I’m willing to guess that if you ask almost any student their favorite school period, the resounding answer will be “lunch!” My memories of school lunch involve scarfing down a peanut butter sandwich and quickly catching up with friends before our 30 minutes were up.
Spotlight on Health Care Series, Part 2: As America’s health care system is facing uncertainty, NCL staff is exploring the topic in a new weekly blog series.
Ding dong, the bill is dead! Democrats, health advocates, patients, and consumers across the country are rejoicing after the GOP’s first attempt to repeal and replace major pieces of the Affordable Care Act (ACA) crashed and burned. Republicans ultimately could not coalesce around House Speaker Paul Ryan’s (R-WI) American Health Care Act (AHCA) and, in a stunning turn of events, the bill was pulled from the House floor without a vote last Friday.While inability to build a solid block of support for the AHCA in Congress became painfully obvious over time, the American people made their disdain of the bill apparent from the start. In the weeks following its introduction, citizens from every corner of the nation fervently expressed their disgust with the attack being waged on their health care. By the time the would-be vote was to have taken place, the AHCA had a meager 17 percent public approval rating, according to a Quinnipiac poll. Though dismal, this figure is hardly surprising, as the bill did nothing to improve access to care or quality of coverage for a clear majority of Americans – and, in many cases, the bill would have left many worse off than before the ACA.
The AHCA touted several policy changes that would have undoubtedly wreaked havoc on our health care system. Paramount was the spending cap (read: MASSIVE CUT) on Medicaid, the defunding of Planned Parenthood, an exponential premium increase for older Americans, a cost shift from the federal government to states and their citizens, and a general rationing and reduction of care to cover massive tax cuts for the wealthy. Arguably, one of the bill’s most odious aspects was the elimination of the essential health benefits – a measure put on the table in a last-ditch effort to get the unyielding, far-right, so-called “Freedom Caucus” block of the House on board. The essential health benefits are 10 services the ACA requires all plans to cover, including maternity and newborn care, ambulatory services, preventive and wellness services, and substance use treatment that can address issues such as the opioid epidemic ravaging communities across the country. Women of child-bearing age would have experienced significantly higher health care costs due to the elimination of maternity care and contraception from the standard benefits package – and they would either have considerably higher premiums than their male counterparts or be forced to pay for their maternity care or contraceptive methods out-of-pocket.
In addition, the AHCA would have effectively gutted consumer health protections, particularly for patients with pre-existing conditions, by eliminating out-of-pocket caps and reinstating lifetime coverage limits. In the long run, adequate care would be far beyond the reach of many Americans who would be left with bare-bones coverage and a higher cost burden. What is worse, by 2026, 24 million Americans would lose their coverage altogether. Americans heard that message loud and clear and they didn’t like what they heard.
While we can breathe a sigh of relief that the ACA is still the law of the land, NCL is among the many groups that agree that the ACA needs some tweaks to make it work better for all Americans. Now more than ever, a bipartisan approach to bringing affordable care and coverage to ALL Americans is not only desired, but essential. Rather than trying to undermine the ACA, Republicans and Democrats should embrace this opportunity to work together to come up with solutions that address the current insufficiencies in health care and make our system one that works for everyone.
The defeat of the AHCA is a big victory for the American people. The persistence and hard work of everyday Americans who spoke up, who called their members of Congress, who attended rallies, wrote to their local papers, and used social media ultimately made the difference. The National Consumers League, which since our inception in 1899 has spoken up for consumers and supported health insurance for all Americans, is proud to have stood alongside our colleagues in the consumer and public health communities in this battle to defend our care and oppose policies that would send us backward. We will continue to fight to protect the ACA, preserve consumer health protections, and argue that it is good for the economy and good for America’s future if all of us have access to health care coverage.
Despite dire predictions to the contrary by Obamacare opponents, three recent studies have found that the Affordable Care Act (ACA) hasn’t hurt the labor market. Critics claimed massive numbers of workers would be moved from full-time to part-time jobs to avoid the cost of the employer mandate on health insurance. Critics also warned that people might choose to work less because they could either get health insurance on the exchanges or qualify under expanded Medicaid coverage.None of those scenarios is playing out. There’s no significant increase in part-time jobs, nor significant shifts in employment patterns in states with expanded Medicaid programs. The Agency for Healthcare Research and Quality data shows no increase in the likelihood of working part-time after the employer coverage mandate went into effect in 2015. On Medicaid expansion, while one of the studies published in Health Affairs found that people were about 0.6 percentage points more likely to leave a job in the states that expanded Medicaid eligibility to 138 percent of the Federal Poverty Level, the difference is not statistically significant. Not only that, but we now have Obamacare firmly in place and the economy is booming.
Throughout NCL’s history, our leaders have called for universal health insurance, and we, and many other supporters are vindicated by these findings. Turns out providing health insurance for all may be good for the economy and can even help create jobs. The President noted in his State of the Union on Tuesday: “It’s about filling the gaps in employer based care so that when you lose a job, or you go back to school, or you strike out and launch that new business, you’ll still have coverage. Nearly 18 million people have gained coverage so far, and in the process health care inflation has slowed, our businesses have created jobs every single month since it became law.”
According to the Department of Health and Human Services, there has been “unprecedented demand” for Marketplace coverage with more than 11.3 million people signed up for coverage through January 2, 2016. Open Enrollment ends on January 31.
Sadly, the Affordable Care Act continues to come under attack by the Republican-led Congress. On January 6, yet again, the House of Representatives passed a bill to repeal the ACA. The Senate had passed the same bill last month. Noting the harm the bill “would cause to the health and financial security of millions of Americans,” President Obama vetoed it. The House will vote to override the veto on January 26, but is expected to fall far short of the 2/3 vote necessary for a veto override.
While the fight over the ACA continues, this news should take the wind out of the sails of hardened Obamacare opponents. In the meantime, the National Consumers League will continue to work with its allies in the advocacy arena to preserve this landmark piece of legislation that–at last–ensures essential health coverage for millions of people. This is truly President Obama’s crowning achievement and one that NCL had been working for since our founding in 1899.
A version of this guest post was originally published in the National Underwriter. The views reflected here are not necessarily those of the NCL.
“The life insurance market is characterized not only by an absence of reliable price information, but also by the presence of deceptive price information…the deceptive sales practices found in the life insurance industry constitute a national scandal.” So testified Professor Joseph Belth, an expert on the life insurance industry, before Congress in 1973. Can this statement, from more than 40 years ago, still be as true today? And is it possible for such deplorable industry practices to be occurring without being in the spotlight of public attention?
The short answers are yes. To this day the life insurance industry too often relies on inadequate product disclosure, misinformation, and fraudulent practices, thereby costing consumers billions of dollars annually. Industry executives have for years acknowledged that no one would buy many of their companies’ products if they were appropriately informed.
The free market economic system is built upon informed buyers making educated decisions. Yet so many life insurance industry chieftains who regularly sing the praise of our economic system fail to acknowledge that their businesses haven’t satisfied the system’s prerequisites or played by its rules.
Empirical proof of the life insurance market’s dysfunction is readily apparent by examining the very products life insurers and their agents sell. While a select few cash-value life insurance policies can provide excellent competitive value, perhaps 95% of such policies sold provide value no informed consumer would accept. This marketplace’s dearth of information also afflicts tens of millions of policyholders at annual renewal; if properly informed, millions of them currently could readily obtain much better value. Consumers of the industry’s other main products, annuities and long term care insurance, also face enormous disclosure-related problems.
The root of the age-old problem is the inadequate disclosure of information surrounding cash-value policies, such as whole life policies, where the annual cost is not the annual premium. Professor Belth and I have both long recommended disclosure about a policy’s annual costs and rate of return on its cash-values.
The attached table of an actual insurance policy’s historical performance (see below) shows how this information on a policy’s annual costs and rates of return on its cash-values can be presented on a year-by-year basis and summarized over the duration with average or aggregate measures. Similar cost and rate information can be calculated on any and all prospective new and in-force policies via online consumer-friendly analytical tools. Understanding policies from this framework, and with solid knowledge of the differences between illustrated future values and actual future performance, enables consumers to assess the competitiveness of a policy’s costs and rates. For example, a healthy 40 year-old male can compare his policy’s costs with benchmarks that are available in the marketplace and its rates of return with suitable alternative investments.
A cash-value life insurance policy’s unique intrinsic economic advantages arise from its Congressionally-granted tax privileges, not its highly touted permanence; after all, a term policy can be converted or exchanged into a policy providing lifelong, permanent coverage. These tax privileges, which are given directly to policyholders, however, are not a basis for which insurers can charge consumers; no one pays thousands of dollars to set-up an individual retirement account (IRA). Consequently, when selling such cash-value policies as whole life agents routinely make assorted misrepresentations. Agents often misleadingly state: 1) that a whole life policyholder pays for a lifetime of costs upfront, and that doing such and owning his/her coverage is better than endlessly renting it; 2) that buying a whole life policy at a younger age locks in a lower level cost for life; and 3) that the annual costs of a whole life policy can actually decline as the insured ages because these policies can pay dividends. These three common agent statements, and myriad variations of such, are deceptive.
Regulations prohibit such misrepresentations, but they have never been enforced. These and other misrepresentations are all designed to distort a cash value policy’s fundamental difference. For agents, the essential difference between whole life and term insurance is the quantum difference in the sales commissions – up to 5-9 times larger on whole life policies than on term policies. No one familiar with the paramount role that compensation incentives tied to the origination of subprime mortgages and the repackaging of such default-inevitable, toxic securities played in creating the Great Recession can doubt the perniciousness of the life insurance industry’s age-old problematic sales practices.
A successful consumer-agent relationship can only be built on trust, so predicating it upon inadequate disclosure is inherently counter-productive to all. While inadequate disclosure appears to be in the insurers’ and agents’ interest, it actually has made consumers so leery of agents that the age-old distribution process is so terribly inefficient and ineffective. Americans’ under-insurance – having woefully less life insurance than needed or appropriate – reaches new records every year. Some insurers’ policy lapse rates raise fundamental questions regarding the products’ suitability that regulators have never examined. And, the facts that the typical life insurance agent sells less than one policy per week and that four out of five new sales recruits fail out of the business within a few years are further proof of this industry’s failed business approaches.
Given the nature of the problem, improved disclosure and publicity of such have always been known to be two indispensable parts of the inevitable solution. Contrary to general opinion, however, there is no need to wait to for this industry’s state regulators to act and mandate disclosure. The necessary disclosures, after all, are not proprietary or esoteric. As is shown in the table, life insurance policies, like an automobiles’ horsepower or MPG, can be disclosed, not only by the manufacturer, but by anyone with the necessary expertise and this information is now available online.
Without publicity though, this public good of disclosure remains undiscovered. Reform of the life insurance industry has always merely been a battle of wills. Reformers have had to confront industry, an uninterested or uninformed media, regulators not understanding their jobs or unwilling or unable to do them, and/or reformers’ own doubts about ever succeeding. Financial markets can be fixed when appropriate policy disclosure for consumers is heralded and becomes pervasive.
When will this information be publicly disseminated, so that everyone knows about it and can use it, thereby initiating the long-overdue repair of the life insurance marketplace? This disclosure-driven transformation will produce the myriad and well-documented benefits of genuine economic competition: consumers will obtain better value; insurers will improve the efficiency of their production processes; and agents will act and be seen as trustworthy professionals. Clearly, the sooner this time comes, the sooner Americans can start saving billions of dollars per year, the better for everyone.
Actual Historical Performance of a Whole Life Policy
$250,000 issued 20+ Years ago (in 1989) to a 45 Year Old Male, Best Health
*Annual Premium $5815 Paid All Years
** Notes below provide additional information
|
Age During Year |
Insurance Death Benefit |
Cash-Value |
Total Annual Costs |
Annual Dividend Rate |
|
45 |
251,425 |
408 |
5,444 |
10.00% |
|
46 |
253,954 |
5,134 |
1,556 |
10.00% |
|
47 |
256,890 |
10,188 |
1,624 |
9.25% |
|
48 |
260,927 |
15,823 |
1,520 |
9.25% |
|
49 |
265,684 |
21,955 |
1,403 |
8.50% |
|
50 |
271,380 |
28,709 |
1,310 |
8.50% |
|
51 |
278,019 |
36,119 |
1,235 |
8.50% |
|
52 |
285,871 |
44,344 |
1,064 |
8.50% |
|
53 |
295,056 |
53,487 |
998 |
8.80% |
|
54 |
305,332 |
63,521 |
919 |
8.80% |
|
55 |
316,703 |
74,519 |
844 |
8.80% |
|
56 |
328,867 |
86,417 |
907 |
8.80% |
|
57 |
341,858 |
99,309 |
787 |
8.60% |
|
58 |
354,658 |
112,782 |
889 |
8.20% |
|
59 |
366,807 |
126,628 |
1,022 |
7.70% |
|
60 |
378,831 |
141,112 |
1,176 |
7.50% |
|
61 |
391,554 |
156,699 |
1,160 |
7.50% |
|
62 |
404,738 |
173,322 |
1,284 |
7.50% |
|
63 |
418,387 |
191,040 |
1,425 |
7.50% |
|
64 |
429,215 |
207,946 |
1,601 |
6.50% |
|
|
|
|
Avg. Rate: |
8.43% |
**Insurance Death Benefit shows the amount the policyholder’s beneficiary would receive after his death
Cash-Value is the cash amount the insurer gives to the policyholder if he cancels his contract
Total Annual Costs show the amount expensed from policy premiums (and policy cash values if and when necessary) to pay for sales, claim, administrative, capital charges and any other miscellaneous costs, such as premium taxes.
Annual Dividend Rate is the rate earned by policyholder, net of investment management costs, on policy cash values, that is, values after costs.
For More Information see this Table 2 of Policy Disclosure article.
Many of us take for granted the ability to make trips to a full size grocery store. For 23.5 million Americans, accessing a full-size supermarket is a challenge. In some areas, small corner stores are often the only source of food for underserved communities.
The work of the National Consumers League is making a difference in people’s lives across the country. Meet some of the consumers touched by our programs.
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Paige, 55, a Nashville wife and mother of two, answered an employment ad for secret shoppers. Before sending payment to the scammers, she reached out to NCL.
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A grease fire flared up in Decklan’s kitchen. As his family scrambled and panicked, fearing that the whole house might erupt in flames, Decklan remained calm. He hurried over to the pantry, grabbed some baking soda, and dumped it on the fire quickly extinguishing the blaze.
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Cincinnati resident Charles, 45, lost his computer business — and health insurance— during a time of economic downturn. A diabetic, Charles was now unable to afford his medication. He stopped taking it which made him seriously ill and put his life at risk.
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Jeremy is a fast-food worker who has been employed at a number of Chipotle restaurants in New York City. When he was just 20 years old, he took part in an NCL research project that revealed that management practices within the fast food chain were putting workers—and food safety for customers—at risk.
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By Sally Greenberg, NCL Executive Director
While the COVID-19 pandemic has led to hardship for all Americans, it is clear that people of color have been disproportionately burdened. Across the health care continuum, addressing this disparity has become part of the broader conversation about the history of systemic racism and the underlying social determinants of health that negatively affect the mental, physical, and economic health of individuals and entire communities.
The pandemic has underscored persistent health disparities, and there is growing recognition that representation in research and clinical trials can have a profound impact on health outcomes. A lack of representation from racially and ethnically diverse groups in research and clinical trials have typically led to gaps in data, missing the opportunity to assess the full impact of various treatments and drugs across a range of populations. The collection and use of real-world research and data to inform the potential use, risks, and benefits of medical products and treatments can ultimately lead to better health outcomes, particularly for those who have been underrepresented in the past.
Existing efforts to improve inclusion
Efforts to expand diversity and representation in medical research are underway in Congress. Policymakers are encouraging the incorporation of Real World Evidence (RWE) in drug development through the recent Cures 2.0 draft legislation released by Reps. Diana Degette (D-CO-1) and Fred Upton (D-MI-6). While the status quo limits us from effectively reaching underserved populations, the proposed legislation would allow studies that include RWE for some drugs after they have been approved. At the heart of this issue is a growing appreciation that the same therapy can affect different populations in different ways, which is why Cures 2.0 supports collecting data that more accurately reflects the unique experiences and needs of patients across diverse populations.
Recognizing the potential for RWE in maternal health
The lack of representative research in the field of maternal health is undeniable, and its implications are staggering. The dismal state of maternal care in the United States reflects how our health care system has failed women of color, including by not adequately studying treatment options to prevent maternal morbidity and mortality. The need for RWE is clear when you consider the persistent disparities in health outcomes that plague minority communities.
Preterm birth and its disproportionate impact on women of color is a stark illustration of the need to make progress on representative research in maternal health. Preterm birth is the second-largest contributor to infant death in America today. Despite the tremendous physical, emotional, and financial toll that preterm birth continues to take on our country — disproportionately so on women and families of color — not enough therapeutic tools currently exist to prevent it.
Today, “17P,” the only FDA-approved treatment to help reduce the likelihood of spontaneous, recurrent preterm birth in the United States is at-risk of being withdrawn from the market in all its forms, including the branded product and five generic versions. Unfortunately there is conflicting evidence from two different clinical trials, one representative of a diverse U.S. population and another studied in a largely white population in Europe. It’s not a straightforward comparison. If 17P is withdrawn, the women most affected by preterm birth, predominantly women of color, would be left without an FDA-approved treatment option.
The FDA is considering the path forward, including additional data collection through leveraging RWE from past patient use. The success of the first (approval) trial for 17P in the impacted communities signals the importance of RWE. Continued access to 17P is, at its core, a matter of health equity. Black women must not yet again be left vulnerable to a system that historically has overlooked them.