People hate shopping for health insurance

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Illustration of a plastic bag with "NO THANK YOU" printed multiple times on it alongside a health plus.

Americans rarely switch to new health plans when the annual insurance-shopping season comes around, even if they could have gotten a better deal, Axios’ Bob Herman reports.

The bottom line: People loathe shopping for health plans, and many are bad at it, for one major reason: “It’s just too hard,” Tricia Neuman, a Medicare expert at the Kaiser Family Foundation, told Bob last year.

Reality check: During any insurance program’s annual enrollment period, most people end up staying with the status quo, if it’s an option, instead of picking a new plan.

  • Fewer than one out of 10 seniors voluntarily switch from one private Medicare Advantage plan to another, according to new research from the Kaiser Family Foundation.
  • The same holds true for Medicare’s private prescription drug plans.
  • Most employers don’t usually change insurance carriers, often out of fear of angering workers, and keep plan options limited.
  • Employees, after several reminders from HR, usually default to what they had.
  • Fewer than half of people in the Affordable Care Act’s marketplaces actively re-enroll in new plans, even though the market was designed for comparison shopping.
  • Medicaid enrollees in some states have no say in the private plans they get.

Between the lines: Buying health insurance — $20,000 decision for the average family — is more complicated than buying furniture.

  • With consumer products, you pretty much know what you’re getting. With health insurance, you’re making an educated guess of how much health care you’ll use, hoping you’ll need none of it.
  • Health insurance terms and policies also are confusing, which turns people off from the shopping process.

The big picture: Shopping for insurance is difficult enough for most people. Shopping for actual doctors, tests and services is even more difficult and less widespread, and likely won’t change if prices are unlocked.

 

 

 

Democrats double down on health care prices

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Illustration of price tag stickers in the shape of a health plus.

Many 2020 Democrats’ health care proposals feature aggressive price regulations, either as a feature or a byproduct — a sign the party has largely given up on the idea that competition alone can keep costs in check.

Between the lines: It’s not just Democrats. As public outrage has grown over prescription drug prices and surprise medical bills, there’s been bipartisan congressional interest in regulating prices.

The two big trends are increasing out-of-pocket costs to consumers and increasing disparity between public and commercial rates — and therefore consumer and employer pushback on those dynamics — and policymakers are now attempting to respond.”

— Chris Jennings, a Democratic health care consultant

The big picture: “Medicare for All” brings all provider and drug reimbursements under the federal government’s control.

  • Sen. Bernie Sanders has been elusive about what those rates would be, but Sen. Elizabeth Warren has proposed massive rate cuts to doctors and hospitals as a way to reduce her plan’s cost.

Even the more moderate candidates’ public-option plans would enroll more Americans in government health care plans that set rates. And some have pitched ideas like limiting how much providers can charge for out-of-network care.

  • But supporters of a public option argue that it also enhances competition in the private insurance market, driving prices down across the board without completely abandoning the use of market forces.

All of the leading 2020 candidates have proposed drug policies, ranging from limiting how much drug companies can increase their prices to allowing the federal government to strip the patent from drugs that are deemed too expensive.

  • Even President Trump has proposed limiting how much Medicare pays for certain drugs by tying the price to what other countries pay.

The other side: The industry hates all of these ideas.

 

 

 

The Health 202: Here’s what doctors, drugmakers and politicians are thankful for

https://www.washingtonpost.com/news/powerpost/paloma/the-health-202/2019/11/27/the-health-202-here-s-what-doctors-drugmakers-and-politicians-are-thankful-for/5ddd69ec88e0fa652bbbda64/

A turkey pardoned by President Trump yesterday. REUTERS/Tom Brenner

It’s Thanksgiving Eve. Which for Health 202 begs this question: What is everyone thankful for this year when it comes to health policy?

We suspect that maybe – just maybe –you’d get vastly different answers from doctors versus insurers versus drugmakers versus consumers versus any other stakeholder in the $3.6 trillion U.S. health-care industry complex. Everyone has competing interests, which is a prime reason why the country’s besetting problems of ever-rising costs and subpar medical outcomes never quite seem to get solved.

So before you tune out the news cycle for Turkey Day, here’s our best guess at what’s giving each health-care stakeholder an attitude of gratitude.

—The White House and Republicans: Democrats are fixated on Medicare-for-all.

The GOP could hardly be more eager to focus on Medicare-for-all proposals from the Democratic presidential candidates. They view it as a way to veer the political conversation away from their own, unpopular actions on health-care policy and to depict Democrats as out-of-touch with voters.

President Trump and his top health officials have repeatedly decried Medicare-for-all, including during an October speech where the president announced an executive order boosting the role of private plans in the Medicare program.

“Every major Democrat in Washington has backed a massive government health care takeover that would totally obliterate Medicare,” the president said during that address. “These Democratic policy proposals … may go by different names, whether it’s single payer or the so-called public option, but they’re all based on the totally same terrible idea: They want to raid Medicare to fund a thing called socialism.”

—Democrats: The Trump administration is refusing to defend the Affordable Care Act.

Democrats are well aware that the refusal by Trump’s Justice Department to defend the Affordable Care Act from a challenge by GOP-led states is a political gift. They spent the 2018 election castigating the administration for not standing by the health-care law’s protections for patients with preexisting conditions – and it helped them win the House majority.

They plan to hammer that message again in 2020, as they seek the White House.

—The Department of Health and Human Services: Obamacare hasn’t been struck down (yet).

A federal appeals court is expected to rule any time now on the challenge to the ACA, which was upheld by a lower court last year. As The Health 202 has written, the decision against defending the law was a deeply controversial one inside the administration.

HHS Secretary Alex Azar and Seema Verma, administrator of the Centers for Medicare and Medicaid Services, tried to persuade the White House to defend the law. If the courts ultimately strike down the ACA, the administration will be on the hook to propose a replacement that would preserve health coverage for millions of Americans who gained it under the health-care law.

—Health-care advocates: Marketplace premiums are somewhat more affordable.

After several rough years for the ACA’s individual marketplaces, they got some good news this year. Average premiums for mid-level “silver” plans fell four percent for 2020 – a marked shift from the double-digit increases shoppers have typically seen.

That doesn’t mean plans are suddenly affordable for consumers ineligible for government subsidies. But it does mean insurers have found a sustainable way to keep participating in the marketplaces – and the marketplaces are here to stay for people without access to employer-sponsored coverage.

—Drugmakers: Chances for a major, bipartisan drug pricing deal this year are fading.

One of the pharmaceutical industry’s biggest fears is that Congress passes legislation allowing the federal government to directly negotiate lower prices in the Medicare program – a move the industry describes as government “price-fixing.”

Trump used to support allowing direct negotiations, and his staff was even in discussions with House Speaker Nancy Pelosi’s (D-Calif.) office earlier this fall over the potential for a bipartisan effort along these lines.

But the president and his aides have increasingly distanced themselves from Pelosi’s bill to allow direct negotiations. Now it looks like House Democrats will pass that measure as a messaging tactic, only to see it blocked in the GOP-led Senate. A bipartisan Senate bill capping how much drugmakers can annually raise prices has somewhat better prospects, but even that measure has made many Republicans suspicious.

In the end, only minor and less-controversial drug pricing measures may end up being attached to a longer-term spending bill.

—Doctors and hospitals: Any legislation protecting patients from “surprise” medical bills will almost certainly include arbitration – an approach that means higher payments for them.

Virtually every member of Congress agrees American patients should be protected from the surprise bills that can result when they visit an emergency department outside their health plan’s provider network or get care from an out-of-network provider at an in-network hospital.

But how to solve that has turned into an insurers-versus-doctors food fight.

Insurers and the Trump administration want to use a benchmarking approach to resolve out-of-network bills, in which the payments are tied to average prices in the same geographic area. That approach would save the government money, the Congressional Budget Office has said.

But doctors – and some dark-money groups that represent their interests – have been spending millions of dollars to push Congress toward adopting an approach called arbitration. In arbitration, which CBO has said would cost the government more money, the medical provider and the insurer each submit a bid to a third party arbiter, who then make a final decision.

Doctors believe arbitration would translate to beefier payments for them – and outcomes from New York’s arbitration system supports that notion. So if Congress passes surprise billing legislation, it will likely include some element of arbitration given the heavy influence by the doctor lobby.

—Regular Americans: Not much.

We hate to say it, readers, but there’s little for you to be thankful for this year when it comes to health-care policy. Costs for employer-sponsored coverage are going up and coverage plans are getting less generous. Congress appears unable to pass major reforms on the biggest consumer concerns. And the next election is likely to result in a government severely split over how to improve health-care – making it likely the status quo will prevail for some time.

But Happy Thanksgiving, anyway!

 

 

 

Nonprofit bad debt climbs again amid steeper deductibles, Moody’s says

https://www.healthcaredive.com/news/nonprofit-bad-debt-climbs-again-amid-steeper-deductibles-moodys-says/567981/

Dive Brief:

  • Bad debt, a proxy for unpaid bills, rose in 2018 for nonprofit hospitals after falling for several years since 2014, when some states decided to expand Medicaid, Moody’s Investors Services said in a recent report.
  • Rising deductibles are fueling the trend, as patients are on the hook for an increasing share of care costs. The growth of bad debt may at times outpace net patient revenue, the ratings agency said.
  • At the same time, deductibles and premiums are increasing faster than wage growth, another ominous signal for hospitals.

Dive Insight:

More Americans have high deductible plans than ever before, according to the Kaiser Family Foundation.

“More than a quarter (28%) of all covered workers, including nearly half (45%) of those at small employers with fewer than 200 employees, are now in plans with a deductible of at least $2,000, almost four times the share who faced such deductibles in 2009,” KFF said in a recent report.

But when patients with high deductibles seek care, hospitals typically have to collect from the patient first. And as more Americans struggle to afford treatment, it’s harder to collect from patients right away.

“The longer the delay between providing service and collecting payment, the less likely a hospital is to collect payment,” Moody’s said.

Many patients don’t have enough saved to cover the cost of their deductible, according to a survey from accounting firm PwC. At least a third of those with employer-based coverage and HDHPs don’t have enough on hand to pay for their deductible, the company reported.

It will be difficult for hospitals to reduce bad debt, according to Moody’s, which characterized it as an “uphill battle.” Collecting on unpaid bills requires “constant vigilance,” the ratings agency said.

In 2014, bad debt clocked in at roughly 5.6% of net patient revenue for nonprofit health systems, and then fell below 4.5% in 2016 and 2017. But in 2018, bad debt climbed again above 4.5%, Moody’s said.

 

 

 

Health insurers eat higher medical costs

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Image result for 2. Health insurers eat higher medical costs

Almost all of the major health insurance companies are spending more on medical care this year than they have in the past, Axios’ Bob Herman reports.

The big picture: Rising prices and more services for some sicker patients are among the many reasons why this is happening. That uptick in spending has freaked out Wall Street, even though insurers are still quite profitable.

Driving the news: Almost all of the eight major publicly traded insurers have shown their medical loss ratio — the percentage of premium revenues they’re spending on medical claims — is rising this year.

  • UnitedHealth Group, the largest insurer in the country, said its loss ratio was 82.4% in the third quarter this year compared with 81% in the same period a year ago.
  • But these companies are handling billions of premium dollars, so any increase in medical claims equates to hundreds of millions of dollars in additional spending, which they don’t want.

Between the lines: Medical loss ratios are often higher for health plans that cover more older adults, the disabled and the poor, because those groups typically need more care or are in the hospital more frequently.

But costs have been climbing in some commercial markets, too.

  • Anthem executives admitted on their earnings call that the company is dumping some employers with workers who had medical needs and costs that were too high.
  • CVS Health, which now owns Aetna, previously said some middle-market clients had employees that it thought were getting too many services and drugs.
  • CVS “intensified our medical management in those geographies,” an executive said on the earnings call.

The bottom line: Health insurance companies closely track their medical loss ratios and aim to hit those targets most often by charging higher premiums, denying care, forcing people to use lower-priced providers or declining to cover people they deem to be too expensive.

 

 

 

 

 

 

NY Local employers predict 3.6% increase in health benefit costs in 2020

https://www.crainsnewyork.com/health-pulse/local-employers-predict-36-increase-health-benefit-costs-2020?utm_source=health-pulse-tuesday&utm_medium=email&utm_campaign=20191028&utm_content=hero-readmore

Image result for chronic care management

Employers in the metro area expect their spending on benefits to rise 3.6% next year after accounting for changes designed to hold down costs, according to an analysis by Mercer.

That trend would be lower than the 3.9% increase employers experienced this year, with local organizations spending $16,059 per active employee. That’s more than 20% higher than the average cost per employee nationwide.

The benefits consultant broke out the responses of 170 employers in New York City, its surrounding counties, northern New Jersey and southern Connecticut for Crain’s from its 2019 National Survey of Employer-Sponsored Health Plans.

In the area, the average contribution to premiums for an individual employee is $199 a month in a PPO plan, $169 a month in an HMO and $107 a month in a consumer-directed health plan, which tends to have a higher deductible.

The median deductible for members in a PPO plan was $500 locally.

Nationwide, there was a split, with the average deductible for businesses between 10 and 499 employees increasing nearly 13%, to $2,285, while employers with 500 or more workers raised the average deductible in a PPO plan just $10, or 1%, to $992.

Companies are looking to telemedicine and management programs for their highest-cost members as ways to keep fees down, said Mary Lamattina, a senior consultant at Mercer. She said most clients she works with have at least one beneficiary with $1 million in annual medical expenses.

“Employers are getting away from cost shifting and looking at other ways to tackle affordability,” she said.

Nationwide, employers spent 3% more on health costs this year, driven in part by specialty drug spending. Costs for specialty drugs rose 10.5% this year.

Ninety percent of employers with 500 workers or more said they viewed monitoring or managing high-cost claimants as important or very important. One strategy companies reported using was introducing a tech-enabled chronic care management program for conditions such as diabetes.

About 88% of large employers said they offer telemedicine as an option, but only 9% of eligible employees had taken advantage of the programs.

Lamattina pointed out that utilization was nearly four times higher at organizations that waived a copay for telemedicine use, compared with employers that charged a $40 copay. “

“Utilization can be driven by the cost,” she said. “Convenience is really key to getting people to use the benefit.” —Jonathan LaMantia