Three States Where Obamacare Premiums May Rise More Than 50% in 2018

As of this writing, the Affordable Care Act, also known as Obamacare, still remains the law of the land, despite efforts to repeal and replace it. The uncertainty about where this is headed has created uncertainty in the marketplace and thus rising prices. There are 3 states where Obamacare premiums may rise more than 50% in 2018 including New York, Georgia, and Maryland. The reasons for this premium increase are enumerated in the article below. Is this a sign of things to come in 2018? Medical Cost Advocate can help you navigate our complex health care system and find the insurance plan that best suits your needs.

By Sean Williams, Aug 26, 2017

Despite President Trump having been in office for more than seven months now and Republicans retaining control of both houses of Congress, the Affordable Care Act, which is best known as Obamacare, remains the health law of the land.

The hallmark legislation signed into law by former President Barack Obama in March 2010 has taken care of its primary goal of reducing the uninsured rate. Between late 2013 and mid-2016, we witnessed the aggregate uninsured rate fall from 16% to around 9%, representing an all-time low, according to the Centers for Disease Control and Prevention.

However, Obamacare has also been a relatively unpopular law since its inception. Until recently, when Republicans tried unsuccessfully on numerous occasions to repeal and replace Obamacare, you could easily count on two hands just how many months over the past six-plus years that Obamacare had more “favorable” views than “unfavorable” when it came to Kaiser Family Foundation’s Health Tracking poll. Most Americans never really cared for the individual mandate, which required them to purchase health insurance, and they certainly disliked the Shared Responsibility Payment, which required them to pay a penalty if they didn’t purchase health insurance.

Nevertheless, rate requests have been submitted by insurance companies in nearly every state, and we’re heading into 2018 with the strong likelihood that Obamacare will remain law.

President Trump threatens to go nuclear on Obamacare

Of course, that doesn’t mean President Trump has to like what’s transpired.

The Commander in Chief has suggested that if Congress doesn’t get its act together and repeal Obamacare, he’d consider going nuclear and withholding cost-sharing reductions in order to topple the program. Cost-sharing reductions, or CSRs, are the subsidies paid to lower-income individuals and families making between 100% and 250% of the federal poverty level, and they help cover the costs of heading to the doctor (e.g., copays, deductibles, and coinsurance). More than 7 million people enrolled via Obamacare’s marketplace exchanges qualified for CSRs in 2017. Without CSRs, lower-income folks would have health insurance but would probably be unable to afford the copay and deductible costs of being seen by a doctor.

This all ties back to a 2014 lawsuit filed by the House Republicans against Sylvia Burwell, who at the time was the Secretary of the Department of Health and Human Services (HHS). The GOP argued that only Congress has the right to apportion federal funding, which in this case meant approving funds for CSR payments. Since these subsidies weren’t getting the alleged proper approval, Republicans sued. In May 2016, they won; however, Judge Rosemary Collyer stayed her order, given the likelihood of an appeal from the Obama administration, which did come in. That appeal remains in place today, though Trump has appointed Tom Price as the new HHS secretary. All Donald Trump would have to do is drop the appeal of the case, and Collyer’s order would halt further CSR payments to insurers and low-income individuals and families.

Insurers, not knowing what will happen, have been requesting significant rate hikes to take into account both adverse selection (i.e., getting more sick enrollees than expected) and the possibility that these CSR subsidies could be taken away, in which case members may not be able to pay their medical bills. According to ACASignUps.net, which has aggregated price request data for nearly every state, the average rate hike request if CSRs remain in place is almost 16% in 2018, while premiums could jump by an average of 30% if CSRs are taken away.

Three states with possibly the highest average rate-hike requests

As in years past, we’ve seen a wide variance of rate requests. Alaska, which is known for having the highest monthly premiums, could see premiums drop by an average of 30% to 22% next year, simply depending on whether or not CSRs are kept or taken away. The drop is thanks to a new reinsurance program within the state.

Oklahoma could also see premiums fall by 1.9% in 2018 if CSRs are paid, or rise by an average of 8.7% if they aren’t. While good news on the surface, it’s little consolation considering the 76% that Blue Cross Blue Shield of Oklahoma hiked rates in 2017.

At the other end of the spectrum, three states could be in line to hike premiums by more than 50% if CSRs don’t get paid. Please note the emphasis on that “if,” because it could mean significantly more money flowing out of the pockets of unsubsidized Americans come 2018 if CSRs get taken away.

These states are:

  1. New York: According to published rate requests in early June from the Department of Financial Services, insurers in the Empire State are requesting an average hike of 16.6% if the CSRs remain. This comes on top of the average 18% rate hike they requested last year. However, ACASignUps.net has New York pegged for an average weighted rate hike of up to 50.5% should CSRs be taken away. Last year, regulators only managed to lower New York insurers’ rate-hike request to 16.6% from 18%, so there’s little hope of much solace for New Yorkers on Obamacare in the coming year. Insurers provided little info on what’s driving their double-digit rate-hike requests, but it’s believed to be uncertainty stemming from future CSR payments.
  2. Georgia: The Peach State is another that could be facing some very extreme premium increases should CSRs be taken away by President Trump. The weighted average rate hike for Georgia, inclusive of CSRs, is already a whopping 29.2%. However, if those CSRs aren’t there, Georgians could see premiums spike higher by a weighted average of 52.2%. Feel free to point the finger at Anthem (NYSE: ANTM), the largest in-state Obamacare insurer, whose Blue Cross Blue Shield of Georgia is requesting a rate hike of 40.6% with CSRs continuing to be paid, or 63.6% without them. Anthem is among the biggest beneficiaries of government-sponsored subsidies under Obamacare, and their removal could possibly hurt it more than any other national insurer.
  3. Maryland: Taking the cake with the largest possible average weighted premium increase in 2018 looks to be the Old Line State. Even if CSRs are paid, Maryland’s insurers have requested an average weighted rate hike of 46.1%. However, if CSRs are taken away, this premium increase jumps to a weighted average of 57.1%. Both CareFirst of Maryland and CareFirst Blue Choice requested average rate increases of 58.8% and 50.4%, respectively, with one Cigna plan within the state requesting up to a (I hope you’re sitting down for this) 150.83% increase in 2018 from the previous year. As in numerous states, CSR uncertainty and a need to significantly boost premiums to account for adverse selection are the primary catalysts behind these large rate-hike requests.

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Medical Billing Mistakes to Avoid

We are all busy these days; whether it be the normal requirements of work or trying to get ahead so you can go enjoy that well earned vacation. You are never too busy to take your healthcare billing for granted and just pay. The below article describes three things you can do. Medical Cost Advocate can do all these steps for you and add the rigorous capability of our Healthcare Advocacy Services to manage you billing and insurance ongoing … so you can take that vacation and rest assured your medical bills are being handled by an expert.

3 medical debt mistakes to avoid

Sean Pyles, NerdWallet

Many consumers take their medical bills at face value — and pay the price.

You can limit the hurt by shopping around beforehand, double-checking bills and negotiating your out-of-pocket expenses. Avoid these three mistakes:

  1. Not shopping around

Start by knowing the cost of services. For planned or routine medical expenses, you can ask the billing department to estimate costs. Then shop around if you have a choice of providers.

Resources like New Choice Health and Healthcare Bluebook can show you a price range for services in your area.

  1. Taking your bill at face value

“There’s a large number of people who touch your medical bill when you go to the medical office, from service providers, nurses and office administrators,” says Cheryl Walsh, a medical bill advocate in New York. “Between that, there’s a lot of room for errors for medical bills.”

Medical bills usually have a single total at the bottom. What that doesn’t show are the items, big and small, you’ve been charged for. Request an itemized bill to check for duplications or charges for care you didn’t receive. Compare this with your explanation of benefits to verify your insurer paid what it should.

If you’re overwhelmed, you might need a professional. Medical bill advocates specialize in reducing the amount that people pay. Many give free consultations and charge only if medical bills are reduced, sometimes based on a percentage of savings.

  1. Not negotiating payment options

Negotiating has two parts. First, agree on what you’re going to pay. Then establish how you’ll pay it.

Knowing what others paid can give you leverage, so check the online resources mentioned above. Don’t be afraid to talk to your provider; just prepare by figuring out what you can realistically pay.

“Your job is to say, ‘Look, if you want to be paid, this is what I can afford,’” says Jerry Ashton, co-founder of RIP Medical Debt, a nonprofit that purchases, then forgives, medical debt. “Never make an agreement you know you can’t uphold.”

If you’re facing out-of-pocket costs you can’t handle, you may be able to:

  • Establish a payment plan: Just as prices vary among doctors, so do payment terms. Often, all you have to do is ask to break the cost into manageable chunks.
  • Ask for a financial hardship plan: Some providers offer these to low-income patients. Eligibility varies, and you may have to apply for Medicaid before being eligible.
  • Negotiate: You may be able to settle for less than you owe, especially if your bill is in collections.
  • Consider debt relief: If your debt is more than half your annual income and you see no way to pay it off within five years, you may want to consider bankruptcy.

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A New Plan to Replace the ACA

With the effort to amend/repeal/replace the Affordable Care Act, we are currently one plan down and one to go. The first attempt to enact a new plan failed to come to vote in the House in March. This week a modified plan has surfaced that some are saying may move closer to being approved. In the below Article you will see some of the major provisions we expect to see vetted over the coming days.

 

 Republicans have a new plan to repeal and replace Obamacare

Thursday, 20 Apr 2017 | 10:26 AM ET  by Berkeley Lovelace Jr. – CNBC

Republican lawmakers have a new plan to repeal and replace Obamacare in a bid to bridge the gap between the House Freedom Caucus and moderates, according to a document obtained by CNBC.

A Freedom Caucus source told CNBC the changes to the health bill would secure 25 to 30 “yes” votes from the Freedom Caucus, and the new bill would get “very close” to 216 votes. The source said that 18 to 20 of those “yes” votes would be new.

Here is the document:

MacArthur Amendment to the American Health Care Act – 4/13/17

Insurance Market Provisions

The MacArthur Amendment would:

  • Reinstate Essential Health Benefits as the federal standard
  • Maintain the following provisions of the AHCA:

– Prohibition on denying coverage due to preexisting medical conditions

– Prohibition on discrimination based on gender

– Guaranteed issue of coverage to all applicants

– Guaranteed renewability of coverage

– Coverage of dependents on parents’ plan up to age 26

– Community Rating Rules, except for limited waivers

Limited Waiver Option

The amendment would create an option for states to obtain Limited Waivers from certain federal standards, in the interest of lowering premium costs and expanding the number of insured persons.

States could seek Limited Waivers for:

  • Essential Health Benefits
  • Community rating rules, except for the following categories, which are not waivable:
  • Gender
  • Age (except for reductions of the 5:1 age ratio previously established)
  • Health Status (unless the state has established a high risk pool or is participating in a federal high risk pool)

Limited Waiver Requirements

States must attest that the purpose of their requested waiver is to reduce premium costs, increase the number of persons with healthcare coverage, or advance another benefit to the public interest in the state, including the guarantee of coverage for persons with pre-existing medical conditions. The Secretary shall approve applications within 90 days of determining that an application is complete.

CNBC has reached out to the office of House Speaker Paul Ryan about the document.

Earlier this month, Freedom Caucus chairman Rep. Mark Meadows said the majority of caucus members will support the new bill if changes offered by the White House are included in the legislation, such as coverage waivers related to community rating protections.

In March, House Republicans pulled their first attempt at a repeal and replacement of Obamacare, dubbed the American Health Care Act, due in large part to opposition from both conservative and moderate Republicans.

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The ‘Trump effect’ on your Obamacare coverage

Happy Holidays from Medical Cost Advocate! As we enter a new year and new administration, change is inevitable on many fronts. Understandably people want to know what that means in regards to their healthcare. More specifically they want to know how they will be affected in light of the promised changes to Obamacare. Though we can only speculate at this point, a great overview by healthinsurance.org provides some insights based on what we know so far.

With our newly elected president threatening repeal of Obamacare, should you worry that your health insurance could go up in smoke?

By Louise Norris, healthinsurance.org contributor, November 12, 2016

Donald Trump will be our next president. What exactly does that mean for your health insurance coverage and access to healthcare? It’s a question that has drawn speculation from health policy wonks since the day after Trump’s election – but I’ve also been receiving many of these questions from clients who are curious about whether their coverage will change any time soon.

In truth, nobody can say for sure at this point, since there are still so many moving parts to the law. But we have some educated guesses, based on Trump’s positions and the actions Congress has taken over the last six years with regards to Obamacare.

Here are the best answers we have at the moment for some questions you might have, along with more details about what you can expect in the coming months and years:

Do you still need to buy ACA-compliant coverage?

Q: If Obamacare is going to be repealed, do I need to buy ACA-compliant coverage now?

A: Yes, you still need coverage for 2017, and now’s the time to buy it. On November 9, the day after Trump won the election, 100,000 people enrolled in coverage through HealthCare.gov, according to HHS Secretary Sylvia Burwell. That’s the largest number of sign-ups in a single day since open enrollment began on November 1, so there is considerable momentum in terms of people enrolling in coverage for 2017.

We can assume that Congress will pass legislation to repeal parts of the ACA (more details below), and that Trump will sign it into law. This is likely to happen in 2017. But it’s unlikely that it will have an effective date prior to 2019, as Congress will need time to implement its replacement plan, and the IRS will need time to establish the new tax system that will go along with whatever replaces the ACA (most likely, tax credits to offset the purchase of coverage).

So for 2017, you still need coverage. And subsidies — including premium subsidies and cost-sharing subsidies — are still available. Although they’re likely to be eliminated eventually, at least in their current form, that’s not likely to take effect in 2017. (more…)

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Healthcare Cost and Complexity Continue to Grow – Insurance Consultation and Claims Advocacy are Better Together in This Healthcare Climate

As we enter a new open enrollment period, companies and individuals are reviewing their health care plans. The litany of regulatory and economic changes in our health care system has created a daunting challenge of navigating less choice and availability, along with higher costs. Add to this the uncertain future health care landscape under a new Trump Administration and the complexity multiplies. Healthcare advocacy services are becoming even more necessary to help families manage the ongoing insurance, billing and navigation issues they will inevitably encounter.

Contributed by Derek Fitteron, CEO Medical Cost Advocate

November 1 marked the beginning of the open enrollment period for many individual insurance plans. Open enrollment is the time when individually insured families must enroll in, or make changes to, their health insurance coverage. The individual insurance market has been largely subsumed by the Affordable Care Act (ACA) and the State Exchanges in recent years. This year, choice, availability, features and cost have all deteriorated. Many of the largest insurers are withdrawing from the individual marketplace for economic reasons. The resulting plans have narrower networks, higher deductibles, and fewer features; all for a higher price.

The laws of supply and demand do not apply anymore. Wealthy consumers as well as those requiring subsidies must choose from the same underwhelming plans. Nowhere is this more evident than in New York. Aetna has left the market and Health Republic has become insolvent, leaving only Empire Blue Cross Blue Shield, United Healthcare and three much smaller companies offering plans. Perhaps most startling, none of the available plans are PPO plans that offer out-of-network benefits.

Consumers clearly need help selecting the best plans among available alternatives, but now more than ever they need assistance optimizing their plans going forward.

Consumers who wish to obtain the best care will go out-of-network in increasing numbers and will be largely “self-pay.” They will be on their own to manage filing, billing and administrative complexity. Medical Cost Advocate is recognizing these issues. To provide more value for clients, we have started bundling Insurance Consultation with Comprehensive Bill and Claims Advocacy. The benefits are clear. We can help clients select the best plan available and manage the ongoing issues they will inevitably face. We review bills, resolve problems, file claims, negotiate reductions and provide advice on how to better utilize these plans. For a nominal fee above an Insurance Consultation alone, consumers can obtain the same consultation plus 3 hours per month of billing advocacy over the entire year.

Our clients are looking for solutions to manage complexity in the changing healthcare system. Medical Cost Advocate is an even more advisable solution for those who want to focus on their health, not insurance and billing.

For more information on how Medical Cost Advocate can help your family/company realize value from healthcare, please click here or call us at (201) 891-8989.

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Surprise Hospital Bills – The Debate Continues

The debate continues in New Jersey and New York regarding what to do about out-of-network charges and balance bills when the consumer has no opportunity to choose or shop for care. Several State Legislatures are trying to tackle this problem in order to protect the consumer from large unexpected medical bills. Another related challenge is who should take the financial burden of these bills: the insurance company – by paying out of network bills, or the medical provider – by accepting less payment.

Restarting N.J. hospital billing debate

By Lindy Washburn, The Record

Michael Young, a 24-year-old college student, thought he was going to die a year ago May when he called 911 while visiting his father in Paramus.

It turned out he had appendicitis. The ambulance took him to The Valley Hospital in Ridgewood, where a surgeon performed an emergency appendectomy.

Now Young faces a different kind of crisis: The anesthesiologist that night at The Valley Hospital is suing him for $2,200 — after his insurer paid $726.

Surprise medical bills just keep coming for patients in New Jersey, five months after the Legislature’s effort to fix the problem died. Some come from hospital-based doctors who don’t accept the same insurance plans as the hospital where they work. Others are received by patients with out-of-state or federally regulated coverage who go to out-of-network emergency rooms — New Jersey regulations that require the insurer to protect its members from balance billing in such cases don’t apply to their plans.

Young gets his coverage through a family insurance plan for retired New York City employees; it is outside the jurisdiction of New Jersey regulations.

His anesthesiologist was part of Bergen Anesthesia group, which does not participate in his insurance plan. There were no other choices when the ambulance took him to Valley because it is the sole provider of anesthesia services there.

The insurer — GHI/EmblemHealth — paid about a quarter of the $2,900 he was charged for anesthesiology for lower abdominal surgery under emergency conditions. GHI used its own fee schedule to determine what they considered appropriate; Bergen Anesthesia billed Young for the remainder.

Now Young is stuck with the charges. He has no income of his own.

Other recent examples include:

–At one hospital, the father of a 3-year-old who needed emergency stitches was surprised when the plastic surgeon billed him $2,000, on top of the $3,800 he received from the insurer. When the father took it up with a hospital executive, the executive said his options were limited because the plastic surgeon did not participate in any insurance plans. But he called the surgeon, who agreed to waive the rest of his fee after the child’s father paid $900 — his remaining deductible — toward the balance.

–Another couple chose a Bergen County hospital as their baby’s birthplace because it was in their insurer’s network. They were surprised to learn — when the bills came — that the anesthesiologist, surgeon and neonatologist at the hospital did not participate in their insurance plan. The plan, purchased through the Affordable Care Act on HealthCare.gov, provides no out-of-network coverage.

–In Hudson County, all three hospitals owned by for-profit CarePoint Health no longer participate in the network of the state’s largest insurer, Horizon Blue Cross Blue Shield of New Jersey. Hoboken University Medical Center was the last to opt out, as of Wednesday, when its contract ended. The three, including hospitals in Bayonne and Jersey City, are also out-of-network for Aetna, Cigna, Health Republic of New Jersey, Oscar Health Insurance and UnitedHealthcare. The vast majority of CarePoint’s patients enter through the facilities’ emergency rooms, which enables the hospitals to demand payment from insurers for their charges, among the highest in the nation, while leaving the patient’s obligation the same as it would have been at an in-network facility.

Ward Sanders, president of the state Association of Health Plans, condemned that business model on Thursday, when he renewed his industry’s call for legislative reforms. “New Jersey has become a hotbed for unconscionable out-of-network billing practices,” he said. “Certain facilities and providers … engage in predatory pricing, surprising consumers with unexpected bills, and creating exorbitant costs for consumers, employers and unions.”

“It’s time for the Legislature to step in,” he said.

Now that the logjam over Atlantic City has been broken, lawmakers say they are gearing up to try again on what Democrats and Republicans agree is a pocketbook issue. But recent developments affecting the state’s hospitals may make it more difficult. Legislation that could reduce hospital revenues or diminish their leverage with insurers will be seen as a problem, and lawmakers with hospitals in their districts are likely to hear about it.

Hospitals take a hit

The launch of the Omnia health plan by Horizon Blue Cross Blue Shield of New Jersey alienated half of the state’s 62 hospitals by labeling them as Tier 2, a non-preferred status expected to lead fewer patients to seek care at their facilities, and thus lower revenues. In addition, 30 non-profit hospitals face lawsuits — and the potential loss of their property-tax exemptions — after a precedent-setting state Tax Court decision and Governor Christie’s veto of legislation that would have protected them. And hospitals are fighting additional cuts in state charity care funding this year.

Nevertheless, Sen. Gerald Cardinale, a Demarest Republican and health professional himself — he’s a dentist — has begun circulating his own version of the “Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act” first introduced last year by three Assembly Democrats and the chairman of the Senate Health Committee, Sen. Joseph Vitale, D-Middlesex.

Cardinale’s version is somewhat friendlier to doctors and hospitals, because it would rely on peer review — one panel for doctors and one for hospitals — to settle disputes when insurers and out-of-network providers disagree over how much should be paid for a service. The original version relied on “baseball arbitration” — a choice of one side’s final offer — by outside professional arbitrators.

The Democratic sponsors of the measure that failed last session — Assemblyman Craig Coughlin of Middlesex, and Assemblymen Gary S. Schaer of Passaic and Troy Singleton of Burlington, along with Vitale — have met with interest groups and say they plan to meet again to see what changes might help the bill win passage. And Citizen Action, the consumer advocacy group, plans to call attention to the problem of surprise medical bills at an event in mid-June.

All aim to take the consumer out of the middle of such disputes.

And that’s a goal with which the state hospital association, which did not support the measure last year, can agree. It has suggested changes that would give hospitals a bigger role in preventing staff anesthesiologists and other hospital-based specialists from billing patients beyond their in-network financial obligation after the insurer has paid.

  (more…)

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The Affordable Care Act after Six years

Excellent summary from the Kaiser Family Foundation that clears up some of the confusion around where the Affordable Care Act fits in the overall healthcare system

By Drew Altman, president and chief executive officer of the Kaiser Family Foundation.

The Affordable Care Act generates so much partisan heat and draws so much media attention that many people may have lost perspective on where this law fits in the overall health system.

The Affordable Care Act is the most important legislation in health care since the passage of Medicare and Medicaid. The law’s singular achievement is that 20 million people who were previously uninsured have health-care coverage. What sets the ACA apart is not only the progress made in covering the uninsured but also the role the law has played rewriting insurance rules to treat millions of sick people more fairly and its provisions reforming provider payment under Medicare. The latter is getting attention throughout the health system.

Still, while the ACA expands coverage and has changed pieces of the health system–including previously dysfunctional aspects of the individual insurance market–it did not attempt to reform the entire health-care system. Medicare, Medicaid, and the employer-based health insurance system each cover many more people. Consider:

Some 12.7 million people have signed up for coverage in the ACA marketplaces, and enrollment in Medicaid and the Children’s Health Insurance Program has increased by 14.5 million from pre-ACA levels, the Department of Health and Human Services noted in December. By contrast, 72 million people are enrolled in Medicaid and CHIP, 55 million in Medicare, and 150 million are covered through the employer-based health insurance system. The latter is where most Americans get their health coverage (Medicare and Medicaid share 10 million beneficiaries covered by both programs). All these forms of coverage have been affected by the ACA but operate largely independent of it.

In one presidential debate the moderator confused premium increases in ACA marketplaces (some of which are high, though the average is moderate) with premium increases in the much larger employer-based system. The tendency to overattribute developments, both good and bad, to the ACA is a product of super-heated debate about the law.

Given what the law actually does, it is not all that surprising that half of Americans say they have not been affected by it. Kaiser Family Foundation polling consistently finds that while the political world focuses on the ACA, the public is more concerned about rising deductibles and drug prices and other changes in the general insurance marketplace that have been developing with less scrutiny while attention has gone to the ACA. With so much published and said about the ACA since 2010, these and other important issues have received less attention from policy makers, the media, and health-care experts.

The ACA could get hotter before it cools. There is a case on contraception coverage under consideration at the Supreme Court–with oral arguments heard Wednesday–and another big debate about the law is likely if a Republican wins the White House in November. Such a debate would probably involve legislation characterized as “repealing” the ACA, though such a bill is more likely to focus on changes that stop short of rolling back the law’s popular coverage expansions and insurance reforms that benefit tens of millions of Americans.

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Surprise Medical Bills

This is an excellent article published by the Kaiser Family Foundation reporting on a survey finding that 7 in 10 individuals with out-of-network bills didn’t know their health care provider was not participating in their plan. Surprise medical bills can contribute significantly to financial burden and medical debt among insured individuals.

By Karen Pollitz, KFF

A Kaiser Family Foundation survey finds that among insured, non-elderly adults struggling with medical bill problems, charges from out-of-network providers were a contributing factor about one-third of the time. Further, nearly 7 in 10 of individuals with unaffordable out-of-network medical bills did not know the health care provider was not in their plan’s network at the time they received care.

“Surprise medical bill” is a term commonly used to describe charges arising when an insured individual inadvertently receives care from an out-of-network provider. This situation could arise in an emergency when the patient has no ability to select the emergency room, treating physicians, or ambulance providers. Surprise medical bills might also arise when a patient receives planned care from an in-network provider (often, a hospital or ambulatory care facility), but other treating providers brought in to participate in the patient’s care are not in the same network. These can include anesthesiologists, radiologists, pathologists, surgical assistants, and others. In some cases, entire departments within an in-network facility may be operated by subcontractors who don’t participate in the same network. In these non-emergency situations, too, the in-network provider or facility generally arranges for the other treating providers, not the patient.

For insured patients, the surprise medical bill can involve two components. The first component reflects the difference in patient cost-sharing between in-network and out-of-network providers. For example, in a managed care plan that provides coverage in- and out-of-network (sometimes called a PPO plan), a patient might owe 20% of allowed charges for in-network services and 40% of allowed charges for out-of-network services. A second component of surprise medical bills is due to “balance billing.” Typically health plans negotiate fee schedules, or allowed charges, with network providers that reflect a discount from providers’ full charges. Network contracts also typically prohibit providers from billing patients the difference between the allowed charge and the full charge. Because out-of-network providers have no such contractual obligation, however, patients can be liable for the balance bill in addition to any cost-sharing that might otherwise apply.

Data on the prevalence of surprise medical bills and costs to consumers are limited. The Affordable Care Act (ACA) requires health plans in and out of the Marketplace to report data on out-of-network costs to enrollees, though this provision has not yet been implemented. Research studies offer some clues as to the prevalence and cost to patients due to surprise medical bills:

• One national survey found that 8% of privately insured individuals used out-of-network care in 2011; 40% of those claims involved surprise (involuntary) out-of-network claims. This survey found that most surprise medical bills were related to emergency care.

• In 2011, the New York Department of Financial Services studied more than 2,000 complaints involving surprise medical bills, and found the average out-of-network emergency bill was $7,006. Insurers paid an average of $3,228 leaving consumers, on average, “to pay $3,778 for an emergency in which they had no choice.”

• The same New York study found that 90% of surprise medical bills were not for emergency services, but for other in-hospital care. The specialty areas of physicians most often submitting such bills were anesthesiology, lab services, surgery, and radiology. Out-of-network assistant surgeons, who often were called in without the patient’s knowledge, on average billed $13,914, while insurers paid $1,794 on average. Surprise bills by out-of-network radiologists averaged $5,406, of which insurers paid $2,497 on average.

• A private study of data reported by health insurers in 2013 to the Texas Department of Insurance suggest that emergency room physicians often do not participate in the same health plan networks as the hospitals in which they work. Three Texas insurers with the largest market share reported that between 41% and 68% of dollars billed by for emergency physician care at in-network hospitals were submitted by out-of-network emergency physicians. Analysis of provider directories of these three insurers found that between 21% and 45% of in-network hospitals had no in-network emergency room physicians.

Federal and State protections against surprise medical bills

Policymakers at the federal and state level have expressed concern that surprise medical bills can pose significant financial burdens and are beyond the control of patients to prevent since, by definition, they cannot choose the treating provider. Various policy proposals have been advanced, and some implemented, to address the problem. These include hold harmless provisions that protect consumers from the added cost of surprise medical bills, including limits or prohibitions on balance billing. Others include disclosure requirements that require health plans and/or providers to notify patients in advance that surprise balance billing may occur, potentially giving them an opportunity to choose other providers.

Federal policy responses

Several federal standards have been adopted or proposed to address the problem of surprise medical bills in private health plans generally, in qualified health plans offered through the Marketplace, and in Medicare. These standards vary in scope and applicability:

• Out-of-network emergency services (all private health plans) – The ACA requires non-grandfathered health plans, in and outside of the Marketplace, to provide coverage for out-of-network emergency care services and apply in-network levels of cost sharing for emergency services, even if the plan otherwise provides no out-of-network coverage. For example, if an HMO would normally cover 80% of allowed charges for in-network care and nothing for out-of-network care, the HMO would have to pay 80% of allowed charges for an out-of-network emergency room visit. This provision does not, however, limit balance billing by out-of-network emergency providers.

• Proposed changes to coverage for out-of-network non-emergency services (Marketplace plans) – Recently the Centers for Medicare and Medicaid services proposed changes to address surprise medical bills for non-emergency services for individuals covered by qualified health plans offered through the Marketplace. Proposed standards would apply when an enrollee receives care for essential health benefits from an out-of-network provider in an otherwise in-network setting (for example, anesthesia care for surgery performed in an in-network hospital.) Plans would be required to apply out-of-network cost sharing for such care toward the plan’s annual out-of-pocket limit for in-network cost sharing. The proposed rule would waive this requirement whenever plans notify enrollees in writing at least 10 days in advance (for example, as part of a plan pre-authorization process) that such surprise medical bills might arise. The proposed rule indicates that CMS may consider an alternative under which all out-of-network cost sharing for surprise medical bills would count toward the in-network OOP limit, regardless of whether the plan provides advance notification, but notes the agency is “wary of the impact of such a policy on premiums.” The proposal would not apply to balance billing charges arising from surprise medical bills. In addition, the proposal would seem to not affect enrollees of HMO or EPO plans that do not cover non-emergency out-of-network services at all. Such plans comprise 73% of all QHPs offered in the federal Marketplace in 2016.

• Out-of-network services (Medicare) – Rules governing the traditional Medicare program generally limit patient exposure to balance billing, including surprise medical bills. Providers that do not participate in Medicare are limited in the amount they can balance bill patients to no more than 15% of Medicare’s established fee schedule amount for the service. Since these rules were adopted in 1989, the vast majority of providers accept Medicare assignment, and beneficiary out-of-pocket liability from balance billing has declined from $2.5 billion annually in 1983 ($5.65 billion in 2011 dollars) to $40 million in 2011. The rules are somewhat different for Medicare Advantage plans, which typically have more limited provider networks compared to traditional Medicare and which may not provide any coverage out-of-network. For emergency services, Medicare Advantage plans must apply in-network cost sharing rates even for out-of-network providers. Balance billing limits similar to those under traditional Medicare also apply. For non-emergency services, enrollees in PPO plans in surprise medical bill situations would be liable for out-of-network cost sharing, but Medicare balance billing rules would still apply, while enrollees in HMO plans might not have any coverage for non-emergency out-of-network services.

State policy responses

• New York’s comprehensive approach to surprise medical bills – Last year a new law took effect in New York limiting surprise medical bills from out-of-network providers in emergency situations and in non-emergency situations when patients receive treatment at an in-network hospital or facility. To date, this law stands out as offering the most comprehensive state law protection against surprise medical bills. For emergency services, patients insured by state-regulated health plans (e.g., not including self-funded employer plans) are held harmless for costs beyond the in-network cost sharing amounts that would otherwise apply. For non-emergency care, patients who receive surprise out-of-network bills can submit a form authorizing the provider to bill the insurer directly, and then are held harmless to pay no more than the otherwise applicable in-network cost sharing. In both situations, out-of-network providers are prohibited from balance billing the patient; although providers who dispute the reasonableness of health plan reimbursement may appeal to a state-run arbitration process to determine a binding payment amount. The New York law applies only to state-regulated health plans. However, patients who are uninsured or covered by self-insured group health plans may also apply to the state-run arbitration process to limit balance billing by providers under certain circumstances.

• Limited provisions addressing surprise medical bills – A number of other states have laws limiting balance billing by out-of-network providers in certain circumstances. Some of these laws apply only to certain types of health plans (HMO vs. PPO) or only to certain types of providers or services (for example, for ambulance providers or emergency care services.)

• NAIC model act – This fall, the National Association of Insurance Commissioners (NAIC) proposed changes to its health plan network adequacy model act to address surprise medical bills. NAIC model acts do not have the force of law, but often encourage state legislative action. For example, twenty states had adopted the previous NAIC model act on network adequacy or similar laws for network-based health plans. In addition, federal health insurance laws and regulations sometimes cite NAIC model act standards. The model act revisions would apply new standards for in-network facilities (hospitals and ambulatory care facilities) with non-participating facility based providers (such as anesthesiologists or emergency physicians). For emergency services, state-regulated plans would be required to apply in-network cost sharing rates for surprise medical bills (extending the ACA’s requirement for non-grandfathered plans to grandfathered plans as well). For balance billing amounts, out-of-network facility-based providers would be required to offer patients 3 choices: (1) pay the balance bill, (2) for balance bill amounts greater than $500, submit the claim to a mediation process with the provider to determine an allowed charge amount, or (3) rely on any other rights and remedies that may be available in the state. Similar requirements would apply for non-emergency services. In addition, health plans that require pre-authorization of facility-based care would be required to notify enrollees that surprise medical bills could arise, and plans would be required to provide enrollees with a list of facility-based providers that are participating in the plan network. Finally, plans would be required to keep data on all requests for mediation involving surprise medical bills and, upon request, report it to the state regulator.

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Obamacare supporters don’t like talking about it — but the individual mandate is working

According to this article published by Vox, healthy young adults are finally starting to get the message about the importance of signing up for health insurance coverage, which is integral to making health insurance affordable.

by Sarah Kliff,

Recent enrollment data shows that the mandate is working. The exact type of people the requirement was meant to target — young, healthy adults who might forgo coverage were it not for a government fine — signed up in record numbers this year.

Having a decent number of young and health people in the insurance pool is integral to making costs affordable for everyone, which is exactly why the mandate exists in the first place. And architects of Obamacare’s enrollment strategy say that talking about the mandate — something Obamacare supporters didn’t really start doing until 2015 — has been core to making it work.

Obamacare supporters used to skirt talk of the mandate.

The earliest polls made the facts clear: Americans did not like the idea of the government requiring the purchase of health insurance. The mandate was the very first part of the law challenged in court.

Obamacare supporters took all of this in consideration as they crafted early messages.

“The first year we were concerned it would be interpreted as a negative message, possibly turning people off,” says Anne Filipic, who runs Enroll America, a national nonprofit focused on getting the uninsured signed up for the health law’s insurance expansion.

But 2015 was different. Survey research had shown that, despite the mandate’s unpopularity, reminding the uninsured of the fees they’d face for remaining uninsured was an excellent way to encourage them to buy coverage. The penalty rose from $95 in 2014 to $695 in 2016.

“THE FIRST YEAR WE WERE CONCERNED IT WOULD BE INTERPRETED AS A NEGATIVE MESSAGE”

So this year, the mandate was “core” to Enroll America’s message. “It’s in our outreach script, it’s in our email messaging, it’s integrated into the top line points we want to get across,” Filipic says.

New data suggests the new message was successful. In 2015, people under 35 made up 35 percent of Healthcare.gov’s open enrollment sign-ups. In 2014, the number stood at 33 percent. What’s more: Healthcare.gov netted 980,000 new enrollees under 35 this year, a big increase over the 670,000 new sign ups last year.

The percentage point increase is, to be sure, slight. But it does show that, in 2015, there was something that worked to convince way more young adults to sign up for coverage — people who sat out the chance to do so in 2013 and again in 2014.

The individual mandate motivates young people to sign up — a lot
If there’s anyone who understands how young adults think about the individual mandate, it’s Mike Perry and Tresa Undem. They run the polling firm PerryUndem that, for the past two years, has done some of the most extensive work surveying the Obamacare-eligible population.

They’ve consistently found that the individual mandate tends to be a stronger motivator for young adults (for them, people between 18 and 29) than any other demographic.

“They’re not like other groups,” says Perry. “In focus groups, they don’t talk about wanting preventive care, or the importance of covering their family. Young adults really talk about two things: accidents could screw me over, and I don’t want to pay the fine.”

Perry and Undem conducted a survey in 2014 of the people who signed up for coverage in Obamacare’s first enrollment period. They found that young adults (18 to 29) were more likely to say they signed up for coverage because “I didn’t want to pay the fine” than any other demographic.

Perry pointed to data from Massachusetts’ health insurance expansion, which phased its mandate in over three years — and saw young adult enrollment go up as the penalties grew higher.

For the first six months of the Massachusetts health insurance expansion (from July to December 2007), there was no penalty for not carrying coverage, and the average age of those covered was 45.1. In January 2008, the state began to assess a $219 penalty to the uninsured — and the average age of enrollment dropped to 43.3. The full mandate penalty of $900 started in January 2009, and average age fell again, this time to 41.3.

“My own work tells me there has to be a connection,” Perry says. “For young adults, they don’t have as many motivations as other cohorts. So when the fine goes up, so does their interest in getting coverage.”

Pro-Obamacare groups are trying to make the mandate work even better
Enroll America knew, from its survey data, that the mandate was a good way to convince young adults to buy health insurance. And they’ve used the past year to try and perfect the message, to increase the odds that someone they email or call would end up enrolling in coverage.

For example, Filipic said that her group wanted to understand what they should call the individual mandate. Should it be the mandate? Or a tax? A fine? A penalty?

Enroll America tested out the different words in different versions in the subject lines of their emails, seeing which ones recipients were more or less likely to open. They found that fine worked best — so they went with that.
Another thing Enroll has learned: people like to know the size of the fine, so the group tries to feature that number prominently, too.

Filipic and her team already think the mandate could play a bigger role in their messaging going forward. Right now, Enroll America has a calculator that lets potential enrollees see how much financial help they’d be eligible to receive if they signed up for coverage.

The group is experimenting with changing that calculator to also display the size of the fine the individual would pay if they didn’t buy coverage.

“The calculator is consistently the most visited page on our site, so we’re testing different ways to incorporate that information,” she says. “We want to give consumers specific information, related to their own situation, rather than generalities.”

Filipic doesn’t know exactly what that will look like — it will take a bit more testing. But she does know that the mandate, as part of Enroll America’s message, is here to stay.

“The increase in young people is very encouraging,” she says. “The fine is going up, and we’re three years into this now. So the repeated message, seeing friends and family get coverage, all those things are now starting to come together.”

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This Could Be the Obamacare Outcome we’ve All Been Waiting For

This often-overlooked long-term goal of Obamacare may be finding the mark according to this latest study from the American Cancer Society.

The third open enrollment period for the Affordable Care Act, best known as Obamacare, has been ongoing for roughly five weeks now. And as seems to be the trend around this time of year, more questions than answers appear to be swirling around healthcare’s law of the land.

Big changes lead to an uncertain future

Obamacare is facing a number of changes in the 2016 calendar year, and, frankly, no one is certain yet how those changes might affect enrollment or patient mix for insurers.

For example, insurance premiums are rising at about their fastest rate in about a decade. The Great Recession held premium rate inflation in check for years, but the failure of more than half of Obamacare’s health cooperatives, coupled with many low-cost insurers coming to the realization that their rates were unsustainably low, are leading to big premium hikes in the upcoming year.

Data from the Washington Examiner showed that 231 insurers requested double-digit percentage premium price hikes in 2016 compared to just 121 in 2015. Furthermore, the magnitude of these hikes — 61 plans are looking for a minimum premium increase of 30% this year — is much higher than 2015. In short, there’s concern that higher premiums could reduce the affordability of the program for those who don’t qualify for a subsidy, leading to a higher uninsured rate.

Meanwhile, the employer mandate will be fully implemented on Jan. 1, 2016. The employer mandate will require that businesses with 50 or more full-time-equivalent employees (FTE’s) offer eligible health coverage to those FTE’s and their dependents under the age of 26, as well as provide financial assistance in instances where low-income FTE’s would be paying more than 9.5% of their modified adjusted gross income out of pocket toward their premium. If qualifying businesses fail to follow the rules, they could be looking at a $2,000 to $3,000 fine per employee.
The big question here is how businesses will respond. Will bigger companies step up and supply health insurance for their workers or will we see layoffs, hour cutbacks, or a move to private health exchanges? Obamacare’s big changes in 2016 are leading to a seemingly uncertain enrollment outlook in the near term.

Obamacare’s incredibly important goal that you probably overlooked

The easiest way to measure the success of Obamacare has always been by its overall enrollment totals. Obamacare was first and foremost designed to reduce the number of uninsured and to utilize the individual mandate and employer mandate to make that happen. The Centers for Disease Control and Prevention reported in Q1 2015 that just 9.2% of U.S. adults remained uninsured, including Medicare patients, which is the lowest figure on record. By this token, Obamacare would appear to be hitting its primary goal.

But there’s an even more important long-term goal that’s often lost on critics when discussing Obamacare’s success or failure — namely, the impact that preventative (and earlier) medical access could have on reducing long-term medical costs.
For insurers, Obamacare is a bit of a give and take. Insurers are enrolling more people than ever, and they’re also being required to accept members with pre-existing conditions. The result is that some insurers, such as the nation’s largest, UnitedHealth Group, are dealing with adverse selection and losing money on their individual marketplace plans because they’ve enrolled a large number of sicker individuals. Even though some of its large peers such asAnthem are healthfully profitable, the margins most insurers are generating on Obamacare plans (if they’re even profitable in the first place) are relatively small.

Now here’s the catch: In exchange for spending more money on their members up front, it’s possible that chronic and serious diseases that are the primary expense culprit for insurance companies can be caught before they become a serious issue. Thus, while health benefit providers may be spending more now than they would like to, their long-term outlook is also looking brighter presuming the current generation of members is now going to be healthier than the last generation given expanded access to medical care.

This could be the outcome we’ve been waiting for.

This last point sounds great on paper, but it’s difficult to prove that Obamacare is really making a dent in lowering long-term healthcare costs, especially since it’s only been the law of the land for about two years. All that consumers and critics can focus on at the moment are the rapidly rising premium prices.

However, a new study from the American Cancer society that was published online in the Journal of the American Medical Association late last month appears to show that there is a correlation between Obamacare’s expansion and a higher rate of cervical cancer diagnoses in select patients.

Researchers from the Department of Epidemiology at Emory University and from the ACS’ Department of Intramural Research analyzed a large database of cancer cases within the United States, separating cervical cancer diagnoses for women ages 21 to 25 in one group from cervical cancer diagnoses in women ages 26 to 34 in the other cohort. The reasoning behind this split? Persons under the age of 26 are still eligible to be covered under their parents’ health plan under Obamacare, and thus the expansion of this dependent clause should give researchers a reasonable correlation of how well Obamacare is affecting the rate of cervical cancer diagnoses.

After examining cervical cancer diagnosis rates for both cohorts before and after the implementation of Obamacare, researchers noted that there was a substantial increase in the number of cervical cancer diagnoses for women ages 21 to 25, whereas the age 26-34 cohort had a relatively consistent number of diagnoses before and after Obamacare’s implementation.

On the surface, a rising rate of cervical cancer diagnoses may not sound good at all. But, in a different context it could be just the news we’ve been hoping for. The key to beating cervical cancer is discovering it early, and presumably being able to stay on their parents’ health plans until age 26 helped the 21- to 25-year-old cohort gain this vital medical access. It’s possible that this early diagnoses not only saved lives, but for insurers that it kept them from shelling out big bucks in mid- to late-stage cancer treatments.

Keep in mind that this is just one example, and one example does not make a trend. However, it’s long been postulated that reducing the barriers to health insurance would lead to a higher medical utilization rate for consumers and a better chance of discovering potentially serious and chronic conditions at an earlier time, thus saving the patients’ lives and cutting insurers’ long-term medical expenses. It’s possible we could be witnessing the first signs of that.

Understandably, we’ll want to see additional studies emerge that examine disease diagnosis and treatment rates in a pre- and post-Obamacare setting so we can make a conclusive ruling as to whether or not Obamacare could actually lower long-term healthcare costs and improve long-term patient survival rates. The initial signs, though, are very encouraging.

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