Tag Archives: Higher Premiums

When Hospitals Merge to Save Money, Patients Often Pay More

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The nation’s hospitals have been merging at a rapid pace for a decade, forming powerful organizations that influence nearly every health care decision consumers make.

The hospitals have argued that consolidation benefits consumers with cheaper prices from coordinated services and other savings.

But an analysis conducted for The New York Times shows the opposite to be true in many cases. The mergers have essentially banished competition and raised prices for hospital admissions in most cases, according to an examination of 25 metropolitan areas with the highest rate of consolidation from 2010 through 2013, a peak period for mergers.

The analysis showed that the price of an average hospital stay soared, with prices in most areas going up between 11 percent and 54 percent in the years afterward, according to researchers from the Nicholas C. Petris Center at the University of California, Berkeley.

During the Obama years, the mergers received nearly universal approval from antitrust agencies, with the Federal Trade Commission moving to block only a small fraction of deals. State officials generally looked the other way.

President Trump issued an executive order last year calling for more competition, saying his administration would focus on “limiting excessive consolidation throughout the health care system.” In September, Congress asked the Medicare advisory board to study the trend.

But not only have big consolidations continued, the behemoths have further cemented their reach in some regions of the country by gobbling up major doctors’ and surgeons’ practices.

“You have to watch for these systems throwing their weight around,” said Xavier Becerra, the California attorney general whose office has sued Sutter Health, a sprawling system in the northern part of the state. “We are looking for cases where consolidation does nothing for efficiency and leads to distortions of the market.”

Ted Doolittle, who heads Connecticut’s Office of the Healthcare Advocate, has fielded angry complaints from residents, but he sees few options available to officials. “A lot of this is too little and too late,” he said.

The latest giant hospital consolidations continue to stir concerns. Dignity Health and Catholic Health Initiatives, two large chains, are expected to become one of the nation’s largest groups — with 139 hospitals in 28 states — by the end of the year. And two of Texas’ biggest systems, Baylor Scott & White Health and Memorial Hermann Health System, recently announced plans to combine.

The New Haven area has witnessed the most significant decline in competition. Yale New Haven Health, one of the largest hospital groups in Connecticut, took over the only competing hospital in the city and has also aggressively expanded along the state’s coast. The group recently added another hospital to its collection, merging Milford with its Bridgeport location.

Although the price of a hospital admission in the New Haven-Milford area was already three times higher than in other parts of the state, prices surged by 25 percent from 2012 to 2014, compared with 7 percent elsewhere in the state, according to the Petris Center.

In the national analysis, a third of the metropolitan areas experienced increases in the cost of hospital stays of at least 25 percent from 2012 to 2014, from roughly $12,000 to at least $15,000.

Prices rise even more steeply when these large hospital systems buy doctors’ groups, according to Richard Scheffler, director of the Petris Center.

Thousands of Connecticut residents were stranded without a local hospital last year when another big hospital group, Hartford HealthCare, battled the state’s biggest health insurer over how much it would charge for patient care.

Its six hospitals are clustered around the state capital and are the only resort for residents in broad swaths of the eastern part of the state. This month, it announced plans to add a seventh hospital to its network.

“These systems are empire-building, there’s no question,” said Jill Zorn, a senior policy officer for the Universal Health Care Foundation of Connecticut, which seeks to improve access for residents. “But to whose benefit?”

Numerous studies by economists and others have underscored how hospital consolidation is driving up the cost of medical care. “Within the academic community, there is near unanimity,” said Zack Cooper, a health economist at Yale University who is among a group of researchers that has looked at how dominant hospitals affect prices.

The emergence of a one-hospital town is inevitable in many places, and the Parkersburg, W.Va., area is no exception. St. Joseph’s merged with neighboring Camden-Clark Memorial in 2011, and then they were consumed by what is now the state’s largest health system.

Residents can get most care locally but they go to Morgantown, where the academic medical center is situated, for complex conditions. “We’ve elevated the level of care,” Mr. Wright said.

But private insurers are paying more. In the Parkersburg-Vienna area, the overall price of a hospital stay increased 54 percent from 2012 to 2014, after the mergers. That is compared with 10 percent elsewhere in the state, according to the Petris Center.

Large systems “get paid better by some of the insurers,” Mr. Wright said.

Flailing hospitals often have little choice but to be acquired or go out of business, and a larger system can offer badly needed capital and management skills. “They can fix a hospital and benefit the community,” said Torrey McClary, a lawyer who specializes in mergers at King & Spalding.

When Yale New Haven Health took over the Hospital of Saint Raphael, a Catholic hospital six blocks away from its New Haven location, Saint Raphael was in danger of going under. Over the last six years, the system has invested more than $200 million in capital improvements at Saint Raphael, said its president Richard D’Aquila, including modernizing “everything behind the walls.”

Because it converted Saint Raphael into what is essentially a second 555-bed campus for its academic medical center, Yale New Haven Health defends the higher rates it charges private insurers as appropriate for a top-tier medical institution. Its community hospitals negotiate prices individually with insurers.

Systems also say they are trying to improve the care for smaller communities. “We’re actively trying to move care toward places that are accessible,” Hartford’s chief executive, Elliot Joseph, said.

But patients rarely reap the rewards of lower insurance premiums or out-of-pocket expenses when mergers occur.

Hartford executives talk about reducing the total cost of care in the same breath that they discuss the need to charge insurers more. “The math for us is how we move the care out of the hospitals while maintaining our financial stability,” Mr. Joseph said.

To defend higher rates, many hospitals cite low reimbursements from government sources, particularly Medicaid, and highlight their role as a safety net. “We’re left with no choice,” Mr. D’Aquila said.

Others, like Hartford, negotiate prices as a single entity, forcing health insurers to include all of their hospitals in a network or risk losing access in areas where there are no alternatives.

Hartford “has taken over so many hospitals and practices that, with the Anthem dispute, we felt we had no choices at all,” Sharry Goldman, a Storrs, Conn., resident, told state lawmakers. Although Hartford and Anthem Blue Cross, the insurer, eventually reached an agreement, Connecticut passed a law this year requiring hospitals and insurers to extend previous contracts for two months to protect consumers when the parties are at an impasse.

While patients may pay more for a well-known brand, like Yale, it is not clear that the higher price tags lead to better care, said Francois de Brantes, a health care executive who once worked at General Electric, which is headquartered in the state.

Since the merger, Yale New Haven has defended the higher rates it charges private insurers as appropriate for a top-tier medical institution.CreditChristopher Capozziello for The New York Times

“We have more lower-rated hospitals in Connecticut than in other New England states,” he said, pointing to an analysis he did at the time of the Anthem-Hartford dispute.

In the Albany, Ga., area, where the Berkeley researchers found a rare decline in hospital prices, the Federal Trade Commission had unsuccessfully attempted to block HCA, the for-profit hospital chain, from selling its hospital to its only local competitor in 2011. But the merger took place, and the F.T.C. reached a settlement with the parties involved.

While Berkeley researchers found area prices dropped, another study by two former F.T.C. employees, Christopher Garmon and Laura Kmitch, found that certain hospital quality measures declined. The merger “highlights the problems that can occur when competition is reduced,” the authors said.

The hospital group, Phoebe Putney Health System, dismissed the findings. “Phoebe has made great strides in enhancing the quality of health care available to the people of southwest Georgia,” Dawn Benson, Phoebe’s general counsel, said in a statement.

To foster competition, Lee County is planning a new 60-bed hospital within the Albany area.

In some cases, state regulators have opposed actions they consider illegal and anti-competitive. In Washington, state officials accused CHI Franciscan Health, based in Tacoma, of using its ties to two doctors’ practices to raise prices and decrease competition on the Kitsap Peninsula, according to a lawsuit filed last year.

The regulators argue that CHI wanted to wield its newfound clout by shifting some operations and imaging from less expensive outpatient settings to hospitals where they could charge more.

“I am all for taking advantage of hospital-based pricing, if we think it is doable in the market and the market can support it,” a CHI executive is quoted as saying in the lawsuit. “It would be great to drop a couple of million more to our bottom line.”

CHI Franciscan said the attorney general’s allegations were “misguided and unfounded.”

In California, Mr. Becerra, the state attorney general, brought a lawsuit against Sutter in March, claiming that its actions led to significantly higher prices in Northern California.

Sutter says it adopted methods encouraged by the federal health care law, by combining hospital services with care delivered outside the hospital to better meet patients’ needs.

But Mr. de Brantes, the health care executive in Connecticut, and others wonder why many mergers were allowed in the first place. “The puzzling part for many of us in the state is why anyone would allow these oligopolies to form,” he said.

 

 

 

The ACA Protects People with Preexisting Conditions; Proposed Replacements Would Not

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https://www.commonwealthfund.org/blog/2018/aca-protects-people-preexisting-conditions-proposed-replacements-would-not?omnicid=EALERT%%jobid%%&mid=%%emailaddr%%

Patient with preexisting condition

The Affordable Care Act’s health insurance marketplaces open for enrollment today for the sixth time. But this year the marketplace health plans in many states will face some new competition from insurance products that don’t meet the law’s standards, including the ban on denying coverage or charging more based on a person’s preexisting health conditions.

New Trump administration regulations released earlier this year have undermined the coverage protections in the ACA by making it possible for insurers to renew often skimpy short-term health insurance for up to three years, and for small businesses to form associations that sell substandard health plans. One of the reasons insurers can charge low premiums for these plans is that they generally cover less that ACA-compliant plans and insurers can deny them to people with diabetes or a history of cancer, for example. Only healthy people get these plans. And the more healthy people who buy them, the more expensive coverage becomes for people with a history of illness who buy their own insurance and have incomes too high to qualify for marketplace subsidies. In guidance released last week, the administration will allow states to further encourage the sale of these plans by letting people use federal subsidies to buy them.

As a nation, it is important for us to focus our energy on ways to improve people’s health. We are experiencing an unprecedented decline in life expectancy which will ultimately affect our economic health and the ability of Americans to compete in a global workforce. One of the most basic things we can do is preserve the coverage protections for people with health problems that have been law for more than four years, rather than poke holes in them. Americans say they support this idea. Recent polls have found that majorities of Americans believe that people with health conditions should not be denied affordable health insurance and health care. As a result, House and Senate candidates of both parties are running on their support for protecting coverage for people with preexisting conditions. But some of those very candidates voted to repeal the ACA last year.

The ACA has dramatically improved the ability of people with preexisting conditions to buy coverage. In 2010, before the law passed, we conducted a survey that found 70 percent of people with health problems said it was very difficult or impossible to buy affordable coverage, and just 36 percent said they ended up purchasing a health plan. By 2016, the percentage of people who had trouble buying an affordable plan had dropped down to 42 percent — still high but much improved — and 60 percent ultimately bought a plan.

While the congressional ACA repeal bills failed last year, a Republican Congress could try again next year. And in the meantime, the law’s preexisting conditions protections and other provisions face another threat from a lawsuit brought by Republican governors and attorneys general in 20 states. The U.S Department of Justice has agreed with the plaintiff states in part, and refused to defend the law’s preexisting condition protections. The court decision is pending. Should the states win, an estimated 17 million people could become uninsured.

Some congressional candidates from these states and others are pointing to their support for Republican proposals, such as the “Ensuring Coverage for Patients with Pre-Existing Conditions Act,” as proof they support coverage for preexisting conditions. This bill would prevent insurers from refusing or varying premiums based on preexisting conditions. But, unlike the ACA, this bill would allow insurers to sell plans that entirely exclude coverage for care pertaining to the preexisting conditions themselves. The reality is that this bill would not protect sick Americans, or those who may become ill in the future, from high out-of-pocket health care costs.

Several million people will be going to the marketplaces in the next few weeks to sign up for coverage since they do not have it through an employer. At this time, not one of them who buys a plan in the marketplace has to fear that an insurance company will deny them coverage or charge them a higher premium because of their health. The efforts to undermine the individual market and invalidate the ACA’s consumer protections are real-life threats for people who depend on this insurance for their health care. The nation cannot move forward with tackling our most pressing health care problems if we continue to debate a core protection of the ACA that most Americans support.

 

 

Why the new ACA waivers matter

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https://www.axios.com/newsletters/axios-vitals-0c7471b2-4434-433d-95c2-929297dedf3c.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

 

As in-the-weeds as a revised waiver process sounds, the practical effects of what the Trump administration announced yesterday could add up to one of its most substantive blows yet against the Affordable Care Act.

The big picture: These changes will likely cause more separation of healthy and sick people, but only in states that avail themselves of these new options — creating another level of segmentation between red and blue states.

How it works: Under the Obama administration, states seeking a waiver from the ACA’s rules had to show that their alternatives would cover just as many people as the ACA, with insurance that’s just as robust, for the same cost. That’s why only 8 waivers have ever been granted.

  • But under the Trump administration’s approach, if the same number of people have access to ACA-level coverage, that’ll count — even if few of them actually choose it.
  • Likewise, “a waiver that makes coverage much more affordable for some people and only slightly more costly for a larger number of people would likely meet” the new standards, the formal policy guidance says.
  • States could, for example, seek a waiver that would let their residents apply the ACA’s premium subsidies to “short-term” insurance plans, even though those plans don’t meet the ACA’s requirements, including the mandate to cover people with pre-existing conditions.

Between the lines: The Trump administration has often treated the ACA’s exchanges as a de facto high-risk pool. And that’s the best prism through which to understand these latest changes.

  • These waivers will let states lean even further into new, non-ACA options for healthy people. That will likely increase premiums for ACA coverage. But because the vast majority of ACA enrollees are subsidized, they’ll be insulated from those costs.

There are limits to how far that dynamic can go, because states’ waivers still can’t add too much to the federal government’s costs. But that’s the basic dynamic at play here — and it’s one that will continue to move the larger individual market further and further away from the ACA.

 

The Health 202: The rate of people without health insurance is creeping upward

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https://www.washingtonpost.com/news/powerpost/paloma/the-health-202/2018/09/13/the-health-202-the-rate-of-people-without-health-insurance-is-creeping-upward/5b99569b1b326b47ec95958c/?utm_term=.ae9e8af79dd2

 

THE PROGNOSIS

New Census Bureau data on the number of uninsured Americans is either a testament to the resiliency of the Affordable Care Act or a sign that President Trump’s anti-ACA rhetoric and policies are starting to work.

As our colleague Jeff Stein reported Wednesday, there was a slight uptick in the number of Americans without health insurance in 2017 compared to 2016, even though that number essentially remained statistically flat. Still, the fact that uninsured rate went up at all, by about 400,000 people, marks the first time since the ACA’s implementation that the uninsured rate didn’t drop. 

Supporters of the ACA worry the news marks the beginning of a trend, especially when some of Trump administration policies intended to circumvent the ACA go into effect next year.

Ahead of open enrollment last year, the Trump administration dramatically decreased funding for any Obamacare outreach or advertising, limited resources for “navigators” who help people find an insurance plan, and shortened the window for people to sign up for insurance from three months to six weeks in states that use a federally run marketplace.

“Even with all of that, health coverage stayed steady. But at the same time, we’d like to see further progress in the rate of the uninsured,” said Judith Solomon of the Center on Budget and Policy Priorities.

It’s part of a pattern to weaken the 2010 health-care law known as Obamacare. After the GOP Congress failed to repeal and replace the ACA last summer, the Trump administration moved to dilute the law in other ways: including signing off on a plan to eliminate the individual mandate penalty next year; allowing individuals to buy skimpier, short-term health plans without certain coverage requirements under Obamacare; and seeking to allow states to put conditions on Medicaid coverage.

Some of the most prominent health care organizations in the country came together this morning to voice their disapproval of those short-term plans — including the American Cancer Society Cancer Action Network, the American Heart Association, Planned Parenthood Federation of America, the National Women’s Law Center, the , American Academy of Family Physicians, the American Academy of Pediatrics and Families USA.

“The Administration’s decision to expand short-term health plans will leave cancer patients and survivors with higher premiums and fewer insurance options,” said Dr. Gwen Nichols, chief medical officer of the Leukemia & Lymphoma Society.

The groups’ statements, compiled and released by Sen. Tammy Baldwin (D-Wis.), are in support of the senator’s effort to have Congress rescind the White House regulation. Nearly every Democratic senator has signed a resolution of disapproval to overturn it.

The census data reflects trends that started last year, when the administration’s policies had yet to be implemented. Fourteen states saw their uninsured populations rise in 2017. The only three states that didn’t see a spike in that number were New York, California and Louisiana. The first two aren’t surprising given those states’ robust efforts to enroll their own residents, while Louisiana expanded Medicaid in June 2016 so its decrease represents those low-income individuals who now have government coverage.

Medicaid expansion in most of the 33 states and D.C. that have done so under the ACA has predictably decreased the number of people without coverage. The uninsured rate last year in states with an expanded Medicaid program was 6.6 percent compared to 12.2 percent in non-expansion states — a gap that has only continued to grow since 2013.

To be fair, as Larry Levitt, senior vice president at the Kaiser Family Foundation, pointed out on Twitter: the uninsured rate started leveling off before the Trump administration started its work. But Levitt suggested the uninsured rate may really rise in 2019 when elimination of the individual mandate penalty takes effect. Moreover, states are increasingly taking the White House up on its suggestion to add work requirements to their Medicaid programs — in just the first three months of it being implemented in Arkansas, more than 4,000 people were jettisoned from the rolls for failure to comply.

Matthew Fiedler, a health-policy expert at the Brookings Institution, agreed with Levitt’s assessment, noting that the bulk of the people who were uninsured pre-ACA have already been enrolled  in the program. He contended that if policy had remained static, there would likely have been a modest decline instead of similar increase in the uninsured rate — though not a dramatic one. The real effects, he said, of the Trump administration’s efforts to chip away at the ACA are still to come. 

“I don’t think the right takeaway is that none of the policy changes will have a negative effect. I think they will going forward, we just haven’t seen that yet,” he said. “I think if your goal is to evaluate the ACA, I think the right takeaway is that there was a lot of progress, but more policy progress to be made.”

Of course, Democrats and Republicans have disparate views on how to get there. Democrats are now pushing for a public option or a universal health care system in which the government would foot the bill for many health-care costs. A lot of them feel  the ACA “got us roughly 40 percent there and established a framework for lawmakers to make that progress going forward,” Fiedler said. That’s why we’re now seeing so many Democratic candidates and lawmakers embracing some iteration of a “Medicare for all” program.  

Republicans still criticize the ACA as vast government overreach and are vowing they will take another stab at repealing it should they maintain the congressional majorities after the November midterms.

“We made an effort to fully repeal and replace ObamaCare and we’ll continue,” Vice President Pence said while campaigning for Baldwin’s opponent, Leah Vukmir, if the GOP performs well in the midterms.

One additional interesting data point from the census is ages at which there was the greatest increases or decreases in the uninsured rate. As highlighted in the chart above, rates of those without insurance rose at ages 18 and 19 — when children are no longer eligible for the Children’s Health Insurance Program; and for those between ages 25 and 26 — when children no longer qualify for their parents’ insurance. The uninsured rate dropped, however, for those aged 64 and 65 — when adults are eligible for Medicare.

The greatest spike in those without insurance was documented for 26 year olds. That’s likely because young adults are typically healthier and feel less urgency to pay for insurance when they lose coverage under their family’s plan.

As noted by the New York Times’ Margot Sanger Katz on Twitter, these stats show just how crucial government programs and laws have been in providing health coverage to Americans:

Premium hikes reignite the ObamaCare wars

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Premium hikes reignite the ObamaCare wars

Image result for aca higher premiums

The ObamaCare premium wars are back.

The cost of health insurance plans on the ObamaCare exchanges could jump in the coming weeks, some by double digits, inflaming the issue ahead of the midterm elections.

Democrats argue the price increases are the result of what they refer to as “Republican sabotage.” They contend that, since the GOP controls Congress and the White House, the price hikes are their responsibility — and that’s the message they plan to take into the fall campaign.

“If these early states are any indication, health insurance companies are going to ask for huge hikes in the wake of President Trumpand congressional Republicans’ repeated efforts to sabotage our health-care system,” Senate Minority Leader Charles Schumer (D-N.Y.) said at a press conference last week. “And we Democrats are going to be relentless in making sure the American people exactly understand who is to blame for the rates.”

Republicans counter that it was Democrats who passed the law, enacted in 2010, in the first place and without any GOP votes. And they blame Democrats for the failure to pass a bill that was aimed at shoring up ObamaCare’s exchanges.

Democrats wrote the Affordable Care Act, so “they should look in the mirror,” Sen. Lamar Alexander (R-Tenn.), chairman of the Senate Health Committee, said last week on the Senate floor.

“And this is the very worst. When Republicans were prepared one month ago to stabilize these markets — and according to the Oliver Wyman health-care experts, to lower rates by up to 40 percent over three years — the Democrats said no,” he said.

For years, Republicans had the upper hand on health care, with the backlash to the Affordable Care Act helping them win the House in 2010, the Senate in 2014 and the White House in 2016.

During the Obama administration, Republicans railed against ObamaCare premium hikes while pledging to repeal and replace the law.

But that repeal push ended in failure last year, and Democrats say the political winds have shifted in their favor.

Democrats argue that any higher premiums this year will be a direct result of the Republican Congress and the Trump administration. They refer to certain actions by the GOP — such as the repeal of the individual mandate to have health insurance — as acts of “sabotage” that will siphon healthy people out of the ObamaCare insurance markets, leading to sicker people on the plans and higher costs.

“Thus far, Democrats have been on the defensive about premium increases,” said Cynthia Cox, a health insurance expert with the Kaiser Family Foundation. “Now they’re starting to play offense, and from our polling we’ve seen that a lot of the public now feels that the Trump administration and Congress are responsible for any problems with the [Affordable Care Act] going forward, so it may be that the politics of premium increases has changed.”

Protect Our Care, a pro-ObamaCare group, launched “Rate Watch” on Tuesday, a media campaign and website aimed at getting out the Democrat’s message that Republicans are to blame for rate hikes.

Only a handful of states have released proposed premiums for next year, as insurers are largely still hammering out what their preliminary rates are going to be.

In Maryland, the average proposed increase among insurers and plans was 30 percent. CareFirst BlueCross BlueShield, for example, requested an 18.5 percent hike for its HMO plans and 91.4 percent for its PPO plans.

In Virginia, proposed rate hikes varied widely, from 15 percent to 64 percent. Vermont’s proposed premium increases were more modest.

It’s too early to know the full picture for what premiums will look like around the country for 2019. Insurers tend to file proposed rates in the late spring and early summer, and they’re generally not finalized until early fall — a little more than a month before the ObamaCare exchanges open for business on Nov. 1.

“It’s hard to come up with a general impression … but I think what we can expect is probably another year of double-digit rate increases driven in large part by the individual mandate repeal and the expansion of short-term health plans and association health plans,” Cox said.

The Trump administration proposed a rule to increase the length of time a consumer can keep a plan that doesn’t comply with ObamaCare’s insurance regulations from three months to nearly a year. Democrats deride those plans as “junk insurance.”

Association health plans would let small businesses and self-employed individuals band together to buy coverage that doesn’t comply with ObamaCare’s rules.

Republicans say the rules will expand choice and allow people to buy cheaper alternatives to ObamaCare plans.

Some insurers have cited the repeal of the individual mandate as a factor in their decision to propose rate hikes, and at least one also included the proposed regulations from the administration as a factor.

Some insurance commissioners across the country are approaching the open enrollment period with a level of “concern and a bit of trepidation,” said Julie Mix McPeak, Tennessee’s insurance commissioner who serves as the president of the National Association of Insurance Commissioners.

In McPeak’s home state, she’s hopeful that signs are pointing to rates beginning to plateau and that Tennessee won’t see the large hikes of years past.

“My experience in Tennessee … is not typical for all of the states in the United States,” said McPeak, who was appointed to run the state’s insurance department by Gov. Bill Haslam (R.).

“I’m hearing from some of my colleagues from the national perspective that they are looking at significant rate increases,” she said.

Dave Jones, California’s Democratic insurance commissioner, said he’s worried that some insurers may leave parts of the state.

“We’re working closely with our exchange and other California agencies to do everything we can to encourage insurers to stay and to create as much stability as we can, not withstanding all of the rocks that the Trump administration is throwing at health-care reform,” he said.

If the short-term and association health plan rules are implemented, Jones said he’s prepared to file litigation aimed at stopping the regulations.

In North Dakota, the state’s Republican insurance commissioner is more optimistic.

Jon Godfread said he expects North Dakota’s marketplace will consist of three carriers selling plans across the state — an increase from last year, when areas had only one or two insurers to choose from.

As for rate hikes, he’s hoping in the low double-digits or, worst case, in the 18 percent to 22 percent range. He believes the repeal of the individual mandate won’t have much impact on consumer behavior in North Dakota because people who couldn’t afford insurance have likely already left the marketplace in the state.

“Health insurance and health care by its very nature is demographic,” Godfread said. “We may be leading into a somewhat calm year — in North Dakota, at least that’s what we’re hoping for. But that doesn’t mean my colleagues in Iowa and Nebraska and other places aren’t facing some pretty significant challenges, and we very well, that could be us next year, or it could be us this year still, too. There’s a lot of time between now and open enrollment.”

 

 

Health Care’s New ‘Skinny Plans’: Winners and Losers

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https://www.wsj.com/articles/health-cares-new-skinny-plans-winners-and-losers-1524654000

Image result for Health Care’s New ‘Skinny Plans’: Winners and Losers

 

Trump’s ‘skinny plans’ offer a cheaper alternative to the Affordable Care Act, but may have far less coverage.

 

New, more-limited health plans may draw consumers away from Affordable Care Act coverage and drive up prices on insurance sold in the health law’s marketplaces. These “skinny” plans offer lower premiums, making them an attractive alternative for young, healthy buyers.

New, more-limited health plans may draw consumers away from Affordable Care Act coverage and drive up prices on insurance sold in the health law’s marketplaces.

These “skinny” plans offer lower premiums, making them an attractive alternative for young, healthy buyers.

State Regulation of Coverage Options Outside of the Affordable Care Act: Limiting the Risk to the Individual Market

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http://www.commonwealthfund.org/publications/fund-reports/2018/mar/state-regulation-coverage-options-outside-aca?omnicid=EALERT1377329&mid=henrykotula@yahoo.com

Abstract

  • Issue: Certain forms of individual health coverage are not required to comply with the consumer protections of the Affordable Care Act (ACA). These “alternative coverage arrangements” — including transitional policies, short-term plans, health care sharing ministries, and association health plans — tend to have lower upfront costs and offer far fewer benefits than ACA-compliant insurance. While appealing to some healthy individuals, they are often unattractive, or unavailable, to people in less-than-perfect health. By leveraging their regulatory advantages to enroll healthy individuals, these alternatives to marketplace coverage may contribute to a smaller, sicker, and less stable ACA-compliant market. The Trump administration recently has acted to reduce federal barriers to these arrangements.
  • Goal: To understand how states regulate coverage arrangements that do not comply with the ACA’s individual health insurance market reforms.
  • Methods: Analysis of the applicable laws, regulations, and guidance of the 50 states and the District of Columbia.
  • Findings and Conclusions: No state’s regulatory framework fully protects the individual market from adverse selection by the alternative coverage arrangements studied. However, states have the authority to ensure a level playing field among coverage options to promote market stability.

Background

Recent federal actions have created the potential for instability in the individual health insurance market, through which approximately 18 million Americans currently purchase their health insurance coverage.1 In October 2017, President Trump issued an executive order to encourage the sale of health insurance products that do not comply with the consumer protections of the Affordable Care Act (ACA).2 In December, Congress repealed, effective in 2019, the tax penalty for individuals who can afford to maintain health insurance coverage but decline to do so (the individual mandate penalty).3

Prior to health reform, insurers in the individual market had wide latitude to deny coverage, charge an unaffordable premium, or limit benefits based on a person’s medical history. As a consequence, individual market health insurance routinely proved inadequate for consumers’ health and financial needs and was often inaccessible to those with even minor health problems.4 The ACA established numerous consumer protections designed to make it easier for consumers in the individual market to access affordable, adequate health insurance. The law requires insurers that sell individual health insurance to offer coverage to all individuals regardless of health status, requires coverage of preexisting conditions, and prohibits insurers from charging higher premiums based on a person’s medical history or gender. It also includes limits on cost-sharing and requires insurers to cover a minimum set of essential health benefits, including coverage for mental and behavioral health care, prescription drugs, and maternity services.

For these consumer protections to work as intended and to keep premiums affordable, they need to be paired with policies that encourage a broad and balanced risk pool. To promote continuous enrollment by the sick and healthy alike, the ACA imposes an individual mandate and provides financial assistance to make coverage more affordable for those with lower and moderate incomes. Importantly, the ACA also defines what types of coverage were sufficiently protective for purposes of satisfying the individual mandate. To prevent cherry-picking of individuals who are low health risks, it also requires all individual market insurers to play by the same rules.

In many ways, the ACA’s regulatory approach to the individual market has proven successful. During the most recent open enrollment period, approximately 11.7 million Americans signed up for coverage through the ACA marketplaces (also called exchanges), most of whom are eligible for subsidies to help with the cost of coverage.5 In turn, improved access to comprehensive individual health insurance under the ACA, along with the expansion of Medicaid, has helped to reduce the uninsured rate by a third, as of 2018, and lower consumers’ average out-of-pocket costs.6 And, despite insurers’ continued uncertainty over the possible repeal of the health law and the Trump administration’s approach to implementing the ACA, analysis showed that, on average, states’ individual markets were stabilizing, with some insurers reaching profitability.7

However, challenges remain. In the past two years, the individual market in most states has seen significant increases in premiums, coupled with decreases in the number of participating insurers.8 While the ACA’s premium subsidies insulate many consumers from these price hikes, many millions of consumers are not eligible for subsidies, and those individuals identify the cost of coverage as a significant barrier to care.9 And though marketplace sign-ups remain stable despite federal policy uncertainty and Trump administration actions seen as undermining the ACA, enrollment remains well below early expectations.10

These challenges are interrelated and can be attributed to many factors. Still, the availability of coverage options that are not compliant with the ACA’s rules, as well as confusion over them, likely has played an important contributing role.

Policy Implications

Although states’ approaches to implementing the ACA can sharply differ, the law’s consumer protections operate nationwide, and nearly all states have taken responsibility for enforcing these reforms in their jurisdictions. The insurance exchanges in most states have proven resilient in the face of significant change and uncertainty, with millions of Americans now able to depend on individual health insurance to protect them both medically and financially.

However, maintaining a stable individual market will become more challenging, thanks to an environment in which healthy consumers are not required to maintain insurance and federal regulations are loosened to promote coverage arrangements likely to weaken insurance risk pools and raise premiums. These developments may incline healthy individuals to look increasingly outside the compliant market for coverage, leaving those who remain to face higher costs and fewer plan choices.68

Based on our review of state laws and standards, it appears that no state maintains a regulatory environment that fully protects its individual health insurance market from being undermined by the alternative coverage options we have identified. However, states continue to be the primary regulators of private health insurance. Although the ACA set a federal floor of consumer protections for insurers that operate in the individual market, it did not curtail states’ power to regulate above these minimum standards and to exercise full authority over coverage arrangements that fall outside the scope of federal insurance law.

How We Conducted This Study

This analysis is based on a review of applicable laws, regulations, and guidance enacted or promulgated prior to February 1, 2018, by each of the 50 states and the District of Columbia. This review was supplemented by correspondence with state regulators in 48 states and the District of Columbia.

A number of states have taken steps to limit the availability of non-ACA-compliant products and protect against adverse selection. Massachusetts and New York promptly discontinued transitional coverage and effectively prohibit underwritten short-term policies, while several other states tightly restrict the duration of such plans. Significantly, Massachusetts also has its own individual mandate, requiring state residents to maintain coverage that meets minimum standards.69 Other states have begun to explore enactment of similar policies in anticipation of the federal mandate’s 2019 repeal.

On many fronts, states face a federal regulatory approach to the individual market that is significantly different from what was originally envisioned under the Affordable Care Act. In light of these changed circumstances, there may be value for states in considering regulatory options for protecting their individual insurance markets and their insured beneficiaries from the detrimental effects of non-ACA-compliant policies. The decisions states make will likely have a significant impact on their residents’ access to adequate and affordable coverage and on the stability of their individual health insurance markets.

 

 

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.”

 

 

Americans’ Views on Health Insurance at the End of a Turbulent Year

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http://www.commonwealthfund.org/publications/issue-briefs/2018/mar/americans-views-health-insurance-turbulent-year?omnicid=EALERT1363672&mid=henrykotula@yahoo.com

 

The Affordable Care Act’s 2018 open enrollment period came at the end of a turbulent year in health care. The Trump administration took several steps to weaken the ACA’s insurance marketplaces. Meanwhile, congressional Republicans engaged in a nine-month effort to repeal and replace the law’s coverage expansions and roll back Medicaid.

Nevertheless, 11.8 million people had selected plans through the marketplaces by the end of January, about 3.7 percent fewer than the prior year.1 There was an overall increase in enrollment this year in states that run their own marketplaces and a decrease in those states that rely on the federal marketplace.

To gauge the perspectives of Americans on the marketplaces, Medicaid, and other health insurance issues, the Commonwealth Fund Affordable Care Act Tracking Survey interviewed a random, nationally representative sample of 2,410 adults ages 19 to 64 between November 2 and December 27, 2017, including 541 people who have marketplace or Medicaid coverage. The findings are compared to prior ACA tracking surveys, the most recent of which was fielded between March and June 2017. The survey research firm SSRS conducted the survey, which has an overall margin of error is +/– 2.7 percentage points at the 95 percent confidence level. See How We Conducted This Study to learn more about the survey methods.

HIGHLIGHTS

Adults were asked about:

  • INSURANCE COVERAGE 14 percent of working age adults were uninsured at the end of 2017, unchanged from March–June 2017.
  • AWARENESS OF THE MARKETPLACES 35 percent of uninsured adults were not aware of the marketplaces.
  • REASONS FOR NOT GETTING COVERED Among uninsured adults who were aware of the marketplaces but did not plan to visit them, 71 percent said they didn’t think they could afford health insurance, while 23 percent thought the ACA was going to be repealed.
  • CONFIDENCE ABOUT STAYING COVERED About three in 10 people with marketplace coverage or Medicaid said they were not confident they would be able to keep their coverage in the future. Of those, 47 percent said they felt this way because either the Trump administration would not carry out the law (32%) or Congress would repeal it (15%).
  • SHOULD AFFORDABLE HEALTH CARE BE A RIGHT? 92 percent of working-age adults think that all Americans should have the right to affordable health care, including 99 percent of Democrats, 82 percent of Republicans, and 92 percent of independents.