reduce healthcare costs

Trump and Congress Tried to Make Coronavirus Testing and Treatment Free, but People are Still Getting Big Bills when They Go to the Hospital

Maria Montecillo Leave a comment

In the early stages of the pandemic, the rules regarding insurance and patient billing for a suspected or confirmed COVID-19 diagnosis were not very clear. One must do his/her due diligence in asking your own insurance company how they will be processing a claim. Many provider billing departments send out invoices automatically via computer. Make sure you check your invoices carefully, as Coronavirus testing and treatment should be “free.” What this truly means is “no out-of-pocket costs or cost-sharing” for the patient.

Kimberly Leonard – Businessinsider.com – 5/21/20

The Trump administration set up a fund for the uninsured. But Imad Khachan, a coronavirus patient who is uninsured, received a large medical bill after a hospital stay.
– Congress and the Trump administration tried to protect coronavirus patients from getting large medical bills, but problems are popping up.
– Two patients who tried to get treatment for coronavirus symptoms didn’t get tested, but still received large medical bills.
– One uninsured patient living in New York City got a nearly $50,000 bill after a three-night hospital stay for coronavirus care.
David Anthony in New Jersey received a $1,528.43 bill for a chest X-ray.
Lindsay Hill in Milwaukee spent 30 minutes in a triage tent and later received a $1,186 bill in the mail.
Imad Khachan from New York City received a bill for nearly $50,000 after a three-night hospital stay.
Patients who seek medical attention for COVID-19, the disease caused by the coronavirus, are not supposed to be getting large charges like these.
President Donald Trump signed two measures into law to protect patients with the coronavirus — and those who seek help because they fear they have it — from having to pay for testing and treatment. His administration is also letting hospitals bill the government directly for coronavirus testing and treatment for the uninsured, instead of charging patients.
But the changes aren’t happening seamlessly. Whether because of bad timing, an incorrect billing code, or being unable to get tested, documents sent to Business Insider show patients who sought medical help for the coronavirus are still facing big bills.
Business Insider previously reported on loopholes in the laws that were passed to protect patients from big medical bills related to the coronavirus. Michael Santos, for instance, received a $1,689.21 bill after unsuccessfully seeking a coronavirus test and getting a flu test and X-ray instead. His insurer decided to cover the cost of his emergency department visit after Business Insider inquired about it.
Christen Linke Young, a fellow with the USC-Brookings Schaeffer Initiative for Health Policy, said part of the reason patients are still getting large medical bills is that healthcare providers are “dealing with a whole bunch of new payment options.” On top of that, she said, there are loopholes in the new laws and regulations.
“It’s going to result in a significant amount of confusion on the consumer end,” she said, adding that “people’s fear of bills could deter them from seeking care.”

Uninsured small businesman in NYC gets COVID-19

Khachan, 56, the patient in New York City, spent three nights at the end of March in the hospital being treated for the coronavirus.
Khachan owns a chess shop called the Chess Forum in Greenwich Village that has been shut down since March 20. He had been covered by private health insurance until Dec. 31, 2019, but had foregone coverage for 2020 because of cost.
On March 24, while still in the hospital, Khachan paid the hospital $5,000 out of pocket for care, according to a receipt he received from Northwell Health, the health system the hospital belongs to.
“Everyone in the hospital was extremely kind and nice and wonderful and the hospital itself is a great medical facility that offers great medical care,” Khachan said in an email to Business Insider.
A couple of weeks after he was discharged, he was stunned to receive a bill for $47,915.20. He also received several other smaller bills for treatment and tests, as well as a $788.50 ambulance bill. He said he couldn’t afford the bills and had expected to pay roughly another $5,000.
In a later email from the hospital that Khachan shared with Business Insider, Lenox Hill said he owed a lower amount of $32,864.20.
Khachan appeared to be a victim of bad timing. He received his bill before the Department of Health and Human Services set up a website where hospitals can request reimbursement for coronavirus testing and care for the uninsured.
The administration announced the fund for the uninsured on April 22 and the website wasn’t up until May 6, which was after Khachan received medical care and his first bill. Payments from the federal government to hospitals started going out May 18, according to the Trump administration.
Under the fund’s rules, hospitals can get paid for anyone who is uninsured who received testing or care for the coronavirus starting on Feb. 4. Hospitals aren’t obligated to use the fund, and it is not yet clear how many will choose to participate.
Terry Lynam, a spokesman for Northwell Health, said the hospital first had to enroll to use the online portal, which took a few days, and then started filing claims for uninsured coronavirus patients on May 14.
Khachan’s claims would be included, meaning he won’t have to pay for the medical care and will be refunded his $5,000 deposit, Lynam said. Northwell plans to call Khachan to double check his information and will send the check before the end of this week, Lynam said.
Hundreds more patients were uninsured and treated for the coronavirus at Northwell’s hospitals alone. Bill Fuchs, who oversees billing at Northwell, said so far its hospital system filed coronavirus claims to the government for roughly 800 uninsured patients.
The hospital system said it’s also instituting a 60-day hold on all patient bills, which prevents them from being turned over to collections. The hold can be renewed depending on financial hardship.
As for the bill for the ambulance, which was provided through the New York City Fire Department, that won’t be covered by the federal uninsured fund, because the department isn’t eligible to use it, a spokesman for the department said.
Federal health officials won’t say how much money they set aside for the uninsured and it’s not clear whether the funding will be adequate at a time when nearly 39 million people have lost their jobs — and, many of them, the insurance that came with them. The Kaiser Family Foundation estimated that the cost of treating uninsured patients with the coronavirus could land between $13.9 billion and $41.8 billion.
Linke Young from Brookings said people with the coronavirus who have smaller bills were likely to pay them rather than contest them under the new rules because they don’t know about the federal fund for the uninsured.
She said she would advise patients to call the hospital or doctor’s office and explain why they believe the provider is entitled to reimbursement from the federal government, and for the patient to ask the provider to pursue that option.
“There is nothing that tells providers they can’t bill the consumer first,” she said.
“These funds didn’t use to exist and providers were just doing what they have always done — sending bills,” she added.
Patients sought help for coronavirus but ended up with no answers and big bills.

Patients are getting billed in other instances
Anthony, 34 — who asked to use his middle name for this story to protect his family’s privacy — did a video visit on March 23 because he feared he had the coronavirus after he had chest pain that lasted several weeks and spread to his abdomen. His doctor recommended he get an X-ray, so he did.
He didn’t receive a coronavirus test and, after examining the X-ray, the doctor told him he likely had inflammation in the lungs and advised he take Advil.
A couple of weeks later, Anthony got a $52.94 bill for the online consultation. A couple of days later he received a bill for $1,528.43 for the X-ray. He was confused about the telehealth bill because he had understood all virtual visits were supposed to be covered without a copay — a change his insurer, United HealthCare, announced March 18.
He received the bill because he hadn’t yet met the deductible for his insurance plan, Anthony told Business Insider. His insurer told him the healthcare provider billed for pleurodynia, a lung infection that causes chest pain.
Anthony paid the bill with money from a health savings account.

‘Textbook COVID’ and a $1,186 bill
Hill, 39, the patient from Wisconsin, on April 5 visited a triage tent at St. Luke’s Medical Center because she worried she had the coronavirus.
Nurses measured her temperature, her pulse, and her oxygen levels, and listened to her lungs. Over a video inside the tent, Hill spoke to a nurse practitioner who told her that her symptoms were “textbook COVID.”
But, the nurse told Hill, she wouldn’t be admitted to the hospital because her oxygen levels were healthy. And because she wasn’t being admitted, the hospital wouldn’t be performing a coronavirus test.
“She told me that I ‘most likely’ had it, told me to quarantine myself for two weeks, take extra cleaning precautions around my family, and come back to the ER if my breathing became even more labored,” Hill told Business Insider in an email. “I was in and out of the triage tent in about 30 minutes. No tests were run on me, but my discharge papers read, ‘suspected COVID-19.’”
At the end of April, she received a $1,186 bill.
“It was my understanding from what I had read and what I had heard that there would not be a bill for it,” she told Business Insider.
Anthony and Hill both sought care because they worried they had the coronavirus. Under Trump administration rules, “presumed cases” of coronavirus are supposed to be covered, but it’s left up to healthcare providers to bill an insurance company for COVID-19.
“A presumptive case of COVID-19 is a case where a patient’s medical record documentation supports a diagnosis of COVID-19, even if the patient does not have a positive in vitro diagnostic test result in his or her medical record,” said a Health Resources and Services Administration spokesperson.
When patients see doctors, they sometimes order other tests to rule out similar conditions. That means patients can still get charged for those tests even if they only went to a provider in the first place because they feared they had the coronavirus.
Linke Young from Brookings pointed out that other patients could end up in similar situations. For instance, patients could get big bills after getting checked out at a hospital that didn’t have coronavirus testing, or after going to a clinic and finding out they didn’t have the coronavirus after all.
“There is nothing to protect them from getting those bills,” she said.

Health insurers revisited the medical bills
When Business Insider asked about Anthony’s charges, United HealthCare said that it was waiving all out of pocket charges for him after reviewing the services he received, and said it would refund his payments. The company is waiving charges for coronavirus treatment from February 4 to May 31, and providers have to bill the visit as related to COVID-19.
Hill is appealing her bill. She called her insurance provider, Blue Cross Blue Shield of Illinois, which told her that its billing practices had changed since the beginning of April because of the pandemic. The insurer called St. Luke’s to re-code the diagnosis so that it would be covered.
Hill said her insurer was helpful, and she will find out the result of her appeal within 30 days. BCBS Illinois told her that if for some reason the hospital doesn’t recode the bill, then she can appeal to the insurer and submit her discharge papers that read “suspected COVID-19.”
Asked about company’s practices, Katherine Wojtecki, spokeswoman for BCBS of Illinois, didn’t comment specifically on Hill’s case but said in an email that “our focus is on helping our members access medically necessary care amid the coronavirus public health emergency and ease the burden of individuals who may be facing challenging circumstances, so they can focus on their health and well-being.”
LeeAnn Betz, spokeswoman for Advocate Aurora Health, the health system St. Luke’s belongs to, also didn’t comment on Hill’s case but said in an email that patients who arrive at facilities with symptoms of coronavirus will get tested.
“We’ve had to react quickly to changes that insurance companies made in how they wanted services billed during this pandemic, but it’s a priority that our patients are informed on what services they are receiving and why they are being performed,” she said. “In most cases, insurance companies are paying for COVID¬-related services without any remaining patient financial responsibility.”

Read More

How Not To Get “Hurt” Giving Birth: Medical Billing Tips for Parents

Maria Montecillo Leave a comment

The Cost of Giving Birth: What Expecting Parents Should Know About Medical Billing

Giving birth in America comes with a lot of costs, some disclosed and some not. It is possible to manage the cost of childbirth through informed, careful decision-making. The key is to plan ahead. The below article includes quotes by Medical Cost Advocate and appeared on Fatherly.com on August 16, 2019

By Adam Bulger – Fatherly.com

Giving birth

Moments after my daughter’s birth, I basically had to negotiate the cost of a timeshare.

My first job as a new dad was choosing a recovery room at a Manhattan hospital known for luxury accommodations. It was the dead of night. I was exhausted and unsure about our insurance coverage, so I opted for a lower-tier option. Months later, our insurance covered the room but, because of a billing error that took months to resolve, didn’t cover basic care.
Sorting out the cost of birth was confusing and stressful. But compared to other parents, my family had it pretty easy. Giving birth in America is an expensive, confusing process where parents often feel like they have no choices or negotiating power. But medical billing experts and maternity care advocates say it’s possible to manage the cost of childbirth through informed, careful decision-making.

In a 2013 national study of inpatient care costs, pregnancy and childbirth hospitalizations accounted for five of the 20 most expensive conditions for hospital stays covered by Medicaid and three of the 20 most expensive conditions for hospital stays covered by private insurance. The mean hospital stay expense is $18,000. All told, a standard birth could run you roughly $30,000. If a C-Section is required? It’s considerably more. But despite the price tag, births aren’t big money-makers for hospitals. Sean P. Lillis, founder and CEO of New York City–based medical billing services firm Billing Geeks, notes that the high cost of birth for parents doesn’t translate into enormous profits for hospitals.

Per Lillis, hospitals don’t make money off of obstetrics. Hospitals have to devote considerable time, resources, and staff for labor. Despite the overhead, private insurance pays hospitals according to fee-for-service schedules, meaning insurance pays more to hospitals for some types of patients, like the ones undergoing short stay surgical procedures requiring a battery of tests and procedures, than others, like the ones giving birth. “They can’t make their maximum reimbursement charge rate,” he says.

While the real action of having a kid happens in the delivery room, that’s not what you pay for. Most labor costs happen later, during the mom’s short hospital stay following birth.
“Four out of five of all dollars paid on behalf of the mother and the baby across that full episode from pregnancy through the postpartum and newborn period go into that relatively brief hospital window,” says Carol Sakala, Director of Childbirth Connection Programs at the National Partnership for Women & Families.

Some of the hospital costs, like medical tests for the baby and mother, can’t be avoided. Others you might be able to work around. Some hospitals reportedly impose fees for using their TVs; others can charge as much as $20 for an Ibuprofen. Packing an iPad and a bottle of Advil in your go-bag can defray some of those gotchas. But, honestly, saying no to these add-ons is chump change compared to what you can save by doing a little homework ahead of time.

How to Avoid the High Costs of Child Birth
Maria Montecillo, a healthcare insurance and billing advocate for the New Jersey medical billing advocacy firm Medical Cost Advocate, says parents should get in the weeds of their health plan as soon as they know they’re expecting. Knowing what health care providers are in your network makes a huge cost difference. And if your network’s too small, you may be lucky enough to be able to expand it. While it isn’t easy to time a pregnancy, the months leading up to your company’s health care enrollment period are an ideal time to make informed coverage changes.

“If you know you’re going to be pregnant this year, think about changing your insurance coverage,” Montecillo says. “You’ll pay a higher premium now but it’ll work out later.”
And when you’re getting close to the due date, taking your time can save a lot of money. Hospitals often try to slot births into a timetable that benefits the institution but may harm its patients, as there’s evidence early admission correlates with higher rates of labor induction and C-section births.
“The system is, for its convenience, pushing women into giving birth at weekday, daytime, non-holiday hours,” Sakala says. “A vast number of labor inductions, which add costs, could be avoided, a vast number of Caesarians, which add costs, could be avoided.”

Delayed admission to labor, where the mother doesn’t enter the delivery until they’re in active labor, is a simple way to reduce the cost of birth. Under delayed admission, the mother, ideally with the guidance of a midwife, doula, or other birthing professional, monitors the frequency and intensity of her contractions.

If the expectant mother has a hearty constitution or advanced skills in pain management, forgoing an epidural can avoid billing surprises.
“One of the places where people are getting into trouble with out-of-network providers is with the anesthesiologist,” Sakala says. “You didn’t choose that person, and the person who’s on call at that time could very well be out-of-network and those charges could be sky-high.”

It might be possible to skip the hospital — and its price tag — altogether. Sakala is a big proponent of birth centers, non-hospital labor facilities that offer natural births, without epidurals, inductions, or Caesarians or the high costs associated with those procedures. “They’re avoiding many things that are avoidable and pulling in beneficial practices that might be kind of low-tech, like being up and about, as opposed to staying in bed,” she says. “Or being in a tub or being in a shower. Those kinds of things can make a huge difference.”

The first month after the birth, parents have a small window of opportunity to shuffle around their insurance coverage. If the mother and father have separate insurance coverages, a baby’s birth is automatically billed under the mother’s insurance. They have 30 days to add the newborn to either the mother or father’s policy. Tracking the vagaries of insurance coverage can easily slip down the priorities list when you’re dealing with a newborn but ignoring it can court disaster.
“I once had a case where the parents ‘forgot’ to add the baby into their insurance plan, and they had to wait until open enrollment for the baby to be added,” Montecillo says. “As luck would have it, the baby developed complications and needed surgery. The insurance company stuck to their guns and refused coverage for the baby, as this was clearly stated on the policy and the parents were hit with a huge medical bill.”

When your insurance company’s bill for the birth arrives, don’t rush out to the post office with a check. Take your time and scrutinize the charges. Insurance coverage is complicated, even for insurance professionals. Mistakes happen. An insurer may have calculated a payment on the basis of an incorrect fee schedule for your plan or charged you for something that wasn’t performed.
“Look over the bill carefully,” Montecillo says. “It’s just like at a restaurant. You want to see that if you ordered chicken nuggets that they charged you for chicken nuggets.”

Spotting a costly error can be infuriating. Nonetheless, overt hostility is the wrong approach to the discovery. Montecillo says that everything is negotiable — she chiseled down a $60,000 triplet birth to a $1,300 final bill, for example — but only when the person on the phone wants to negotiate. And that means being not just polite but persuasive. “Start with sweetness but if you’re not getting anywhere, ask to talk to a manager,” she says.

And Montecillo speaks from experience. Before working on behalf of consumers, she spent 14 years as billing manager for a large private medical practice.
“I was on the other end of those calls and I know that I can make changes,” she says. “But if you’re nasty or you’re saying mean things about the doctor, I can say no.”

Read More

Medical Cost Advocate was featured in a documentary by a French journalist

Maria Montecillo Leave a comment

A French journalist from CAPA TV (the equivalent of 60 Minutes in the US) came to our office and interviewed our CEO Derek Fitteron regarding our advocacy services. The interview was also about our client Stella who is featured on the previous blog. Watch how Stella was very stressed over the thousands of dollars in medical bills that she received when her triplets were born prematurely, and how her Advocate helped her in resolving these bills.

To watch it subtitled in English, go to settings➡️subtitles➡️auto translate➡️English.

You will see Stella, Stella’s advocate Maria, and Derek beginning at the 7:20 mark.

 

 

Read More

Surprise Medical Bills

Doug Leave a comment

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.

Read More

How 6 key trends are driving the employee benefits landscape

Doug Leave a comment

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.

Read More

Finding Help for the High Costs of Cancer Care

Doug Leave a comment

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.

Read More

The Hospital-Dependent Patient

admin

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.

Read More

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.

Read More

The battle of the anecdotes: Gird yourself for Obamacare’s newest fight

admin

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. Today’s 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.”

(more…)

Read More

Driving a New Bargain in Health Care

Doug

By TYLER COWEN, professor of economics at George Mason University

Interesting piece on possible compromises that both political parties could agree to in improving the health care law.

The Affordable Care Act has gotten off to a rocky start. Federal and state online health insurance exchanges, which opened for business at the beginning of the month, have been bedeviled by technical snags. And opposition to the law from some House Republicans blocked funding for the entire federal government, leading to its partial shutdown.

In fact, with all the conflict and vituperation over Obamacare, it sometimes seems that one of the few things Democrats and Republicans agree on is that the law is imperfect at best. And they also agree that it could be improved. Even if a bipartisan deal to create a better health care system seems far off today, it’s not too soon to start imagining what a future bargain might look like.

Just to get started, I will assume that, at some point, Democrats will be willing to acknowledge that not everything has worked out as planned with the legislation, and that they would consider a rewrite that would expand coverage. I’ll also assume that Republicans will acknowledge that a feasible rewrite of the bill cannot give the Democrats nothing. And Republicans will need to recognize that repeal of Obamacare should not be their obsession, because they would then be leaving the nation with a dysfunctional yet still highly government-oriented health care system, not some lost conservative paradise. Both sides have a lot to gain, and, at some point, they should realize it.

Let’s look at some of the current problems in the health care system and see whether they might be patched up.

Even under Obamacare, many people will not have health insurance coverage, including two-thirds of poor blacks and single mothers and more than half the low-wage workers who lacked coverage before the law was enacted. That is largely because of the unwillingness of 26 governors to expand Medicaid coverage as the original bill had intended. The Supreme Court struck down that portion of the Affordable Care Act, however, giving states a choice.

Will many red-state governors eventually accept the act’s Medicaid extension, which is sometimes portrayed as a financial free lunch, since federal aid covers most of the coverage expansion? It’s not clear that they will. If the Republicans win the White House in 2016 and perhaps the House and Senate as well, they may cut off federal funds for that Medicaid expansion. In the meantime, many states don’t want to extend their Medicaid rolls, because such benefits are hard to withdraw once granted.

There is a deeper problem with relying heavily on Medicaid as the backbone of health care for the poor. The fact that so many governors have found political gain in opposing a nearly fully-funded Medicaid expansion suggests that long-term support for Medicaid is weaker than it appeared just a few years ago. Furthermore, in cyclical downturns, the increase in Medicaid coverage after a climb in unemployment puts much strain on state budgets.

A separate issue concerns employers who are shedding insurance coverage, whether by dropping retirees, moving more workers to part-time status, withholding coverage and paying fines mandated by law, or simply not hiring more workers in the first place. The magnitude of these effects is not yet clear, but over time we can expect that new businesses and new hiring will be structured to minimize costly insurance obligations. It’s no accident that the Obama administration handed out more than 1,000 exemptions from the employer coverage mandate, and postponed the employer mandate until 2015: both actions reflected underlying problems in the legislation. Ideally, the health care law should minimize what is essentially an implicit tax on hiring.

One way forward would look like this: Federalize Medicaid, remove its obligations from state budgets altogether and gradually shift people from Medicaid into the health care exchanges and the network of federal insurance subsidies. One benefit would be that private insurance coverage brings better care access than Medicaid, which many doctors are reluctant to accept.

To help pay for such a major shift, the federal government would cut back on revenue sharing with the states and repeal the deductibility of state income taxes. The states should be able to afford these changes because a big financial obligation would be removed from their budgets.

By moving people from Medicaid to Obamacare, the Democrats could claim a major coverage expansion, an improvement in the quality of care and access for the poor, and a stabilization of President Obama’s legacy — even if the result isn’t exactly the Affordable Care Act as it was enacted. The Republicans could claim that they did away with Medicaid, expanded the private insurance market, and moved the nation closer to a flat-tax system by eliminating some deductions, namely those for state income taxes paid.

At the same time, I’d recommend narrowing the scope of required insurance to focus on catastrophic expenses. If insurance picks up too many small expenses, it encourages abuse and overuse of scarce resources.

In sum, poorer Americans would get a guarantee of coverage and, with private but federally subsidized insurance, gain better access to quality care for significant expenses than they have now with Medicaid. Private insurance pays more and is accepted by many more doctors. But on the downside, the insured care would be less comprehensive than under current definitions of Obamacare’s mandate.

With a cheaper and more modest insurance package mandated under a retooled law, employers would be less intent on dropping coverage. That would help in job creation. It also would lower the federal cost of the subsidies through the exchanges, both because employers would cover more workers and because the insurance policies would be cheaper.

This wouldn’t be an ideal health care system, but it may be the best we can do, considering where we stand today.

Read More