Monthly Archives: May 2017

Self-insurance Options Continue to Draw Employers

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http://www.healthleadersmedia.com/health-plans/self-insurance-options-continue-draw-employers?spMailingID=10958671&spUserID=MTY3ODg4NTg1MzQ4S0&spJobID=1160435461&spReportId=MTE2MDQzNTQ2MQS2

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Employers seek more flexibility in designing a plan suitable for their employees. The self-insured are not immune, however, from the effects of the healthcare reform debate.

More employers are moving to self-funded healthcare insurance and the trend is likely to continue as they seek health plans that satisfy their employees more than the commercial options currently available under the Affordable Care Act, says an industry insider.

Dissatisfaction with the offerings of commercial health plans is encouraging a steady migration of employers to the self-insurance option, says Mike Ferguson, CEO of the Self-Insurance Institute of America. Rather than paying the insurance company a premium to take the annual risk on the healthcare costs of its employees, the company assumes the risk and pays the bills directly.

“Over the years there has been a slow but steady increase in the number of employers moving to self-funded plans, and the reason for that is that they can better take advantage of some cost saving opportunities and also customize the plans to the needs of their work force,” Ferguson says.

Blue Shield CEO Says GOP’s ‘Flawed’ Health Bill Would Harm Sicker Consumers

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http://www.healthleadersmedia.com/health-plans/blue-shield-ceo-says-gop%E2%80%99s-%E2%80%98flawed%E2%80%99-health-bill-would-harm-sicker-consumers?spMailingID=10958671&spUserID=MTY3ODg4NTg1MzQ4S0&spJobID=1160435461&spReportId=MTE2MDQzNTQ2MQS2

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The CEO’s comments break with conventional wisdom, showing that at least one insurance industry leader has strong reservations about returning to the practice of scrutinizing people’s medical histories to determine rates.

 

Poll: Americans divided over what Congress should do about Obamacare

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Poll: Americans divided over what Congress should do about Obamacare

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According to a new POLITICO/Harvard T.H. Chan School of Public Health poll, Americans remain divided over how to move forward on healthcare.

Recently, President Trump and Republicans in Congress proposed the American Health Care Act (AHCA) as a potential replacement for the Affordable Care Act (ACA), also known as Obamacare. The AHCA was withdrawn, however, without a vote in Congress. The new survey shows that, following the ACHA’s withdrawal, political opinions remain dramatically polarized about the future of Obamacare. For nearly every question, Republican opinions differ substantially not only from Democratic opinions, but from those of the public as a whole.

Consistent with other polls showing low favorability ratings toward the Republicans’ AHCA, this poll shows that 60% of the public as a whole preferred keeping Obamacare over adopting the AHCA. However, despite the low favorability, 64% of Republicans nonetheless would have preferred the AHCA to Obamacare.

Moving forward, Americans are divided over what President Trump and Republicans should do on healthcare: 41% think that the GOP should work with Democrats to fix Obamacare, while another 19% think they should move on to other issues. A further 19% think they should try again to repeal and replace Obamacare. Republicans are similarly internally divided, while Democrats are more unified. Among Republicans, 60% want the GOP to either try a new repeal-and-replace plan (33%) or to repeal the law entirely (27%). Among Democrats, a 58% majority want the GOP to work with Democrats to fix Obamacare.

Robert Blendon, who co-directed the poll, discussed the poll’s political implications: “The findings mean different things for different parties. Democrats want to see their members of Congress try to fix the law or move on. Republicans, on the other hand, want to see another effort to repeal and replace, or just repeal the whole program. This suggests the GOP would likely face backlash from their constituencies if they were to move on to other issues without at least trying again to repeal and replace Obamacare.”

Additionally, Obamacare allowed for states to expand their Medicaid program, and the Republicans’ recent bill sought to repeal this measure. One element of the Republican proposal would have shifted control over directing the Medicaid program to states, in exchange for less federal money for the program. On this topic, a 54% majority of the public as a whole opposed this idea, instead preferring to keep Medicaid funding as it currently is. Once more Democrats and Republicans differ: 83% of Democrats support the current structure of Medicaid, while 67% of Republicans support increased state control in exchange for less federal funding.

Methodology

These polls are part of an on-going series of surveys developed by researchers at the Harvard Opinion Research Program (HORP) at the Harvard T.H. Chan School of Public Health in partnership with POLITICO.

The research team at Harvard T.H. Chan School of Public Health consists of: Robert J. Blendon, Professor of Health Policy and Political Analysis and Executive Director of HORP; John M. Benson, Senior Research Scientist and Managing Director; Logan S. Casey, Research Analyst in Public Opinion; and Justin M. Sayde, Administrative and Research Manager. The research team at POLITICO was led by Joanne Kenen, Executive Editor, Health Care at Politico/Politico Pro.

Interviews for the first poll were conducted with a nationally representative sample of 1,019 randomly selected adults, ages 18 and older, via telephone (including cell phones and landlines) by SSRS of Media, Pennsylvania. The interviewing period was March 22–26, 2017.

Interviews for the second poll were conducted with a nationally representative sample of 1,017 randomly selected adults, ages 18 and older, via telephone (including cell phones and landlines) by SSRS of Media, Pennsylvania. The interviewing period was March 29–April 2, 2017.

The data for each of the polls were weighted to reflect the demographics of the national adult population as described by the U.S. Census. When interpreting these findings, one should recognize that all surveys are subject to sampling error. Results may differ from what would be obtained if the whole U.S. adult population had been interviewed. The margin of error for the first poll is ±3.7 percentage points; for the second poll, ±3.8 percentage points

Possible sources of non-sampling error include non-response bias, as well as question wording and ordering effects. Non-response in telephone surveys produces some known biases in survey-derived estimates because participation tends to vary for different subgroups of the population. To compensate for these known biases and for variations in probability of selection within and across households, sample data are weighted by household size, cell phone/landline use and demographics (sex, age, race/ethnicity, education, and region) to reflect the true population. Other techniques, including random-digit dialing, replicate subsamples, and systematic respondent selection within households, are used to ensure that the sample is representative.

House Votes to Repeal and Replace the ACA

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http://www.medpagetoday.com/Washington-Watch/repeal-and-replace/65028?xid=fb_o_

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The House of Representatives voted 217-213 here Thursday to repeal and replace the Affordable Care Act (ACA) with a plan that critics say could throw millions of people off of health insurance and cause premiums to rise steeply for older Americans.

The vote on a revised version of H.R. 1628, the American Health Care Act (AHCA), came just before House members headed out of town for a week-long recess. The measure now heads to the Senate, where many observers say it will have a tough time getting through. Reaction to the vote from the healthcare community was swift and negative, with many organizations predicting dire consequences for patients.

Under the original version of the bill, the Congressional Budget Office (CBO) estimated that 24 million people would lose their health insurance as of 2026 if the bill were passed; it would also reduce the deficit by $337 billion over the same period, CBO said. However, the current bill — which has several revisions — was voted on too quickly for the CBO to develop a revised estimate.

Mandates Eliminated

The AHCA would eliminate the taxes and mandates that financed the ACA — including the individual and employer mandate penalty — allow insurers to charge older adults and young people less, and replace subsidies based on need with flat tax credits based primarily on an age. Over time, the plan would repeal the Medicaid expansion and put a ceiling on the entitlement program by shifting its structure to a per-capita block grant, which would increase as enrollee size increases. The bill would also freeze federal funding for Planned Parenthood.

The original AHCA bill was scheduled for a vote on March 24, but it was pulled at the last minute by House Speaker Paul Ryan (R-Wisc.) after he determined he did not have enough votes to pass it. Since then, Republicans made several changes to their bill in order to attract recalcitrant members of their party, both moderates and conservatives.

These included:

  • An amendment by Rep. Tom MacArthur (R-N.J.) that would allow states to opt out of requiring insurers to cover the ACA’s list of “essential health benefits”; instead, states could develop their own lists of what benefits they considered essential. The amendment also would allow states to charge more for 1 year to patients with pre-existing conditions if they have been without insurance coverage for 63 days or more. This type of medical underwriting would be done in lieu of a 30% penalty called for under the law for patients who re-enroll in health insurance after such a lapse in coverage. States who opt to allow medical underwriting also would have to set up high-risk pools for patients with high costs due to pre-existing conditions.
  • An amendment by Reps. Fred Upton (R-Mich.) and Billy Long (R-Mo.) that would provide states with an extra $8 billion over 5 years to set up high-risk pools to cover patients with high costs due to pre-existing conditions, in addition to the $130 billion already in the bill that states could use for that purpose. Although no CBO estimate is available, an estimate from the Center for American Progress, a left-leaning think tank here, found that states would need an extra $200 billion for the high-risk pools to be adequately funded, assuming that 5% of patients in the individual and small-group markets end up in the pools.
  • An amendment by Rep. Martha McSally (R-Ariz.) to prevent members of Congress from being exempted from the AHCA. The AHCA originally exempted Congress members from being affected by state waivers.

Rep. Phil Roe, MD (R-Tenn.), an ob.gyn., said he was voting for the bill because the ACA cannot be fixed. “The whole [ACA] plan is so complicated it’s impossible,” he told MedPage Today in a phone interview. “There are people out there who got helped by [the ACA], no question, but they’ll get helped by this bill also.”

More than half of those who have coverage through the ACA “have out-of-pocket costs and copays so high that they don’t go for healthcare,” he said. “If you have a health insurance card but you can’t use it, it’s not of much value to you. So we have to try to get the costs down.”

Medical Groups Pan the Measure

Medical groups panned the House’s action. “The bill passed by the House today will result in millions of Americans losing access to quality, affordable health insurance and those with pre-existing health conditions face the possibility of going back to the time when insurers could charge them premiums that made access to coverage out of the question,” Andrew Gurman, MD, president of the American Medical Association (AMA), said in a statement. “The AMA urges the Senate and the Administration to work with physician, patient, hospital and other provider groups to craft bipartisan solutions so all American families can access affordable and meaningful coverage.”

“The American College of Physicians (ACP) is extremely disappointed” in the bill’s passage in the House, ACP president Jack Ende, MD, said in a statement. “The House action is by no means the end of the story, however. ACP will continue to do all that it can to ensure continued coverage and access for the millions of patients who have benefited from the Affordable Care Act.”

 The [American Diabetes] Association remains deeply concerned with the AHCA and has expressed our reservations throughout the rushed legislative process, the group said in a statement. “The most alarming last-minute changes to the bill will allow states to waive the requirement for essential health benefits and health status rating. Weakening these rules will give insurers the ability to charge people with pre-existing conditions, — such as diabetes — higher prices. It will also allow insurers to deny people with diabetes coverage for the care and services they need to treat their disease.”

Heated Floor Debate

Debate on the House floor was heated. “How did we get to this point?” asked Rep. Michael Burgess, MD (R-Texas), an ob/gyn. “The ACA is simply not working for the American people; it is limiting choices, it is raising costs, it is leaving millions without access to care. The ACA has left the individual market in shambles and is driving insurers away from offering coverage.”

“Pathetic — that is the word to describe this process and this bill,” said Rep. Jim McGovern (D-Mass.). “If the American people could sue Congress for malpractice, my Republican friends would be in deep trouble. How could you do this to the people you represent? You’re allowing insurance companies to discriminate against people with preexisting conditions? What is wrong with you guys?”

Molina Healthcare fires its CEO and CFO

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http://www.fiercehealthcare.com/payer/molina-healthcare-fires-its-ceo-and-cfo

Boardroom

Citing “the company’s disappointing financial performance,” Molina Healthcare has cut ties with its CEO, J. Mario Molina, and his brother, CFO John Molina.

The Medicaid managed care company announced Tuesday that Joseph W. White, who was its chief accounting officer, will take over the role of CFO and act as the interim president and CEO while Molina seeks a replacement for that role.

Molina’s board of directors took the step of firing the sons of the company’s founder, C. David Molina, “in order to drive profitability through operational improvements,” Chairman Dale B. Wolf said in the announcement.

“With the industry in dynamic transition, the Board believes that now is the right time to bring in new leadership to capitalize on Molina’s strong franchise and the opportunities we see for sustained growth,” he added.

The leadership change comes in the wake of Molina’s revelation in February that it lost $110 million on its Affordable Care Act exchange business last year. On the company’s fourth-quarter earnings call, J. Mario Molina primarily blamed the ACA’s risk adjustment program, which he said uses a methodology that “penalizes low-cost and low-premium health insurers like Molina.”

That was a sharp turnaround from back in September, when the insurer’s CEO said that it had exceeded its own growth targets for its ACA exchange business.

J. Mario Molina has also been an outspoken critic of Republicans’ bill that aims to repeal and replace the Affordable Care Act—a rarity among his peers. In particular, he was critical of the steep funding cuts for Medicaid proposed by the GOP.

Molina’s now-ex-CEO earned $10 million in total compensation in 2016, a slight decrease from the $10.3 million he made the year prior and only one of two executives at the eight largest publicly traded health insurers to take a pay cut.

The Impact of the ACA’s Medicaid Expansion on Hospitals’ Uncompensated Care Burden and the Potential Effects of Repeal

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http://www.commonwealthfund.org/publications/issue-briefs/2017/may/aca-medicaid-expansion-hospital-uncompensated-care

Abstract

Issue: By increasing health insurance coverage, the Affordable Care Act’s Medicaid eligibility expansion was also expected to lessen the uncompensated care burden on hospitals. The expansion currently faces an uncertain future.
Goal: To compare the change in hospitals’ uncompensated care burden in the 31 states (plus the District of Columbia) that chose to expand Medicaid to the changes in states that did not, and to estimate how these expenses would be affected by repeal or further expansion.
Methods: Analysis of uncompensated care data from Medicare Hospital Cost Reports from 2011 to 2015.
Findings and Conclusions: Uncompensated care burdens fell sharply in expansion states between 2013 and 2015, from 3.9 percent to 2.3 percent of operating costs. Estimated savings across all hospitals in Medicaid expansion states totaled $6.2 billion. The largest reductions in uncompensated care were found for hospitals in expansion states that care for the highest proportion of low-income and uninsured patients. Legislation that scales back or eliminates Medicaid expansion is likely to expose these safety-net hospitals to large cost increases. Conversely, if the 19 states that chose not to expand Medicaid were to adopt expansion, their uncompensated care costs also would decrease by an estimated $6.2 billion.

Background

Prior to the Affordable Care Act (ACA), childless, nondisabled adults were ineligible for Medicaid in most states. The ACA allowed states to expand eligibility to nonelderly adults with incomes up to 138 percent of the federal poverty level (roughly $16,400 for an individual and $33,600 for a family of four in 2017). As of March 2017, 31 states and the District of Columbia had expanded Medicaid, while 19 states had not.1

One intended benefit of the Medicaid expansion was to reduce uncompensated care burdens that hospitals face. Uncompensated care is any treatment or service not paid for by an insurer or patient. We define uncompensated care costs as the sum of a hospital’s losses on both charity care (when hospitals forgo or reduce the cost of care) and bad debt (when hospitals bill for services but cannot collect payment).

Our previous research, detailed in a 2016 Health Affairs article, found that hospitals in Medicaid-expansion states experienced a sizeable reduction in their uncompensated care costs between 2013 and 2014, from 4.1 percentage points to 3.1 percentage points of operating costs.2 To see if this uncompensated care decrease has continued, we extended our analysis to 2015 and explored which hospitals saw the greatest decreases in uncompensated care costs.

This issue brief is intended to guide decisions around a possible ACA repeal and further state Medicaid expansions, as well as inform policies aimed at alleviating hospitals’ uncompensated care burden. In 2015, U.S. hospitals provided a total of $35.7 billion in uncompensated care, according to the American Hospital Association.3 However, this burden is unevenly distributed. Safety-net hospitals care for a larger-than-typical share of low-income and uninsured patients. In the past, Medicare and Medicaid disproportionate share hospital (DSH) payments provided significant financial relief to safety-net hospitals. But the ACA mandates a sizeable reduction in DSH payments.

Findings

Uncompensated Care Declines in Expansion States Are Substantial Relative to Profit Margins

To identify trends in uncompensated care burdens for hospitals in expansion and nonexpansion states, we used data from Medicare Hospital Cost Reports to create a sample of 1,154 hospitals that report financial data for the calendar year. Focusing on hospitals within the 75th percentile, 50th percentile, and 25th percentile of the uncompensated care cost distribution, we found that between 2013 and 2014, these costs markedly declined in expansion states, and this downward trend continued into 2015 (Exhibit 1). The trajectories of uncompensated care costs were similar for hospitals across the three percentiles. In contrast, we found no similar break from historical trend in nonexpansion states.