affordable care act

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.

 

 

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Changes to the Affordable Care Act

Maria Montecillo Leave a comment

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.
Trump’s Dismantling
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.”

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

Maria Montecillo Leave a comment

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

By Sean Williams, Aug 26, 2017

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

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

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

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

President Trump threatens to go nuclear on Obamacare

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

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

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

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

Three states with possibly the highest average rate-hike requests

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

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

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

These states are:

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

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A New Plan to Replace the ACA

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

 

 Republicans have a new plan to repeal and replace Obamacare

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

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

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

Here is the document:

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

Insurance Market Provisions

The MacArthur Amendment would:

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

– Prohibition on denying coverage due to preexisting medical conditions

– Prohibition on discrimination based on gender

– Guaranteed issue of coverage to all applicants

– Guaranteed renewability of coverage

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

– Community Rating Rules, except for limited waivers

Limited Waiver Option

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

States could seek Limited Waivers for:

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

Limited Waiver Requirements

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

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

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

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

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The Affordable Care Act after Six years

Doug Leave a comment

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

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

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

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

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

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

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

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

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

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A Look at the Lives of American Nurses

Doug

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

By Nancy Szokan, Washington Post

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

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

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

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

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

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Americans don’t know what’s in Obamacare, do know they don’t like it

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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.

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

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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…)

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Affordable Care Act Rate Shock?

Doug

By Kathleen Phalen-Tomaselli,TheStreet.com

Come January 1 of next year, those with the lowest health insurance risk may be hit the hardest with premium increases as high as 40%. “The rules are changing,” says Robert Zirkelbach, vice president of strategic communications for the American Health Insurance Plans (AHIP) in Washington, D.C.

If you are young, healthy and qualify for non-group coverage, you could face rate hikes forcing you to reconsider how you spend your health care dollars. Here’s what’s happening: The Affordable Care Act, aka Obamacare, reaches maturity the first of the year. Designed to tackle the problem of insuring the nation’s estimated 48 million uninsured in addition to increasing benefits for such services maternity care and reproductive aid—all while lowering premium rates for older Americans. But the new provisions come with a price.

And because of new age rating band requirements tied to the ACA, the 18 to 44 age group’s premiums will increase while the over 57 group will decrease. Today, the ratio for age rating bands is 5:1, which means insurers can charge older individuals five times more than younger insureds. Come January 1, the band ratio reduces to 3:1. Take, for example, a 24-year-old who pays $1,200 annually for non-group coverage today could. He could see an overnight increase to $1,800, while a 60-year-old paying $6,000 today will pay $5,400 in 2014, according to the AHIP.
Nonetheless, in the report “Timely Analysis of Immediate Health Policy Issues” published last month by the Urban Institute Health Policy Center in Washington, D.C., lead author Linda J. Blumberg concludes that such predictions are over inflated. Citing government subsidies available to help defray such increases for those earning less than 400% of the federal poverty level, Blumberg says that subsidies will help this age group obtain expanded coverage. Even so, according to the report, “Premiums for 21-to 27-year-olds are $850 lower under (the)5:1 (age band rating) than under (the)3:1 rating.”

The problem with counting on subsidies to defray higher premiums is that, “40% will not be eligible for subsidies,” says Zirkelbach. He goes on to explain that 7.6 million of those in the non-group category in 2011 earned more than 400% of the federal poverty level.

According to an Oliver Wyman study, the cut-off for subsidies is closer to 250% of the federal poverty level—in other words, those earning less than $25,000. There will be no subsidies for individuals earning more than $50,000.

Along with tax subsidies, the ACA calls for the expansion of state Medicaid programs to help those with lower incomes. But, depending on where you live, this may not be an option. The Supreme Court recently ruled that states can decide on whether they will participate. At this point, many states remain undecided with some governors, like Gov. Tom Corbett(R-PA), saying they have no intention of expanding an already stretched program.

To further compound the issue of higher premiums, the health care reform law includes a new $100 billion sales tax on health insurance that will continue to drive up costs. AHIP predicts this increase may be as high as $300 per family.

The Congressional Budget office says the taxes will, “largely be passed through to consumers in the form of higher premiums.” A 2011 Oliver Wyman analysis estimates that this tax alone—not accounting for age rating bands or expanded coverage—will increase premiums over a ten-year period by $2,150 for individuals and an average of $5,080 for families.

Currently, federal and state governments are establishing health care exchanges—much like a one-stop health insurance supermarket—and individuals will be able to select plans starting October 1.

What are your options?

Pay the higher premiums that will also offer you more coverage. Opt-out of coverage and pay the federal uninsured penalty of about $95 in 2014. Or choose a catastrophic plan available for those up to age 27.

What does Zirkelbach hope for? A repeal of the health care tax and a phasing in of the age rating bands. Is there still time to hope? “It’s hard to say,” he says. “Maybe when taking a closer look at this they will re-visit these issues.”

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Healthcare Costs Top $20K Per Family

J Roberts

Here’s some more discouraging news: Healthcare for a family of four now costs as much as small family sedan. For many consumers the price to pay is too much. Even employers are grappling with rise in costs as they struggle to provide healthcare benefits to employees. Read the below article to learn just how much the cost of healthcare has risen in the past few years.

 

Margaret Dick Tocknell, for HealthLeaders Media , May 16, 2012

The national annual cost of medical care for a typical family of four with PPO coverage has edged up over $20,000 for the first time, according to the actuarial and consulting firm, Milliman.

The 2012 Milliman Medical Index estimates the annual cost at $20,728. That’s a record $1,335 increase in the total cost of care compared with 2011, and the first time the cost has notched above the $20K mark since Milliman started reporting on these costs twelve years ago. Through a combination of copayments, deductions, and premiums, the prototypical family of four will be responsible for a record share—42%—of its medical costs.

A combination of factors is driving the increase, including the comparative lack of control insurers exert on outpatients costs, a slowdown in hospital bed utilization, and the cost of technology in patient care, explains Chris Girod, principal and consulting actuary in Milliman’s San Diego office and a co-author of the report.

The good news? The pace of the increase is slowing. The 6.9% increase in total costs is the lowest annual rate of increase in more than a decade.

The MMI is comprised of five components: inpatient facility care, outpatient facility care, physician services, pharmacy, and miscellaneous other.

Among the MMI findings:

Outpatient facility costs posted its first single digit increase, 8.6%, in four years, but for the fifth year that increase outpaced all the other MMI components.

Outpatient facility care costs totaled $3,699, or 18% of a family of four’s annual healthcare bill. Girod explains that the level of insurer control is improving under contractual discount arrangements, but still isn’t on par with inpatient controls.

Inpatient facility utilization or the number of inpatient days for a covered population in a year has remained unchanged for several years. However, the patients who are hospitalized tend to require more intensive and expensive services that have helped boost the cost of treatment contributing to a 7.6% increase in the average charge per day costs.

Physician care costs reversed a four-year trend and increased by 5%. Girod says a number of things may have contributed to this cost bump, including evidence of some pushback by physicians in their contract negotiations with health plans.

Hospital inpatient costs ($6,531) and physician costs ($6,647) each account for 32% of a family of four’s total annual healthcare bill.

Pharmacy costs continued their roller coaster ride of cost increases and exceeded $3,000 for the first time. The 7.3% increase is down slightly from 2011’s 8%, but a significant increase over 2010’s 6%. Pharmacy costs totaled $3,056 or 15% of the family’s total annual healthcare bill. Girod says that while the shift to generics has helped slowed the growth in pharmacy costs, the expense of specialty drugs will have a growing impact on this cost trend.

The cost of miscellaneous other services such as durable medical equipment, ambulance services and home health posted a 6.7% increase to $795.

In addition to looking at costs on a nationwide basis, for the last five years the Index has looked at comparative healthcare costs in the same 14 cities across the country, including Chicago, Denver, and Los Angeles.

With a current annual cost of $24,965, Miami has topped the list for five years. Girod explains that Miami has a large number of healthcare practitioners and capacity helps drive the demand for healthcare services. Also, the practice of defensive medicine is more prevalent in the Miami area.

Phoenix was the least expensive with a cost of $18,365 for a family of four.

For the 2012 study, healthcare costs in 11 of the 14 cities exceeded $20,000 annually for a typical family of four. In 2011 only six of the 14 cities posted costs in excess of $20,000. While that could suggest an easing in the geographic differences in the cost of healthcare, Girod says a more likely explanation is that “the entire scale is shifting up, both at the bottom and the top, so we just ended up with more cities over that $20,000 threshold.”

The report notes that so far the Patient Protection and Affordable Care Act has had “only a limited effect on total healthcare costs for the illustrative family of four.”

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