This week President Trump made the first move to begin the replacement of the Affordable Care Act. By issuing this executive order, this will drive immediate compliance. However, it will touch off reactions from all healthcare stakeholders including patients, providers, insurers, employers and the government. No matter which side of the political aisle you sit on, be prepared. The coming changes to the Affordable Care Act will require cooperation and compromise not seen from Washington in many years. It should be an interesting year for healthcare in 2018.
By John Tozzi and Zachary Tracer, Bloomberg
October 13, 2017
The Trump administration is cutting tens of millions of dollars from organizations that help Americans enroll in Obamacare health plans, leaving some of the groups scrambling to shrink their operations weeks before enrollment for 2018 coverage opens on Nov. 1.
The organizations, called navigators, say the funding cuts have been arbitrary, opaque and don’t follow the Trump administration’s stated method for calculating the reductions. The groups had been counting on money for the final year of a three-year grant program, and most didn’t learn how deep the cuts would be until after last year’s funding expired on Sept. 1.
When the Trump administration announced in late August that it would make the reductions, it said they would hold inefficient groups accountable and navigators that met prior enrollment goals would maintain funding.
Navigator groups say it hasn’t worked out that way.
Catherine Edwards, the executive director of the Missouri Association of Area Agencies on Aging, said her group helped 3,945 people last year sign up for health insurance, exceeding their goal. Their grant was cut 62 percent, to $349,251, from $919,902.
“This administration has been doing everything it can to make sure the Affordable Care Act fails,” Edwards said. “They’re tying our hands behind our back to make sure this does fail.”
Edwards’ group had to cut enrollment help and advertising, and will field 52 navigators this year, down from 72, leaving some rural parts of the state without any enrollment assisters.
A spokeswoman for the Department of Health and Human Services declined to provide data on navigator groups’ performance or to explain why some organizations that appeared to meet their goals were cut.
Navigators focus on enrolling people with complex family or financial situations, and offer in-person assistance to those who have trouble enrolling online because of language barriers or lack of internet access. Some groups serve ethnic enclaves or vulnerable communities unreached by broader marketing campaigns.
The cuts are likely to hit rural areas the hardest, potentially depressing enrollment in parts of the country where insurers have already pulled back.
President Donald Trump, having watched Republicans in Congress fail to repeal the Affordable Care Act, has taken aim at the law using regulations and executive actions. On Thursday, Trump signed an executive order mean to make it easier for people to buy insurance that doesn’t meet the ACA’s standards, potentially drawing healthy people out of the ACA market. Late that evening, the administration said it would stop making subsidy payments to insurers that help lower-income people afford co-pays and other cost-sharing.
“We’re starting that process” of repeal and replace, Trump said at the White House Thursday.
The administration has also slashed advertising for Obamacare signups by 90 percent, and plans to take down the healthcare.gov website for maintenance periods in the middle of the season. Premiums for next year are rising as insurers say they’re uncertain about the law’s future.
A Nationwide Pattern
What happened to Edwards’ group in Missouri has happened around the country.
Covering Wisconsin, the larger of two navigator programs in that state, enrolled 2,287 people in private health plans and another 1,370 people in Medicaid last year, exceeding targets for both, director Donna Friedsam said in an email. Its funding was cut from to $576,197 this year, from $998,960 last year, a 42 percent reduction. As a result, its navigators won’t be in 11 of the 23 counties it served over the last year.
The Ohio Association of Foodbanks, the primary navigator in the state, helped nearly 9,000 Ohioans enroll in private plans and another 35,000 apply for Medicaid since 2013. The group “met, nearly met, or exceeded” goals for four years, said executive director Lisa Hamler-Fugitt. Despite that, funding was cut by 71 percent, to $485,000, from $1.7 million.
The funding cuts seem like sabotage, not accountability, Hamler-Fugitt said. Her group closed its navigator program and let most of its staff go rather than try to sustain it at the lower funding level.
“If we were such poor performers, why were we not notified and corrective action taken? Because we weren’t,” she said.
Smaller and Sicker
Along with the navigator cuts and other regulatory moves, confusion over Obamacare’s fate will likely lead to “a smaller, sicker group of enrollees,” said Sabrina Corlette, a research professor at the Georgetown University Health Policy Institute.
Customers who don’t shop around for coverage could “have huge sticker shock” if they do nothing and are automatically re-enrolled in their current plans, Corlette said.
The navigator grants are funded by a levy on health plans in the insurance marketplaces, which benefit from the marketing and outreach. Trump administration officials didn’t respond to questions about how unspent fees would be used.
Cut at the Last Minute
The Trump administration said in August that it would cut funding to the navigators by 39 percent, down from $62.5 million the last enrollment period. The cuts apply only to states that have health-care markets run by the federal government — 16 operate their own.
They were announced just days before the new grants were supposed to begin. The agency had affirmed grant amounts earlier in the year.
“All indications were everything was going very well,” said Allen Gjersvig, director of navigator and enrollment services at the Arizona Alliance for Community Health Centers. Staff at CMS told the group as late as Aug. 28 that the funding was on track, he said. Days later, the Alliance’s navigator grant was cut from about $1.1 million to $700,000.
His confusion isn’t unique. Of the 48 navigator programs that responded to a survey from the Kaiser Family Foundation, about half said no rationale was provided, and another 40 percent said the explanation was “very or somewhat unclear.”
The Palmetto Project in South Carolina had its navigator grant cut from $1.1 million to $500,000, and will have 30 navigators instead of the 62 it planned on, said Shelli Quenga, the organization’s director of programs. It plans to leave some rural areas without in-person help.
“I think there will be people who choose poorly,” Quenga said. “There will also be people who just give up.”
This week President Trump made the first move to begin the replacement of the Affordable Care Act. By issuing this executive order, this will drive immediate compliance. However, it will touch off reactions from all healthcare stakeholders including patients, providers, insurers, employers and the government. No matter which side of the political aisle you sit on, be prepared. The coming changes to the Affordable Care Act will require cooperation and compromise not seen from Washington in many years. It should be an interesting year for healthcare in 2018.
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.
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.
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.
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:
- They are technology-driven, including through the use of a mobile experience and a Facebook like interface
- They offer maximum choice and convenience
- They are employer-funded, employee-owned
- 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.
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.
By PAULINE W. CHEN, M.D.
Interesting piece about the unintended cost and consequences of hospital re-admissions. Spectacular advances in medical science have led to a growing population of patients who are “hospital-dependent” adding great cost to the healthcare system.
“He’s back?” my colleague asked, eyes widening as she passed the patient’s room. “He’s in the hospital again?”
Slender, pale and in his late 60s, the man had first been admitted nearly a year earlier with pressure in his chest so severe he had trouble breathing. When his heart stopped, doctors and nurses revived him by injecting the latest life-saving medicines into his veins and applying the newest electrical defibrillator paddles to his chest.
Within minutes, the cardiology team arrived, but when the blockage in the arteries of his heart proved too extensive for even their state-of-the-art techniques and equipment, they handed him off to the waiting surgeons. The surgeons, in turn, cooled down his heart until it stopped beating, sewed in bypass conduits with threads finer than human hairs, restarted the heart with a few well-placed jolts of electricity and then transferred the patient to the cutting-edge intensive care unit to recover.
The man survived. Sort of.
Weakened by this string of emergencies, he required a breathing machine for several days. When excess fluid in his lungs caused shortness of breath, he needed intravenous diuretics. When his heart began beating erratically, he was obliged to take a finely tuned cocktail of heart medications. And when his chest wound became infected, he had to return to the operating room.
Finally, after nearly two months in the hospital, he was discharged to a skilled nursing center. But then a urinary tract infection made him dizzy and confused, and he went right back to the hospital, beginning a cycle of discharge and re-admittance that would persist for almost a year.
To many of us who had cared for the man, it seemed as if he had spent more days in the hospital than out.
“What kind of life is that?” my colleague asked as we stood in the hallway and watched the man’s wife help him once again put on his hospital gown and pack away his street clothes. “You’ve got to wonder,” she whispered, “did we really do him a favor when we ‘saved’ him?”
I was reminded of the frail man and the many patients like him whom I have known when I read a recent Perspective piece in The New England Journal of Medicine titled “The Hospital-Dependent Patient.”
Over the last 30 years, American hospitals have become a showcase of medical progress, saving lives that not long ago would have been lost.
“Rapid response teams,” drilled in precision teamwork and the latest techniques of critical care, have become commonplace. Cardiac and respiratory monitors, once found only in intensive care units, are now standard equipment on most wards and even in many patient rooms. CAT scanners and M.R.I. machines, once rare, have become de rigueur, with some hospitals boasting duplicates and even triplicates.
But up to one-fifth of patients treated with these new medical advances and then deemed well enough to leave the hospital end up being re-admitted within 30 days of their discharge, at considerable cost. Insurers and third-party payers have begun penalizing health care systems for these quick re-admissions; and hospitals, in response, have begun significant efforts to improve the transition from hospital to home, creating clinics that remain open beyond usual working hours and marshaling teams of care coordinators, post-discharge pharmacists and “care transition coaches.”
The problem persists, though, because our spectacular advances in medical science have led to a growing population of patients who are “hospital-dependent,” according to the authors of the Perspectives article.
Hospital-dependent patients are those who, a generation ago, were doomed to die. Now they are being saved. But they are not like the so-called hot spotters, a group of patients more commonly associated with frequent re-admissions who return to the hospital because of inadequate follow-up care, failure to take prescriptions correctly or difficult socioeconomic circumstances. Instead, hospital-dependent patients come back because they are so fragile, their grasp on health so tenuous, that they easily “decompensate,” or deteriorate under stress, when not in the hospital.
Medical advances can snatch them from the clutches of death, but not necessarily free them from dependence on near-constant high-tech monitoring and treatments.
“They are like a house of cards,” said Dr. David B. Reuben, lead author of the article and chief of the division of geriatrics at the Geffen School of Medicine at the University of California, Los Angeles. “When one thing goes wrong, they collapse.”
Not surprisingly, hospital-dependent patients feel more secure and are happier in the hospital than at home. While clinicians and even family members may judge theirs a diminished existence, these patients find their quality of life acceptable, relishing their time with friends and family or engaged in passive hobbies like watching sports or reading the newspaper, albeit in the hospital.
Over time, however, their recurring presence can result in conflicted feelings among those who were responsible for saving them in the first place. Some clinicians even begin to resent their obligation to continue administering resource-intensive care. “Physicians are socialized to cure patients, then move on,” Dr. Reuben observed. “They want to treat patients, not adopt them.”
Dr. Reuben and his co-author offer potential solutions, such as specialized wards or facilities that would be more intensive than skilled nursing homes yet less costly than a hospital. But they are quick to add that more research must also be done. Their concept of “hospital-dependency” is a new one, so no research is available to help identify patients at risk of becoming hospital-dependent, estimate the percentage of early re-admissions they are responsible for or calculate the costs they incur.
Even without studies, it’s clear that the numbers of these patients are increasing. With every triumphant medical advance, there are patients who are cured but who remain too fragile to live beyond the immediate reach of the technology that saved them. Until we begin making different decisions regarding how we allocate our resources, their presence will be a constant reminder of which medical research and health care we consider worthy and which we do not.
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?
By Sarah Kliff, Washington Post
Fifty percent of Americans now say they oppose the Affordable Care Act. This is the highest number that Kaiser Family Foundation’s poll has seen since October 2011, when Republicans were in the midst of a primary cycle and lots of anti-Obamacare rhetoric was in the air. The easiest explanation for the recent upswing in negative sentiment would be that lots of Americans tried, but failed, to buy insurance through HealthCare.gov. They ran into technical barriers that plagued the site in October and November. But Kaiser’s data don’t really bear out that thesis. There’s actually only been a tiny uptick in the number of Americans who say the health-care law has affected their lives over the past three months. A full 59 percent of Americans still report no personal experience with the law.
Most Americans don’t know that Obamacare has, at this point, pretty much fully taken effect. When surveyed in January, after the insurance expansion began, 18 percent said they thought “all” or “most” provisions of the Affordable Care Act had been put into place.
There’s lots of confusion, too, about what policies are and aren’t part of the health-care law. Most Americans know there’s a mandate to purchase health insurance. A lot fewer are aware that the law provides financial help for low- to middle-income Americans (the tax subsidies) or gives states the option of expanding Medicaid.
For many Americans – particularly the 68 percent who get coverage through their work, Medicare and Medicaid — the launch of the exchanges probably doesn’t affect their coverage situation. They’ll continue getting insurance in 2014 just the same way they did in 2013. For them, an expansion of Medicaid or an end to the denial of coverage for people with pre-existing conditions isn’t a big change (unless, of course, they lose their current coverage).
So what’s driving the negative opinions of Obamacare? The Kaiser survey does point to one potential culprit: negative news coverage. More Americans say they’ve seen stories about people having bad experiences with the Affordable Care Act than good ones.
Politico’s David Nather had a great line on this recently, in a story about the very high bar for success stories about the Affordable Care Act.
“Here’s the challenge the White House faces in telling Obamacare success stories: Try to picture a headline that says, ‘Obamacare does what it’s supposed to do,’ ” Nather writes. “Somehow, the Obama administration and its allies will have to convince news outlets to run those kinds of stories — and to give the happy newly insured the same kind of attention as the outraged complainers whose health plans were canceled because of the law.”
We don’t have a great sense yet of what type of experience Obamacare’s new enrollees are having — whether they’re disproportionately bad or if the bad stories are just more interesting to cover. But the more negative news coverage does seem to have played some role in the recent uptick in negative opinions about the new law.
By Sarah Kliff
Below is an interesting piece by Sarah Kliff on how the Affordable Care Act is changing the American health-care system — and being changed by it. At this stage, the report card for the program depends largely on who you ask.
Fliers promoting the Get Covered Illinois health insurance marketplace sit in a box at the Bureau County Health Department offices in Princeton, Illinois, U.S., on Wednesday, Dec. 18, 2013. Todays deadline for Americans to sign up for Obamacare health coverage effective Jan. 1 was extended until midnight tomorrow as heavy traffic to the online enrollment system caused a queuing system to be activated.
If you want to believe Obamacare is going great, you should call up Linda Browne. She’s a 62-year-old retired accountant from California who already has an appointment to see her new primary-care doctor at Kaiser Permanente, the new health insurer she signed up with through Covered California.
“I thought I would have to wait a long time,” Browne says. “But when I called, they said she had an appointment Wednesday for a physical.”
If you’d prefer to believe Obamacare is going terribly, then Michael D. Scott has got a story for you. He’s a 36-year-old Texan who turned up at a pharmacy last week trying to fill a $700 prescription for anti-seizure medication — only to find the technicians had no record of his enrollment.
“I’m stuck,” says Scott, who takes the prescription to treat a genetic condition called Ehlers-Danlos syndrome. “I’m going to have to start buying a couple days’ worth on my own if they can’t figure things out. It’s disappointing.”
Both Browne and Scott signed up for health insurance through the Affordable Care Act. Browne has had the law work pretty well; Scott has spent hours on the phone with customer service representatives (actually, he spent one hour and 37 minutes on his last call — yes, he timed it). And stories like theirs are about to become central to the next Obamacare fight, what I like to think of as the battle of the anecdotes.
The battle of the anecdotes is all-but-guaranteed because access to health care is really difficult to measure, even more so than the number of people who have enrolled or how well HealthCare.gov is functioning. With enrollment, for example, HealthCare.gov can track all the people who pick a private insurance plan, as can the 14-state based insurance exchanges. That’s how we know 2.1 million people have selected private insurance plans (although we don’t know how many have paid their first month’s premium, which is due, for January coverage, by this Friday).
The federal government can gauge how well HealthCare.gov is working by tracking how long it takes pages to load, or how many enrollment files — known as ‘834s’ — contain errors. And the call centers know, too, how long customers have to wait to get a person on the line.
But when it comes to access to health care, there’s no analogous metric. Our health-care system is really fragmented. Since HealthCare.gov shoppers are buying private coverage, and not a government plan, we have no central clearing house to understand whether more shoppers are having an experience like Scott in Texas — or like Browne in California.
Nonprofit institutions do study these types of questions. The Commonwealth Fund, for example, regularly looks at how long patients in different countries have to wait to see a primary-care doctor or a particular surgeon. But these surveys take months to conduct and analyze, meaning that we will probably have to wait until late 2014 or early 2015 to get a sense of what access looks like under the Affordable Care Act.
Enter the anecdote, which can be great to understand how new policy programs are impacting the way that Americans receive health care. But they can also be a really terrible way to gauge whether Obamacare is going great — or is a complete disaster. One or two stories don’t do a great job of capturing the experience of the millions of Americans who have signed up for health plans.
And even the anecdotes themselves can be nuanced, portrayed in different ways to make Obamacare seem great, or horrible. Take Browne: She called for an appointment in her new network the morning of Jan. 2. But she couldn’t get through to a real, live person until that afternoon; she kept getting a message that said “all circuits are busy.”