Tag Archives: Out of Pocket Expenses

The ‘Kimmel test’ could be a good health care yardstick for the GOP

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The ‘Kimmel test’ could be a good health care yardstick for the GOP

Should the “Kimmel test” help shape the health care bill that the US Senate is now working on behind closed doors? Republican senators could easily use it to vet the bill while staying true to their conservative roots.

Last month, talk show host and comedian Jimmy Kimmel shared with his audience a story about his son, Billy, who had been born a few days earlier with a heart defect called the tetralogy of Fallot and needed open heart surgery at three days old.

“If your baby is going to die, and it doesn’t have to, it shouldn’t matter how much money you make,” pleaded Kimmel in an impassioned take on health insurance that has been viewed by millions.

Not long afterward, Republican Senator Bill Cassidy, a physician who represents Louisiana, said that any Republican health care legislation would need to pass the “Jimmy Kimmel test.” Morally and politically, Cassidy is right.

Every day in my work in a pediatric emergency department, I see firsthand that the Affordable Care Act, the law that the Republican House and Senate are determined to replace, saves lives. Before the ACA, children born with pre-existing conditions were often uninsurable, their families left to struggle with an unmanageable economic burden.

Kimmel thinks the solution is easy: “Don’t give a huge tax cut to millionaires like me and instead leave it [the ACA] how it is.” But the solution is far from easy.

As a physician, a conservative Republican, and a health insurance scholar, I believe that government intrusion into private insurance has had serious consequences. Families across America are paying thousands of dollars a year more in higher health insurance premiums. Insurers, which have been losing money, have started abandoning entire markets. The House of Representatives passed the American Health Care Act in early May, believing it had to do so to stabilize markets and reduce premiums. But the Congressional Budget Office finally reported that the AHCA strips away most protections for pre-existing conditions and pushes an estimated 23 million more Americans into being uninsured.

Can we Republicans pass the Kimmel test, improving on the AHCA while still ensuring the sustainability of American health care? Senate Republicans have expressed skepticism, but I believe we can. The key is to stay true to our roots by adhering to four conservative principles.

First, private markets must remain free. Healthy people will need to help pay for sick people — that’s how health insurance works — but they must be allowed to choose their own insurance. The ACA coerced the healthy into paying above-market rates for insurance, and so it prohibited the lower-premium catastrophic plans that make sense for most families.

Second, the poor should never pay for government benefits to the wealthy. The main way the ACA tries to help families with pre-existing conditions is by regulating insurance premiums, but that means its benefits are indiscriminate. The young and healthy, many of whom are struggling economically, pay more. The elderly, many of whom need help but some of whom are wealthy, pay less. We should use America’s progressive tax system, where the wealthy pay more in taxes, to implement a means-tested health insurance system that specifically helps the needy. Republicans don’t love taxes, but a hidden tax is worse than a visible one, and it is utter anathema that the ACA moves even a single dollar from the poor to the rich.

Third, redistribution must be transparent. The ACA mainly forces higher costs onto private insurance plans, which invisibly pass those costs to healthy consumers. Democrats may prefer this hidden tax politically, but to abide by conservative principles, a subsidy must come with a budget that can be seen, understood, and voted on.

Fourth, health insurance subsidies must be structured to reduce expenditures over time. Just as welfare should be a bridge to independence for individuals, subsidies should be a bridge to sustainability for the health care industry.

The ACA introduced some promising cost-reductions, like financial responsibility provisions for hospitals and limits on luxury plan tax deductions. The Senate needs to continue these efforts. Subsidized care must be adequate and compassionate, but it should insist on using generic drugs (when available) rather than brand-name ones, and it should not cover newly constructed hospitals or low-value services. Medicine must de-intensify, helping patients receive care at home instead of in hospitals when appropriate and using social workers to meet social needs. We also need to help subsidized patients take more responsibility for their health — showing up for appointments, taking prescribed medications, and, if needed, quitting smoking and receiving treatment for addiction.

In my view, the best way to accomplish these four goals would be through either a federally funded expansion of Medicaid or a federally run high-risk pool, which would offer families a means-tested option to buy in once medical bills reach a certain point. Such a plan would intentionally have high deductibles and copays, but it would offer extra assistance to needy families. The private insurance market would be free to compete on price and quality, innovating new ways to deliver value.

I am not writing to advocate for any specific plan. Instead, I offer conservative principles as a yardstick: Does the program provide compassionate, adequate coverage to the sick? Is it transparent, fair, and sustainable? Are the healthy still free to choose their own insurance?

Republicans can craft sensible, conservative subsidies to protect our most vulnerable citizens while also preventing hidden taxes and blank checks. Kimmel is right: No parents should have to choose between bankruptcy and saving their child’s life. Nor does our nation have to choose between fiscal irresponsibility and compassion for our most vulnerable.

With Spotlight on Obamacare, Public’s Opinion of Drugmakers Softens

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https://morningconsult.com/2017/06/05/spotlight-obamacare-publics-opinion-drugmakers-softens/

Consumer perceptions of several major pharmaceutical companies have softened in recent months amid an industry push to counter public uproar over high drug prices, Morning Consult Brand Intelligence data show.

Large drugmakers this spring have seen a decline in the the percentage of Americans who view them unfavorably, according to weekly national surveys of thousands of U.S. adults.

The Pharmaceutical Research and Manufacturers of America, the industry’s largest trade group, took action in January to revamp its public image by rolling out a multiyear ad campaign that promotes breakthrough medicines. The drug lobby, which consistently outspends other industries in an effort to exert influence on Capitol Hill, spent $245 million last year, an increase of more than $18 million since 2013, according to the Center for Responsive Politics.

The shift in public opinion has occurred amid GOP efforts to overhaul the nation’s health insurance system and the high-profile battle over the Affordable Care Act. The White House has prioritized replacing the 2010 ACA over lowering drug prices, though newly installed Food and Drug Administration Commissioner Scott Gottlieb announced last month that his agency is looking for ways to reduce some costs to consumers.

Since the House GOP health care legislative effort began in earnest in March, some of the most unpopular drugmakers have seen declines in the percentage of Americans who view them unfavorably. Still, favorability rankings for drugmakers have not improved significantly.

Some of the most-liked drugmakers include Johnson & Johnson and Bayer — the most well-known drug manufacturers among U.S. consumers.

Results are based on online surveys, with a nationally representative sample of adults, that ask participants if they have a favorable or unfavorable impression of certain companies.

Pfizer, which last year killed a proposed $160 billion merger with Allergan after the Obama administration announced new rules on tax inversions, had the highest unfavorability percentage among drugmakers tracked in March, at 29 percent. As of June 5, that figure had fallen to 12 percent.

Another drugmaker – Bristol-Myers Squibb – saw its unfavorability decline 13 percentage points during the same time period, from 23 percent in March to 10 percent in June. Merck had its unfavorable views peak at 25 percent in March before falling to 12 percent in June.

1 in 3 People in Medicare is Now in Medicare Advantage, With Enrollment Still Concentrated Among a Handful of Insurers

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Medicare Advantage 2017 Spotlight: Enrollment Market Update

Medicare Advantage plans have played an increasingly larger role in the Medicare program as the share of Medicare beneficiaries enrolled in Medicare Advantage has steadily climbed over the past decade.  The trend in enrollment growth is continuing in 2017, and has occurred despite reductions in payments to plans enacted by the Affordable Care Act of 2010 (ACA).  This Data Spotlight reviews national and state-level Medicare Advantage enrollment trends as of March 2017 and examines variations in enrollment by plan type and firm. It analyzes the most recent data on premiums, out-of-pocket limits, and quality ratings.  Key findings include:

  • Enrollment Growth. Since the ACA was passed in 2010, Medicare Advantage enrollment has grown 71 percent. As of 2017, one in three people with Medicare (33% or 19.0 million beneficiaries) is enrolled in a Medicare Advantage plan (Figure 1).

 

  • Market Concentration. UnitedHealthcare and Humana together account for 41 percent of enrollment in 2017; enrollment continues to be highly concentrated among a handful of firms, both nationally and in local markets. In 17 states, one company has more than half of all Medicare Advantage enrollment – an indicator that these markets may not be very competitive.

 

  • Medicare Advantage Penetration. At least 40 percent of Medicare beneficiaries are enrolled in Medicare private plans in six states: CA, FL, HI, MN, OR, and PA. In contrast, fewer than 20 percent of Medicare beneficiaries are enrolled in Medicare Advantage plans in 13 states, plus the District of Columbia.

 

  • Premiums and Cost-Sharing. While average Medicare Advantage premiums paid by MA-PD enrollees have been relatively stable for the past several years ($36 per month in 2017), enrollees may be liable for more of Medicare’s costs, with average out-of-pocket limits increasing 21 percent and average Part D drug deductibles increasing more than 9-fold since 2011; however, there was little change in out-of-pocket limits and Part D drug deductibles from 2016 to 2017.

Medicare Advantage enrollment is projected to continue to grow over the next decade, rising to 41 percent of all Medicare beneficiaries by 2027.1  As private plans take on an even larger presence in the Medicare program, it will be important to understand the implications for beneficiaries covered under Medicare Advantage plans and traditional Medicare, as well as for plans, health care providers and program spending.

Healthcare Triage News: Knee Surgery Doesn’t Improve Outcomes, but We Still Do A LOT of Them

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Healthcare Triage News: Knee Surgery Doesn’t Improve Outcomes, but We Still Do A LOT of Them

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The news tells us that arthroscopic surgery for knee arthritis and meniscal tears isn’t worth it. Healthcare Triage told you that a while ago. What’s new? This is Healthcare Triage News.

 

When An Insurer Balks And Treatment Stops

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When An Insurer Balks And Treatment Stops

Gillen Washington, a student at Northern Arizona University, had been getting medication for an immunodeficiency disease since 2011. But when he went to his clinic in November 2014 for the monthly dose, a nurse told him his insurance company had denied it.

Soon after, the plan sent him a letter saying his bloodwork was outdated and didn’t show that the treatment was medically necessary, Washington’s attorney said.

Over the next few months, as Washington appealed the insurance company’s decision, he developed a cough that wouldn’t go away. He moved home to Huntington Beach, Calif., and ended up in the hospital with pneumonia and a collapsed lung.

“It was terrifying,” said Washington, 22. “I have never felt so depressed and so scared in my entire life.”

In 2015, Washington filed a breach of contract lawsuit in Orange County Superior Court against his insurer, Aetna, arguing that the company had improperly denied him the medication. The case is set for trial this month.

From 35,000 to 50,000 people in the U.S. are estimated to be dependent on medications to treat primary immunodeficiency diseases — about 300 rare conditions in which the immune system doesn’t function properly, or at all. The medication, known as immunoglobulin replacement therapy, replaces antibodies that the body doesn’t make. It can cost tens of thousands of dollars each year.

In recent years, patients with these diseases have faced increasing difficulty getting their insurers to approve treatments, according to clinicians and patient advocates. In some cases, insurers interrupt treatments that are already underway. In others, they deny it at the outset. Without medication, patients can get infections or even suffer organ failure.

Aetna, one of the nation’s largest insurers, with a 2016 net income of $2.3 billion, declined to answer questions about Washington’s case, citing the pending litigation. In court documents, attorneys representing the company argued that it didn’t breach its contract with Washington.

In 2014, Aetna denied coverage of the medication that Gillen Washington was taking for an immunodeficiency disease. He was later hospitalized with pneumonia and a collapsed lung. (Courtesy of Gillen Washington)

Dr. Rebecca Buckley, a professor of immunology and pediatrics at Duke University Medical Center, said insurance companies often require patients with immunodeficiency diseases to stop taking their medication and undergo new lab work to demonstrate they still need it. That interruption is a “serious problem” for people with a definitive diagnosis, she said, because the consequences can be so devastating.

“If you stop the treatment, they are going to get sick,” Buckley said. “There are no spontaneous recoveries from any of these genetic defects.”

Buckley acknowledged that some people are put on the medication unnecessarily. But those who definitely have the diseases can’t make antibodies on their own and have no protection without treatment.

The Immune Deficiency Foundation, a national patient advocacy organization, regularly advises patients who receive insurance denials. President and founder Marcia Boyle said the foundation is getting a growing number of calls each year from patients who face treatment delays because of insurance company decisions. Insurers are also more frequently shifting costs to patients by requiring higher copays and coinsurance or using restrictive formularies, she said.

“Some insurers are creating unnecessary roadblocks because of the costly therapy,” she said. “More often than not, when you have someone with a lifelong, preexisting condition that needs very good medical care and expensive therapy, you are going to have issues with access to care and insurance.”

BCBS of Georgia to stop covering ED visits it deems unnecessary

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http://www.beckershospitalreview.com/payer-issues/bcbs-of-georgia-to-stop-covering-ed-visits-it-deems-unnecessary.html

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Starting next month, Anthem Blue Cross Blue Shield of Georgia will no longer cover emergency department services it determines are unnecessary for members with individual plans.

The insurer said the policy aims to steer patients with nonemergent symptoms to see a primary care physician, urgent care provider or use its LiveHealth telehealth app to limit costly ED visits. If a BCBS of Georgia policyholder receives care for nonemergent symptoms, a medical director will use the prudent layperson standard to deem whether the service is necessary.

Jeff Fusile, president of BCBS of Georgia, told WABE, “The cost of care’s been going up so much faster than people’s earnings. We have got to find a better way to do some of this stuff, taking some of that unnecessary spending out of the system.”

The policy does not include referrals from a physician to the ED for nonemergent services, nonemergent services provided to children under age 14, instances when an urgent care clinic is more than 15 miles away and when care is administered on Sundays and major holidays.

“We’re not trying to steer people away from the emergency room if they have a serious condition,” Debbie Diamond, director of publications for BCBS of Georgia, told Becker’s Hospital Review. “If a member is having chest pain that they think is a heart attack, they should still go to the emergency department.”

Ms. Diamond said similar policies have been enacted at Anthem-affiliated plans in Missouri, Kentucky and Virginia. Missouri said it would reinforce the program June 1 and Kentucky enacted the policy in 2015.

Donald Palmisano, president of the Medical Association of Georgia, told WABE the policy disproportionately affects the elderly, rural residents and children over the age of 14. He added physicians are concerned the policy places “the patient, who doesn’t have the clinical background, to determine whether their condition is of an emergency nature.”

Trump’s budget forces states into ‘difficult decisions’ about spending for hospitals serving indigent patients

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http://www.journalnow.com/business/business_news/local/trump-s-budget-forces-states-into-difficult-decisions-about-spending/article_15f1eee9-b4aa-5c6b-8132-3d93739682c5.html

hospital bed

A prominent rating agency, Moody’s Investors Service, said Thursday the proposed Trump administration budget could form an even darker financial cloud over the nation’s not-for-profit health-care systems and state legislatures.

Moody’s said the White House budget, if approved in its current form by Congress, would represent a “credit negative” for both groups.

The White House budget calls for $610 billion in Medicaid cuts over 10 years as well as eliminating $250 billion dedicated to state Medicaid expansion programs.

A projected $834 billion in lower Medicaid spending over 10 years was scored by the Congressional Budget Office if the American Health Care Act (AHCA) is enacted. The bill also would lead to 23 million Americans losing their health insurance by 2026, the office projected.

Moody’s wrote that the White House budget, if enacted, “would pressure state governments to take various actions to balance their budgets, including adjusting Medicaid eligibility rules, increasing their own funding of Medicaid, or cutting payments to hospitals and other providers,” Moody’s said.

“Although the budget would give states limited new flexibility to adjust their Medicaid programs, the measure overall reflects a significant cost shift away from federal funding to states,” Moody’s said. “It would force states to make difficult decisions about safety-net spending for hospitals that serve large numbers of indigent patients.”

The warning comes 10 weeks after Moody’s and S&P Global Ratings cautioned that the proposed AHCA could put increased pressure on health-care systems’ operating revenue and bottom lines.

The ratings groups expressed concern that the ACHA would change funding for Medicaid from an open-ended entitlement to a system based on payments that will be made to the states based on a capped per-capita amount.

The bill passed the U.S. House, but is likely to face significant changes in the U.S. Senate.

Another factor Moody’s cited in the credit negative rating is a White House budget proposal “that forces” states to share the costs of the federal Supplemental Nutrition Assistance Program, also known as food stamps.

The federal government covers all benefit costs of the program, while states pay to administer it. The White House budget proposes to shift 25 percent of the benefit costs to states, totaling $190 billion by fiscal 2027.

“We expect action to vary among states, with some taking more action to limit the loss of insurance coverage or benefit changes,” Moody’s said.

“Material reductions of insurance coverage would be credit negative for not-for-profit hospitals because they would increase their bad debt and uncompensated care costs.”

In the most recent quarterly reports for the Triad’s three main health-care systems, each reported an increase in bad debt.

According to the American Hospital Association, bad debt is defined as services for which hospitals anticipate, but do not receive, payment from patients who have the financial means to pay.

Wake Forest Baptist Medical Center reported that through the first three quarters of fiscal 2016-17, it had $166.1 million in bad debt, compared with $38.2 million the year before.

Divisions emerge in the Senate on pre-existing conditions

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Divisions emerge in the Senate on pre-existing conditions

Divisions emerge in the Senate on pre-existing conditions

Senate Republicans are showing early divisions over what to do about ObamaCare’s protections for people with pre-existing conditions.

Some conservatives, including Sen. Mike Lee (R-Utah), want to simply repeal those provisions and other ObamaCare regulations and leave them up to the states.

But advocates of a more centrist approach, like Sen. Bill Cassidy (R-La.), are speaking out in favor of pre-existing condition protections and endorsing a “Jimmy Kimmel test” for the bill, where no one can be denied coverage.

Other senators are exploring a middle ground where states would have to automatically enroll people in health insurance before they could get a waiver for the regulations, though conservatives object to that idea as Washington overreach.

The disagreements over what to do about preexisting conditions point to the larger difficulty facing Senate Republicans as they seek to find consensus on a host of contentious issues in the healthcare bill.

Pre-existing Conditions and Medical Underwriting in the Individual Insurance Market Prior to the ACA

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Pre-existing Conditions and Medical Underwriting in the Individual Insurance Market Prior to the ACA

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Before private insurance market rules in the Affordable Care Act (ACA) took effect in 2014, health insurance sold in the individual market in most states was medically underwritten.1  That means insurers evaluated the health status, health history, and other risk factors of applicants to determine whether and under what terms to issue coverage. To what extent people with pre-existing health conditions are protected is likely to be a central issue in the debate over repealing and replacing the ACA.

This brief reviews medical underwriting practices by private insurers in the individual health insurance market prior to 2014, and estimates how many American adults could face difficulty obtaining private individual market insurance if the ACA were repealed or amended and such practices resumed.  We examine data from two large government surveys: The National Health Interview Survey (NHIS) and the Behavioral Risk Factor Surveillance System (BRFSS), both of which can be used to estimate rates of various health conditions (NHIS at the national level and BRFSS at the state level). We consulted field underwriting manuals used in the individual market prior to passage of the ACA as a reference for commonly declinable conditions.

 

Pre-ACA Market Practices Provide Lessons for ACA Replacement Approaches

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Pre-ACA Market Practices Provide Lessons for ACA Replacement Approaches

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Significant changes to the Affordable Care Act (ACA) are being considered by lawmakers who have been critical of its general approach to providing coverage and to some of its key provisions. An important area where changes will be considered has to do with how people with health problems would be able to gain and keep access to coverage and how much they may have to pay for it.  People’s health is dynamic. At any given time, an estimated 27% of non-elderly adults have health conditions that would make them ineligible for coverage under traditional non-group underwriting standards that existed prior to the ACA. Over their lifetimes, everyone is at risk of having these periods, some short and some that last for the rest of their lives.

One of the biggest changes that the ACA made to the non-group insurance market was to eliminate consideration by insurers of a person’s health or health history in enrollment and rating decisions.  This assured that people who had or who developed health problems would have the same plan choices and pay the same premiums as others, essentially pooling their expected costs together to determine the premiums that all would pay.

Proposals for replacing the ACA such as Rep. Tom Price’s Empowering Patients First Act and Speaker Paul Ryan’s “A Better Way” policy paper would repeal these insurance market rules, moving back towards pre-ACA standards where insurers generally had more leeway to use individual health in enrollment and rating for non-group coverage.1  Under these proposals, people without pre-existing conditions would generally be able to purchase coverage anytime from private insurers.  For people with health problems, several approaches have been proposed: (1) requiring insurers to accept people transitioning from previous coverage without a gap (“continuously covered”); (2) allowing insurers to charge higher premiums (within limits) to people with pre-existing conditions who have had a gap in coverage; and (3) establishing high-risk pools, which are public programs that provide coverage to people declined by private insurers.

The idea of assuring access to coverage for people with health problems is a popular one, but doing so is a challenge within a market framework where insurers have considerable flexibility over enrollment, rating and benefits.  People with health conditions have much higher expected health costs than people without them (Table 1 illustrates average costs of individuals with and without “deniable” health conditions). Insurers naturally will decline applicants with health issues and will adjust rates for new and existing enrollees to reflect their health when they can.  Assuring access for people with pre-existing conditions with limits on their premiums means that someone has to pay the difference between their premiums and their costs.  For people enrolling in high-risk pools, some ACA replacement proposals provide for federal grants to states, though the amounts may not be sufficient.  For people gaining access through continuous coverage provisions, these costs would likely be paid by pooling their costs with (i.e., charging more to) other enrollees.  Maintaining this pooling is difficult, however, when insurers have significant flexibility over rates and benefits.  Experience from the pre-ACA market shows how insurers were able to use a variety of strategies to charge higher premiums to people with health problems, even when those problems began after the person enrolled in their plan.  These practices can make getting or keeping coverage unaffordable.

The discussion below focuses on some of the issues faced by people with health issues in the pre-ACA non-group insurance market.  These pre-ACA insurance practices highlight some of the challenges in providing access and stable coverage for people and some of the issues that any ACA replacement plan will need to address. Many ACA replacement proposals have not yet been developed in sufficient detail to fully deal with these questions, or in some cases may defer them to the states.

We start by briefly summarizing key differences between the ACA and pre-ACA insurance market rules for non-group coverage that affect access and continuity of coverage.  We then focus on pre-ACA access and continuity issues for three different groups: (1) people transitioning from employer coverage or Medicaid to the non-group market; (2) people with non-group coverage who develop a health problem; and (3) people who are uninsured (are not considered to have continuous coverage) who want to buy non-group coverage.  After that, we discuss how medical underwriting and rating practices can segment a risk pool, initially and over time, and challenges that this poses for assuring continuous coverage.  We end by reviewing some of the policy choices for addressing the challenges that have been raised.