Category Archives: ACA

Heads Up: A Ruling On The Latest Challenge To The Affordable Care Act Is Coming

Posted on by • Posted in 2020 Election Issues, ACA, Appellate Court, Essential Health Benefits, Health Insurance Coverage Adequacy, Health Policy, Out of Pocket Expenses, Preexisting Conditions, Supreme Court, Texas v. Azar Lawsuit, Underinsured, Uninsured • Leave a comment

https://www.npr.org/sections/health-shots/2019/10/12/769038397/heads-up-a-ruling-on-the-latest-challenge-to-the-affordable-care-act-is-coming?fbclid=IwAR3g7_yZtBbywVWukbTC0PmcInHcioxPcF9Y5LsWYLpEH5Gs-3ZgBGgINVM

A decision in the latest court case to threaten the future of the Affordable Care Act could come as soon as this month. The ruling will come from the panel of judges in the 5th Circuit Court of Appeals, which heard oral arguments in the Texas v. Azar lawsuit.

An estimated 24 million people get their health coverage through programs created under the law, which has faced countless court challenges since it passed.

In court in July, only two of the three judges — both appointed by Republican presidents — asked questions. “Oral argument in front of the circuit went about as badly for the defenders of the Affordable Care Act as it could have gone,” says Nicholas Bagley, a professor of law at the University of Michigan. “To the extent that oral argument offers an insight into how judges are thinking about the case, I think we should be prepared for the worst — the invalidation of all or a significant part of the Affordable Care Act.”

Important caveat: Regardless of this ruling, the Affordable Care Act is still the law of the land. Whatever the 5th Circuit rules, it will be a long time before anything actually changes. Still, the timing of the ruling matters, says Sabrina Corlette, director of the Center on Health Insurance Reforms at Georgetown University.

“If that decision comes out before or during open enrollment, it could lead to a lot of consumer confusion about the security of their coverage and may actually discourage people from enrolling, which I think would be a bad thing,” she says.

Don’t be confused. Open enrollment begins Nov. 1 and runs at least through Dec. 15, and the insurance marketplaces set up by the law aren’t going anywhere anytime soon.

That’s not to underplay the stakes here. Down the line, sometime next year, if the Supreme Court ends up taking the case and ruling the ACA unconstitutional, “the chaos that would ensue is almost possible impossible to wrap your brain around,” Corlette says. “The marketplaces would just simply disappear and millions of people would become uninsured overnight, probably leaving hospitals and doctors with millions and millions of dollars in unpaid medical bills. Medicaid expansion would disappear overnight.

“I don’t see any sector of our health care economy being untouched or unaffected,” she adds.

So what is this case that — yet again — threatens the Affordable Care Act’s very existence?

A quick refresher: When the Republican-led Congress passed the Tax Cuts and Jobs Act in 2017, it zeroed out the Affordable Care Act’s penalty for people who did not have health insurance. That penalty was a key part of the Supreme Court’s decision to uphold the law in 2012, so after the change to the penalty, the ACA’s opponents decided to challenge it anew.

Significantly, the Trump administration decided in June not to defend the ACA in this case. “It’s extremely rare for an administration not to defend the constitutionality of an existing law,” says Abbe Gluck, a law professor and the director of the Solomon Center for Health Law and Policy at Yale University. “The administration is not defending any of it — that’s a really big deal.”

The basic argument made by the state of Texas and the other plaintiffs? The zero dollar fine now outlined in the ACA is a “naked, penalty-free command to buy insurance,” says Bagley.

Here’s how the argument goes, as Bagley explains it: “We know from the Supreme Court’s first decision on the individual mandate case that Congress doesn’t have the power to adopt a freestanding mandate, it just has the power to impose a tax.” So therefore, the argument is that “the naked mandate that remains in the Affordable Care Act must be unconstitutional.”

The case made by the plaintiffs goes further, asserting that because the individual mandate was described by the Congress that enacted it as essential to the functioning of the law, this unconstitutional command cannot be cut off from the rest of the law. If the zero dollar penalty is unconstitutional, the whole law must fall.

Last December, a federal judge in Texas agreed with that entire argument. His judgement was appealed to the panel of judges in the 5th Circuit. Even if those judges agree that the whole law is unconstitutional, that would not be the end of the story — the case will almost certainly end up before the Supreme Court. It would be the third case to challenge the Affordable Care Act in the nation’s highest court.

So if the ruling will be appealed anyway, does it matter? “It matters for at least two reasons,” Bagley says. “First of all, if the 5th Circuit rejects the lower court holding and decides that the whole law is, in fact, perfectly constitutional, I think there’s a good chance the Supreme Court would sit this one out.”

On the other hand, if the 5th Circuit invalidates the law, it almost certainly will go the Supreme Court, “which will take a fresh look at the legal question,” he says. Even if the Supreme Court ultimately decides whether the ACA stands, “you never want to discount the role that lower court decisions can play over the lifespan of a case,” Bagley says.

The law has been dogged by legal challenges and repeal attempts from the very beginning, and experts have warned many times about the dire consequences of the law suddenly going away. Nine years in, “the Affordable Care Act is now part of the plumbing of our nation’s health care system,” Bagley says. “Ripping it out would cause untold damage and would create a whole lot of uncertainty.”

 

 

 

Trump’s Lightweight Alternative to Medicare for All

Posted on by • Posted in 2020 Election Issues, ACA, Dept of Health and Human Services (HHS), Health Policy, Medicare, Medicare Advantage • Leave a comment

https://www.realclearpolicy.com/articles/2019/10/11/trumps_lightweight_alternative_to_medicare_for_all_111288.html?utm_source=The+Fiscal+Times&utm_campaign=bc4ead3dce-EMAIL_CAMPAIGN_2019_10_11_09_27&utm_medium=email&utm_term=0_714147a9cf-bc4ead3dce-390702969

Image result for weak light bulb

President Trump and senior officials in his administration have been signaling for several months that they would release an updated GOP health-care plan, presumably to repeal and replace the Affordable Care Act (ACA) — which the president still criticizes as a “disaster.” Last week, the president gave a campaign-style speech denouncing Medicare for All and announcing a new executive order (EO) on improving Medicare. If the EO is the administration’s much-hyped health-care “plan,” it is a surprisingly lightweight offering.

The EO tasks the Secretary of Health and Human Services (HHS) and officials in the White House with producing several deliverables focused mainly on expanding options in Medicare Advantage (MA), which is the private insurance alternative to Medicare’s government-managed fee-for-service (FFS) option.

  • HHS is to propose regulations within a year to make it easier for Medicare beneficiaries to use medical savings accounts (Medicare’s version of health savings accounts) in conjunction with MA offerings and to facilitate cash rebates to MA enrollees when selecting options with particularly low premiums.
  • HHS is to suggest regulatory changes to make it easier for MA plans to offer innovative supplemental benefits, including telehealth services.
  • Working with the Council of Economic Advisers and others in the White House, HHS is to recommend how payment rates for medical services paid by the traditional FFS program could be tied more closely to the market rates paid by MA plans.
  • To provide more flexibility for MA plans, HHS is to recommend changes that scale back network adequacy requirements in states that limit provider competition and to account for the benefits of telehealth services.
  • The agency is to look for ways to allow MA plans to speed adoption of innovative medical technology and practices.
  • HHS also is to provide beneficiaries with “better” quality and cost data.

The EO uses general language throughout so it is difficult to know for sure what some of these administrative actions will mean. Overall, however, it is clear that what is called for are steps allowed under current law. As such, the changes are likely to be incremental and gradual.

The most promising proposal might be the push to encourage the payment of cash rebates to beneficiaries selecting low-cost MA options. Today, MA plans compete mainly by offering supplemental benefits beyond what Medicare covers. Cash rebates paid directly to the beneficiaries might usher in more direct price competition among MA plans, and between MA and FFS too.

The benchmarking of FFS rates to those negotiated by MA plans is a particularly obscure recommendation. Most FFS payment rates are grounded in statutory requirements. HHS may not have much authority to unilaterally adjust payments based on what is occurring among MA plans. Further, it is not clear if what the administration has in mind would raise or lower FFS spending.

While some of the concepts in the EO may be helpful, it is hard to see how they will have a dramatic effect on the health system, or on voters’ perception of the health system. The EO does nothing of consequence for Americans who are not enrolled in Medicare, nor does it offer much for 40 million Medicare beneficiaries enrolled in the traditional FFS program.

The EO may signal a play it safe approach by the administration. Instead of offering an actual plan or even just a vision for a reformed system, the administration may have decided that it is better to attack the Democratic party’s ideas rather than offer up a viable alternative course of action. Most of the political attention in 2020 will be focused upon whatever plan is pushed by the winning Democratic candidate anyway (either Medicare for All, or perhaps the introduction of a public option). The Trump administration seems more comfortable attacking either of those ideas than defending a Republican alternative.

That’s not a new development, of course. For years, Republicans have been more willing to state what they are against than what they are for.

But that strategy has its limits. As was demonstrated when the ACA passed in 2010, under the right circumstances, Democrats can pass a health-care bill even when all Republicans vote no. That might happen again, and perhaps soon, if the GOP fails to offer a convincing vision for fixing the problems – most especially rising costs — that concern many voters.

Most Republicans say they want the health system to rely on competition and consumer choice, not government control to discipline costs, but they have only vague ideas of what that would require in practice.

For the market to work, consumers need to be rewarded financially when they migrate to low-cost, high-value health care and away from costly and inefficient alternatives. That does not occur often enough today in large part because, under current law, the federal government provides larger subsidies when consumers in Medicare and job-based health care opt for more expensive coverage. Republicans shy away from fixing these problems because doing so would be politically controversial. Thus, they are left with offering safer, and less consequential, changes that represent modest progress at best.

Attacking Medicare for All or the public option is a short-term political strategy. Over the long run, the best way to beat those ideas is by enacting a viable, market-based reform plan that demonstrates cost discipline is possible without handing over all control to the federal government.

 

How seniors are being steered toward private Medicare plans

Posted on by • Posted in 2020 Election Issues, ACA, Health Policy, Medicare, Medicare Advantage • Leave a comment

https://www.axios.com/medicare-advantage-tilting-scales-7db28dd2-25af-4283-b971-21a61fa59371.html

Illustration of a wheelchair on one side of a seesaw with a hand pressing down the other side.

Today is the final day when seniors and people with disabilities can sign up for Medicare plans for 2019, and consumer groups are concerned the Trump administration is steering people into privately run Medicare Advantage plans while giving short shrift to their limitations.

Between the lines: Medicare Advantage has been growing like gangbusters for years, and has garnered bipartisan support. But the Center for Medicare Advocacy says the Trump administration is tilting the scales by broadcasting information that “is incomplete and continues to promote certain options over others.”

The big picture: The government has talked up the benefits of Medicare Advantage plans in emails to prospective enrollees during the past several weeks, the New York Times recently reported. Enrollment is approaching 22 million people, and there are reasons for its popularity.

  • Many MA plans offer $0 premiums and extra perks that don’t exist in standard Medicare, like vision and hearing coverage and gym memberships. MA plans also cap enrollees’ out-of-pocket expenses.
  • Traditional Medicare, by contrast, has higher out-of-pocket costs that usually require people to buy supplemental medical policies, called Medigap plans, as well as separate drug plans.

Yes, but: Federal marketing materials rarely mention MA’s tradeoffs.

  • MA plans limit which doctors and hospitals people can see, and they require prior approval for certain procedures. Provider directories also are loaded with errors.
  • MA plans spend less on care, yet continue to cost taxpayers more than traditional Medicare. Coding is a major problem.
  • People who enroll in MA often can’t buy a Medigap plan if they later decide to switch to traditional Medicare. And others, especially retirees leaving their jobs, may not even realize their employers are enrolling them in Medicare Advantage.

Where it stands: The Affordable Care Act slashed payments to MA insurers, but other Obama administration policies bolstered the industry. And now the Trump administration is helping it even more.

  • Obama officials built the chassis for today’s bonus system, which has been lucrative for plans (and likely wasteful, according to federal auditors).
  • A bipartisan 2015 law that adjusted Medicare payments to doctors killed the most popular Medigap plans, starting in 2020 — a move experts say could indirectly drive more people to MA.
  • HHS championed MA in a new policy document this week, on the heels of positive marketing.

What we’re hearing: Wall Street is beyond bullish on the major MA insurers like UnitedHealth Group and Humana. Supporters of MA like the idea of treating Medicare more like a marketplace, where people have to shop for a plan every year, but experts are worried about how it will affect the average enrollee.

“We know people don’t” actively engage in health insurance shopping, said Tricia Neuman, a Medicare expert at the Kaiser Family Foundation who recently wrote about MA. “It’s just too hard.”

 

 

 

WHY HOSPITALS ARE GETTING INTO THE HOUSING BUSINESS

Posted on by • Posted in ACA, Charity Care, Community Benefit, Health Policy, Health System, Homeless, Hospital, Hospital Industry, Housing, Operating Income, Operating Margin, Operating Performance, Unstable Housing • Leave a comment

https://www.healthleadersmedia.com/clinical-care/why-hospitals-are-getting-housing-business

Hospitals cannot discharge patients if they have no safe place to go, so patients who are homeless, frail, living alone, or experiencing an unstable housing situation, can occupy hospital beds long after their acute medical problem is resolved.

One patient at Denver Health, the city’s largest safety net hospital, occupied a bed for more than four years—a hospital record of 1,558 days.

Another admitted for a hard-to-treat bacterial infection needed eight weeks of at-home IV antibiotics, but had no home.

A third, with dementia, came to the hospital after being released from the Denver County Jail. His family refused to take him back.

In the first half of this year alone, the hospital treated more than 100 long-term patients. All had a medical issue that led to their initial hospitalization. But none of the patients had a medical reason for remaining in the hospital for most of their stay.

Legally and morally, hospitals cannot discharge patients if they have no safe place to go. So patients who are homeless, frail or live alone, or have unstable housing, can occupy hospital beds for weeks or months—long after their acute medical problem is resolved. For hospitals, it means losing money because a patient lingering in a bed without medical problems doesn’t generate much, if any, income. Meanwhile, acutely ill patients may wait days in the ER to be moved to a floor because a hospital’s beds are full.

“Those people are, for lack of a better term, stranded in our hospital,” said Dr. Sarah Stella, a Denver Health physician.

To address the problem, hospitals from Baltimore to St. Louis to Sacramento, Calif., are exploring ways to help patients find a home. With recent federal policy changes that encourage hospitals to allocate charity dollars for housing, many hospitals realize it’s cheaper to provide a month of housing than to keep patients for a single night.

Hospital executives find the calculus works even if they have to build affordable housing units themselves. It’s why Denver Health is partnering with the Denver Housing Authority to repurpose a mothballed building on the hospital campus into affordable senior housing, including about 15 apartments designated to help homeless patients transition out of the hospital.

“This is an experiment of sorts,” said Peg Burnette, the hospital’s chief financial officer. “We might be able to help better their lives, as well as help the financials of the hospital and help free up capacity for the patients that need to come to see us for acute care.”

SPENDING TO SAVE MONEY

Denver Health once used the shuttered 10-story building for office space but opted to sell it to the housing authority and grant a 99-year lease on the land for a minimal fee.

“It really lowers the construction costs for us,” said Ismael Guerrero, Denver Housing Authority’s executive director. “It was a great opportunity to build additional housing in a location that’s obviously close to the hospital, close to public transit, near the city center.”

Once the renovation is complete in late 2021, the housing group will hire a coordinator to assist tenants with housing-related issues, including helping those in the transitional units find permanent housing. The hospital will provide a case manager to help with their physical and behavioral health needs, preparing them for life on their own. Denver Health expects most patients will be able to move on from the transitional units within 90 days.

The hospital will pay for the housing portion itself. That will still be far cheaper than what the hospital currently spends.

It costs Denver Health $2,700 a night to keep someone in the hospital. Patients who are prime candidates for the transitional units stay on average 73 days, for a total cost to the hospital of nearly $200,000. The hospital estimates it would cost a fraction of that, about $10,000, to house a patient for a year instead.

“The hospital really is like the most expensive form of housing,” Stella said.

GROWING INTEREST

A recent report from the Urban Institute found that while most hospital officials are well aware of how poor housing affects a patient’s recovery, they were stymied about how to address the issue.

“It’s on the radar of almost all hospitals,” said Kathryn Reynolds, who co-authored the report. “But it seemed like actually making investments in housing, providing some type of financing or an investment in land or something that has a good amount of value seems to be less widespread.”

The report found housing investment has been more likely among hospitals with their own health plans or other types of arrangements in which they were receiving a fixed amount of money to care for a group of patients. Getting patients into housing could lower their costs and increase their operating margins. Others, particularly religiously affiliated and children’s hospitals, sought housing solutions as part of their charitable mission.

Reynolds said the trend is due in part to the Affordable Care Act, which requires hospitals to perform a community needs assessment to help guide their charitable efforts. That prompted more hospitals to consider the social needs of their patients and pushed housing concerns up the list. Additionally, the Internal Revenue Service clarified in 2015 that hospitals could claim housing investments as charitable spending required under their tax-free status. And provisions included in the 2017 tax cut bill provided significant tax savings for investors in newly designated opportunity zones, increasing their interest in affordable housing projects.

Some hospitals, she said, may use their cash reserves to invest in housing projects that generate a lower return than other investment options because it furthers their mission, not just their profits.

In other cases, hospital systems play a facilitator role—using their access to cheap credit or serving as an anchor tenant in a larger development—to help get a project off the ground.

“Housing is not their business,” Guerrero said. “It’s not an easy space to get into if you don’t have the experience, if you don’t have a real estate development team in-house to understand how to put these deals together.”

CUTTING COSTS

In the southwestern corner of Colorado, Centura Health’s Mercy Regional Medical Center has partnered with Housing Solutions for the Southwest to prioritize housing vouchers for frequent users of the emergency room.

Under a program funded by the Catholic Health Initiatives, Mercy hired a social worker and a case manager to review records of frequent emergency room patients. They quickly realized how big an issue housing was for those patients. Many had diabetes and depended on insulin—which needs refrigeration. Kidney failure was one of the most costly diagnoses for the hospital.

Once patients received housing vouchers and found stable housing, though, costs began to drop.

“We now knew where they were. We knew that they had a safe place to live,” said Elsa Inman, program coordinator at Mercy Regional. “We knew they would be more effective in managing their chronic conditions.”

The patients with stable housing were more likely to make it to their primary care and specialist appointments, more likely to stay on top of medications and keep their chronic conditions in check.

The combination of intensive case management and patient engagement helped to halve ER visits for the first 146 patients in the program, saving nearly $495,000 in Medicaid spending in less than three years.

“Hospitals are businesses and nonprofits are businesses,” said Brigid Korce, program development director for Housing Solutions. “They are bottom-line, dollars-and-cents people.”

Inman acknowledged that the hospital might have missed out on some revenue by reducing ER use by these patients. Hospitals are still largely paid by the number of patients they treat and the number of services they provide.

But most of those patients were covered by Medicaid, so reimbursements were low anyway. And the move freed up more ER beds for patients with more critical needs.

“We want to be prepared for life-threatening conditions,” Inman said. “If you’ve got most of your beds taken up by someone who can be receiving patient care outside in the community, then that’s the right thing to do.”

That was less of an issue for the inpatients at Denver Health. Because hospitals are generally paid a fixed amount for a given diagnosis, the longer a patient stays in the hospital, the more money the hospital loses.

“They’ve basically exhausted their benefit under any plan because they don’t meet medical necessity anymore,” Burnette said. “If they had a home, they would go home. But they don’t, so they stay in the hospital.”

 

 

 

Americans need more convincing on Medicare for All, poll says

Posted on by • Posted in 2020 Election Issues, ACA, Essential Health Benefits, Health Insurance Coverage Adequacy, Health Policy, High Deductible Health Plans, High Drug Prices, High Premiums, High Prices, Medicare, Medicare for All, Out of Network, Out of Pocket Expenses, Preexisting Conditions • Leave a comment

https://www.pbs.org/newshour/health/americans-need-more-convincing-on-medicare-for-all-poll-says?omnicid=CFC1688174&mid=henrykotula@yahoo.com

Americans need to know more before they can make up their minds about proposed overhauls to the nation’s health care system, according to a survey released Thursday.

When asked if they wanted to wipe out private health insurance for a so-called Medicare for All public insurance program, 40 percent of U.S. adults between the ages of 19 to 64 said they did not know enough to offer an opinion.

A few Democratic presidential candidates have put forward their proposed health care plans, including Medicare for All. Sen. Bernie Sanders, I-Vt. and Sen. Elizabeth Warren, D-Mass. have advocated for Medicare for All models that replace private insurance with a national health insurance plan. And Sen. Kamala Harris, D-Calif., released a health care proposal that covered 330 million Americans under one government health care plan. According to the candidates, these plans would make health care affordable for more Americans. It could help reduce the number of uninsured Americans, which currently amounted to 27.5 million people nationwide in 2018, according to the Census Bureau, marking a rise of 1.9 million people over the previous year.

According to a July 22 poll from the PBS NewsHour, NPR and Marist, 70 percent of U.S. adults said they supported Medicare for All proposals as long as they maintain an option to keep private health insurance. A system like this has been proposed by Pete Buttigieg. By comparison, when asked in a separate question, only 41 percent of survey respondents said they wanted to scrap private health insurance for a government-run plan.

In this latest poll from the Commonwealth Fund, another 32 percent of Americans said they opposed the idea, while 27 percent of Americans favored such a plan, according to the survey results published by the Commonwealth Fund, which researches health policy. The survey polled 4,914 U.S. adults ages 19 to 64 from March 19 to June 9.

“People are confused about what this might mean for them, and what it might mean for the health system and what it might mean in terms of trade-offs,” said Sara Collins, vice president of Health Care Coverage and Access at the Commonwealth Fund, during a call with reporters Wednesday.

Americans are largely satisfied with their health insurance, but lacked confidence that their health care coverage could protect them financially if they fell seriously ill and required medical care.

“These satisfaction rates reflect the fact that most people don’t use their insurance a ton,” said Sabrina Corlette, a research professor and co-founder of the Center on Health Insurance Reforms at Georgetown University. “It’s sporadic interactions.”

Eighty-five percent of working-age Americans said they were satisfied with their health insurance. That included private health insurance, Medicaid, and coverage purchased on the individual marketplace established under the Affordable Care Act. Another 14 percent said they were dissatisfied with their current health insurance.

In contrast, 61 percent of U.S. adults age 16 to 64 said they were confident that they would be able to afford the cost of care if they became seriously ill, while 38 percent of Americans said they were not confident.

These survey results come as Democratic presidential candidates promote their health care plans going into the 2020 election. Meanwhile, Republicans in Congress and the Trump administration have promised to replace the Affordable Care Act, known as Obamacare, with “something better,” although it is unclear what that would be. To date, they have eliminated some policies put into place under Obamacare, including dismantling the individual mandate.

Health care will be one of the most important issues among voters going into the next presidential election. Health care costs for Americans are the highest among industrialized nations. Meanwhile, life expectancy has dropped nationwide in recent years, in part due to the rise in drug overdose deaths, many of which are tied to the opioid crisis. Among developed nations the OECD ranked for infant mortality, the U.S. was among the bottom 11, after Russia.

This survey suggests that all the campaigns have their work cut out for them if they want to ramp up public awareness of proposals on the table to fix health care, Corlette said. She said the public needs more education and discussion about possible solutions aimed at problems in the U.S. health care system.

“It strikes me as a really good opportunity for people on both sides of the debate,” Corlette said. “There’s clearly a lot of people who have just not made up their mind.”

But she said the lack of confidence in how much protection health coverage affords people tugs at the reality that “the system doesn’t work really well for people who are very sick.”

New analysis from the Kaiser Family Foundation supports that notion. Annual family premiums for employer-based health insurance rose 5 percent to $20,576 on average, faster than wage growth, which increased by 3.4 percent, according to the study, published in Health Affairs. And since 2009, those premiums jumped 54 percent.

Health insurance costs and coverage only provide part of the picture of what troubles Americans, said Thomas Miller, a resident fellow with the conservative American Enterprise Institute.

Policymakers need to think about more than tinkering with “incremental expansions of coverage on the margins beyond where we already are,” Miller said. “It’s important to remember that people need most of all economic growth, job security and reasons to be optimistic about managing their lives.”

 

 

 

Americans need more convincing on Medicare for All, poll says

Posted on by • Posted in 2020 Election Issues, ACA, Health Policy, Medicare, Medicare for All • Leave a comment

https://www.pbs.org/newshour/health/americans-need-more-convincing-on-medicare-for-all-poll-says?omnicid=CFC1688174&mid=henrykotula@yahoo.com

Americans need to know more before they can make up their minds about proposed overhauls to the nation’s health care system, according to a survey released Thursday.

When asked if they wanted to wipe out private health insurance for a so-called Medicare for All public insurance program, 40 percent of U.S. adults between the ages of 19 to 64 said they did not know enough to offer an opinion.

A few Democratic presidential candidates have put forward their proposed health care plans, including Medicare for All. Sen. Bernie Sanders, I-Vt. and Sen. Elizabeth Warren, D-Mass. have advocated for Medicare for All models that replace private insurance with a national health insurance plan. And Sen. Kamala Harris, D-Calif., released a health care proposal that covered 330 million Americans under one government health care plan. According to the candidates, these plans would make health care affordable for more Americans. It could help reduce the number of uninsured Americans, which currently amounted to 27.5 million people nationwide in 2018, according to the Census Bureau, marking a rise of 1.9 million people over the previous year.

According to a July 22 poll from the PBS NewsHour, NPR and Marist, 70 percent of U.S. adults said they supported Medicare for All proposals as long as they maintain an option to keep private health insurance. A system like this has been proposed by Pete Buttigieg. By comparison, when asked in a separate question, only 41 percent of survey respondents said they wanted to scrap private health insurance for a government-run plan.

In this latest poll from the Commonwealth Fund, another 32 percent of Americans said they opposed the idea, while 27 percent of Americans favored such a plan, according to the survey results published by the Commonwealth Fund, which researches health policy. The survey polled 4,914 U.S. adults ages 19 to 64 from March 19 to June 9.

“People are confused about what this might mean for them, and what it might mean for the health system and what it might mean in terms of trade-offs,” said Sara Collins, vice president of Health Care Coverage and Access at the Commonwealth Fund, during a call with reporters Wednesday.

Americans are largely satisfied with their health insurance, but lacked confidence that their health care coverage could protect them financially if they fell seriously ill and required medical care.

“These satisfaction rates reflect the fact that most people don’t use their insurance a ton,” said Sabrina Corlette, a research professor and co-founder of the Center on Health Insurance Reforms at Georgetown University. “It’s sporadic interactions.”

Eighty-five percent of working-age Americans said they were satisfied with their health insurance. That included private health insurance, Medicaid, and coverage purchased on the individual marketplace established under the Affordable Care Act. Another 14 percent said they were dissatisfied with their current health insurance.

In contrast, 61 percent of U.S. adults age 16 to 64 said they were confident that they would be able to afford the cost of care if they became seriously ill, while 38 percent of Americans said they were not confident.

These survey results come as Democratic presidential candidates promote their health care plans going into the 2020 election. Meanwhile, Republicans in Congress and the Trump administration have promised to replace the Affordable Care Act, known as Obamacare, with “something better,” although it is unclear what that would be. To date, they have eliminated some policies put into place under Obamacare, including dismantling the individual mandate.

Health care will be one of the most important issues among voters going into the next presidential election. Health care costs for Americans are the highest among industrialized nations. Meanwhile, life expectancy has dropped nationwide in recent years, in part due to the rise in drug overdose deaths, many of which are tied to the opioid crisis. Among developed nations the OECD ranked for infant mortality, the U.S. was among the bottom 11, after Russia.

This survey suggests that all the campaigns have their work cut out for them if they want to ramp up public awareness of proposals on the table to fix health care, Corlette said. She said the public needs more education and discussion about possible solutions aimed at problems in the U.S. health care system.

“It strikes me as a really good opportunity for people on both sides of the debate,” Corlette said. “There’s clearly a lot of people who have just not made up their mind.”

But she said the lack of confidence in how much protection health coverage affords people tugs at the reality that “the system doesn’t work really well for people who are very sick.”

New analysis from the Kaiser Family Foundation supports that notion. Annual family premiums for employer-based health insurance rose 5 percent to $20,576 on average, faster than wage growth, which increased by 3.4 percent, according to the study, published in Health Affairs. And since 2009, those premiums jumped 54 percent.

Health insurance costs and coverage only provide part of the picture of what troubles Americans, said Thomas Miller, a resident fellow with the conservative American Enterprise Institute.

Policymakers need to think about more than tinkering with “incremental expansions of coverage on the margins beyond where we already are,” Miller said. “It’s important to remember that people need most of all economic growth, job security and reasons to be optimistic about managing their lives.”

 

 

 

Hospital Giant Sutter Health Faces Legal Reckoning Over Medical Pricing

Posted on by • Posted in ACA, Antitrust, Competition, Federal Trade Commission (FTC), Health Policy, Health System, High Deductible Health Plans, High Premiums, High Prices, Hospital, Hospital Industry, Lawsuit, Limited Competition, Market Consolidation, Market Power, Monopoly, Monopoly Behavior, Out of Network, Out of Pocket Expenses, Out-of-Network, Payer Contracting • Leave a comment

https://khn.org/news/sutter-health-antitrust-lawsuit-hospital-consolidation-medical-pricing/?fbclid=IwAR25Fe5xyq6Ne2lq_tuTo-r5ft4mUaLBLN7TLaMIo_cl5gJ59lMBNXwB33A

Economists and researchers long have blamed the high cost of health care in Northern California on the giant medical systems that have gobbled up hospitals and physician practices — most notably Sutter Health, a nonprofit chain with 24 hospitals, 34 surgery centers and 5,000 physicians across the region.

Now, those arguments will have their day in court: A long-awaited class-action lawsuit against Sutter is set to open Sept. 23 in San Francisco Superior Court.

The hospital giant, with $13 billion in operating revenue in 2018, stands accused of violating California’s antitrust laws by leveraging its market power to drive out competition and overcharge patients. Health care costs in Northern California, where Sutter is dominant, are 20% to 30% higher than in Southern California, even after adjusting for cost of living, according to a 2018 study from the Nicholas C. Petris Center at the University of California-Berkeley cited in the complaint.

The case was initiated in 2014 by self-funded employers and union trusts that pay for worker health care. It since has been joined with a similar case brought last year by California Attorney General Xavier Becerra. The plaintiffs seek up to $900 million in damages for overpayments that they attribute to Sutter; under California’s antitrust law, the award can be tripled, leaving Sutter liable for up to $2.7 billion.

The case is being followed closely by industry leaders and academics alike.

“This case could be huge. It could be existential,” said Glenn Melnick, a health care economist at the University of Southern California. If the case is successful, he predicted, health care prices could drop significantly in Northern California. It also could have a “chilling effect” nationally for large health systems that have adopted similar negotiating tactics, he said.

The case already has proved controversial: In November 2017, San Francisco County Superior Court Judge Curtis E.A. Karnow sanctioned Sutter after finding it had intentionally destroyed 192 boxes of documents sought by plaintiffs, “knowing that the evidence was relevant to antitrust issues.” He wrote: “There is no good explanation for the specific and unusual destruction here.”

Antitrust enforcement is more commonly within the purview of the Federal Trade Commission and U.S. Department of Justice. “One of the reasons we have such a big problem [with consolidation] is that they’ve done very little. Enforcement has been very weak,” said Richard Scheffler, director of the Nicholas C. Petris Center. From 2010 to 2017, there were more than 800 hospital mergers, and the federal government has challenged just a handful.

“We feel very confident,” said Richard Grossman, lead counsel for the plaintiffs. “Sutter has been able to elevate their prices above market to the tune of many hundreds of millions of dollars.”

Or, as Attorney General Becerra put it at a news conference unveiling his 2018 lawsuit: “This is a big ‘F’ deal.”

Sutter vigorously denies the allegations, saying its large, integrated health system offers tangible benefits for patients, including more consistent high-quality care. Sutter also disputes that its prices are higher than other major health care providers in California, saying its internal analyses tell a different story.

“This lawsuit irresponsibly targets Sutter’s integrated system of hospitals, clinics, urgent care centers and affiliated doctors serving millions of patients throughout Northern California,” spokeswoman Amy Thoma Tan wrote in an emailed statement. “While insurance companies want to sell narrow networks to employers, integrated networks like Sutter’s benefit patient care and experience, which leads to greater patient choice and reduces surprise out-of-network bills to our patients.”

There’s no dispute that for years Sutter has worked aggressively to buy up hospitals and doctor practices in communities throughout Northern California. At issue in the case is how it has used that market dominance.

According to the lawsuit, Sutter has exploited its market power by using an “all-or-none” approach to contracting with insurance companies. The tactic — known as the “Sutter Model” — involves sitting down at the negotiating table with a demand: If an insurer wants to include any one of the Sutter hospitals or clinics in its network, it must include all of them. In Sutter’s case, several of its 24 hospitals are “must-haves,” meaning it would be almost impossible for an insurer to sell an insurance plan in a given community without including those facilities in the network.

“All-or-none” contracting allows hospital systems to demand higher prices from an insurer with little choice but to acquiesce, even if it might be cheaper to exclude some of the system’s hospitals that are more expensive than a competitor’s. Those higher prices trickle down to consumers in the form of higher premiums.

The California Hospital Association contends such negotiations are crucial for hospitals struggling financially. “It can be a great benefit to small hospitals and rural hospitals that don’t have a lot of bargaining power to have a larger group that can negotiate on their behalf,” said Jackie Garman, the CHA’s legal counsel.

Sutter also is accused of preventing insurers and employers from tiering benefits, a technique used to steer patients to more cost-effective options. For example, an insurer might charge $100 out-of-pocket for a procedure at a preferred surgery center, but $200 at a more expensive facility. In addition, the lawsuit alleges that for years Sutter restricted insurers from sharing information about its prices with employers and workers, making it nearly impossible to compare prices when selecting a provider.

Altogether, the plaintiffs allege, such tactics are anti-competitive and have allowed Sutter to drive up the cost of care in Northern California.

Hospitals in California and other regions across the country have watched the success of such tactics and taken note. “All the other hospitals want to emulate [Sutter] to get those rates,” said Anthony Wright, executive director of the advocacy group Health Access.

A verdict that finds such tactics illegal would “send a signal to the market that the way to compete is not to be the next Sutter,” said Wright. “You want them to compete instead by providing better quality service at a lower price, not just by who can get bigger and thus leverage a higher price.”

Along with damages, Becerra’s complaint calls for dismantling the Sutter Model. It asks that Sutter be required to negotiate prices separately for each of its hospitals — and prohibit officials at different hospitals from sharing details of their negotiations. While leaving Sutter intact, the approach would give insurers more negotiating room, particularly in communities with competing providers.

Consolidation in the health care industry is likely here to stay: Two-thirds of hospitals across the nation are part of larger medical systems. “It’s very hard to unscramble the egg,” said Melnick.

California legislators have attempted to limit the “all or nothing” contracting terms several times, but the legislation has stalled amid opposition from the hospital industry.

Now the courts will weigh in.

 

 

 

Paying for healthcare shouldn’t bankrupt families

Posted on by • Posted in 2020 Election Issues, ACA, Bad Debt Expense, Bankruptcy, Essential Health Benefits, Health Insurance Coverage Adequacy, Health Policy, High Deductible Health Plans, High Premiums, High Prices, Out of Pocket Expenses, Out-of-Network, Preexisting Conditions, Short Term Health Insurance, Surprise Bills • Leave a comment

https://www.modernhealthcare.com/opinion-editorial/paying-healthcare-shouldnt-bankrupt-families?utm_source=modern-healthcare-daily-finance&utm_medium=email&utm_campaign=20190923&utm_content=article4-readmore

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Healthcare costs in the U.S. are too high. Americans struggle to afford basic needs like prescription drugs and too often face crushing surprise bills after undergoing necessary medical procedures. Seniors in particular feel the weight of health expenses when they discover that the Medicare benefits they earned don’t always provide sufficient coverage.

While the Affordable Care Act instituted protections for Americans with pre-existing conditions, guaranteed essential health benefits and made some progress in lowering patients’ costs, those advancements are under attack in the courts and through regulatory actions. I chair the House Ways and Means Committee, which has jurisdiction over a great deal of our nation’s healthcare system, including Medicare. Under Democratic leadership, we are fighting to bring down healthcare costs and preserve critical existing health protections.

Our committee hit the ground running this year. The first hearing I convened as chairman focused on protecting Americans with pre-existing conditions. Nearly 130 million Americans have a pre-existing condition—anything from asthma to cancer to diabetes. Thanks to the ACA, insurance companies can no longer refuse to cover these individuals. The hearing shed light on the importance of this safeguard and the ways it provides Americans with greater peace of mind and financial security.

We also highlighted the immense pain families will endure if 18 Republican state attorneys general succeed in their case to repeal the law.

House Democrats, along with Democratic state attorneys general, jumped into this court battle and continue to defend the millions of Americans with health conditions from discrimination and financial ruin.

We also took concrete steps to increase transparency and lower drug prices. Ways and Means advanced legislation that sheds light across the healthcare supply chain—from pharmaceutical manufacturers to pharmacy benefit managers—to help reduce costs for families. More can be done. In the coming months, the committee will consider legislation to improve the Medicare Part D program, establishing an out-of-pocket cap on expenses for beneficiaries. This would lower costs for seniors and save taxpayers money.

Part D reform is just one way to improve Medicare for beneficiaries. Many seniors aren’t aware that Medicare does not cover routine vision, hearing or dental exams. I will work to change that. Helping seniors access the glasses, hearing aids or dental care they need will save them money on the front end. This coverage will also prevent the trauma and expense of falls or other related health problems that could arise down the road as a result of inadequate services.

Some of the most jarring and devastating medical costs Americans encounter are surprise medical bills. Ways and Means plans to tackle this problem too. We are crafting legislation now that will help patients avoid the huge expenses that follow inadvertently being treated by out-of-network providers.

Healthcare is a necessity and it’s a human right. Paying for it shouldn’t bankrupt families. We can lower patient costs without stifling medical innovation or throwing hospitals into turmoil. It’s possible to achieve commonsense solutions that strengthen our nation’s healthcare system while reducing the burden on consumers.

 

Trial approaching in Sutter Health antitrust case

Posted on by • Posted in ACA, Antitrust, Competition, Federal Trade Commission (FTC), Health Policy, Health System, High Deductible Health Plans, High Premiums, High Prices, Hospital, Hospital Industry, Lawsuit, Market Consolidation, Market Power, Mergers & Acquisitions, Monopoly, Monopoly Behavior, Non-Profit Healthcare Industry, Operating Income, Operating Margin • Leave a comment

https://www.modernhealthcare.com/legal/trial-approaching-sutter-health-antitrust-case?utm_source=modern-healthcare-daily-finance&utm_medium=email&utm_campaign=20190923&utm_content=article1-readmore

Spurred in part by the Affordable Care Act, hospitals across the country have merged to form massive medical systems in the belief it would simplify the process for patients.

But a simpler bill doesn’t always guarantee a cheaper bill.

That’s a key issue in an antitrust lawsuit against one of California’s largest hospital systems set to begin Monday.

About 1,500 self-funded health plans have sued Sutter Health, a system that includes 24 hospitals across Northern California. The case has dragged on since 2014, but it picked up steam last year when Attorney General Xavier Becerra filed a similar lawsuit. The cases have been combined and jury selection begins Monday. Opening arguments are scheduled for October.

The lawsuit alleges Sutter Health gobbled up competing medical providers in the region and used its market dominance to set higher prices for insurance plans, which means more expensive insurance premiums for consumers.

Becerra points to a 2018 study that found unadjusted inpatient procedure prices are 70% higher in Northern California than Southern California. The lawsuit notes Sutter Health’s assets were $15.6 billion at the end of 2016, up from $6.4 billion in 2005.

“We never meant for folks to use integration to boost their profits at the expense of consumers,” Becerra said.

It’s rare for antitrust lawsuits of this size to go to trial because the law allows for triple damages — a prospect that often spooks companies into settling outside of court to avoid an unpredictable jury. Health plans in this case are asking for $900 million in damages, meaning Sutter Health could take a nearly $3 billion hit.

Atrium Health, a North Carolina-based hospital system, settled a similar anti-trust lawsuit with the federal government last year. And CHI Franciscan, a health system based in Washington state, also settled similar claims in March that had been brought by the state.

But Sutter Health is fighting the case. The company says the lawsuit is not about its prices, but about insurance companies who want to maximize their own profits. Sutter Health officials insist the company faces fierce competition, vowing to detail in court the expansion of other health systems in the San Francisco Bay Area and the Sacramento Valley.

Four Sutter Health hospitals had operating losses in 2018, totaling $49 million.

“The bottom line is that this lawsuit is designed to skew the healthcare system to the advantage of large insurance companies so they can market inadequate insurance plans to Californians,” said Sutter Health Director of Public Affairs Amy Thoma Tan.

At issue are several of Sutter Health’s contracting policies that Becerra says have allowed the company to “thoroughly immunize itself from price competition.”

One way insurance companies keep costs down is to steer patients to cheaper health care providers through a variety of incentives. Becerra says Sutter Health bans insurance companies from using these incentives, making it harder for patients to use their lower-priced competitors.

Becerra also says Sutter has an “all or nothing” approach to negotiating with insurance companies, requiring them to include all of the company’s hospitals in their provider networks even if it doesn’t make financial sense to do so.

The case was originally filed by a trust of Northern California’s largest unionized grocery companies in 2014. A representative for the trust said it was “unknowingly forced to pay Sutter’s artificially high prices.”

But the company says these contracting practices are designed to protect patients. People often are unable to pick which hospital they go to in a medical emergency, which can lead to surprise bills when they learn a hospital or doctor was not in their network.

Jackie Garman, lawyer for the California Hospital Association, said these contracting practices are standard at a lot of hospitals. If the lawsuit is successful, she said it could “disrupt contracting practices at a lot of other systems.”

But the consequences of not bringing the lawsuit could be greater, Becerra said.

“We are paying every time we allow an anti-competitive behavior to drive the market,” he said.

 

 

 

Insurers to deliver whopping $1.3B in ACA consumer rebates

Posted on by • Posted in 2020 Election Issues, ACA, Health Insurance Industry, Health Policy, High Premiums, Market Uncertainty, Medical Loss Ratio (MLR), Uncertainty • Leave a comment

https://www.healthcaredive.com/news/insurers-to-deliver-whopping-13b-in-aca-consumer-rebates/562689/

Dive Brief:

  • Health insurers are expected to issue at least $1.3 billion worth of rebates to customers in the coming weeks, hitting a new record, according to an analysis from the Kaiser Family Foundation.
  • The record amount reflect just how profitable payers were over the past few years, largely fueled by insurers in the individual market, according to KFF. Companies in the individual market are expected to return about $743 million to customers, more than that of insurers in the small and large markets combined.
  • The average rebate per customer in the individual market is about $270. There are about 2.7 million customers in the individual market.

Dive Insight:

The Affordable Care Act sets limits on insurer profits, and in an effort to protect consumers, the law requires plans spend a majority of premium dollars on actual care, or claims for their patients.

Each year, if insurers do not meet that threshold, also known as the medical loss ratio, they issue rebates to customers. The rebates in 2019 take into account performance for the trailing three years.

“Insurers in 2018 were highly profitable and arguably overpriced, which is why rebates are so large despite being averaged across less favorable years (2016 and 2017),” KFF said.

Insurers in the individual market are fueling this whopping rebate return, according to KFF.

Even though exchange insurers struggled in 2016, previous data show that profit margins spiked in the first quarter of 2018. Many attribute the spike to insurers drastically raising premiums amid the uncertainty around policy plans from the Trump administration. Experts have said insurers raised prices and overcorrected in preparing for the potentially turbulent year.

Lingering overhead at the time was the threat of ACA repeal and the loss of cost sharing subsidy payments.

St. Louis-based Centene is expected to dish out the most in rebates, totaling nearly $217 million, followed by Virginia-based Optima Health, owned by Sentara Healthcare, which is set to return nearly $99 million.