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
Eric Stoltz Is Determined To Bring El Paso Voices Back To City Hall.
by Eric Stoltz
July 18, 2018
This interivew with Eric Stoltz, a young native El Pasoan running for City Council in District 6, was conducted and condensed by frank news.
Eric Stoltz: My name is Eric Stoltz, I grew up in the Lower Valley in El Paso, raised there for my whole life, lived in the same place for 25 years. It's the outskirts of El Paso and it's a farm ranch area.
Tatti: What is the population like there?
Eric Stoltz: Very Spanish-speaking. El Paso is probably 80% Hispanic, but I think my areas about 93%. English is spoken but Spanish is a lot more common where I live.
Tatti: How does immigration policy affect your daily life?
Eric Stoltz: It's affected me with my neighbors, family, friends that I've known for a long time. I've had friends that had their parents deported when they were young. Even today I have a really close friend whose dad was deported. I think I've seen immigration in a complete context of people that were able to get papers or were able to get citizenship or residency, but then also saw people that had to live secretly and live in the shadows. My grandma actually owned a trailer park and a lot of her residents were people that didn't have documents, so she made sure they felt comfortable and that they knew she was okay with people that didn't have documents to live openly and live without fear.
When we talk about immigration people talk about border security. I think border security brings a militarized presence anywhere you go. Even if I am documented and I have papers I feel a little bit uncomfortable having to deal with being watched, you have a bunch of helicopters disturbing you. People also have an idea that immigration is like jumping over a border when in reality it's also people getting visas and crossing back and forth.
There's a lot of people from El Paso that work in El Paso and live in Juarez because of the cost of living. A lot of people go to school back and forth. The strict hard policy doesn't make sense, especially to someone living on the border, because you see that it's just one large city and one large interconnected area rather than a hard invisible line that people want to invent.
Tatti: Is there a tangible difference between presidents and policy?
Eric Stoltz: Not so much, not during my time. My parents saw a big difference with the building of the current wall.
Tatti: When was that?
Eric Stoltz: That was in 1996 I think, that was when they had Operation Hold The Line, when they put more Border Patrol in the cities and drove immigrants out to the desert, which made it more dangerous for people. Then they built the wall, which I think actually was in 2000. That was the only time I experienced something different like, whoa we had fences and now we have a wall. I was younger so I didn't really understand what it was or what the meaning of it was. Nothing is really different than from Obama and Bush to me in the presence of Border Patrol because you just see them everywhere, I'm just so used to seeing them everywhere. Not much has changed aside from like rhetoric and hateful things being said towards immigrants.
Tatti: Do you think it’s right to focus anger on this administration or do you think that negates years of other similar policy?
Eric Stoltz: I think that while Trump has terrible rhetoric and obviously he has no idea what he's talking about I think that it does go a lot further and back into past presidencies and the real root reason of issues that are happening.
It does go back further and I think that right now Trump is taking it to an extreme level and actually an even scarier level where he allows law enforcement to basically spread fear around our community. That's something that we haven't seen, a more fearful area, a more fearful time. I know people whose parents are very scared. But it does go back to years and years of neglect on immigration issues, but also ignoring the reasons why people are leaving their countries.
Tatti: What do you want to ask elected officials, in positions of power in Texas, about immigration?
Eric Stoltz: I would have two separate questions. One, do they support allowing all families to be together, would they continue to support a family migration and allow a quicker process for family migration.I have friends whose parents have been waiting for 12 years, 15 years. And I think when you don't have the ability to be with your family for 15 years it is contrary to a family value system for many. The second question of course would be the root of everything, can they ensure us that the United States is no longer in the game of toppling socialist or left-wing governments that are democratically elected.
Tatti: The argument we keep hearing is if you break the law as an American you’re sent to jail, why would it be any different for non Americans?
Eric Stoltz:
But to me, at the end of the day, we're all humans regardless of your ethnicity or citizenship. When you take humanity away from people, that’s when you start to lose a part of your humanity. When you look at El Paso, we are a city that has immigrants undocumented and with documents and we live a great life. We live as a community, we live as one, and we benefit from each other. We are not a crutch on each other, we are united as one and we progress with each other. I think that people don't understand and don't see people in their communities because every community has immigrants. They might not know, but I think when people start understanding that their neighbors, that their co-workers, that business owners are undocumented people and that they are also benefiting our economy and giving jobs and helping our country in a profound way, people will actually see and understand that immigration and undocumented people are not an enemy.
They are helping people, and they are helping U.S. citizens. A lot of people think that undocumented people don't pay taxes, undocumented people pay taxes and it goes straight to the government, and they don't receive that back. We need to think of everything as humanity before we get into ideas of citizenship.
Why do people leave their countries to begin with? I wouldn't want to leave my country but if I felt I had to, look, the law is not going to stop somebody. And at the moment, people are seeking legal asylum and being denied legal asylum at the border and are forced to go through other means which are illegal to get to the United States. There are people in this country that live 300 miles from the border who have never seen it, never visited it. They need to observe and actually learn from people at the border and ask us what we see and what our daily life is. I wouldn’t tell someone who lives by the ocean that I know everything about the currents when I’ve never been to an ocean before.
Tatti: How do you think the media has handled the immigration issue in the last couple of weeks?
Eric Stoltz: I'm happy that they’re a little more concerned about border issues and immigration issues. I do wish that they talked about it year round and really went in depth on these particular issues. When we have a population of the U.S. that is completely anti media I think that you, as the media, need to show the facts and use recent evidence about what’s happening, video and audio and images that are recent, from right now, because you have a whole segment of people demonizing the media, who don't believe the media. If you use an image that's two years old people are going to say that you’re lying.