This week, KHN’s “What the Health?” panelists answered questions submitted by listeners.
Among the topics covered were the origins of coverage in Medicare and Medicaid, telehealth, wellness plans and why doctors get paid the way they do.
This week’s panelists are Julie Rovner of Kaiser Health News, Anna Edney of Bloomberg News, Margot Sanger-Katz of The New York Times and Joanne Kenen of Politico. Below, read a transcript of the questions sent in by listeners and answers from the panel.
Plus, for “extra credit,” the panelists recommend their favorite health stories of the week they think you should read, too:
Julie Rovner: The New York Times’ “Scotland to Provide Free Sanitary Products to Students,” by Ceylan Yeginsu
Joanne Kenen: The Virginian-Pilot’s “Horrific Deaths, Brutal Treatment: Mental Illness in America’s Jails,” by Gary A. Harki
Margot Sanger-Katz: The New York Times’ “Study Causes Splash But Here’s Why You Should Stay Calm on Alcohol’s Risks,” by Aaron Carroll
Anna Edney: Vox.com’s “Republicans Claimed Medicaid Made the Opioid Epidemic Worse. A New Study Proves Them Wrong,” by German Lopez
And now, the podcast transcript, which has been edited for length and clarity:
Julie Rovner: Here’s question one. It’s from Rachel Doherty of Clovis, Calif. She wants to know why dental insurance isn’t part of medical insurance. Joanne, you want to take a shot at it?
Joanne Kenen: Medicare was an acute hospital-focused program originally, and dental insurance wasn’t really common. Medicare was modeled, in part, on the existing commercial insurance. They were trying to keep things under a certain dollar amount, and that added cost. I also think that 50-60 years ago we thought of teeth as more of a cosmetic issue, and we now think of it as oral health. But we still don’t cover it very well. Kids get covered in Medicaid, and kids get covered in the [Affordable Care Act], but adults still have a lot of gaps.
Rovner: At the time, insurance packages didn’t by and large cover dental care and so neither did Medicare.
Kenen: It’s still an add-on. I mean, most of us have a separate dental program.
Margot Sanger-Katz: I feel like it reflects this strange history where dentists are not trained at traditional medical schools; they go to separate dental schools. You know, if you go to the emergency room if you have a problem with any part of your body, besides your teeth, you probably will get treated for it. If you have a problem with your teeth — which is a very common reason why people go to emergency rooms — they will essentially give you an antibiotic and refer you to a dentist. It’s this weird history where dental medicine actually sort of came up as a separate branch of medicine from the whole rest of the body and it has stayed separate in all of these different institutions, and insurance is one reflection of that.
Rovner: So while we are talking about things that are covered and not, we have two Medicaid questions. Both also about historical things. The first is from Kamren Gilbard from Phoenix, Ariz. She wants to know why children are defined as under the age of 21 rather than 18 in Medicare’s EPSTD program.
Rovner: First of all, Medicaid’s EPSDT program stands for Early and Periodic Screening, [Diagnostic] and Treatment. It is a program that was started in 1967 — two years after Medicaid — to help kids get care, particularly preventive care. The EPSTD program came about because a famous 1962 study found that half of the men drafted for the military that year could not serve because of medical problems. And most of them were medical problems that could have been prevented if they had gotten appropriate medical care, preventive care, when they were much younger. Actually, the 21 rather than 18 is because that was the end age of welfare at the time. Kids were eligible up to age 21. That was later lowered to 18.
Rovner: The second question is from Arielle Levin Becker from Cheshire, Conn.: Why does Medicaid cover long-term care as opposed to Medicare or even a separate form of coverage? Joanne, you’ve looked at this a lot.
Kenen: As I mentioned a minute ago, Medicare was really pretty hospital-focused, and that’s really how people died in the ’60s, when Medicare was created. We didn’t live as long and we didn’t have all these chronic diseases. There wasn’t as much dementia because people didn’t live as long. So, there was less of a long-term care need, less of a long-term care industry. So it wasn’t the focus of Medicare.
There was actually a precursor to Medicaid, a much more limited [program]. But it looks like Medicaid. It was a state-federal program. It did help poor elderly people; it helped blind people. There was a small long-term care component for that. So when we went from that to what we now know as Medicaid, nursing home care, long-term care came into Medicaid.
There really wasn’t much of a nursing home industry at that point, and we didn’t have a way of paying for it. Well, lo and behold, once we came up with a way of paying for it for some people, what do you know? We had a much bigger long-term care industry once we had money for it.
Rovner: Something that has been true in health care all along.
Kenen: A vicious or virtuous cycle, depending whether you’re writing the check or getting it.
Rovner: Next topic [is] single-payer health care. We also have two questions. First, Bill Yeakel of Sacramento, Calif., wants to know what happens to the shareholders and health insurance companies if single-payer is enacted? Does the government buy their shares? What happens if a single state such as New York enacts single-payer that results in less income to the health insurance companies? So, this is a good question about sort of the potential pitfalls in the transition. Has anybody even looked at what might happen to private industry?
Sanger-Katz: This is totally a political choice. So there is nothing inherent in single-payer that says a single thing about the shareholders of health care industry companies. But, in general, I would say that people who are writing these bills, who are making these political choices are not remotely concerned about this problem.
There is a related thing that you do see in some of these bills, and I believe [Vermont Sen. Bernie] Sanders’ single-payer bill includes this, which is a concern not about the shareholders of for-profit companies and the health care industry but a concern about the employees of the health insurance industry that will essentially be put out of business. So some of these bills do create some kind of transition for those people, whether it’s money or job training or other kinds of things.
Rovner: Also along those lines, David Henderson of Raleigh, N.C., has a question about “Medicare-for-all.” He said, in response to Democratic Rep. Tulsi Gabbard of Hawaii tweeting support of proposals for switching to a “Medicare-for-all” health system: “I read the replies and easily more than half the ones arguing against it were saying Medicare is bankrupt. What’s the origin of this narrative?”
Anna Edney: So this typically comes about every spring [when] you’ll see a report from the Medicare and Social Security trustees. They are the officials who are supposed to look at this trust fund for Medicare and Social Security. They are the Treasury secretary, the Health and Human Services secretary, Labor secretary and the Social Security Administration. So, they take a look at the projections for how much money is left and when this fund will be exhausted.
In June, the report said it will be exhausted in 2026, and that’s three years earlier than projected last year. This is a number that fluctuates on many things — on legislation and policy that’s being implemented. In June, they said it was in part three years earlier because of the tax law. So, essentially the government would be collecting less in income taxes than it had been before. And also there had been lower wages, and so there will be lower payroll taxes as well.
And then at the same time, because the Republicans had repealed the individual mandate in Obamacare, hospitals were going to have a higher level of uncompensated care, meaning they’d be looking to Medicare to make up for some of that. So Medicare would probably be paying higher fees to hospitals as well.
Kenen: And this is Medicare Part A. This is the trust fund. And Part A, simply stated, is mostly inpatient care. It’s the hospital fund. It pays for a few other things, but you can think of it as paying the hospital bills. That is the part that comes out of this trust fund.
I was just curious. Last night, I looked up the history of the trust funds, and they didn’t even have one the first few years of Medicare. In 1970 was the first trust fund report, at least the first one I found on Google. And at that point in 1970 it was about to go broke in 1972. So, you know, you’ve had immediate two, three, four years [before funds run out] … 10- or 15-year [warnings], when it gets close — and we’ve seen this happen many times — Congress fixes it. They change the payroll tax, they come up with an inpatient patient payment system. The big one was the Balanced Budget Act of [1997]. It changed a lot of things. So it’s fixable, but you do have to want to fix it, and you do have to have bipartisanship to fix it. And we do not have a ton of bipartisanship now. Will Congress let Medicare go broke? No.
Rovner: Medicare Part A, the hospital and small nursing home benefit, is funded by the Medicare payroll taxes. Part B, which is all of the outpatient stuff and everything else, is funded by general revenue, so it can’t go broke. There have been some efforts along the years to try to rein in the cost of Part B and put some caps on it. People with higher incomes do pay higher Part B premiums and pay a higher Part D premiums for their drugs. But, in general, the only part of Medicare that can go bankrupt is the Part A trust fund.
Sanger-Katz: When people talk about paying into Medicare all my life, that’s what they’re talking about. If you look at your paycheck, you’ll see there’s a special line. And that’s for a Medicare payroll tax. That goes into the trust fund and then all of the hospital bills that Medicare has to pay come out of that money. So it’s a little bit of a fiction. Really all the money is mixed together in a giant pool, and as Julie said there are other parts of Medicare that are just paid out of the general fund, and no one is really concerned about the in and out.
But I think the fact that Medicare is perpetually going broke is a good reminder that the amount of taxes that a typical person pays into Medicare during their working life does not come close to covering the total cost of care that Medicare provides to them. And the system sort of depends on there being a lot of other people who are paying and help supplement your expenses when you need them. There’s not an individual account for you that you’re putting money into and then gets spent later.
Rovner: The notion that you’re prepaying your Medicare is not actually true.
Kenen: It’s not like you’re putting money on a debit card. I mean the fiscal problems are real and [so are] the demographic problems. It’s not that there are not problems that Congress doesn’t have to address. They do. But it’s not suddenly going broke in a way that we haven’t experienced.
Sanger-Katz: Even in 2026, when the Medicare trustees say that the fund will be exhausted, even then Medicare is not broke in the way that we think of it because there still are a lot of us who pay these payroll taxes who are going to continue to pay into the system. Essentially what happens at that time is that there’s no extra money in the pot. So that will be a problem for Medicare because it will only be able to pay a fraction of its bills.
Rovner: I think that the first year is like 75 percent.
Rovner: Moving on, we’re going to talk about a podcast favorite, drug prices. Barry Leybovich from Basking Ridge, N.J., wants to know about the interaction between payers, PBMs and drug manufacturers. He’s particularly interested in how rebates and clawbacks work. Anna, you’re our drug price expert, why don’t you give us a very brief summary.
Edney: So the pharmacy benefit managers [PBMs] are sort of what we call the middlemen, and they work on behalf of insurers or employers. They negotiate with the drug companies to try and get a rebate. So the idea is the drug company sets a list price and then [the PBMs] try to negotiate to get a rebate on that price.
Think of this like when in the past you bought electronics. Often you wrote in for this $50 rebate. It’s along those lines. These [PBMs] started getting a ton of attention in 2011 when CVS started excluding some drugs from its formulary — the list of drugs that they will cover. There were about 30 of those, and it picked up in 2014, 2015. Then you had these very high-priced hepatitis C drugs. And so the big pharmacy benefit managers came out and said we’re only going to cover one or the other.
Rovner: And the [hepatitis C drugs] cost $84,000.
Edney: By doing that, they were able to pay far less than the $84,000 in the end. But the problem is now we have drug prices just getting higher and higher. And so the thinking is that these rebates are keeping the drug prices high essentially because the pharmacy benefit managers can take the rebates and, if they want, keep a portion of them. And so, that’s sort of seen as a disincentive to the drugmakers to bring the prices down.
The clawbacks work when you go to the pharmacy and get a drug and you pay a copay. Let’s say it’s a specialty drug. It’s on a high tier on the formulary and you’re paying $40, but the drug doesn’t actually cost that much. When you pay that amount, the pharmacy benefit manager claws back the leftover money. That’s something that’s been the subject of some lawsuits recently. It’s not clear yet how exactly they’re going to play out and whether there’ll be a trend there.
There is a movement to try to look at pharmacy benefit managers maybe more as fiduciaries. The Trump administration put out a blueprint to lower drug prices in May. And it suggested looking into [requiring] pharmacy benefit managers to put the customers’ interests first. Obviously, the industry does not like this idea at all.
Rovner: Now we have a question about something we don’t talk about that much but probably should: telemedicine. It’s from Jay Kucia from Clinton, Miss. He wants to know basically why there isn’t “more progress and publicity on telehealth.” Joanne, you’ve looked at telehealth a lot. Why isn’t it catching on more?
Kenen: Well, it is catching on more, but it’s uneven because we don’t have great ways of paying for it.
Rovner: We should talk about what it is.
Kenen: It’s either just on the telephone or using a computer or a Skype kind of secure [technology] instead of in-person [doctor] visits. It has a huge amount of potential, particularly in rural areas or if you’re homebound and can’t get to the doctor easily. I mean, you’re not going to do heart surgery by telemedicine, but you might do a follow-up visit after your heart surgery.
We still don’t have great ways of paying for it. But as the payment system in health care goes from fee-for-service to alternatives … lump funds and new formulas, it is beginning to [take] a foothold or a toehold. Some of the managed-care Medicaid programs are using it. We’re not sure it’s a money saver. There was one study that came out that said it actually raises prices because if you’re sort of sick but [weren’t] going to drag yourself to the doctor, it might be easier just to Skype the doctor. [That could result] in more visits.
Rovner: Well, speaking of things that may or may not save money, we have a wellness question. It’s from Gustavo Corral from New York City. He points out that the ACA allows health plans to set aside up to 30 percent of health premiums as a reward or incentive for workers to participate in a variety of what’s deemed healthy behaviors, everything from getting a health screening to losing weight or quitting tobacco. “Has this idea gone anywhere?” he asks. “Is this just another part of the ACA that never got off the ground?” Margot, I think you’ve written the most about this among those of us at the table.
Sanger-Katz: So, I’m fascinated by this because I think that wellness seems like the sort of thing that’s a win-win, which is so rare in health care. The idea that if you give people incentives, they will take better care of themselves, and it will also lower the cost of their health care.
So two things. One is that this has in fact caught on. It’s become more and more popular among large employers. The Kaiser Family Foundation puts out a study every year where they look at health benefits sort of across the country. And what they say is that about more than half of large employers have some kind of wellness program. About 35 percent of small employers do. Not all of them are leveraging these kinds of financial incentives. But about half are, so let’s think about maybe like [in] a third of employer health plans you have some money on the line if you do or don’t comply with various wellness requirements.
But there is a growing body of evidence that these programs don’t seem to actually be very good at improving people’s health or lowering health spending for them. And there is a lot of concern that they may turn out to be somewhat discriminatory against people who are at risk for illness, who have disabilities or other kinds of health problems, and that what they tend to do is just heap rewards upon people who are already healthy. For example, at The New York Times, managers have a wellness program that gives you a benefit if you go running a couple of times a week. If you have a fitness tracker and you achieve a certain number of steps, you get points and you can use those points to buy gift cards or whatever and get a discount on your health insurance premium. It turns out that the people who run a lot love it. They’re getting a discount and I think they feel an incentive that they probably were going to do it anyway and it’s just like this bonus affirmation. But if you’re someone who is not a runner, you’re actually paying more. And I think it’s very interesting because it sort of runs counter to a lot of the core values of the Affordable Care Act.
I think one of the main goals of the law was to make it so that health insurance costs the same whether you’re healthy or sick to try to make it so that people who have preexisting health conditions get the same kind of access. And I think this pulls a little bit in the opposite direction. There is some sense that really well-targeted programs, for example, programs that pay people to complete smoking cessation programs, seem to actually reduce smoking. So it may be that there are ways to do it that are really effective and that are valuable. But the blunt wellness programs it seems are not doing as well as we had hoped.
Rovner: And yet there’s a huge wellness industry.
Kenen: But there’s also privacy concerns. There’s a debate about who sees what, but also there are concerns about your personal health data and your personal health status.
Sanger-Katz: Yes, because typically the programs aren’t run by the health insurance companies themselves. They tend to be run by third-party vendors, and those companies are not always subject to the same privacy requirements that health care providers and insurers are. So there’s been some good reporting actually here at Kaiser Health News and some other places about that data essentially being aggregated and sold with other kinds of commercial data, like your internet browsing history or a voter file and other things.
Rovner: You wonder why you get these ads on Facebook.
Rovner: The next question is from Chris Cahill. He’s a pediatric hospitalist in San Jose, Calif. He wants to know why the median pay for those who treat children is substantially lower than for those who treat adults. And more broadly: “Who decides how much to pay any doctor for the procedures and medical work that she does?” Meanwhile, Joe Felice from Liberty Lake, Wash., wants to know, “What is being discussed to address one of the obvious problems with U.S. health care costs: the fact that U.S. doctors get paid too much relative to those in other developed countries?”
Kenen: Well, regular pediatricians are considered primary care, so primary care physicians make less money as a rule than specialists.
Sanger-Katz: I think part of the reason has to do with who has what kinds of insurance in this country. A very large percentage of American children are insured through the Medicaid program or the CHIP program. In your working-age years, you’re more likely to have employer insurance. And then when you reach 65 you’re more likely to have Medicare. So, if you’re a doctor who treats a lot of kids, a very large percentage of your patients are going to pay with Medicaid.
This is not true in every case, but, in general, Medicaid tends to pay doctors lower prices for the same services than other kinds of insurance. Commercial insurance tends to pay the best. Medicare tends to pay something somewhere in the middle. But the other thing is that you know the way that people get paid for medical care is based on, like, the stuff that you do. And pediatricians, in general, spend more time talking to their patients. It’s more office visits. It’s harder to communicate with kids and figure out what’s going on with them. It’s a little bit less procedural.
Kenen: It’s also an AMA-affiliated panel that gives recommendations for what doctors should be paid. And that’s dominated by specialists, not quite as much as it was a few years ago but it is still dominated by specialists. And that is one reason that specialists have been paid more than primary care doctors.
As Margot said, we talk a lot about the gap between primary care pay and specialty pay. But as Margot was getting at, it’s procedure lists versus cognitive, which is a mouthful of a phrase, but it’s the doctor who does something to you, with your permission, and the doctor who talks to you about maybe why not to do that. And a really good example is feeding tubes in people with dementia. The gastroenterologist putting in a feeding tube makes between $1,500 and $2,500, and it’s not a very long complicated procedure. They can do a whole bunch of them in one day. So they can make a lot of money by doing that.
That same surgeon, if he were going to sit down and have an hour-long conversation with the family about the emotionally difficult and hard to understand [reasons] why isn’t this good for Grandma, he makes like 125 bucks or 200 bucks. Not only are some doctors getting paid more for things that we shouldn’t really be doing so much of, we’re paying for the wrong stuff.
Rovner: And we pay our doctors — even the ones who we underpay compared to what they do — we do pay our doctors a lot more than most other developed countries do. Again, that’s mostly because we don’t have a really, you know, robust system of how we pay anybody in health care. To wit, we just talked about drug prices.
Edney: And don’t doctors say, too, a lot of that is legal liability. I mean, they have huge insurance [costs] against malpractice that they claim in the U.S. is worse than any other country.
Sanger-Katz: Like the dentistry thing, I think a lot of it is historical and cultural in this country relative to other countries. I think there are countries in Europe where being a doctor is, like, a middle-class professional, like being a schoolteacher. You know, you’re seen as an expert. You work your job, you’re treated with respect. But in the U.S., we have this history of a doctor as this very elevated, high-status, high-regard, high-trust kind of profession. Doctors are expected to make a lot of money. That feels appropriate, and, of course, the fact that doctors in the U.S. make a lot of money relative to other kinds of professionals does influence who chooses to go into medicine versus other professions. If we paid doctors less, that would change who would choose medicine relative to other careers.
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This story was produced by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.