On July 1st, Georgia will launch its Pathways to Coverage program, which partially expands its Medicaid program to enroll individuals with incomes up to 100 percent of the federal poverty line (FPL), but only if they demonstrate at least 80 hours a month of work, education, job training, or community service.
This expansion is only projected to extend Medicaid coverage to an additional 50K state residents, far short of the 400K that full Medicaid expansion (without work requirements, to individuals earning up to138 percent of the FPL) would have covered. Georgia’s plan was approved by the Trump administration in 2020, but the Biden administration rescinded its waiver prior to implementation. Georgia then sued the Biden administration, and a Federal District Court sided with the state, allowing the partial expansion with work requirements to proceed. The Biden administration chose not to appeal.
The Gist: Though Georgia’s implementation is more limited in scope compared with other states which are currently pursuing Medicaid work requirements, Georgia sets a precedent to motivate those states that are looking to pursue similar strategies.
Research has shown that most adults on Medicaid who do not face barriers to work are already working,and that the cost of systems to monitor beneficiary work status likely offsets any savings in reduced Medicaid spending.
The burden of having to report work status is onerous for potential Medicaid enrollees, discouraging some from seeking coverage altogether.
Billionaire investor Charlie Munger has been vocal in expressing his concerns about U.S. healthcare, stating that it is “shot through with rampant waste” and has become “immoral.”
Munger says there are substantial problems that need to be addressed, including the presence of unnecessary costs and inefficiencies that plague the medical field.
Drawing a vivid analogy at a Daily Journal Annual Meeting, Munger compared the experience of a dying old person in many American hospitals to that of a carcass on the plains of Africa. He painted a bleak picture, describing how vultures, jackals, hyenas and other scavengers swarm around the helpless creature.
In an attempt to address these issues, Berkshire Hathaway, Amazon.com Inc., and JPMorgan Chase joined forces to establish Haven Healthcare a venture that despite their combined efforts failed to achieve its objectives.
Some startups have seen success where they failed. iRemedy, for example, is a startup using artificial intelligence (AI) technology, that offers a solution to the healthcare system’s challenges through its large procurement marketplace. Its platform streamlines the supply chain, enabling faster and more affordable access to lifesaving supplies for doctors, hospitals and healthcare providers.
Munger, vice chairman of Berkshire Hathaway Inc., criticized the high costs and inefficiencies in medical care as both expensive and wrong. In a CNBC interview, he went on to claim that some medical providers artificially prolong death to increase their profits.
With over 35 years of experience as board chairman of Good Samaritan Hospital in Los Angeles, Munger expressed his belief that certain healthcare practices are absurd.
“A lot of the medical care we do deliver is wrong — so expensive and wrong. It’s ridiculous,” he said in a “Squawk Box” interview.
In 2018, Munger predicted that when Democrats gain control of all three branches of government, there will be a push for a single-payer healthcare system. He highlighted the need for a complete change forced by the government because of the severity of the issues in the current system. He suggested that a universal healthcare system with an opt-out option would be a reasonable solution.
Warren Buffett, Munger’s longtime investing partner, shares similar concerns regarding healthcare spending, referring to it as a “tapeworm on the economic system.” Buffett believes the private sector can make substantial contributions to cost-reduction efforts.
A recent investigation conducted by Kaiser Health News-NPR shed light on the alarming reality of medical debt in the United States. The study reveals that over 100 million Americans are burdened with medical debt, placing a significant financial strain on their lives. Further analysis of the data reveals that approximately one-fourth of American adults carrying this debt owe more than $5,000.
What makes this issue even more concerning is the fact that it is not primarily driven by a lack of insurance coverage. Contrary to popular belief, the majority of people grappling with medical debt are not uninsured. Instead, it is the problem of being underinsured that is prevalent.
Many people have health insurance plans that do not offer sufficient coverage, leaving them vulnerable to high out-of-pocket expenses and accumulating medical debt.
A majority of Americans with health insurance said they had encountered obstacles to coverage, including denied medical care, higher bills and a dearth of doctors in their plans, according to a new survey from KFF, a nonprofit health research group. As a result, some people delayed or skipped treatment.
Those who were most likely to need medical care — people who described themselves as in fair or poor health — reported more trouble; three-fourths of those receiving mental health treatment experienced problems.
“The consequences of care delayed and missed altogether because of the sheer complexity of the system are significant, especially for people who are sick,” said Drew Altman, the CEO of KFF, formerly known as the Kaiser Family Foundation.
The survey also underscored the persistent problem of affordability as people struggled to pay their share of health care costs. About 40% of those surveyed said they had delayed or gone without care in the last year because of the expense. People in fair or poor health were more than twice as likely to report problems with paying medical bills than those in better health, and Black adults were more likely than white adults to indicate they had trouble.
Why It Matters: Delayed care can endanger health.
Nearly half of those who encountered a problem with their insurance said they could not satisfactorily resolve it. Some could not obtain the care they had sought, while others said they paid more than expected. Among the nearly 60% who reported difficulty with their insurance coverage, 15% said their health had declined.
“This survey shows it’s not enough to just get a card in your pocket — the insurance has to work or it’s not exactly coverage,” said Karen Pollitz, the co-director for KFF’s patient and consumer protections program.
People have a hard time understanding their coverage and benefits, with 30% or more reporting difficulty figuring out what they will be required to pay for care or what exactly their insurance will cover.
“Insurances are way more complicated than they should be,” said Amanda Parente, a 19-year-old college student in Nashville, Tennessee, who is covered under her mother’s employer plan. She was surprised to find that her out-of-pocket costs spiked recently when she sought treatment for strep throat. While she realized her copayments would be higher, “I guess we didn’t know how drastic it was going to be,” she said.
Background: Insurance coverage is confusing to everyone.
Navigating the intricacies of coverage and benefits were similar regardless of what kind of insurance people had. At least half of those surveyed with private coverage, through an employer, those with an “Obamacare” plan, or a government program like Medicare or Medicaid, said they experienced difficulties.
People might be unhappy with their coverage because they were already concerned about higher inflation and potential layoffs, said Christopher Lis, the managing director of global health care intelligence at J.D. Power, which found that consumer satisfaction with insurers had declined in a recent study. “We’ve got economic conditions that set the stage for concern around coverage and benefits,” he said.
Insurers say people generally report being happy with their plan, and 81% of those surveyed by KFF gave their insurance high ratings. “Health insurance providers are committed to improving access, affordability and convenience for all Americans and will continue to find innovative solutions to work toward this common goal,” said David Allen, a spokesperson for AHIP, a trade group that represents insurers.
What’s Next: How to haggle with insurers or appeal?
Also striking among the survey’s findings was how unaware people were about pursuing appeals of denied coverage and how to go about doing so.
“Most people don’t know who to call,” Pollitz said. Sixty percent of insured adults surveyed did not know they had a legal right to appeal, and about three-fourths said they did not know which government agency to contact for help, particularly respondents with private insurance.
State insurance regulators oversee fully insured policies sold to individuals and small businesses, and the federal Department of Labor has jurisdiction over employer-sponsored insurance.
Many of the problems people have with their insurance could be solved by enforcing existing rules, like federal regulations requiring private insurers to issue understandable explanations of benefits and to maintain accurate, current lists of doctors and hospitals within their networks.
On April 1st, Medicaid’s pandemic-era continuous enrollment policy began to sunset, kicking off a 14-month window for states to reassess their Medicaid rolls. In this week’s graphic, we highlight new Congressional Budget Office projections showing the impact of Medicaid redeterminations on insurance coverage rates over the next decade for the under-65 population.
The Medicaid and Children’s Health Insurance Program (CHIP) coverage rate is expected to drop from 31 percent of all Americans under 65 in 2023, to 27 percent in 2024.
Meanwhile, after reaching an all-time low in 2023,the under-65 uninsured rate is projected to surpass nine percent in 2024 and climb to over 10 percent by 2033.
While over 15M Americans are expected to lose Medicaid coverage during redeterminations, a majority of those disenrolled will gain health insurance either through an employer-sponsored or non-group plan.
But over 6M people, nearly 40 percent of those losing Medicaid coverage, are projected to become uninsured, erasing nearly half the progress the country has made since 2019 at lowering the uninsured rate.
Last week, Marlee Stark and I published an op-ed in the Arkansas Democrat Gazette on why the Arkansas Department of Human Services (DHS) should press pause on its Medicaid unwinding process. Earlier this month, DHS released its first report laying out how many people lost coverage in April, as the state resumed its redetermination process.
As we write,
According to DHS’ recent report, over 50,000 people were disenrolled for procedural reasons, like failure to return paperwork or requested information, or because the state didn’t have their correct address on file. Only 15 percent of those who were disenrolled were confirmed truly ineligible or said they no longer needed their coverage, likely because they acquired another source of coverage during the pandemic.
In our piece, we argue that DHS should take a look at why so many people are losing coverage even though they may still be eligible—and outline some of the consequences the state may face if it chooses not to do so.
A surge in the uninsured population from Medicaid redetermination could swamp some health systems that struggled to stay afloat during the pandemic. But experts say it could also translate into a financial boost for networks, if enough individuals find new sources of coverage.
Why it matters:
Even the temporary loss of coverage as states unwind their COVID-era Medicaid enrollment requirements means more people will go without checkups and other primary care, increasing the likelihood they’ll wait until they’re sick to seek help.
A key question is how many of the disenrolled will find new arrangements through workplace insurance or subsidized Affordable Care Act plans, both of which pay providers at higher rates than Medicaid.
Driving the news:
More than 170,000 people lost their Medicaid coverage in four states in April, and it’s not clear from state data how many of those people found new arrangements, reapplied successfully for Medicaid or remain uninsured.
An estimated 17 million children and adults could lose Medicaid coverage this year, after pandemic-era protections are rolled back, per a recent KFF survey.
Trinity Health, an 88-hospital health system operating in 26 states, estimates that Medicaid redetermination could result in a loss of $70 million to $90 million if disenrolled people don’t find other arrangements and the system has to provide them with charity care.
“It’s painful to watch; it’s not good for people and for our communities and those who are most vulnerable,” Dan Roth, chief clinical officer at Trinity Health, told Axios.
Emergency departments could fill up quickly if enough people who delay care wait for a health crisis to get help, said Ben Finder, director of policy research and analysis at the American Hospital Association.
He said other patients could cut pills in half or otherwise make medications last longer, “which can create cascading problems for folks.”
What we’re watching:
Redeterminations could change the payer mix in a revenue-positive way if patients go from Medicaid to employer-sponsored or ACA plans.
One Urban Institute report estimates that as many as 10.5 million patients could shift from Medicaid to employer-sponsored coverage or a marketplace plan.
This could boost payments to hospitals significantly, per Duane Wright, a Bloomberg Intelligence analyst, since commercial payment rates for hospital services are on average 223% higher than Medicare payments.
Zoom in:
Providers might be the first ones to inform patients who don’t know that their coverage has been terminated when they come in seeking care.
Health systems can create special teams to proactively reach out to Medicaid patients before they even come to the hospital, said Karen Shields, chief client engagement officer at Gainwell and former deputy director at the Centers for Medicare and Medicaid Services.
“There is a moral and financial imperative for us to be good at this,” Shields told Axios.
The bottom line:
Most health systems have bounced back from a shaky 2022. But redeterminations, combined with inflation, supply chain problems and staffing shortages, could prove too much, especially during the colder months when respiratory viruses proliferate.
“Everyone is holding their breath watching for how this unfolds in each state,” Finder told Axios.
A lack of data about Medicare Advantage plans means there are several unanswered questions about the program, according to an analysis from Kaiser Family Foundation.
The analysis, published April 25, breaks down the kinds of Medicare Advantage data not publicly available. Some missing data is not collected from insurers by CMS, and some data is collected by the agency but not available to the public.
Here are five questions researchers can’t answer without more data, according to Kaiser Family Foundation:
Insurers are not required to report how many enrollees use supplemental benefits and if members incur out-of-pocket costs with their supplemental benefits. Without this data, researchers can’t answer what share of enrollees use their supplemental benefits, how much members spend out of pocket for supplemental benefits, and if these benefits are working to achieve better health outcomes.
CMS does not require Medicare Advantage plans to report prior authorizations by type of service. Without more granular data, researchers can’t determine which services have the highest rates of denial and if prior authorization rates vary across insurers and plans.
Insurers are also not required to report the reasons for prior authorization denials to CMS. This leaves unanswered questions, including what is the most common reason for denials and if rates of denials vary across demographics.
Medicare Advantage plans do not report complete data on denied claims for services already provided. Without this data, researchers cannot determine how often payers deny claims for Medicare-covered services and reasons why these claims are denied.
CMS does not publish the names of employers or unions that receive Medicare funds to provide Medicare Advantage plans to retired employees. Without more data, researchers can’t tell which industries use Medicare Advantage most often and how rebates vary across employers.
This brief examines past-due medical debt among nonelderly adults and their families using nationally representative survey data collected in June 2022. The analysis assesses the share of adults ages 18 to 64 with past-due medical bills owed to hospitals and other health care providers as well as the actions taken by hospitals to collect payment or make bills easier to settle.
It focuses on the experiences of adults with family incomes below and above 250 percent of the federal poverty level (FPL), approximating the income cutoff used by many hospitals to determine eligibility for free and discounted care.
WHY THIS MATTERS
In their efforts to protect patients from medical debt, policymakers have increasingly focused on the role of hospital billing and collection practices, with particular scrutiny directed toward nonprofit hospitals’ provision of charity care. Understanding the experiences of people with past-due bills owed to hospitals and other providers can shed light on the potential for new consumer protections to alleviate debt burdens.
WHAT WE FOUND
More than one in seven nonelderly adults (15.4 percent) live in families with past-due medical debt. Nearly two-thirds of these adults have incomes below 250 percent of FPL.
Nearly three in four adults with past-due medical debt (72.9 percent) reported owing at least some of that debt to hospitals, including 27.9 percent owing hospitals only and 45.1 percent owing both hospitals and other providers. Adults with past-due hospital bills generally have much higher total amounts of debt than those with past-due bills only owed to non-hospital providers.
Most adults (60.9 percent) with past-due hospital bills reported that a collection agency contacted them about the debt, but much smaller shares reported that the hospital filed a lawsuit against them (5.2 percent), garnished their wages (3.9 percent), or seized funds from a bank account (1.9 percent).
Though about one-third (35.7 percent) of adults with past-due hospital bills reported working out a payment plan, only about one-fifth (21.7 percent) received discounted care.
Adults with incomes below 250 percent of FPL were as likely as those with higher incomes to experience hospital debt collection actions and to have received discounted care.
The concentration of past-due medical debt among families with low incomes and the large share who owe a portion of that debt to hospitals suggests that expanded access to hospital charity care and stronger consumer protections could complement health insurance coverage expansions and other efforts to mitigate the impact of unaffordable medical bills.
HOW WE DID IT
This analysis draws on data from the June 2022 round of the Urban Institute’s Health Reform Monitoring Survey (HRMS), a nationally representative, internet-based survey of adults ages 18 to 64 that provides timely information on health insurance coverage, health care access and affordability, and other health topics. Approximately 9,500 adults participated in the June 2022 HRMS.
The film “American Hospitals: Healing a Broken System” premiered in Washington, D.C., on March 29. This documentary exposes the inconvenient truths embedded within the U.S. healthcare system. Here is a dirty dozen of them:
Hospitals are largely unaccountable for poor clinical outcomes.
The cost of commercially insured care is multiples higher than the cost of government-insured care for identical procedures.
Customer service at hospitals is dreadful.
Frontline clinicians are overburdened and leaving the profession in droves.
Healthcare still operates the same way it has for the last one hundred years — delivering hierarchical, fragmented, hospital-centric, disease-centric, physician-centric “sick” care. Accordingly, healthcare business models optimize revenue generation and profitability rather than health outcomes. These factors explain, in part, why U.S. life expectancy has declined four of the five years and maternal deaths are higher today than a generation ago.
It’s hard to imagine that the devil itself could create a more inhumane, ineffective, costly and change-resistant system. Hospitals consume more and more societal resources to maintain an inadequate status quo. They’re a major part of America’s healthcare problem, certainly not its solution. Even so, hospitals have largely avoided scrutiny and the public’s wrath. Until now.
“American Hospitals” is now playing in theaters throughout the nation. It chronicles the pervasive and chronic dysfunction plaguing America’s hospitals. It portrays the devastating emotional, financial and physical toll that hospitals impose on both consumers and caregivers.
Despite its critical lens, “American Hospitals” is not a diatribe against hospitals. Its contributors include some of healthcare’s most prominent and respected industry leaders, including Donald Berwick, Elizabeth Rosenthal, Shannon Brownlee and Stephen Klasko. The film explores payment and regulatory reforms that would deliver higher-value care. It profiles Maryland’s all-payer system as an example of how constructive reforms can constrain healthcare spending and direct resources into more effective, community-based care.
The United States already spends more than enough on healthcare. It doesn’t need to spend more. It needs to spend more wisely. The system must downsize its acute and specialty care footprint and invest more in primary care, behavioral health, chronic disease management and health promotion. It’s really that simple.
My only critique of “American Hospitals” is many of its contributors expect too much from hospitals. They want them to simultaneously improve their care delivery and advance the health of their communities. This is wishful thinking. Health and healthcare are fundamentally different businesses. Rather than pivoting to population health, hospitals must focus all their efforts on delivering the right care at the right time, place and price.
If hospitals can deliver appropriate care more affordably, this will free up enormous resources for society to invest in health promotion and aligned social-care services. In this brave new world, right-sized hospitals deliver only necessary care within healthier, happier and more productive communities.
All Americans deserve access to affordable health insurance that covers necessary healthcare services without bankrupting them and/or the country. Let me restate the obvious. This requires less healthcare spending and more investments in health-creating activities. Less healthcare and more health is the type of transformative reform that the country could rally behind.
At issue is whether America’s hospitals will constructively participate in downsizing and reconfiguring the nation’s healthcare system. If they do so, they can reinvent themselves from the inside out and control their destinies.
Historically, hospitals have preferred to use their political and financial leverage to protect their privileged position rather than advance the nation’s well-being. Like Satan in Milton’s “Paradise Lost,” they have preferred to reign in hell rather than serve in heaven.
Pride comes before the fall. Woe to those hospitals that fight the nation’s natural evolution toward value-based care and healthier communities. They will experience a customer-led revolution from outside in and lose market relevance. Only by admitting and addressing their structural flaws can hospitals truly serve the American people.
April 1st marked the start date of a one-year window for state Medicaid offices to reassess their beneficiary rolls, as Medicaid’s continuous enrollment policy sunsets. Since the early days of the pandemic, the federal government has boosted state Medicaid funding by 6.2 percent, in exchange for a requirement that current Medicaid beneficiaries maintain eligibility, regardless of changes to their income or other qualifiers. This policy helped grow national Medicaid enrollment to a record 90M, but a projected 15M may now lose coverage through the redetermination process.
The Gist: After the US uninsured rate recently hit a record low, millions of Americans will now lose insurance coverage, at least temporarily.Of those no longer eligible for Medicaid, an estimated 2.7M will qualify for subsidized exchange plans, while around 400K in non-expansion states will have incomes too high for Medicaid and too low for exchange subsidies. The impact will vary in each state, both in terms of how quickly and how many Medicaid beneficiaries are disenrolled.
But in over half of states,at least one-fifth of those who will lose Medicaid coverage are projected to remain uninsured—a significant step backward in the effort to ensure universal coverage.
Communication from Medicaid offices and exchange plan navigators will be key to preventing as many people as possible from becoming uninsured.
HENRY KOTULA 