Author: Doug

The Affordable Care Act after Six years

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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

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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

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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

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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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How 6 key trends are driving the employee benefits landscape

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Interesting report on trends shaping the design and delivery of employee benefits for the Workplace Benefits Summit.

By Melissa Winn, Employee Benefit Advisor

Emerging trends in the health care insurance and benefits landscape threaten to have a lasting impact on the way employers provide and administer employee benefit packages. Benefit advisers hoping to not only remain relevant to their clients, but to thrive during this time of adversity, will need to adjust to the changes ahead, according to Rick Lindquist, president of Zane Benefits.

He told attendees of the Workplace Benefits Summit that his company is focusing product development on 6 key trends in the industry today.

  • First and foremost is a sharp rise in the cost of employer contributions for health care insurance.
    (This trend is driving employers to seek ways to fix the cost of offering benefits so they can sustain them.)
  • Second, employee costs are also rising, and rising faster than wages, causing dissatisfaction.
  • The third trend is shifting more financial responsibility for benefits to consumers.
  • The fourth trend is the increased use of consumer technology, a trend which actually aids employers and advisers in shifting more responsibility to individuals.
  • Trend number five is the decrease in unemployment rates, will increase importance on employers’ compensation and benefit packages.
  • Last, millennials are entering the workforce in droves and will comprise the majority of the workforce by 2025. Millennials want to own their own way when it comes to benefit selection. They demand to operate at their own convenience.

The four characteristics of modern benefit offerings, Lindquist said, include:

  1. They are technology-driven, including through the use of a mobile experience and a Facebook like interface
  2. They offer maximum choice and convenience
  3. They are employer-funded, employee-owned
  4. They offer a better value than cash

For advisers these trends mean they must be able to deliver direct to consumer employee services, or broker a third party service.

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Group Health Premiums Inch Up While Deductibles Jump

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By Jerry Geisel, Business Insurance

Excellent summary of a survey of employee benefits cost conducted by the Kaiser Family Foundation and the HRET. While premiums rose modestly in 2015, the employee’s share of healthcare cost went up significantly. No surprise that out-of-pocket costs will remain high for consumers around the country.

Group health insurance premiums continue to rise modestly, according to a survey released Tuesday by the Kaiser Family Foundation and the Health Research & Educational Trust.

The survey of nearly 2,000 employers conducted from January through June found that the premium for family coverage rose an average of 4.2% in 2015, increasing to $17,545. That 4.2% increase compares with average premium hikes of 3% in 2014, 3.8% in 2013 and 4.5% in 2012.

While premium increases were modest, cost-shifting to employees in the form of higher deductibles was not. This year, the average deductible for employees with single coverage increased to $1,318, up 8.3% over 2014.

“With deductibles rising so much faster than premiums and wages, it’s no surprise that consumers have not felt the slowdown in health spending,” Kaiser President and CEO Drew Altman in Washington said in a statement.

Other findings in the Kaiser/HRET survey include:

• Premium costs are considerably higher at larger employers than at smaller organizations. For example, the average premium cost in 2015 for family coverage among larger employers — defined as those with at least 200 employees — was $17,983. That compares with an average premium cost of $16,625 among employers with between three and 199 employees.

• Employees working for smaller companies pay a much greater share of the premium than those working for larger employers. For example, in 2015, employees working at organizations with between three and 199 employees paid an average premium of $5,904 for family coverage, $1,355 more than employees working at larger employers who paid an average $4,549 in premium contributions.

• Thirty-nine percent of employees with single coverage are enrolled in plans with an annual deductible of at least $1,000, up sharply from 32% in 2014 and three times higher compared with 2009, when just 13% of employees with single coverage faced deductibles of at least $1,000.

• The percentage of employers offering coverage to their employees varied considerably by employer size. For example, 97% of employers with at least 100 employees offered coverage to employees in 2015, up from 94% in 2014, while 54% of employers with between three and 49 employees offered coverage in 2015, up from 52% in 2014.

While enrollment in private health insurance exchanges remains modest — just 2% of covered employees in firms with more than 50 employees are enrolled in a private exchange — 17% of firms with more than 50 employees and 22% of employers with at least 5,000 employees are considering offering benefits through an exchange.

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Finding Help for the High Costs of Cancer Care

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This article from the Philadelphia Enquirer contains valuable information about the high cost of cancer care and the options people have in managing those costs.

The good news is more Americans are surviving cancer.

The bad news? We pay big bucks to stay free and clear of the disease.

Nearly 14.5 million American cancer survivors remain alive and well as of Jan. 1, 2014, according to the American Cancer Society, the National Cancer Institute, and the Centers for Disease Control and Prevention. By 2024, cancer survivors will number 19 million people.

So how much does it cost to stay cancer-free? Quite a lot, says Zhiyuan Zheng, Ph.D. and senior health services researcher with the American Cancer Society in Atlanta.

For American men, the three most prevalent types of cancer among survivors are prostate (43 percent), colorectal (9 percent), and melanoma (8 percent). Breast (41 percent), uterine (8 percent), and colon and rectum (8 percent) are most common among women who survive cancer.

Prostate, colorectal, and breast cancers account for about 30 percent of all cancer-related health-care costs. The survivors incur higher medical expenses, are at higher risk of secondary cancer, and require more tests and follow-up care.

Total cancer treatment costs in 2004 were $72 billion, about $120 billion in 2014, and will increase to $180 billion by 2024, Zheng adds.

How does that break down per person? In the first 12 months, breast cancer treatment costs roughly $20,000, colorectal cancer $30,000, and prostate $10,000.

Lost workdays add to the total annual economic burden per cancer survivor: $20,238 for colorectal, $14,202 for breast, and $9,278 for prostate, for those under age 64, the researchers found.

Fortunately, cancer patients can now turn to medical bill negotiators who bargain with medical providers.

“We have a number of cancer patients who’ve hired us. Plus we’re also seeing a higher success rate” among cancer patients, says Derek Fitteron, founder and CEO of Medical Cost Advocate in Wyckoff, N.J.

One customer was a family facing $125,000 in bills incurred in a year for treatment of a rare childhood cancer.

“We reviewed the bills for billing accuracy and found comparable pricing negotiating savings of more than $85,000 with several Pennsylvania facilities,” Fitteron said.

Resources Cancer maintains a list of organizations that help patients financially

The Cancer Financial Assistance Coalition is a group of national organizations that provide financial help.

The nonprofit CancerCare provides limited financial assistance to people affected by cancer. It also has a foundation to help fund copays, the CancerCare Patient Assistance Foundation

The HealthWell Foundation similarly provides financial assistance to cover copayments, premiums, and deductibles for certain medications and therapies.

Partnership for Prescription Assistance helps qualifying patients who lack prescription-drug coverage obtain the medications they need.

Needy Meds offers information on companies assisting those who can’t afford medication.

The Patient Access Network Foundation assists patients with out-of-pocket costs associated with their treatment.

Patient Services Inc. assists with insurance premiums and copayments for people with chronic diseases.

RxHope.com helps patients obtain free or low-cost prescription medications.

The Assist Fund provides financial support to chronically ill patients with high-cost medications.

The Patient Advocate Foundation provides education, legal counseling, and referrals for people with cancer who need assistance managing insurance, financial, debt crisis, and job-discrimination issues.

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A Look at the Lives of American Nurses

Doug

Fantastic new book, film and website explores nurse’s critical role at the bedside working within the state of our current healthcare system. This film has received nationwide acclaim and is worth seeing.

By Nancy Szokan, Washington Post

Photographer and filmmaker Carolyn Jones created “The American Nurse” after publishing a coffee-table book on the subject two years ago, and the film builds on the same mix of powerful images with words of men and women whose lives are devoted to healing.

Over the film’s 78 minutes, viewers see Jason Short, an auto mechanic, describe how a bad motorcycle accident taught him what it was like to be helpless and in need of care; he is now a home health nurse in Appalachia. They follow Tonia Faust into her job at the Louisiana State Penitentiary: “People ask me how I can take care of people who have committed such horrific crimes,” she says.

“But when I’m at their bedside, I’m taking care of just another human being.”

The other nurses are a nun who runs a nursing home in Wisconsin, a labor and delivery nurse at Johns Hopkins Hospital in Baltimore and a former Army medic who rehabilitates wounded soldiers in San Diego.

After its premiere before an invited audience, the movie will be distributed nationwide through theaters and health-care centers. To see a trailer and a schedule of screenings go to: www.AmericanNurseProject.com.

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When Health Costs Harm Your Credit

Doug

By ELISABETH ROSENTHAL New York Times

This is an excellent article outlining the problems people can run into by allowing medical bills to go unpaid. It takes a long time to decipher what you actually owe, but providers can report you to credit agencies for late payment very quickly.  People in these types of situations have reason to worry.

LIKE most people, I am generally vigilant about paying my bills — credit cards, mortgage, cellphone and so on. But medical bills have a different trajectory. I (usually) open the envelopes and peruse the amalgam of codes and charges. I sigh or swear. And set them aside for when I have time to clarify the confusion: An out-of-network charge from a doctor I know is in-network? An un-itemized laboratory bill from a doctor I’ve never heard of? A bill for a huge charge before my insurer has paid its yet unknown portion of a hospital’s unknowable fee?

I would never countenance the phrase “60 days past due” on my Visa card statement. But medical bills? Well… with the complex negotiations that determine my ultimate payment, it often takes months to understand what I actually owe.

Unfortunately, I may be playing a dangerous game. Mounting evidence shows that chaos in medical billing is not just affecting our health care but dinging the financial reputation of many Americans: While the bills themselves frequently take months to sort out, medical debts can be reported rapidly to credit agencies, and often without notification. And even small unpaid bills can severely damage credit ratings.

A mortgage initiator in Texas, Rodney Anderson of Supreme Lending, recently looked at the credit records of 5,000 applicants and found that 40 percent had medical debt in collection, with the average around $400; even worse, most applicants were unaware of their debt. Richard Cordray, director of the federal Consumer Financial Protection Bureau, has noted that half of all accounts reported by collection agencies now come from medical bills, and the credit record of one in five Americans is affected.

A single medical bill reported to a credit agency can easily become a “millstone around your neck” said Mark Rukavina, principal at Community Health Advisors, a health care advisory service. He added: “It will take a long time to make that right, even once the bill is paid. I’ve had mortgage brokers call me and say ‘I have these people with great credit. They’ve refinanced before, but now they’ve got this medical bill and even though they’ve paid it off, I can’t get them a good rate.’ ”

Part of the problem is that there are few standards governing medical debts: One billing office might give you — or your insurer — 60 days to pay before pursuing collection. Another might allow you to pay off a bill slowly over a year. Many will sell the debt to collection companies, which typically take a cut of the proceeds and decide when or whether to report unpaid debt to credit agencies.

The problem is accelerating for several reasons. Charges are rising. Insurance policies are requiring more patient outlays in the form of higher deductibles and co-payments. More important, perhaps, is that while doctors’ practices traditionally worked out deals for patients who had trouble paying, today many doctors work for large professionally managed groups and hospital systems whose bills are generated far away, by computer.

Both Congress and the protection bureau have been trying to better insulate patient credit scores from the inefficiencies of our market-based medical system. Various proposals have been considered to differentiate medical debt from other forms; it could be erased once it has been paid off or not reported to credit agencies at all, for example. So far, the credit industry has fought successfully against such efforts, noting that they could allow some genuine scofflaws to evade legitimate charges. But it’s also good business, since health care bills are now the largest source of business for collection companies, according to consumer protection agency officials.

Having spent the last year reporting a series on American health costs, I’ve heard plenty about credit casualties.

Gene Cavallo, 61, a New Mexico businessman who put his children through college, had always paid his bills promptly and had an excellent credit rating, until he required surgical excision of a melanoma on his shin two years ago. The more than 60 bills generated for the surgery and six months of follow-up visits — arriving sporadically and ranging from 18 cents to $17,000 — came to $110,000; his insurance covered about $70,000.

When various providers asked him to pay the remaining $40,000, he requested itemized bills and balked at some of the “ridiculously inflated prices,” such as $85 for tweezers and $20 for a box of tissues. He argued the bills point by point, and ultimately agreed to pay $25,000.
But during the negotiations some of the debt was sent to collection. Two years later, he no longer answers the daily robocalls from collection agencies and has had a couple of credit cards canceled because his score has fallen. “It was a scary thing to do because I own a business and dabble in real estate, so the ability to borrow has always been important to me. And now I have no ability, I assume, to borrow for any reason.”
Michael S., who declined to give his full name so as to protect his reputation with business clients, had to declare bankruptcy in Wisconsin more than five years ago after a fraught year in which his toddler was evaluated for what proved to be a benign neurological condition that required no treatment: “You’d get bills for several different doctors’ groups and for tests and M.R.I.s and you don’t know what they are. I was having trouble figuring out who we owed what. And then, if it goes to collection, then suddenly they’re saying we need this paid now.”

With medical expenses, unlike most other purchases, you generally don’t know the price the hospital will charge in advance. And the subsequent bills and insurance statements — so-called explanations of benefits — are often layered in obfuscation and pressure tactics.

Consider Chris Sullivan of Pennsylvania, whose $2,770 bill for an echocardiogram offered a “prompt payment” discount of 20 percent if he wrote a check within 21 days — meaning a discount for not asking questions on a bill for a test he was told would be under $300.

Another “explanation of benefits” statement notified Joe Cotugno of New York City that his two-day hospital stay for a hip replacement was billed at $99,469.70 (doctors’ fees not included). Cigna paid $68,420.53 after knocking off some $28,000 and requiring Mr. Cotugno to pay $3,018.41. So, it informed him, “You saved 96 percent.” Huh?

The Consumer Financial Protection Bureau has been studying the impact of medical billing on credit scores since 2012, acknowledging that unpaid medical bills in collection “frequently end up on consumer credit reports,” as an outgrowth of “very complex and confusing systems of figuring out who owes what after a medical procedure.” Mr. Cordray, the bureau’s director, said it would take appropriate action if harmful practices were identified.

Bills in Congress that would regulate the practices have been stalled for years. The Medical Debt Relief Act was passed by the House in 2010, but never made it to a Senate vote. After a modified version of the bill failed to pass again last year, another act was recently introduced in the Senate and House.

Meanwhile, patients are right to worry. When Matt Meyer, who owns a saddle-fitting company in New Hampshire, set up a monthly payment plan after some surgery, he was distressed to notice that the invoices came from a debt collector. “I had no idea this was considered debt,” he said, and wondered: “Are they reporting that” to a credit agency?

Good question.

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HealthCare.gov is clearly working better. But is it actually working?

Doug

by Ezra Klein, Washington Post

Interesting report on the improvements in the consumer experience of healthcare.gov and what that is likely to mean for the next election cycle.

A report released by the Obama administration this weekend shows the consumer experience is clearly improved. More than 400 of the 600 fixes on the administration’s “punchcard” of repairs have been made. System response time has fallen from eight seconds to less than one second. The administration believes HealthCare.gov can now handle 50,000 concurrent users. The site, which was down 55 percent of the time in early November, is now functional more than 90 percent of the time.

Of course, that means the site still suffers a disastrous outage rate judged by the standards of major retail Web sites — and that’s not counting the time it spends down for scheduled maintenance. We have no idea whether the 200 fixes left on the list are the really important ones, or the really difficult ones. We don’t know what percentage of people who begin an application suffer some failure before completion. The administration hasn’t released information on the error rate in the eligibility determinations or the transmissions to insurers, so it’s impossible to judge whether the site’s critical back-end functions are reliable. And there are important pieces of the site, like the payment mechanisms, that have yet to be built.

So there remains reason for concern. But here’s what’s indisputable: HealthCare.gov is improving, and fast. Or, to put it differently, HealthCare.gov will be fixed. In fact, for most people, it is probably fixed now, or will be fixed quite soon.

The repair job is likely proceeding quickly enough to protect Obamacare from the most severe threat to its launch: Democrat-backed legislation unwinding the individual mandate or other crucial portions of the law. So long as people can actually purchase insurance through the federal exchanges, congressional Democrats are likely to support the basic architecture of the legislation they passed in 2010.

Republicans realize the Web site is quickly improving, and are planning a multi-phase attack on the law’s other disruptions. There are the insurance cancellations, of course, but there also going to be people who happily buy new insurance only to find their doctor isn’t covered, and there will be people who end up paying higher premiums in the new market, and there will be employers who raise deductibles to keep from paying the 2018 tax on high-value insurance plans, and so on.

Unlike HealthCare.gov’s technical problems, most of these issues will be part of the law working as it’s supposed to work rather than the law failing to work as it’s supposed to work. Tighter care networks, for instance, are part of how insurers will cut costs and increase quality in a more competitive market. As Dan Diamond writes, “insurers say that limiting the size of the network allows them to steer patients to high-quality facilities and doctors; participating providers, meanwhile, may agree to price cuts in exchange for new volumes.” It’s exactly what Republicans hoped would happen in health-insurance exchanges — an idea they thought of, and still support for Medicare.

Change hurts, particularly in health-care insurance, and it may well hurt Democrats in 2014. But Obamacare is now moving from unexpected problems that threaten the law to predictable disruptions that are, in many cases, intended by the law. And the Obama administration will have three full years to create millions, and perhaps tens of millions, of winners who are getting insurance or protection through the law. As in 2010, they may well lose on the politics in the midterm election even as they win on the policy in the long term.

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