United’s $14 billion year

https://docs.google.com/spreadsheets/d/1X7-NPrOJXPMt2i2dIMkMFTrQ0208wvCyuEk84RJebRk/edit#gid=1436564969

https://www.axios.com/newsletters/axios-vitals-40a9c349-fbf1-434b-96d4-fee0598d1254.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

Image result for unitedhealth group

UnitedHealth Group blew the doors off the opening of earnings season this week, reporting a better-than-expected fourth quarter, Bob writes.

  • Its health insurance unit kept more of the premium dollars, and its pharmacy benefit manager, OptumRx, anchored all of the Optum companies.

By the numbers: United reported a $13.8 billion profit on $242 billion of revenue in the full-year 2019.

  • The only other health care company that posts higher annual profits, in absolute numbers, is Johnson & Johnson. J&J reports next week.

Follow along: Our earnings tracker is updated. Tell Bob (bob@axios.com) what you’re seeing and thinking about.

 

Private insurance is health care’s pot of gold

https://www.axios.com/jp-morgan-2020-private-health-insurance-prices-costs-1e92f969-bffc-4584-a3c9-e8c4072b5144.html

Image result for Private insurance is health care's pot of gold

Private health insurance is a conduit for exploding health care spending, and there’s no end in sight.

The big picture: Most politicians defend this status quo, even though prices are soaring. And as the industry’s top executives and lobbyists gathered this week in San Francisco, some nodded to concerns over affordability — but then went on to tell investors how they plan to keep the money flowing.

 

Where it stands: More than 160 million Americans get private insurance through an employer or on their own, and per-person spending in that market rose by almost 7% in 2018, the highest annual growth rate in 14 years.

  • “Prices are definitely going up,” Owen Tripp, CEO of health tech startup Grand Rounds, told me this week during the annual J.P. Morgan Healthcare Conference.
  • His company’s vast amount of commercial health data shows big increases in what companies are spending on hospitals, doctors, specialty drugs, devices and out-of-network services.

 

What they’re saying: Many in the industry admit price inflation has been hammering the commercial markets for years.

  • “Cost per unit is the primary driver,” Cigna CEO David Cordani said. He did not mention the exploding costs of administering health insurance.
  • One hospital system at the conference acknowledged that “the number one cause of personal bankruptcy is our industry” — before going on to tell investors about the hospital’s strong margins.

 

Multiple hospital executives claimed they charge commercial plans higher prices to make up for the lower rates they get from Medicare and Medicaid.

  • “Every health system I know of loses money on every Medicaid and every Medicare patient,” Amy Compton-Phillips, a top clinical executive at Providence St. Joseph Health, told me.
  • But the evidence overwhelmingly shows that hospitals’ explanation doesn’t hold water.

 

Drug spending has risen at a slower rate than hospital and physician spending.

  • But in the commercial market, drug companies also have tripled their spending on programs that cover all or part of patients’ out-of-pocket costs, then bill insurers for the full freight.
  • “It’s an intriguing theory,” said Stephen Ubl, CEO of PhRMA, the pharmaceutical industry’s main lobbying group. “But I would be shocked if we were a significant contributor” to the increased private spending.

 

The bottom line: The private market is the main pot of money that everyone is chasing at the J.P. Morgan conference, and most in the industry don’t see the ballooning spending within that market as a problem.

 

 

 

 

How the Health Insurance Industry (and I) Invented the ‘Choice’ Talking Point

It was always misleading. Now Democrats are repeating it.

There’s a dangerous talking point being repeated in the Democratic primary for president that could affect the survival of millions of people, and the finances of even more. This is partly my fault.

When the candidates discuss health care, you’re bound to hear some of them talk about consumer “choice.” If the nation adopts systemic health reform, this idea goes, it would restrict the ability of Americans to choose their plans or doctors, or have a say in their care.

It’s a good little talking point, in that it makes the idea of changing the current system sound scary and limiting. The problem? It’s a P.R. concoction. And right now, somewhere in their plush corporate offices, some health care industry executives are probably beside themselves with glee, drinking a toast to their public relations triumph.

I should know: I was one of them.

To my everlasting regret, I played a hand in devising this deceptive talking point about choice when I worked in various communications roles for a leading health insurer between 1993 and 2008, ultimately serving as vice president for corporate communications. Now I want to come clean by explaining its origin story, and why it’s both factually inaccurate and a political ploy.

Those of us in the insurance industry constantly hustled to prevent significant reforms because changes threatened to eat into our companies’ enormous profits. We were told by our opinion research firms and messaging consultants that when we promoted the purported benefits of the status quo that we should talk about the concept of “choice”: It polled well in focus groups of average Americans (and was encouraged by the work of Frank Luntz, the P.R. guru who literally wrote the book on how the Republican Party should communicate with Americans). As instructed, I used the word “choice” frequently when drafting talking points.

But those of us who held senior positions for the big insurers knew that one of the huge vulnerabilities of the system is its lack of choice. In the current system, Americans cannot, in fact, pick their own doctors, specialists or hospitals — at least, not without incurring huge “out of network” bills.

Not only does the current health care system deny you choice within the details of your plans, it also fails to provide many options for the plan itself. Most working Americans must select from a limited list made by their company’s chosen insurance provider (usually a high-deductible plan or a higher-deductible plan). What’s more, once that choice is made, there are many restrictions around keeping it. You can lose coverage if your company changes its plan, or if you change jobs, or if you turn 26 and leave your parents’ plan, among other scenarios.

This presented a real problem for us in the industry. Well aware that we were losing the “choice” argument, my industry colleagues spent millions on lobbying, advertising and spin doctors — all intended to muddy the issue so Americans might believe that reform would somehow provide “less choice.” Recently, the industry launched a campaign called “My Care, My Choice” aimed in part at convincing Americans that they have choice now — and that government reform would restrict their freedom. That group has been spending large sums on advertising in Iowa during this presidential race.

This isn’t the first time the industry has made “choice” a big talking point as it fights health reform. Soon after the Affordable Care Act was passed a decade ago, insurers formed the Choice and Competition Coalition and pushed states not to create insurance exchanges with better plans.

What’s different now is that it’s the Democrats parroting the misleading “choice” talking point — and even using it as a weapon against one another. Back in my days working in insurance P.R., this would have stunned me. It’s why I believe my former colleagues are celebrating today.

The truth, of course, is that Americans now have little “choice” when it comes to managing their health care. Most can’t choose their own plan or how long they retain it, or even use it to select the doctor or hospital they prefer. But some reforms being discussed this election, such as “Medicare for all,” would provide these basic freedoms to users. In other words, the proposed reforms offer more choice than the status quo, not less.

My advice to voters is that if politicians tell you they oppose reforming the health care system because they want to preserve your “choice” as a consumer, they don’t know what they’re talking about or they’re willfully ignoring the truth. Either way, the insurance industry is delighted.

I would know.

 

 

New York State Investigates Christian Health Cost-Sharing Affiliate

Image result for New York State Investigates Christian Health Cost-Sharing Affiliate

Subpoenas have been issued to a company that solicits memberships for a health insurance alternative that offers no guarantees for covering medical bills.

New York State officials are investigating a business representing a major Christian group offering an alternative to health insurance, joining several states scrutinizing these cost-sharing programs that provide limited coverage.

On Wednesday, New York state insurance regulators issued a subpoena to Aliera, which markets the Christian ministry run by Trinity Healthshare, according to people who have seen the subpoena.

More than one million Americans have joined such groups, attracted by prices that are far lower than the cost of traditional insurance policies that must meet strict requirements established by the Affordable Care Act, like guaranteed coverage for pre-existing conditions.

 

These Christian nonprofit groups offer low rates because they are not classified as insurance and are under no legal obligation to pay medical claims. But state regulators are questioning some of the ministries’ aggressive marketing tactics, saying some consumers were misled or did not grasp the lack of comprehensive coverage in the case of a catastrophic illness.

Some members have paid hundreds of dollars a month, and then have been left with hundreds of thousands in unpaid medical bills in several states where the ministries, which are not subject to regulation as insurers, failed to follow through on pooling members’ expenses.

Numerous states are taking action against Aliera Healthcare, the for-profit company based in Georgia that was been the subject of an investigation by The Houston Chronicle. The Texas attorney general sued Aliera last summer to stop it from offering “unregulated insurance products to the public,” while Connecticut, Washington and New Hampshire are trying to stop Trinity and Aliera from doing business in those states.

Regulators say they are concerned that the ministry is, in fact, operating as an insurer. In New York, which has not previously investigated any ministries, there have been 15 to 20 complaints, including accusations that Aliera misrepresented the coverage being offered. It’s not clear how many customers Aliera has in New York.

“It’s deeply disappointing to see state regulators working to deny their residents access to more affordable alternatives offered by health care sharing ministries,” said Aliera in an emailed statement.

“We’re proud of the work we do to help ministries provide a more flexible method for securing affordable high-quality health care, and we will continue to vigorously defend against the false claims about our company, just as we expect the health care sharing ministries we serve to vigorously defend their members’ right to exercise their religious convictions in making health care choices,” it said.

Trinity, which was not subject to the subpoena, has said its website makes clear that the ministry does not offer health insurance.

 

 

 

Medicare for All’s missing mental health discussion

https://www.axios.com/newsletters/axios-vitals-852bf32f-c3b0-4a2c-9d1f-271843830128.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

Illustration of a health plus on a therapist couch.

America’s mental health care system is in dire need of an overhaul, but the real specifics are largely missing from the 2020 debate about health care.

Why it matters: Suicide and drug overdose rates continue to rise, and the U.S. faces a shortage of mental health providers and a lack of access to treatment.

The big picture: Private insurance is plagued with holes in mental health coverage. Even even though insurers are legally required to cover behavioral health the same way as physical health, they don’t.

Yes, but: “Medicare to All” may not solve the problem, Mental Health America president and CEO Paul Gionfriddo told me.

  • “Medicare would need to be redesigned significantly,” he said.
  • Medicare has its own coverage flaws. It would also be crucial to design a system that encourages preventive and early identification services rather than just post-crisis care.

There’s also a shortage of mental-health providers. Paying mental health providers more could help address this, but care delivery would also need to be redesigned, Gionfriddo said.

  • Rural areas, for example, would likely still struggle to attract and support these providers because of their remoteness and population size.
  • The big wild card is how many mental health providers would participate in a Medicare for all program or opt out of insurance entirely,” said the Kaiser Family Foundation’s Larry Levitt.

For Democrats who support Medicare for All, highlighting how it could help mental health care could have a political upside.

  • Talking about mental health care needs humanizes the candidates, indicts the shortcomings of private insurance and provides rationale for the need for significant reforms around the current system,” Democratic health consultant Chris Jennings said.

 

 

 

Beyond the ACA: Healthcare legal fights to watch in 2020

https://www.healthcaredive.com/news/beyond-the-aca-healthcare-legal-fights-to-watch-in-2020/569793/

All eyes were on the legal drama over the Affordable Care Act as 2019 drew to a close — and while that case remains a focus for this year — a lot more is also at stake.

Payers and providers are fiercely contesting a price transparency push from the Trump administration that would force privately negotiated rates out into the open. The administration is also being challenged over regulations regarding risk corridor payments to payers and the expansion of association health plans.

Antitrust concerns are also front and center, as payers clash over exclusive broker policies in Florida.

As policy debates rage on this year through presidential debates and on Capitol Hill, courthouses will also be a key battleground for the industry in 2020.  Below are the big cases to watch.

ACA and the high court

The most consequential case still making its way through the court system is the challenge to the Affordable Care Act. At the end of last year, an appeals court notched a win for the red states fighting the law by declaring the individual mandate was no longer constitutional after the penalty was zeroed out by a Republican-controlled Congress.

The three-judge panel, however, stopped short of declaring the entire ACA void, instead asking the lower court that made the argument that the rest of the law is not severable from the individual mandate to revisit and clarify its ruling.

Supporters of the ACA are trying to speed up what is almost certainly the next major step for the court case by petitioning the Supreme Court on Friday to hear the case before the November presidential election.

“States, health insurers, and millions of Americans rely on those provisions when making important — indeed, life-changing — decisions. The remand proceedings contemplated by the panel majority would only prolong and exacerbate the uncertainty already caused by this litigation,” according to the Jan. 3 petition filed by California Attorney General Xavier Becerra and a coalition of 19 other states and D.C.

Five justices are needed to approve the suggested expedited timeline while four are needed to agree to hear the case at all. More will be clear in the next couple of months as justices make their decisions. The ultimate decision — whether it comes in months or years — will have huge ramifications across the healthcare landscape.

Price transparency pushback

The legal clash between hospitals and the administration over forcing providers to reveal negotiated rates is set to heat up quickly in the new year.

The federal judge overseeing the case recently released a timeline for how it is expected to proceed in the coming months. Hospitals are seeking a swift ruling and summary judgment. HHS faces a Feb. 4 deadline to file its opposition motion to the summary judgment, while deadlines for motions extend through March 10.

“That is an extremely accelerated schedule,” James Burns, a partner at Akerman, told Healthcare Dive. “My strong suspicion is that we’ll get a ruling from the judge late spring or earlier summer at the latest, which is obviously all before the election.”

Hospital groups including the American Hospital Association and health systems have alleged that the administration’s push to force negotiated rates out into the open exceeds the government’s authority and violates the First Amendment because it compels hospitals to reveal confidential and proprietary information. Legal experts say the principal argument will center around whether the government exceeded its authority, not the First Amendment.

Risk corridor payments

On last month’s Supreme Court docket was a case regarding an ACA risk adjustment program. At issue are $12 billion in payments insurers say they are owed from losses on state exchanges.

Early participants in the marketplaces were hit hard in some cases as they attempted to adjust to people gaining coverage under the ACA. A few nonprofit co-ops were driven to close when CMS declared the program had to be budget neutral and therefore only about one-eighth of the expected risk corridor amount could be paid out.

A number of justices seemed to lean toward ruling in favor of the insurers during arguments in front of the high court, Tim Jost, health law expert and professor emeritus at Washington and Lee University School of Law, told Healthcare Dive​. “Only a couple of the justices that spoke seemed inclined to support the government, but we’ll see what happens there,” he said.

If the payers do prevail, there’s still the question of exactly how much they are owed and how the money will be distributed. It could ultimately affect medical loss ratio rebates or premiums down the road, he said.

CSR fight in court this week

The legal fight over canceled payments to insurers​ under the ACA drags on as oral arguments begin this week in a federal appeals court.

A number of insurers including Maine Community Health Options and Sanford Health claim they’re owed millions in cost-sharing reduction payments that the government failed to pay out after the Trump administration said Congress failed to appropriate the funds. The payments were intended to repay insurers for lowering the cost of care to make coverage affordable for those with low incomes.

Health Options and Sanford both won in the lower courts after judges ruled they were entitled to the unpaid CSR payments. The cases have been consolidated within the appeals court and oral arguments start Thursday.

A ruling in favor of insurers in the risk corridor case could be a good sign for their fight to be reimbursed for CSRs as well, Jost said.

Oscar antitrust argument

Health insurer Oscar has alleged that Blue Cross Blue Shield of Florida is enforcing a broker policy that is impeding Oscar’s ability to sell individual exchange plans and undermines competition in Florida.

The key question in this case is whether Florida Blue, a dominant insurer in the sunshine state, can lawfully bar independent brokers from working with other carriers like Oscar by threatening to cut off their ability to sell all other Florida Blue plans if they sell Oscar’s individual plans.

A lower court ruled against Oscar and found that such arrangements are shielded from antitrust scrutiny. A federal law excludes the “business of insurance” from antitrust scrutiny in some cases, legal experts say this case shouldn’t be exempt from antitrust enforcement.

A group of 10 antitrust scholars called the ruling “dangerous” and “plainly incorrect,” in an amicus brief Dec. 23 to the U.S. Court of Appeals for the 11th District.

“The practice at issue here — forming exclusive deals with industry gatekeepers to box out potential entry by competitors — is a quotidian business strategy that appears across many industries and raises well-recognized antitrust concerns,” according to the amicus brief.

Oscar alleges that consumers are harmed if brokers are barred from discussing other plan options outside Florida Blue.

The Department of Justice also intends to file an amicus brief, according to a recent filing in the appeals case.

Association, short-term health plans

The federal court of appeals in D.C. heard arguments late last year to review a judge’s decision in March 2019 declaring association health plans an “end-run” around the ACA. AHPs are offered by business or professional associations and aren’t bound by ACA requirements protecting pre-existing conditions and mandating essential benefits.

U.S. District Judge John Bates had strong language in March for the Trump administration, which is being challenged for loosening restrictions on what groups can offer AHPs — and therefore expanding their presence in the marketplace.

The D.C. appeals court is expected to rule on the case in the coming months. Jost’s take from the oral arguments is that the court seem inclined to reverse Bates’ decision, though he warned the outcome is not certain. “It’s a technical case that really has more to do with interpreting ERISA than the Affordable Care Act, though both are relevant,” he said.

A similar challenge has risen on short-term health plans, which were originally meant as stopgap coverage but have been expanded by the Trump administration to offer up to three years worth of coverage.

U.S. District Judge Richard Leon ruled in favor of the administration in July, saying the plans did not undermine the ACA. The plaintiffs, including the Association for Community Affiliated Plans, the National Alliance on Mental Illness and AIDS United, quickly appealed to the U.S. Court of Appeals in D.C.

Briefs are due this month and argument is likely in the spring, Jost said.

If AHPs and short-term plans are allowed to continue as the Trump administration has pushed for, it presents a concern for the viability of ACA risk pools. Consumer warnings against short-term plans, however, may be working, he said.

“There’s been a lot of publicity about how risky these plans are and I think they probably have not been achieving the same market strength they were hoping for,” he said.