Tag Archives: ACA

Poll: 44% Of Americans Skip Doctor Visits Because Of Cost

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https://www.forbes.com/sites/brucejapsen/2018/03/26/poll-44-of-americans-skip-doctor-visits-due-to-cost/#31398d56f57e

Because of the high cost of healthcare, 44% Americans didn’t go see a physician last year when they were sick or injured, according to a new survey.

The West Health Institute/NORC at the University of Chicago national poll comes as policymakers and health insurance companies are predicting a jump in health premiums and out-of-pocket costs, particularly for Americans with individual coverage under the Affordable Care Act. The $1.3 trillion spending bill signed into law last week by President Donald Trump didn’t include reinsurance programs and money to restore Obamacare funds to help Americans pay co-payments and deductibles despite bipartisan support in the Senate.

Cost continues to be a barrier to treatment with 40% of Americans who say they “skipped a recommended medical test or treatment in the last 12 months due to cost.” Another 32% were “unable to fill a prescription or took less of a medication because of the cost,” the West Health/NORC poll of more than 1,300 adults said.

“The high cost of healthcare has become a public health crisis that cuts across all ages as more Americans are delaying or going without recommended medical tests and treatments,” West Health Institute chief medical officer Dr. Zia Agha said in a statement accompanying the poll results. The survey is being released at this week’s American Society on Aging 2018 Aging in America Conference in San Francisco.

The West Health-NORC poll is the latest national survey showing Americans continued frustration with high healthcare costs even as the U.S. spends more than $3.3 trillion annually on healthcare.

Several recent polls have indicated healthcare is back on the top of voters’ concerns as they head to the polls this November for mid-term Congressional and statewide general elections. A Kaiser Health Tracking poll published earlier this month ranked “health care costs as the top health care issue mentioned by voters when asked what they want to hear 2018 candidates discuss.”

 

 

 

Two key areas hospitals are planning major tech investments in the immediate future

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http://www.healthcarefinancenews.com/news/two-key-areas-hospitals-are-planning-major-tech-investments-immediate-future?mkt_tok=eyJpIjoiTkRsaU5HTTJNVEV5WldaaSIsInQiOiJFSTVVaHdzRmdQTGVCSXZORmhReEkrbVVWNjZOdzhlOWRuRUwxeUVXNktOa2FyNVpQWkc1dXk5SGNTQjc0YndcL3BuUTkrV2xkWEVLd01qWnd2UGNrWTBFTFFzRWxWaGM3bVFOclwvYjNlbXBPSjA2d1prU0tyMmNpQ0Qwdlg4TGhUIn0%3D

 

Providers are ramping up to focus on urgent care centers and population health initiatives.

Hospitals are gearing up to spend more on population health and urgent care centers in the coming years, according to new research from two different firms.

The market for population health technologies is expected to reach $69 billion by 2025 while the urgent care center space is forecasted to grow by roughly $8 billion in 2018 to $25.93 billion by 2023.

The global population health management market was worth $118.5 million in 2016 and is slated to grow at a CAGR of roughly 16 percent from 2017 to 2025, with the rise in demand for innovative technologies and adoption of healthcare IT tools fueling the growth, Transparency Market Research said in a new report.

In terms of end-users, it’s the healthcare provider segment of the market that is expected to account for the largest share of the global market thanks to rising use of PHM tools. Insurers, pharma and “others” follow in terms of segments.

The benefits of PHM tools like data integration, data analysis, care coordination, and lowering care costs have driven an increase in their adoption, especially in the case of chronic diseases like diabetes and cardiovascular diseases which require identifying high-risk patients and disease management measures.

“This is one of the factors projected to drive the global population health management market during the forecast period,” the report authors wrote. “Developed healthcare IT infrastructure and increase in healthcare IT spending are the other factors anticipated to propel the global market during the forecast period.”

Geographically, North America and Europe are expected to dominate the market thanks to the Affordable Care Act and a rise in healthcare IT spending, owing largely to providers.

“Well-established healthcare infrastructure and strong support from public and private sectors in terms of reimbursement are attributed to the largest market share of North America,” the firm said. “A rise in awareness about population health and government initiatives such as the Affordable Care Act are anticipated to drive the market during the forecast period.”

Urgent Care Centers, meanwhile, will represent a $26 billion market by 2023, and in this year will reach just over $20 billion, ReportsnReports projected. Health systems and corporations with a stake in the healthcare industry know the model is flourishing thanks to affordable pricing, shorter wait times, an increasing elderly population, and the market is seeing more investment activity as well as strategic development partnerships between urgent care providers and hospitals. Corporate-owned urgent care centers, however, are expected to occupy the largest share of this market in 2018.

Concentra, MedExpress, American Family Care, NextCare Holdings, and FastMed Urgent Care are already major market players with CareNow Urgent Care, GoHealth Urgent Care starting to gain more of a presence as well in the United States.

Health systems looking to diversify their portfolios might do well to look at both urgent care centers and population health programs when considering how to expand their footprints. With a reputation for faster service and better pricing, both things that the rising millennial population smile at, they could be a beacon for both primary and specialty care for younger consumers as opposed to traditional practices. Additionally, with the high-deductible health plans, reasonably priced care will be especially attractive to patients who will bear a greater portion of the financial responsibility related to their care.

As these facilities grow in popularity, including them could boost not only your reputation but also your bottom line.

 

Medical Research, Drug Treatment And Mental Health Are Winners In New Budget Bill

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https://www.npr.org/sections/health-shots/2018/03/22/596116779/medical-research-drug-treatment-and-mental-health-are-winners-in-new-budget-bill?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202018-03-23%20Healthcare%20Dive%20%5Bissue:14589%5D&utm_term=Healthcare%20Dive

Sen. Susan Collins, R-Maine (center), is joined on Wednesday by Sen. Lindsey Graham (from left), R-S.C., Sen. Lisa Murkowski, R-Alaska, and Rep. Greg Walden, R-Ore. Collins was pushing for provisions in the budget bill aimed at lowering premiums for people purchasing health insurance in the Affordable Care Act’s marketplaces. That didn’t happen.

 

The big budget deal reached this week in the House doesn’t include a long-sought-after provision to stabilize the Affordable Care Act marketplaces. But the $1.3 billion plan, set to fund the government through September, has lots of new money for medical research, addiction treatment and mental health care.

Here’s the rundown of what’s included in the 2,232-page spending bill, now in the hands of a Senate vote, based on summaries released by the House and Senate appropriations committees.

  • $78 billion in overall funding for the Department of Health and Human Services, a $10 billion increase
  • $3.6 billion to fight the opioid addiction crisis
    • This more than doubles the money allocated in fiscal 2017 and boosts funding for treatment and prevention, as well as helping to find alternatives for people suffering from pain.
  • $3.2 billion for mental health care
    • This is a 17 percent boost from last year and goes to treatment, prevention and research.
  • $37 billion for the National Institutes of Health
    • This is a $3 billion increase over fiscal 2017 and boosts spending on research into Alzheimer’s disease and a universal flu vaccine, among other things.

Lawmakers could not agree on language designed to stabilize the Affordable Care Act insurance markets and lower insurance premiums that Sens. Lamar Alexander, R-Tenn., and Susan Collins, R-Maine, have been fighting for since last fall. That bill would have reinstated the cost-sharing reduction payments, by which the government reimburses insurance companies that give the lowest-income customers a break on their copayments and deductibles.

Last year President Trump announced that the government would stop making the payments, a decision that drove the unsubsidized premiums on insurance policies higher.

Alexander says his proposal would restore those payments and cut premiums as much as 40 percent.

“Nothing is more important to Americans than health care, and nothing is more frightening than the prospect of not being able to afford health insurance, which is the case for a growing number of Americans,” he said at a news conference Wednesday.

But Democrats refused to support the provision because it also included language that would have barred any insurance policy sold on the ACA marketplaces from covering abortion.

 

 

 

What to watch for in the individual health insurance market

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https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2018/03/08/what-to-watch-for-in-the-individual-health-insurance-market/?utm_campaign=Economic%20Studies&utm_source=hs_email&utm_medium=email&utm_content=61590808

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On Tuesday, March 6, the Brookings Institution’s Hutchins Center on Fiscal and Monetary Policy and the USC-Brookings Schaeffer Initiative for Health Policy co-hosted an event examining where the individual health insurance market is today and where it is heading. The event featured an opening presentation followed by a panel discussion featuring speakers from a variety of perspectives. The discussion examined how the individual market has evolved since the implementation of the main Affordable Care Act (ACA) reforms in 2014, the likely impact of recent policy changes implemented by the Trump Administration and Congress, and how federal policy toward the market might evolve in years to come.

Here are highlights from each of the participants.

Fiedler’s opening presentation: An overview of recent individual market trends and policy changes

The event opened with a presentation by Matthew Fiedler, a fellow at the Brookings Institution’s Center for Health Policy (slides available here). Fiedler started by showing that individual market enrollment grew significantly after implementation of the ACA’s reforms in 2014, but that individual market insurers also incurred significant losses. Those losses set the stage for a pricing correction in 2017, which he estimated returned premiums to a roughly sustainable position.

Fiedler then examined the implications of three significant policy changes under the Trump Administration: the end of cost-sharing reduction payments, the pending repeal of the individual mandate, and the proposed expansion of short-term, limited-duration plans. Fiedler argued that “the market will survive and will find a new equilibrium” because many enrollees in the ACA-compliant individual market are eligible for large subsidies that will make remaining in the market attractive.

Nevertheless, he concluded that repeal of the individual mandate and the expansion of short-term plans, will reduce the number of people covered, increase the number of people with lower-quality coverage, and reduce pooling of risk between healthier and sicker individuals. On the other hand, he argued that the Trump Administration’s decision to end cost-sharing reduction payments will have the unintended consequence of lowering premiums after subsidies for many enrollees and increasing federal spending.

Corlette: Short-term plans pose risks to consumers

A major topic for the panel discussion was the Trump Administration’s proposal to expand the definition of “short-term, limited duration” plans from a plan lasting less than 3 months (with no renewals permitted) to a plan lasting less than 12 months (with renewals permitted). Short-term plans are exempt from a broad range of federal regulatory requirements, including the ban on varying premiums based on health status and the ACA requirement to cover the so-called essential health benefits package.

Panelists noted that broader availability of short-term plans is likely to weaken the market for ACA-compliant plans since many healthier enrollees will migrate into the short-term market. Sabrina Corlette, a research professor at Georgetown University, argued that short-term plans pose significant risks not only to the market for ACA-compliant plans but also to consumers who buy them. These short-term plans are potentially harmful, she argued, because they “walk and talk a lot like traditional comprehensive health insurance” but many consumers will find themselves liable for “thousands of dollars of medical bills because these things simply don’t cover anything.”

Capretta: Recent policy changes are expanding state flexibility in beneficial ways

In discussing various policy changes implemented by the Trump Administration, James C. Capretta, a fellow at the American Enterprise Institute, noted that many of these policy changes have the effect of increasing state flexibility. He argued that state flexibility could help illuminate the path forward for federal policy. “Given the stalemate at the national level, maybe we need a two or three-year period where a lot of states try a couple of different things,” he said. “If some states want to re-impose the individual mandate they can do so. If they want to impose continuous coverage penalties they can do so. They can restrict which plans are sold on the insurance market,” he said.

Patterson: What is the next national goal for health policy?

Panelists discussed their views on next steps for federal policymakers. Kevin Patterson, CEO of Connect for Health Colorado, said that policymakers need “to think about what we are going to challenge ourselves to actually deal with.” Patterson noted that the Affordable Care Act had a national goal of improving access to care. “But what’s the next national goal? Is there one?,” Patterson asked. Patterson identified reducing the underlying cost of care as a potential priority. Patterson noted that the “big bad insurance company” often gets blamed for high premiums, “but a lot of what they have to do is just reflect the cost that they’re seeing in what the provider networks are charging.”

Geraghty: Increasing competition among providers can reduce the cost of care

Following on Patterson’s comment, Geraghty highlighted the importance of increasing competition among health care providers if the goal is to reduce costs. “We as a country have not looked at competition on the delivery side,” he said. Geraghty noted that there were particular challenges in many rural markets.  “If you’re in a rural area and you’ve got one hospital and they bought up the physician groups around them, they now set the market and they set the price,” he explained. Geraghty argued that improvements in communications technology might make it possible to deliver more care remotely, which could facilitate increased competition in many markets with a small number of providers.

 

The ACA at Eight: Resilient but Still at Risk

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http://www.commonwealthfund.org/publications/blog/2018/mar/aca-at-eight?omnicid=EALERT1374267&mid=henrykotula@yahoo.com

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It’s Obamacare’s birthday. After eight years of relentless pounding, the Affordable Care Act (ACA) is still the law of the land. Its resilience reflects the fundamental decency of the American people who — when faced with the reality of taking coverage away from millions of their neighbors — refused to let that happen. They filled town hall meetings, they flooded the corridors of Congress, and support for the law surged to its current 54 percent.

That is not to say that the law’s future is assured. As part of its recent tax reform legislation, Congress eliminated financial penalties for not having health insurance — the teeth of the so-called individual mandate. The Congressional Budget Office (CBO) predicts that this will raise health insurance premiums in individual private markets by an average of 10 percent, and 13 million Americans could lose their health insurance. If Congress fails to enact recent bipartisan market stabilization proposals, these numbers could go even higher.

The current administration is also using executive authority to weaken the law. The U.S. Department of Health and Human Services has encouraged states to impose a range of new restrictions on Medicaid recipients — work requirements, premiums, copays — that may reduce the number of poor and near-poor Americans who enroll in this program.

The administration has also proposed new rules that would allow health insurers to sell plans that evade the ACA’s standards regarding preexisting conditions and minimum benefits. For example, the administration would permit insurers to market short-term plans — coverage limited to a year in duration — without the requirement that they accept all comers, and with various restrictions on benefits. These cheaper, less generous plans would appeal to healthier individuals, who would then likely choose not to purchase the more expensive, comprehensive insurance sold in ACA marketplaces. Only sicker individuals would buy ACA plans, raising their costs and making them unaffordable to millions who have come to depend on them. The net effect is to add choices for healthy Americans, but reduce options for the sick.

Efforts to curtail the ACA will likely increase the number of Americans without insurance, now at a historic low of 14 percent of working-age adults, according to the Commonwealth Fund’s Affordable Care Act Tracking Survey. These efforts will also likely increase health disparities between states. A number of the restrictions sought by the administration will go into effect only if states embrace them. States must request waivers to limit Medicaid benefits. So far, only Republican-led states are doing so. Similarly, states have discretion about whether to permit the sale of short-term plans. Many blue states are considering banning or regulating them.

Despite these threats, however, fundamental elements of the ACA remain in effect. Federal financial assistance for purchase of health insurance in ACA marketplaces remains available for individuals with incomes below 400 percent of the federal poverty level. This is one reason why 11.8 million people had signed up for ACA plans through the marketplaces by the end of January. Federal support for states to expand Medicaid persists. Thirty-four states and the District of Columbia have done so, resulting in 15 million more beneficiaries of that program.

Recent legislative and executive restrictions on the ACA will not totally reverse these gains. Paradoxically, some states that refused previously to expand Medicaid may decide to do so now that they may be able to impose work requirements, premiums, and copays, and thus give expansion a conservative stamp. This could actually increase the total number of Americans with some Medicaid coverage.

In fact, the continuing struggle over the ACA fits a decades-old pattern of steady, if erratic, expansion of health insurance coverage in the United States. Since the creation of Medicare and Medicaid 53 years ago, the federal government has periodically extended insurance to new populations: the disabled, those with end-stage renal disease, children. The federal government also massively expanded Medicare benefits to cover drugs. Once provided, these benefits have proved politically difficult to peel back — in a recent poll, 92 percent of Americans said they felt all of us should have the right to health care.

What does this mean for the ACA? While it will not achieve all its supporters’ goals, it will survive, and provide a new foundation upon which Americans can build if they choose, as they have in the past, to help their vulnerable neighbors deal with the scourge of illness. To paraphrase Martin Luther King, one might even say that the arc of history is long, but it bends toward health coverage.

 

Why health care probably didn’t decide the Pennsylvania election

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https://www.axios.com/health-care-pennsylvania-election-conor-lamb-b9731a9f-d7b1-4db7-8483-bee9a29d48fa.html

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The buzz is that health care played a leading role in Conor Lamb’s upset win in last week’s special House election in Pennsylvania. But in reality, we can’t say that health care was a decisive factor in Lamb’s win, at least not based on the one poll that is being used as a basis for that claim.

Between the lines: The poll, conducted by Public Policy Polling and funded by advocacy groups, found that 15% of self-reported voters said health care was the “most important issue” in the election, and an additional 37% said it was a “very important issue.” However, and notably, the poll didn’t ask about any other issue, making it impossible to determine whether health care was more important than other issues for voters.

The big picture: Yes, the Affordable Care Act is becoming more popular. And yes, the energy has flipped from Republicans to Democrats on health care, and health care will be a rallying cry for Democrats in upcoming races. But that doesn’t mean it’s the only issue that matters.

Our own polling shows that health care is among the top issues that registered voters want 2018 candidates to talk about. But other issues like the economy and jobs and immigration are high on voters’ minds as well.

In interpreting the PPP poll, some have combined the “very important” responses with the “most important” responses. When you do that, more than 50% of voters say health care was important to their vote. That sounds impressive, but the same is true for many other issues, including the economy and jobs, immigration, North Korea, and some others.

A few things to keep in mind:

  • Voters who said health care is their most important issue tend to be more liberal and Democratic, and that’s exactly who turned out in the special election in Pennsylvania (according to Cook Political Report). So it is unsurprising that they said health care was important to their vote, as it has historically been among the top issues with this group of voters.
  • This was also an interactive voice response (IVR) poll (sometimes referred to as a “robo-poll”), in which pollsters only interview households with landline phones. More than half of U.S. homes do not have a landline telephone. While these polls are widely used, polls that rely on landline-only interviews disproportionately miss younger, more diverse, and lower-income populations.
  • These groups tend to be less likely to be vote, but the past several months have demonstrated that we may need to reassess our assumptions about who will be showing up to vote this November.

The bottom line: As the head of a leading health policy organization, of course I always root for health care to be as important as possible. But we cannot be sure that it was the top issue in Lamb’s victory, or that it will be one in the coming elections, which will turn not just on issues but on other factors — including the public’s views of President Trump.

And how important health care is will depend on how much, and how effectively, candidates campaign on the issue.

 

 

 

 

How Did State-Run Health Insurance Marketplaces Fare in 2017?

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http://www.commonwealthfund.org/publications/issue-briefs/2018/mar/how-did-state-run-marketplaces-fare-in-2017?

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Abstract

  • Issue: Sixteen states and the District of Columbia manage their own health insurance marketplaces under the Affordable Care Act. These states, which were broadly supportive of health reform, chose to run their marketplaces to exert greater control over their insurance markets and tailor the portals to suit local needs. Though federal policy changes and political uncertainty around the ACA in 2017 have posed challenges across the country, states that operate their own marketplaces had greater flexibility than others to respond.
  • Goal: To understand how states on the forefront of health reform perceived and responded to federal policy changes and political uncertainty in 2017.
  • Methods: Structured interviews with the leadership staff of 15 of the 17 state-run marketplaces.
  • Findings and Conclusions: Respondents unanimously suggested that federal administrative actions and repeal efforts have created confusion and uncertainty that have negatively affected their markets. The state-run marketplaces used their broader authority to reduce consumer confusion and promote stable insurer participation. However, their capacity to deal with federal uncertainty has limits and respondents stated that long-term stability requires a reliable federal partner.

Background

The Affordable Care Act created health insurance marketplaces, also known as exchanges, in each state to help people who don’t have access to insurance through an employer or public program. The marketplaces act as a gateway to coverage for residents, providing a platform through which they can compare and purchase plans. Sixteen states and the District of Columbia are responsible for managing their own marketplaces; 34 states rely on the federal government to operate their exchange.

States that decided to manage their marketplaces wanted to retain control over their insurance markets and have the authority to tailor the portal to meet local needs.2 Compared with states using the federally run marketplace, nearly all these states have expanded their Medicaid programs and have been much more likely to adopt the ACA’s consumer protections into state law — potentially making it easier to enforce these reforms.3

Since President Trump’s election, the ACA and marketplaces have faced an uncertain future. The president has been openly hostile to the ACA and sought its repeal.4 At the same time, the administration has made regulatory and other implementation changes and reduced the funding that supports the marketplaces. These decisions have all affected how the law operates in practice and have had serious repercussions across the country.5 However, the impact has not been uniform. It has varied, in part, based on the choices state policymakers have made in implementing the ACA — including whether to run their own exchange.

We sought to understand how states that have been more actively engaged in reform have perceived federal policy changes and political uncertainty in 2017, and to explore whether these states were better able to promote stability within their markets. To do so, we interviewed the leadership staff of 15 of the 17 state-run marketplaces in September and October 2017.6 This brief explores key themes that emerged from those interviews. It identifies the major challenges facing the marketplaces as they went into the fifth open enrollment period, how states responded to those challenges, and the limits on states’ capacities to act.

Key Findings

Federal Actions Made It Harder for States to Manage Their Own Marketplaces

Marketplace respondents were unanimous in suggesting that actions taken by the Trump administration and ongoing efforts to repeal the ACA have created confusion and uncertainty that have negatively affected their markets. While these marketplaces had experienced ups and downs during their first three years of operation, many respondents were relatively optimistic in the fall of 2016 about future enrollment growth and stability in terms of plan participation and premiums — a view supported by independent analyses.7 But federal developments in 2017 made the challenges of the previous year “pale in comparison,” and respondents described a far more uncertain future.

Officials highlighted four federal-level developments during 2017 that jeopardized stability. First, respondents said that the administration’s repeated threats to end federal payments supporting the ACA’s cost-sharing reduction (CSR) plans caused protracted confusion and disruption and placed states in a “real jam.” These threats were eventually carried out, after months of uncertainty, in October 2017. But as deadlines for marketplace participation and rate setting for the upcoming year (2018) came and went with no clarity on whether the administration would continue to reimburse insurers for the cost of the CSR subsidies, marketplaces struggled to get insurers to commit to participate and to develop responses to the significantly higher premiums the insurers sought to offset the lost payments.8

Second, most respondents noted that actions taken by the administration to undermine the ACA’s individual mandate had the effect of undermining their marketplaces, as well. The requirement to maintain coverage, ultimately repealed on a prospective basis in December, was the law of the land throughout 2017 (and remains so in 2018). However, officials noted that an executive order, signed by the president on Inauguration Day, cast doubt on the enforcement of the mandate and caused insurers to be more cautious when setting rates.9 Many priced higher than they would have otherwise, fearing that a weakened mandate would lead to a sicker and more expensive risk pool.10 The president’s actions and words were also perceived to have caused widespread confusion among consumers about whether the requirement to maintain coverage was still the law.

In a related vein, officials repeatedly expressed frustration at “federal noise”: ongoing but thus far inconclusive discussions about repealing and replacing the ACA, and related rhetoric by administration officials and congressional allies asserting that the health law was “dead” or “collapsing.” Respondents said it was a challenge to ensure residents had accurate information. They reported many instances of consumer confusion about the marketplaces, the mandate, coverage options, and the status of the health law, in general.

Fourth, a majority of respondents predicted that the administration’s decision to reduce advertising spending for the federal marketplace by 90 percent would have negative side effects for the state-run exchanges. Officials in both big and small states explained that because the federal marketing campaign was national in scope and used television advertising — a medium too expensive for several state marketplaces — it was effective in reaching their residents and had complemented state messaging efforts in prior years. Several respondents also lamented the perceived political ramifications of the funding cut, suggesting that the administration’s action would cause enrollment through the federal exchange to diminish, putting the entire program at greater risk of repeal.

 

Republicans release new plan to lower health premiums, stabilize Obamacare markets

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https://www.usatoday.com/story/news/politics/2018/03/19/republicans-release-new-plan-lower-health-premiums-stabilize-obamacare-markets/439216002/

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 Sen. Lamar Alexander and other congressional Republicans are pressing forward with their latest plan to stabilize Obamacare health insurance markets and help provide coverage for patients with high medical costs.

But while previous versions have had bipartisan support, Democrats are refusing to back the latest bill.

Alexander and three key Republicans filed legislation Monday that they said could provide coverage for an additional 3.2 million individuals and lower premiums by as much as 40 percent for people who don’t get their health insurance through the government or their employer.

Beginning in 2019, the bill would reinstate for three years the government subsidies paid to insurers that provide health-care coverage to low-income clients. It also would provide $30 billion in funding – $10 billion a year over three years – to help states set up high-risk insurance pools to provide coverage for people with high medical costs.

The proposal also would revise the Obamacare waiver process so that states will have more flexibility to design and regulate insurance plans. In addition, it would require the Department of Health and Human Services to issue regulations allowing insurers to sell plans across state lines.

“Our recommendations are based upon Senate and House proposals developed in several bipartisan hearings and roundtable discussions,” the proposal’s Republican sponsors said in a statement.

The bill is sponsored in the Senate by Alexander, who chairs the Senate Health, Education, Labor and Pensions Committee, and Sen. Susan Collins, R-Maine. The sponsors in the House are Rep. Greg Walden, R-Ore., who chairs the House Energy and Commerce Committee, and Rep. Ryan Costello, R-Penn.

The lawmakers are hoping to include the bill in a massive spending package that Congress is expected to take up by the end of the week. President Donald Trump told Alexander and Collins in a conference call over the weekend that he wants money to lower health insurance premiums included in the spending package.

The bill marks the latest attempt by lawmakers to offer short-term fixes that could bring some stability to the volatile health insurance markets created under the Affordable Care Act and help offset the higher insurance premiums expected to result from the repeal of the Obamacare requirement that most Americans buy insurance.

Alexander and the Senate health committee’s top Democrat, Sen. Patty Murray of Washington, struck a deal last fall to extend the cost-sharing subsidies for two years. Trump has halted the payments, established under the Affordable Care Act, which are worth around $7 billion each year.

But Murray and other Democrats are refusing to sign onto the latest proposal because it includes language that they say would expand the restrictions on federal funding of abortions.

“Senator Murray is disappointed that Republicans are rallying behind a new partisan bill that includes a last-minute, harmful restriction on abortion coverage for private insurance companies instead of working with Democrats to wrap up what have been bipartisan efforts to reduce health care costs,” said Murray’s spokeswoman, Helen Hare.

Murray “hopes the unexpected release of this partisan legislation isn’t a signal from Republicans that they have once again ended ongoing negotiations aimed at lowering families’ health care costs in favor of partisan politics, and that they come back to the table to finally get this done,” Hare said.

Republicans, meanwhile, pointed to an analysis by health care experts at the management consulting firm Oliver Wyman that compared the new proposal to what people in the individual market will pay if Congress fails to act.

The analysis showed that the package would reduce premiums by up to 40 percent in the individual market for farmers, small business owners and others who don’t buy their insurance from the government or their employer.

A self-employed plumber making $60,000, for example, may be paying $20,000 for health insurance now, but over time that insurance bill could be cut up to $8,000, the lawmakers said.

Preliminary projections from the Congressional Budget Office indicated that the plan could be adopted without adding to the federal debt.

 

Back to the Health Policy Drawing Board

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The Affordable Care Act needs help. After scores of failed repeal attempts, Congress enacted legislation late last year that eliminated one of the law’s central features, the mandate requiring people to buy insurance.

Obamacare, as the Affordable Care Act is widely known, isn’t in imminent danger of collapse, but the mandate’s repeal poses a serious long-term threat.

To understand that threat and how it might be parried, it’s helpful to consider why the United States has relied so heavily on employer-provided insurance — and why it has not yet adopted a form of the universal coverage seen in most other countries.

First, some basics on private insurance: It works well only when many people, each with a low risk of loss, buy in. Most homeowners buy fire insurance, for example, and only a small fraction file claims annually. A modest premium can therefore cover large losses sustained by a few.

But because of what economists call the adverse-selection problem, this model can easily break down for private health insurance. People typically know more about their own health risks than insurers do, making those most at risk more likely to purchase insurance.

This drives premiums up, making insurance still less attractive to the healthiest people. That, in turn, causes many to drop out, producing the fabled “death spiral” in which only the least healthy people remain insured. But at that point, private health insurance may no longer be viable, because annual treatment costs for serious illnesses often exceed several hundred thousand dollars.

Most nations have solved this problem by adopting universal coverage financed by taxes. The United States probably would have followed this approach except for a historical anomaly during World War II. Fearing runaway inflation in tight labor markets, the American government imposed a cap on wages.

But the cap didn’t apply to fringe benefits, which employers quickly exploited as a recruiting tool. Employer health plans proved particularly attractive, since their cost was a deductible expense and they were not taxed. Before the war started, only 9 percent of workers had employer-provided insurance, but 63 percent had it by 1953.

To be eligible for favorable tax treatment, companies were required to make their plans available to all employees, which mitigated the adverse-selection problem. People would lose insurance if they lost their jobs, which inhibited labor mobility, but since employment relationships were relatively durable in the postwar years, this arrangement worked well enough.

But after peaking at almost 70 percent in the 1990s, employer coverage began declining in the face of stagnating wages and rising insurance costs. By 2010, only 56 percent of the nonelderly American population still had workplace health plans.

Even so, because more than 100 million Americans still had such plans and were reasonably satisfied with them, the Obama administration opted to build health reform atop the existing system. In addition to allowing people to keep their existing employer coverage, Obamacare expanded eligibility for Medicaid and established exchanges in which people without employer plans could buy insurance.

At the outset, Obamacare had three central features:

• Insurers could not charge higher prices to people with pre-existing conditions.

• Those without coverage had to pay a penalty to the government (the “mandate”).

• Low-income people would be eligible for subsidies.

The first two provisions were necessary to prevent the death spiral, and government couldn’t mandate insurance purchases without adding subsidies for the poor.

Despite a bumpy rollout and some frustrations over shrinking choices and rising prices at health care exchanges, Obamacare was working remarkably well by most important metrics. Program costs were much lower than expected, and the uninsured rate among nonelderly Americans fell sharply — from 18.2 percent in 2010 to only 10.3 percent in 2018.

This progress is now imperiled.

The mandate — by far the program’s least popular provision — was repealed as part of tax legislation passed in December 2017. And because economists predict that its absence will slowly rekindle the insurance death spiral, we’re forced back to the policy drawing board.

The most common response has been to call for a variant of the single-payer systems employed by most other countries, which promise dramatic reductions in health costs.

The United States spends far more on health care than any other nation, yet gets worse outcomes on most measures. In part this is because administrative and marketing expenses are much lower under single-payer plans. But by far the most important source of savings is that governments are able to negotiate much more favorable terms with service providers. Virtually every procedure, test, and drug costs substantially more here than elsewhere.

An American hospital stay, for example, costs more than twelve times as much as one in the Netherlands. The single-payer approach also sidesteps the thorny mandate objection by covering everyone out of tax revenue.

A June 2017 poll showed that 60 percent of Americans said the government should provide universal coverage, and support for single-payer insurance rose more than one-third since 2014.

Yet a move to a single-payer system faces the same hurdle that shaped Obamacare: Millions of Americans would resist any attempt to take their employer-provided plans away. And although single-payer health care would be far less costly overall, it would be paid for by taxes — the most visible form of sacrifice — rather than by the implicit levies that underwrite employer coverage.

From a purely economic standpoint, the increased tax burden is irrelevant. It’s a truism that making the economic pie larger necessarily makes it possible for everyone to get a larger slice than before. And because the gains from single-payer insurance would be so large, there must be ways to make everyone come out ahead, even in the short run.

The Yale political scientist Jacob Hacker, for example, has proposed the introduction of Medicare Part E (Medicare for Everyone), which would allow anyone to buy into Medicare, regardless of age. The program’s budget would be supported in part by levies on employers that don’t offer insurance.

The cost savings inherent in this form of single-payer coverage would lead more and more firms to abandon their current plans voluntarily. Gradually, the age for standard Medicare eligibility also would fall until the entire population was covered by it. The Center for American Progress has now introduced a similar proposal.

It’s critical to realize that there are attractive paths forward. In no other wealthy country do we see people organize bake sales to help pay for a neighbor’s cancer care. We can avoid this national embarrassment without requiring painful sacrifices from anyone.

 

 

Obamacare insurers just had their best year ever — despite Trump

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https://www.politico.com/story/2018/03/17/obamacare-insurers-2017-profit-analysis-422559

Flyers promoting Blue Cross Blue Shield are pictured. | AP Photo

A new POLITICO analysis finds many health plans turned a profit for the first time as GOP fumbled repeal.

Obamacare is no longer busting the bank for insurers.

After three years of financial bloodletting under the law — and despite constant repeal threats and efforts by the Trump administration to dismantle it — many of the remaining insurers made money on individual health plans for the first time last year, according to a POLITICO analysis of financial filings for 29 regional Blue Cross Blue Shield plans, often the dominant player in their markets.

The biggest reason for the improvement is simple: big premium spikes. The Blue plans increased premiums by more than 25 percent on average in 2017, meaning many insurers charged enough to cover their customers’ medical costs for the first time since the Affordable Care Act marketplaces launched in 2014 with robust coverage requirements.

“2017 was the first year we got our head above water in the individual market since the ACA passed,” said Steven Udvarhelyi, CEO of Blue Cross and Blue Shield of Louisiana.

However, one good year won’t ease the trepidation many insurers feel as they start planning for 2019. After knocking out the law’s individual mandate and a subsidy program worth billions of dollars to insurers late last year, the Trump administration is soon expected to finalize rules making it easier to buy cheaper plans exempt from some Obamacare rules.

“I don’t think we’ve turned the corner,” said Kurt Kossen, president of retail markets at Health Care Service Corporation, which operates Blue plans in five states. The insurer lost $2.5 billion on its individual market business during Obamacare’s first three years, he noted. “One year of being able to make a profit out of four certainly is not a stable market,” he said.

“They understand the risks of the market better now than they did at the start of the ACA exchanges,” said Deep Banerjee, an analyst with Standard & Poor’s who has written extensively about the marketplaces.

The gains were particularly notable among some of the biggest insurers. Health Care Service Corporation spent 77.7 percent of premiums on medical claims, an improvement of 18.5 percentage points over the prior year. Similarly, Blue Cross Blue Shield of North Carolina saw its margin improve by just over 10 percentage points.

But not all insurers have figured out how to make money in the troubled markets, which have failed to attract enough young and healthy customers to function effectively in many states. Of the 29 insurers analyzed, eight plans spent more than 90 percent of premium revenues on medical costs last year, meaning they almost certainly lost money in the marketplaces.

The POLITICO analysis provides a snapshot of financial performance in the marketplaces in 2017, not a definitive portrait. Combined, the 29 Blue plans had 4.5 million individual market customers at the end of last year, accounting for about one-fifth of the total market for people who buy their own coverage.

The healthier balance sheets are a welcome development for insurers after three years of major Obamacare losses, estimated at more than $15 billion by McKinsey. That led many national insurers, including UnitedHealth Group and Aetna, to flee the law’s marketplaces, in some cases leaving Blue Cross Blue Shield plans as the only option for customers.

But their improved financial fortunes could also complicate efforts to convince Republican lawmakers to support an Obamacare stabilization package as part of the massive spending bill Congress is trying pass by March 23. Lawmakers are looking to add new funds to help insurers with especially sick customers and restore a subsidy program known as cost-sharing reductions that helps insurers pay medical bills for their low-income customers.

However, a dispute over abortion language is holding up the Obamacare package in Congress. And many conservatives are wary of providing more funding to prop up the marketplaces, deriding it as a bailout for insurance companies.

“The rates can stay low without these payments,” said Rep. Larry Bucshon (R-Ind.), a member of the Energy and Commerce Committee, regarding the cost-sharing reductions that President Donald Trump cut last fall.

Insurers argue that looking at financial performance over a single year is misleading, and they say they’ve been repeatedly blindsided by changes to the law. For instance, because of budgetary restraints Republicans demanded, insurers haven’t received an expected $12 billion from a program meant to help them cover particularly expensive customers. Dozens of insurers are now suing the federal government to recover payments.

“If you don’t want to stabilize the current market, what’s your solution?” Udvarhelyi said. “The fact that we’ve hung in there losing hundreds of millions of dollars is a testament to the fact that we do care, but we need responsible action on the part of policymakers right now.”

Patrick Conway, CEO of Blue Cross and Blue Shield of North Carolina, points out his company would have kept 2018 premiums flat if Trump hadn’t eliminated the cost-sharing subsidy. Instead, the insurer jacked up rates by an average of 13 percent to make up for the lost funding.

“We’re dedicated to having the lowest possible premiums for our customers, and market stabilization would help us have the lowest possible premiums,” Conway said. “I’ve been traveling around the state and people are really worried about the cost.”

As insurers start to crunch the numbers on 2019 premiums, they will have to account for uncertainty over congressional funding and recent steps taken by the Trump administration weakening Obamacare. The elimination of the requirement to purchase insurance, which takes effect in 2019, and the administration’s efforts to make it easier to sell cheaper, skinnier plans that don’t meet Obamacare’s coverage requirements, are likely to further destabilize the markets.

The insurers’ biggest concern is fewer healthy individuals will buy Obamacare plans, either going without coverage, since they’ll no longer face a fine next year, or buying a new cheaper plan that covers far less.

“These things will chip away at the market,” S&P’s Banerjee said. “It’s not going to get meaningfully worse, but it doesn’t get any better.”

Insurers are warning that they’ll again have to jack up rates in 2019 if Congress doesn’t take action to stabilize the markets. A study from California’s marketplace suggests premium spikes around the country are likely to range from 16 to 30 percent next year. That means many Obamacare customers could be facing sticker shock just weeks before heading to the polls.

Polling has consistently shown that Republicans will shoulder most of the blame for future problems in Obamacare, since they’re fully in charge of the federal government. That could spur them to begrudgingly take action to tamp down premium increases, despite their disdain for the health care law.

“I think the people in charge, whether it’s fair or not, will probably [get the blame],” said Rep. Brett Guthrie (R-Ky.), vice chair of the House Energy and Commerce health subcommittee. “Everybody’s prices are going up. We’re going to have to figure out some way to improve it.”