came home with some sort of volunteerism. Typically this has been around church, supporting ministries in the African-American communities in South LA; I still do that to this very day. Not only do I work here at SHIELDS For Families as the Vocational Service Administrator for all of our adult programs, in the sidebar we have about 38 programs; we're a 25-million-dollar non-profit operation.
I've been here for the last six years. This is a twenty-seven-year-old organization that evolved out of the crack epidemic and everything subsequent to that.
In that last 10 years, I've been challenged in the field of nonprofit work to take on this issue of mass incarceration. When I first got into this field from a workforce development professionals point of view, I came into it at the precipice of the mortgage meltdown and then the Great Recession. At the same exact time California was in the throes of this three judge panel that told Schwarzenegger, and ultimately Jerry Brown, that you got too many people in prison. This is a constitutional violation, it’s cruel and unusual punishment: You're not providing adequate healthcare, you're not providing adequate mental health, you're not providing adequate housing. You've got to drop the population in prison. The advent of Assembly Bill 109, a reform bill around changing the status of felons from the traditional prison felony to now this county jail felony thing. We went through all of this transition and watched the subsequent reform bills along with it.
We were working in that climate, and now I feel like a veteran because we're in one of the most robust economies we've been in in a long time. There's construction across the whole state. There’s opportunities for people to relatively make living wage jobs with very little skills or education, and we still are at a crisis level when it comes to social dynamic. That's what keeps me moving and thinking about policy and legislation, and really closing the gaps where they've been created. Even with the best intentions we couldn't foresee the collateral consequences as a result of the effort that we saw the need for at that time. That's the front we're working on now.
What were the collateral consequences of that work?
I'll give you an example around a very salient point, and that's "Ban the Box". Ban the Box is the policy and intention to remove the question of: "Have you been convicted of a felony?", from employment applications. It was a foreign notion in L.A. and in California ten years ago; we were fighting for it. Now, we have statewide laws, we have one of the most robust Ban the Box laws in the whole country right here in L.A.
We didn't close the gap on how do you sell yourself and verify your work experience the way everyone else is going to? A very well intended, hard fought victory, to get the boxes removed, but now that the box is removed, these other complications are exposing themselves that we don't have a remedy for. On the CDCR, the Department of Corrections and Parole side, unless you have a very motivated parole agent, they're not going to focus on the employment verification for this dude who just spent 20 years in prison. All of his work experience, although credible, although valuable, although more qualified than someone else, won’t be provable. We’re working on that now.
What about extended and collateral consequences in the community?
2018 is midterms for the feds, it's statewide election, we're electing a governor in California, in L.A. we're electing the sheriff. You have 30 percent of the incarcerated population returning to L.A. County, and a huge percentage of that group coming to the city of L.A. Those who've been formerly incarcerated, and are felons and think that they're disenfranchised still, think they can't go to the polls and vote. If you're already a minority group, where it takes everybody's voice to stand up and say we agree with this piece of legislation, or we want this elected candidate in office, and everybody showed up without any restrictions, we still would have a challenge electing somebody.
You don't even scratch the surface of what change looks like. Those are blind consequences to the effect of mass incarceration on communities of color, and these disenfranchised communities like South Los Angeles.
For the last 20 years let's say, the police department, the DA, all of these different government bureaucratic systems, are more willing to work with you as the voice of the community, but the communities themselves are not so open to them.
What does that relationship look like right now?
It's almost like the community is saying, ‘too little too late’. It's like, ‘we were ready to work with you after the riots. We were ready to engage healthy dialogue after Rodney King’. We go through all of that, and not only do we have to suffer through the consequences of that experience, but then you put gang injunctions on our communities and the police come in and terrorize community members and criminalize innocent people inadvertently, and call them gang members. And then the criminal system puts enhancements on charges because now we label innocent people who weren't gang members as gang members and, yeah they sold drugs, or maybe they got caught with a gun, whatever the case may have been, but now I'm labeled a gang member because I grew up in this community and I get an extra five or six years on top of a sentence? These mothers are saying he's not a gang member, and he’s saying I'm not in it — you create this distrust. To the point where we don't want to deal with you.
The community is not in a place where they have been as forgiving as others. My position is, I wish that we – I hear Rodney King in the back of my head: "Can we all just get along?"
Right now the community is playing the biggest part of the problem in my opinion. A murder may happen in the community and the community itself knows exactly who did it, the detectives are doing this full blown investigation with no leads and nobody is saying anything. If you have individuals who consistently find themselves in a place where there's no consequence to their behavior because of the street code, or the community is intimidated by the perpetrator, whatever the case may be, we only end up hurting ourselves. We have to find a balance between those two extremes right now.
What allows you to trust government institutions after your own experience in the system?
And it doesn't take a whole lot. A few years ago, 2012, we worked closely with the sheriff's department and the county Registrar's office with our inmate voter registration. There were approximately 20,000 folks incarcerated in the county jail system at that time. We registered approximately 1,200, 1,250 folks. We didn't hit 10 percent of the total population for a lot of reasons. I felt we didn't do the best job we could. County Board of Supervisors, City Council people elected from the state touted the effort. "Oh my God, look what you guys did!" About 900 of those folks cast their ballot in custody. I've come to realize 900 additional votes could swing an election. I didn’t know it at the time. What I've learned is that we can mobilize and demonstrate that we can do this with intention, and purpose, and have a lot of weight in the power we bring to the table.
You got the power to say “nah not to you, you, but not you". If we all come together, they have to come to us to have a conversation, to get our opinion on what best practice looks like if they're elected. It's been like herding cats to get people into a place to see this potential power. It's apathy. It's almost too little too late. If you had asked it of us ten years ago, maybe, but we don't hear it now. You hear I don't care. Even if it hurts me to avoid this opportunity
Are you optimistic?
I am. You've got to be! I mean there's a verse of Bible that says a living dog is better than a dead lion. As long as we're alive there's hope.
I'm tired of going to funerals; I'm tired of burying kids. I'm tired of visiting domestic violence programs where women are abused simply because of the residual trauma and anger that community members have that are displaced.
I made a commitment as I said in the beginning, that I'm going to do my best to serve my community as long as I'm alive. I see no victory to believe. I'm a firm believer in the word of God that says a little leaven leavens the whole lump. So we can have a little bit, and sustain that little bit, it has the potential to grow into something bigger. I feel I've got other partners across the state who have a similar idea that we're not done yet. I do have optimism towards it.