A lawsuit that threatens to kill the entire Affordable Care Act could be a political disaster for the GOP, but most Republicans aren’t trying to stop it — and some openly want it to succeed.
Between the lines: The GOP just lost the House to Democrats who campaigned heavily on health care, particularly protecting people with pre-existing conditions, but the party’s base still isn’t ready to accept the ACA as the law of the land.
In 2018, the Commonwealth Fund’s centennial year, we continued our efforts to advance health care for all. When viewed through the lens of the most popular publications, it has been a year dedicated in large part to showing how Americans covered through the Affordable Care Act have fared as the law has come under attack from Congress and the White House.
In the last year, we also released our latest state scorecard of health system performance and updated our analysis of the rise in deaths attributable to drugs, alcohol, and suicide. Another top report demonstrated how states can sustain investments in social supports for people in Medicaid managed care.
Please join us as we look back over the year. Here they are: the 10 most-read Commonwealth Fund publications released in 2018.
Between the fiercely competitive midterm elections and ongoing upheaval over the Trump administration’s immigration policies, 2018 was no less politically tumultuous than 2017. The same was true for the world of health care. Republicans gave up on overt attempts to repeal and replace the Affordable Care Act (ACA) through legislation, but the administration’s executive actions on health policy accelerated. Several states took decisive action on Medicaid and some of the struggles over the ACA made their way to the courts. Drug prices remain astronomically high, but public outrage prompted some announcements to help control them. At the same time, corporate behemoths made deeper inroads into health care delivery, including some new overtures from Silicon Valley. Here’s a refresher on some of the most notable events of the year.
Texas v. Azar, a suit brought by Texas and 19 other Republican-led states, asked the courts to rule the entire ACA unconstitutional because Congress repealed the financial penalty associated with the individual mandate to obtain health insurance that was part of the original law. District Judge Reed O’Connor ruled in favor of the plaintiffs, creating confusion at the end of the ACA’s open enrollment period, and setting up what may be a years-long judicial contest (yet again) over the constitutionality of the ACA. To learn more about the legal issues at stake, see Timothy S. Jost’s recent To the Point post.
The federal and state-based marketplaces launched their sixth enrollment season on November 1 for individuals seeking to buy health coverage in the ACA’s individual markets for 2019. Insurer participation remained strong and premiums fell on average. While some states have extended enrollment periods, HealthCare.gov, the federal marketplace, closed on December 15. After lagging in the early weeks, enrollment ended just 4 percent lower this year than in 2017.
While the reasons behind lower enrollment cannot be decisively determined, executive action in 2018 may have contributed. The Trump administration dramatically cut back federal investments in marketplace advertising and consumer assistance for the second year in a row. The federal government spent $10 million on advertising for the 34 federally facilitated marketplaces this year (the same as last year but an 85 percent cut from 2016) and $10 million on the navigator program (down from $100 million in 2016), which provides direct assistance to hard-to-reach populations.
Another tactic the Trump administration is using to undercut the ACA is increasing the availability of health insurance products, such as short-term health plans, that don’t comply with ACA standards. Short-term plans, previously available for just three months, can now provide coverage for just under 12 months and be renewed for up to 36 months in many states. These plans may have gaps in coverage and lead to costs that consumers may not anticipate when they sign up. By siphoning off healthy purchasers, short-term plans and other noncompliant products segment the individual market and increase premiums for individuals who want to — or need to — purchase ACA-complaint insurance that won’t discriminate against people with preexisting conditions, for example.
Few states have expanded Medicaid since 2016, but in 2018, a new trend toward expansion through ballot initiatives emerged. Following Maine’s citizen-initiated referendum last year, Idaho, Nebraska, and Utah passed ballot initiatives in November to expand Medicaid. Other red states may follow in 2019. Medicaid expansion not only improves access to care for low-income Americans, but also makes fiscal sense for states, because the federal government subsidizes the costs of newly eligible Medicaid enrollees (94 percent of the state costs at present, dropping to 90 percent in 2020).
A number of states submitted federal waivers to make employment a requirement for Medicaid eligibility. Such waivers were approved in five states — Arkansas, Kentucky, Wisconsin, New Hampshire, and Indiana — and 10 other states are awaiting approval. At the end of 2018, lawsuits are pending in Arkansas and Kentucky challenging the lawfulness of work requirements for Medicaid eligibility. About 17,000 people have lost Medicaid in Arkansas as a result of work requirements.
Public outrage over prescription drug prices — which are higher in the U.S. than in other industrialized countries — provided fodder for significant regulatory action in 2018 to help bring costs under control. Of note, the Food and Drug Administration announced a series of steps to encourage competition from generic manufacturers as well as greater price transparency. The U.S. Department of Health and Human Services in October announced a proposed rule to test a new payment model to substantially lower the cost of prescription drugs and biologics covered under Part B of the Medicare program.
Far from Washington, D.C., corporations and technology companies made their own attempts to alter the way health care is delivered in the U.S. Amazon, Berkshire Hathaway, and J.P. Morgan Chase kicked 2018 off with an announcement that they would form an independent nonprofit health care company that would seek to revolutionize health care for their U.S. employees. Not to be outdone, Apple teamed up with over 100 health care systems and practices to disrupt the way patients access their electronic health records. And CVS Health and Aetna closed their $69 billion merger in November, after spending the better part of the year seeking approval from state insurance regulators. In a surprise move, a federal district judge then announced that he was reviewing the merger to explore the potential competitive harm in the deal.
The annual report on National Health Expenditures from the Centers for Medicare and Medicaid Services estimates that in 2017, health care spending in the U.S. grew 3.9 percent to $3.5 trillion, or $10,739 per person. After higher growth rates in 2016 (4.8%) and 2015 (5.8%) following expanded insurance coverage and increased spending on prescription drugs, health spending growth has returned to the same level as between 2008 to 2013, the average predating ACA coverage expansions.
Continuing a tragic trend, drug overdose deaths are still on the rise. The Centers for Disease Control and Prevention reported 70,237 fatalities in 2017. Overdose deaths are higher than deaths from H.I.V., car crashes, or gun violence, and seem to reflect a growing number of deaths from synthetic drugs, most notably fentanyl. 2018 was the first year after President Trump declared the opioid crisis a public health emergency. National policy solutions have so far failed to stem the epidemic, though particular states have made progress.
As we slip into 2019, expect health care issues to remain front and center on the policy agenda, with the administration continuing its regulatory assault on many key ACA provisions, Democrats harassing the executive branch with House oversight hearings, both parties demanding relief from escalating pharmaceutical prices, and the launch of health care as a 2020 presidential campaign issue.
Consolidations among larger payers makes it harder for smaller players to enter the market or sustain a presence.
Payment reforms around the ACA will continue to drive more cross-sector collaboration among payers and providers.
Despite the uncertainty over the future of the Affordable Care Act, the U.S. health insurance sector remains stable heading into 2019, according to a new analysis by S&P Global Ratings.
“A combination of still-favorable business conditions, financial factors, and diminished near-term legislative uncertainty balances our concerns relating to merger and acquisition activity, elevated policy risk, and re-emergent legal overhang,” said S&P analyst Joseph Marinucci.
Strong job growth is bolstering commercial markets, aging Baby Boomers are driving Medicare Advantage growth, states are shifting their high acuity populations into managed Medicaid, and the ACA exchanges are stabilizing and attracting new competitors, S&P said.
“We assess capital and liquidity as strong or better for most of our rated U.S. health insurers, which supports balance-sheet strength,” Marinucci said. “U.S. health insurers’ operating performance reflects sustained earnings strength and improved earnings quality.”
However, Marinucci said that profitability could moderate somewhat this year.
M&As remain a key rating factor, especially with larger transaction sizes, raising concerns about financial leverage, integration, and cultural compatibility. Consolidations, joint ventures, and partnering among larger insurers are defragmenting the sector, allowing the big insurers to build scale, “and create more touch points as the trend toward consumerism gains traction.”
“This is making it harder for newer and smaller players to enter the market or sustain their presence,” S&P said. “As a result, we continue to see larger health insurers taking a bigger share of the marketplace, and smaller players being displaced or struggling to achieve profitable growth as the competitive gap widens.”
“Although the mid-term elections removed a good deal of legislative uncertainty for the industry, policy risk remains elevated given the administration’s preference for ACA alternatives,” S&P said.
In addition, S&P says that payment and delivery reforms mandated in the ACA around value-based care will continue to drive greater cross-sector collaboration among payers and providers.
As of Jan. 1, in the name of transparency, the Trump administration required that all hospitals post their list prices online. But what is popping up on medical center websites is a dog’s breakfast of medical codes, abbreviations and dollar signs — in little discernible order — that may initially serve to confuse more than illuminate.
Anyone who has ever tried to find out in advance how much a hospital test, procedure or stay will cost knows the frustration: “Nope, can’t tell you” or “It depends” are common replies from insurers and medical centers.
While more information is always welcome, the new data will fall short of providing most consumers with usable insight.
That’s because the price lists displayed this week, called chargemasters, are massive compendiums of the prices set by each hospital for every service or drug a patient might encounter. To figure out what, for example, a trip to the emergency room might cost, a patient would have to locate and piece together the price for each component of their visit — the particular blood tests, the particular medicines dispensed, the facility fee and the physician’s charge, and more.
“I don’t think it’s very helpful,” said Gerard Anderson, director of the Johns Hopkins Center for Hospital Finance and Management. “There are about 30,000 different items on a chargemaster file. As a patient, you don’t know which ones you will use.”
And there’s this: Other than the uninsured and people who are out-of-network, few actually pay full charges.
The requirement to post charges online in a machine-readable format, such as a Microsoft Excel file, came in a 2018 guidance from the Trump administration that builds on rules in the Affordable Care Act. Hospitals have some leeway in deciding how to present the information — and currently there is no penalty for failing to post.
“This is a small step” toward price transparency amid other ongoing efforts, Centers for Medicare & Medicaid Services Administrator Seema Verma said in a speech in July.
But finding the chargemaster information on a hospital’s website takes diligence. Patients can try typing the hospital’s name into a search engine, along with the keywords “billing” or “chargemaster.” That might produce a link.
Even when consumers do locate the lists, they might be stymied by seemingly incomprehensible abbreviations.
The University of California San Francisco Medical Center’s chargemaster, for example, includes a $378 charge for “Arthrocentesis Aspir&/Inj Small Jt/Bursa w/o Us,” which is basically draining fluid from the knee.
At Sentara in Hampton Roads, Va., there’s a $307 charge for something described as a LAY CLOS HND/FT=<2.5CM. What? Turns out that is the charge for a small suture in surgery.
Which services, treatments, drugs or procedures a patient will face in a hospital stay is often unknowable. And the charge listed is just one component of a total bill. Put simply, an MRI scan of the abdomen has related costs, such as the charge for the radiologist who reads the exam.
Even something as seemingly straightforward as an uncomplicated childbirth can’t easily be calculated by looking at the list.
Comparisons between hospitals for the same care can also be difficult.
An uncomplicated vaginal delivery charge at the Cleveland Clinic’s main campus is $3,466.
Looking for that same information on the Minnesota Mayo Clinic’s online chargemaster page shows two listings, one for $3,030, described as “labor and delivery level 1 short” and the other for $5,236, described as “labor and delivery level 2 long.” But, what’s a short labor? What’s a long one? How is a patient who didn’t go to med school supposed to know the difference?
Also, those are just the charges for the actual delivery. There are also per-day room charges for mom and the newborn, not to mention additional charges for medications, physicians and other treatments.
To get at the total estimated charge, California requires hospitals to report charges for a select number of such “bundles” of care, called “diagnosis-related groups,” or DRGs, in Medicare jargon.
At the University of California-San Francisco’s hospital, for example, there are two chargemaster line items for vaginal childbirth: One is $5,497 and the other is $12,632. But there’s no indication how these differ. Consumers might then turn to the “bundled” cost based on those DRGs, where the ancillary costs are included. That lists the total charge for an uncomplicated childbirth at an astounding $53,184.
A UCSF spokeswoman said no officials were available to comment on this figure.
Though chargemaster rates are quite different from the lower, negotiated rates that insurers pay, they do become the basis for what patients pay who are without insurance or who are treated at hospitals outside their insurer’s network. Out-of-network patients are often surprised when they get what are called “balance bills” for the difference between what their insurer pays toward their care and those full charges.
Still, even knowing chargemaster rates “would be entirely unhelpful” in fighting a high balance bill, said Barak Richman, a law professor at Duke University who has written extensively about balance bills and hospital charges.
“Chargemasters are enormous spreadsheets with incredibly complicated codes that no one short of a billing expert would be able to make sense of,” he said.
Nevertheless, some experts say that merely making the charges public shines a light on the often very high — and widely varying — prices set by facilities.
Even if those charges are only “what hospitals would like to receive,” posting them publicly could make hospitals “totally embarrassed by the prices,” said Anderson at Hopkins.
Billing expert George Nation, a finance professor at Lehigh University, said that rather than posting chargemaster lists, hospitals should be required to provide the average prices they accept from insurers. Hospitals generally would oppose that, saying negotiated rates are a trade secret.
It’s unclear that the lists will have much impact. “It’s been the norm here in California for over a decade,” said Jan Emerson-Shea, vice president of external affairs for the California Hospital Association. Even so, “from a practical standpoint, I’m not sure how useful this information is,” she said. “What an individual pays to [the] hospital is going to be based on what their insurer covers.”
That could include such things as the annual deductible, whether the facility or physicians involved in the care are in-network and other details.
“The hospital piece is just a small piece,” said Ariel Levin, senior associate director for state issues at the American Hospital Association.
Still, “the biggest concern is it falls short of that end goal because it really doesn’t help consumers understand what they are going to be liable for,” she said.
HENRY KOTULA 