A number of our members have reported receiving disturbing emails, phone calls, or letters from Infinity Administrators over the past few days. Infinity Administrators is the company that provides the HealthFlex 2000, HealthFlex 365, and Dental Discount Plus plans which Fractured Atlas offered for several years. If you have received one of these communications, PLEASE talk to us before jumping to any conclusions.

Please be advised that there has been a severe misunderstanding between Infinity Administrators and Fractured Atlas, and it appears that things have gotten a bit messy. I’m very sorry that so many of you were dragged into this. We are working to correct the situation and you can expect further details soon.

In the meantime, I want to clear up a few facts:

1) You have never had to be a member of Fractured Atlas to enroll in any of these plans. Infinity offers all of them on an individual basis, just as any insurance company offers individual versions of their plans. HOWEVER,

2) The rates you’ve received as part of our group have always been significantly less than you’d receive on your own. For example, here are the rates that Infinity currently charges.

Note that HealthFlex + (which is identical to HealthFlex 2000) is $209/month for individuals. By comparison, Fractured Atlas members could enroll for $169/month.

HealthFlex DDS (which is identical to Dental Discount Plus) is $31.25/quarter as an individual. By comparison, enrolling through Fractured Atlas cost $28.00/quarter.

If Infinity has approached you with the same or lower rates as the ones you were paying through Fractured Atlas, that is a special offer they’re making and does not reflect anything that is publicly available.

3) Although we no longer offer these plans to our membership, we were proud to do so for 6 years. Our decision to remove the plans from our website and stop accepting new enrollments should not be interpreted as a criticism of Infinity or the plans themselves. It was simply time for us to move the healthcare program in a new direction, which we’re continuing to do.

Please contact us at support@fracturedatlas.org or (212) 277-8020 with questions.

Business Week reports on the growing problem of sub-standard health insurance being offered by universities to their students:

More than half of the insurance plans recommended by colleges offer benefits of $30,000 or less, according to a survey published in March by the General Accounting Office, an arm of Congress. Many plans have further limits that prevent payout of even modest maximums. While two-thirds of the country’s more than 17 million college students have coverage from a parent’s employer or their own job, many of the rest may be vulnerable if they suffer a serious illness or accident. With premiums and restrictions increasing under employer-provided plans, a growing number of parents are shifting children to college-sponsored coverage. But “when a student gets gravely sick, $30,000 in benefits is unrealistically low,” says Alan Sager, a professor at Boston University’s School of Public Health.

Schools often arrange for a standard student plan, and some even bill for it automatically unless students or their families opt out. But the administrators negotiating multimillion-dollar insurance packages frequently aren’t sophisticated or diligent enough to obtain the best deals in the marketplace, says Mark Rukavina, executive director of the Access Project, a nonprofit health advocacy group in Boston. “Unfortunately, most schools don’t know how to secure the best coverage for students, and so what results is simply the illusion of coverage.” Students and parents, for their part, often don’t take the time to study the fine print.

The really unfortunate aspect of this is that students and their families are looking to the schools to provide unbiased expert advice. Many appear to be substituting faith in the university’s judgment for doing their own due diligence. Yet the universities are doing a lousy job of earning this trust.

The good news is that students are very well-positioned to get coverage elsewhere, often for less money and with better benefits. Non-profit associations like Fractured Atlas can serve as effective advocates and are more aggressive about negotiating favorable benefits packages. And as the article points out, even the individual market often offers better deals than what the universities are providing.

For the past two years, Fractured Atlas has been experimenting with a program called the Arts Wellness Network here in New York City. The concept was that we could assemble a network of artist-friendly health care providers, with a focus on preventive care and alternative medicine, who would make their services available to the arts community at discounted rates regardless of insurance coverage.

As a pilot effort in NYC, the Arts Wellness Network was well received, but we could never figure out how to make it scale, since the overhead involved in assembling and maintaining a provider network is huge. This Spring, thanks to a partnership with HealthAllies (a division of UnitedHealthcare), we’ve finally cracked the code.

Starting today, the Arts Wellness Network is now available to Fractured Atlas members nationwide. For $15.50/month, the program offers pre-negotiated reduced rates within a network of 500,000+ providers. Also included is NurseLine, a 24-hr hotline that provides access to a registered nurse any time of the day or night.

Find out more about the Arts Wellness Network or sign up today.

My apologies for another wonky health insurance post hot on the heels of the last one, but when there’s a major newspaper op ed on a subject I’ve been ranting about for years I can’t resist…

In today’s Wall Street Journal, Congressman Ed Royce (R., Calif) makes the case for federal regulation of the insurance industry:

Because of a Supreme Court decision nearly 140 years ago, the states have sole regulatory authority of insurance. What has resulted since is a bureaucratic cluster of 51 different regulators (every state, plus the District of Columbia) overseeing their individual jurisdictions, punishing American consumers and insurance providers alike.

At Fractured Atlas we’re living this nightmare every day. Mainly it affects our health care program. Despite our community of over 52,000 arts professionals nationwide, we’re forced to fragment our group into 51 sub-groups. This seriously undermines our negotiating leverage with insurance companies. We also have to wrestle with 51 different health insurance regulatory agencies, which I promise is neither easy nor fun.

The most common justification for state-based insurance regulation is that the state insurance departments are the best providers of consumer protections. In truth, some states get it very right, others get it very wrong, and most are somewhere in between. There’s no reason to believe, however, that federal regulators can’t enact their own adequate consumer protections. And a simplified and streamlined regulatory environment would facilitate much greater competition than currently exists in the market for private insurance, which can only benefit consumers.

Today’s Wall St. Journal features a provocative op-ed by Jonathan Kellerman called The Health Insurance Mafia. Kellerman argues that a major source of dysfunction in our health care system is the fact that we’re overly reliant on health insurance as a payment mechanism and that health insurance companies extract far more money from the system than they provide in added value.

You don’t need to be an economist to understand that any middleman interposed between seller and buyer raises the price of a given service or product….The health insurance model is closest to the parasitic relationship imposed by the Mafia and the like. Insurance companies provide nothing other than an ambiguous, shifty notion of “protection.” But even the Mafia doesn’t stick its nose into the process; once the monthly skim is set, Don Whoever stays out of the picture, but for occasional “cost of doing business” increases. When insurance companies insinuate themselves into the system, their first step is figuring out how to increase the skim by harming the people they are allegedly protecting through reduced service.

Insurance is all about betting against negative consequences and the insurance business model is unique in that profits depend upon goods and services not being provided….

Health insurers… affix themselves to the host – in this case dual hosts, both doctor and patient – [and] systematically suck the lifeblood out of the supply chain with obstructive strategies. For that reason, the consequences of any insurance-based health-care model, be it privately run, or a government entitlement, are painfully easily to predict. There will be progressively draconian rationing using denial of authorization and steadily rising co-payments on the patient end; massive paperwork and other bureaucratic hurdles, and steadily diminishing fee-recovery on the doctor end.

Kellerman is overstating the case, but his basic reasoning has some basis in reality. I’ve long argued that overinsurance is as big of a problem as underinsurance in our system.

The (admittedly imperfect) analogy is to car insurance. No one expects her car insurance to cover a routine oil change. Miraculously, people nonetheless manage to make sane decisions about when to get an oil change and how much to pay. Unfortunately, we’ve been conditioned by a paternalistic health care system to avoid anything that might incur out-of-pocket expenses, so people without health insurance actually do forgo necessary care. But if we can ever retrain ourselves to take greater responsibility for our own health care, then there’s a lot of potential in the principles of “consumer driven health care”.

Interestingly, Kellerman’s piece inadvertently hints at one of the strongest arguments for a single payer health care system. All of these insurance company shenanigans amount to attempts to manage their risk pools. Since they all pull the same crap (e.g. denying claims, erecting barriers for unhealthy populations, etc.) it’s all a wash in the end. This is essentially a Nash Equilibrium. If all the insurers decided together that they’d cease all these practices, their risk pools would be essentially unchanged, but their overhead costs would drop by 20% or more. This can’t ever happen in reality, though, because as soon as one of the insurance companies steps up to plate, it’ll get hammered by the remaining bad actors. The only reliable way to wipe the slate clean and eliminate risk juggling is to ensure that there is only one risk pool containing the whole population. This is arguably the greatest benefit single payer has to offer.

Big news today. I’ll let the press release do the talking:

Press Contact:
RoseMarie Terenzio, RMT PR Management 212-414-1909, 917-913-7226, rterenzio@rmtprmanagement.com

FRACTURED ATLAS OFFERS AFFORDABLE AETNA ADVANTAGE PLANS FOR ARTISTSFRACTURED ATLAS MEMBERS AND THEIR FAMILIES IN
29 STATES AND WASHINGTON, DC ARE ELIGIBLE TO ENROLL
IN AETNA’S VARIETY OF AFFORDABLE HEALTH PLANS

NEW YORK, NY – March 3, 2008 – Fractured Atlas, a nonprofit organization that serves a national community of artists and arts organizations, announced today that Aetna Advantage Plans are now available to its members in 29 states and Washington, DC.

According to the U.S. Department of Labor and research conducted by Fractured Atlas, there are roughly 300,000 uninsured artists in the United States. Aetna Advantage Plans provide three PPO plans available to more than 50,000 members of the Fractured Atlas Open Arts Network.

Fractured Atlas knows of no other national organization offering this type of comprehensive health coverage with criteria for membership based on self-identifying as an artist. Aetna Advantage Plans are now available to Fractured Atlas members who qualify for coverage.

“We know individuals who purchase health insurance on their own have a variety of life circumstances that create a wide range of needs and preferences, and the members of Fractured Atlas are no exception,” said Frank McCauley, head of Aetna’s Consumer Business Segment. “The plans and services we are offering to Fractured Atlas should address their unique needs and provide their members and their families with high-quality, affordable health insurance coverage.”

Fractured Atlas’ founder, Adam Forest Huttler, has been researching quality, affordable coverage that could be made available on a national or near-national basis for nearly seven years.

Fractured Atlas has been the leading provider of affordable health insurance to artists in NY State since 2001, but finding appropriate options outside of NY has been nearly impossible. “Several times a year for the past seven years we’ve contacted all the major insurance companies and tried to negotiate something,” said founder, Adam Forest Huttler. “Aetna has always been our first choice carrier because of their stellar reputation, especially for customer service and dependability. Already, we’ve had as easy and pleasant an experience with them as we’ve had with any other insurer we’ve worked with.”

“Artists are poorly served by our employment-based health insurance system,” said James Brown, Director of Health Services for The Actors Fund. “High levels of self-employment, project-based and episodic work patterns, and relatively low wages result in a disproportionately large number of uninsured and underinsured artists.”

Fractured Atlas is providing affordable, comprehensive coverage with slight variations from state to state. Previously, the only available coverage through Fractured Atlas was a limited plan that provided discounts on medical bills and partial reimbursement for out-of-pocket expenses.

Fractured Atlas offers three of Aetna’s Individual Advantage Plans. Two are HSA- (tax-advantaged health savings account) compatible. These two plans have average deductibles of $3,000 and $5,000, respectively. They also feature access to preventive care on a co pay basis before the deductible has been met, with no waiting periods. The third option has a $2,500 deductible and is not HSA-compatible, but features preventive care, primary care office visits and specialist visits subject to co pay before the deductible has been met. The lifetime maximum per insured is $5 million for all plans (unless state variations apply). Fractured Atlas is also offering Aetna’s Dental PPO plan as a rider to the health plan. Information on Aetna Advantage Plans along with enrollment materials is available at www.fracturedatlas.org/healthcare.

The plans are medically underwritten and rates will vary. The plans are now available in the following states:
AL, AK, AZ, AR, CA, CO, CT, DE, FL, GA, IL, KS, LA, MD, MI, MS, MO, NC, NE, NV, OH, OK, PA, SC, TN, TX, VA, WV, WY and Washington, DC.

About Fractured Atlas
Fractured Atlas is a nonprofit organization that serves a national community of artists and arts organizations. Our programs and services facilitate the creation of art by offering vital support to the artists who produce it. We help artists and arts organizations function more effectively as businesses by providing access to funding, health care, education and more, all in a context that honors their individuality and independent spirit. By nurturing today’s talented but underrepresented voices, we hope to foster a dynamic and diverse cultural landscape of tomorrow. For information on membership, visit www.fracturedatlas.org

About Aetna
Aetna is one of the nation’s leading diversified health care benefits companies, serving approximately 36.7 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans, and medical management capabilities and health care management services for Medicaid plans. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans, government-sponsored plans and expatriates. www.aetna.com

I suppose I should be happy that today’s NY Times features a big old article on the impact of our national healthcare crisis on jazz musicians. Maybe the national media is finally noticing this problem, which has plagued artists from every discipline for as long as I can remember. But it’s unfortunate that the piece is entirely focused on a couple of feel good stories about jazz musicians putting together emergency benefit concerts for their colleagues who are facing life-threatening health problems and crippling medical bills.

These kinds of events are actually rather common, especially in the music community. It’s genuinely inspiring to see artists band together like this to support their own in a time of need, and I applaud the jazz musicians mentioned in the article for stepping up to the plate in a big way. And some of the folks in the article are friends of mine who I respect a great deal, such as Wendy Oxenhorn. But it is dangerously misguided to view this kind of thing as anything resembling a real strategy for addressing our industry’s healthcare challenges.

It’s like deciding that we’ll solve homelessness by hosting a fundraiser for each homeless person we find so that we can raise a bunch of money and buy him a house. If you’re lucky it works once. If you’re a profoundly gifted fundraiser it might work twice. But you’re doing nothing about 99.999% of the people who are impacted by the problem. Worse, you’re barely even helping the specific people you’ve targeted, since the underlying problem that caused their homelessness in the first place remains unaddressed, which means they might soon be homeless again.

So what’s a better approach? I’d argue that we need a combination of affordable health insurance, preventive outreach and education, and aggressive advocacy in the public policy sphere. Not very sexy, I admit, but substantive, scalable, big-picture efforts often aren’t.

In light of that, it’s a disservice to the community that the NY Times dedicates a huge article to the topic of artists’ healthcare - the first time I can ever recall it doing such a thing - and there is a grand total of one throwaway sentence alluding to the need for actual, affordable health insurance. We deserve better.

I realize that I’m a healthcare policy nerd and that most folks find this stuff boring and impenetrable. That’s one reason why organizations like Fractured Atlas are needed; we deal with the esoteric minutia so you don’t have to.

Still, it never hurts to educate yourself, especially with an election coming up. The Kaiser Family Foundation has developed an excellent website for comparing and contrasting the major candidates healthcare policy platforms.

I’ve been tracking this stuff pretty closely, myself. To a certain extent it’s all fairly predictable. The Republican candidates mainly talk about increased competition and tax incentives for individual purchasers. The major Democratic candidates all offer proposals aimed at achieving universal coverage, generally by strengthening employer-based coverage and providing access to government-sponsored plans.

I could ramble on endlessly about this stuff, but if you’re actually interested, you’re probably better off just reading the proposals themselves (which are all accessible at health08.org).

Still here? Okay, then permit me one tiny bit of wonkishness. There’s been a lot of media coverage lately about the big dispute among the Dems, which is about whether or not to include a mandate that everyone must have insurance (Clinton and Edwards support the idea, Obama opposes it).

I’m basically a libertarian, so the very idea of such a mandate makes me squirm. However, as a practical matter, it’s absolutely essential for these kinds of “universal coverage” models to work. Clinton, Edwards, and Obama all propose new federal regulations which would require health insurance companies to insure people on a guaranteed issue, community rated basis. (Guaranteed issue means they can’t turn you down for coverage. Community rating means everyone pays the same premium, regardless of health status.) The practical problem with both of these well-intentioned concepts is that healthy people quickly figure out that they’re paying artificially higher rates to subsidize coverage for unhealthy people. Many of them, therefore, opt out of the system and decide to take their chances, rather than “overpay” for coverage. This creates a vicious circle of spiraling rate increases, as the risk pool steadily gets less and less healthy and more and more people find coverage too expensive to purchase. We’ve seen this happen in NY State, and it isn’t pretty.

An individual mandate solves this problem. By forcing everyone to have coverage, healthy or not, you stabilize the risk pool and prevent adverse selection. In my semi-educated opinion, the guaranteed issue, community rated model is simply unsustainable without either a mandate or some form of single-payer national coverage. Since the latter seems unlikely to happen in the foreseeable future, mandates are probably the way to go.

I was invited to testify this afternoon before the NY State Departments of Health and Insurance on ways that the state can move towards universal coverage. These hearings are grueling affairs; today’s was scheduled to go from 9am to 8pm. Fortunately it was right across the street from my office so I cheated and got some work done while listening to the 27 testimonies that preceded mine on the live webcast. (Hooray for gov’t agencies embracing technology!)

I was impressed with a lot of the ideas emanating from both the speakers and the panel. It’ll be interesting to see how this all shakes out. Gov. Spitzer seems determined to do something big, but that’s tough to accomplish on the state level. If people are prepared to accept incremental steps that aren’t wholesale reworkings of the system, we might get something done.

Anyway, for those of you who are into this sort of thing (and I have no illusions that there are more than 3 of you), here’s a transcript of my testimony:

Good morning. I’d like to thank you for providing the opportunity for me to speak, and for including the arts in this important discussion. My name is Adam Huttler and I’m the founder and Executive Director of Fractured Atlas, which is the largest arts service organization in New York State. Fractured Atlas serves a community of artists and independent creative workers by providing a comprehensive infrastructure of support including technical assistance, fiscal sponsorship, professional development, event liability insurance, and access to affordable healthcare. We help artists hone their entrepreneurial skills in order to thrive and prosper while they advance their artistic careers.

Healthcare is a basic and fundamental need critical to everyone’s livelihood, and artists are no exception. Since our inception almost ten years ago, Fractured Atlas has been keen to recognize artists’ needs, and has been leading the charge towards providing a variety of health insurance options for New York’s diverse artist population. Nevertheless, access to affordable health insurance remains problematic for artists and independent creative workers.

According to Creative New York, a 2005 study by the Center for an Urban Future, the creative workforce in New York City alone numbers over 300,000. Approximately 30% of this population is self-employed. Like other independent workers, artists’ work patterns are sporadic and volatile. As such, artists typically lack access to the employer-sponsored health insurance plans which are the backbone of America’s healthcare system. The major performing arts unions such as Actors Equity and the Screen Actors Guild work hard to fill this gap, but in reality only a small percentage of union members quality for coverage, not to mention the tens of thousands of artists who don’t belong to a union. For these reasons, any reform proposals which involve an expansion of the employment-based model will inevitably exclude the arts and creative industries.

For the most part, arts industry professionals who have health insurance either buy it on the individual market or band together in association-based groups. The term “association” is almost a bad word when you’re talking about health insurance, but the truth is that legitimate, competent, non-profit associations like Fractured Atlas can play valuable roles as healthcare intermediaries. We provide coverage that is portable and can be maintained as an individual moves between jobs or assignments and even during periods of unemployment. We also serve as advocates on our members’ behalf, by helping them navigate their coverage options, by explaining their benefits in simple down-to-earth language, and by mediating disputes between individuals and insurance companies or providers. In addition, we have on more than one occasion negotiated special eligibility rules for sole-proprietor plans that account for the atypical employment patterns in the arts and creative industries.

Yet despite our many success stories, Fractured Atlas’s efforts to provide cost-effective health insurance options are constrained by certain aspects of the state’s health insurance regulations. As you know, groups with fewer than 50 employees in New York are subject to community rating. This rule also applies to associations in which any single member has fewer than 50 employees. Since the 8,000 New York artists in our membership are all self-employed, this means we have no hope of leveraging our numbers for improved negotiating power with the insurance companies. As a practical matter, it means those 8,000 individuals pay a penalty for their career choice in the form of much higher health insurance premiums. Considering the enormous benefits that the arts and creative industries bring to the state’s economy, this feels at times like an arbitrary and harsh punishment.

We are aware of a special designation for qualifying association plans, subject to the approval of the superintendent of insurance, which allows for normal large group rating. To our knowledge, there is only one organization in New York State that has been assigned a special class (M) designation. While it is a valuable organization which provides a great service to New York State, it isn’t a panacea. Specifically, many artists have found it difficult to meet their requirements for participation, which are designed to accommodate a broad range of industries. Providing organizations like Fractured Atlas with the same opportunity would go a long way towards leveling the playing field and providing real options for the state’s artists.

To a lesser degree, Fractured Atlas is also held back by the fact that nonprofit organizations cannot have a broker’s license under NY state insurance law. This limits our ability to serve the needs of our constituents and deprives the organization of a great opportunity to subsidize its operations at no cost to the membership.

New York is, for the time being, the cultural capital of the world. The arts and creative industries make a huge and well documented contribution to the state’s economic prosperity. However, many cities across the nation are investing in social capital to facilitate the establishment of creative communities, utilizing the arts to cultivate and sustain economic growth. As a result, more and more artists are embracing the enticing opportunities these new locations can offer them, especially in light of some special challenges that are particularly taxing upon New York’s delicate creative ecosystem. Among the most influential factors is the lack of access to affordable health insurance. Fortunately, it is within the state’s power to make a few minor adjustments, with no budget allocations required, which would dramatically improve this situation. From the standpoint of today’s subject matter, these moves would also result in a substantial increase in the ranks of the insured in New York State. Thank you for your attention to this important issue and for your commitment to the health of all New Yorkers, including artists.

It’s not often that events in the auto industry have a major long-term impact on the arts community. However it’s worth taking note of the groundbreaking new contract that GM just signed with the UAW. As this morning’s Wall Street Journal reports:

The labor agreement reached by General Motors Corp. is the most striking example of a bigger trend sweeping U.S. health-care: employers renouncing their decades-old role as chief health-care buyer.

Let us all hope this trend continues and expands! Perhaps more than any other industry in America, workers in the arts are poorly served by an employment-based healthcare system. For the most part, artists are either self-employed, or they enjoy erratic and episodic employment, or they take “day jobs” like waiting tables or temping that rarely provide benefits. Relying on a paternalistic employer to procure and pay for one’s healthcare is simply a lousy model for us.

GM’s move (which actually leaves both GM and the union in much stronger positions) is being seen as big domino falling, with other companies and other industries likely to follow suit. So if we, as a society, abandon the notion that people ought to get health insurance from their employers, what are our other options? Well, there are three:

1. individuals go direct to insurance companies;
2. the government (state or federal) picks up the tab for everyone;
3. individuals form large, stable groups through non-employer intermediaries who negotiate and purchase coverage on their behalf.

In my view, any of these is preferable to the status quo, though I believe the third option is a nice middle ground that preserves market forces but doesn’t leave individuals alone to wrestle with opaque, cruel bureaucracies.