High Medical Bills Driving Some Americans to Extreme Measures

February 19, 2013 J Roberts

Have you ever delayed, put off or just gone without seeing a physician because of the cost? You would not be alone if you did. A recent study found that many Americans are juggling the high cost of health care by delaying non-essential or non-critical care. In one study, stories of credit card debt and cutting back on food and heating were common, even for the insured.

By Karen Pallarito – HealthDay Reporter

Jan. 18 (HealthDay News)

Insured Americans with serious medical conditions say the financial stress of rising out-of-pocket health care costs is forcing them to juggle household budgets, delay or skimp on care and even run up credit cards or dodge debt collectors, a new study reveals.

The report, published in the January/February issue of the journal Annals of Family Medicine, provides a snapshot of “life disruptions” people experience as a result of their medical expenses and the sometimes extreme measures they take to keep their heads above water.

One study participant was prescribed a drug to alleviate nausea and vomiting caused by his cancer chemotherapy. Insurance picked up $900 of the $1,200 cost, but he could not even afford the co-payment and went without the medicine. “I said, you know what, I’d rather be sick,” he told researchers.

Another paid all her bills but relegated her grocery budget to “whatever’s left.”

“Sadly, our experience with thousands of patients over the last decade has shown us that many of them have to make heartbreaking decisions about following doctors’ orders or putting food on the table for themselves or their families,” said Sarah Di Troia, chief operating officer of Health Leads, a Boston-based organization that works with hospitals and clinics to connect patients to basic resources.

David Lipschutz, policy attorney for the Center for Medicare Advocacy in Washington, D.C., said the study is important, timely and “reinforces a lot of the other literature out there” examining the effects of out-of-pocket spending.

Medicare has considerable cost-sharing requirements, and many people who have Medicare “simply don’t earn the income in order to afford it,” Lipschutz added.

Consider this: Half of the nation’s Medicare beneficiaries live on less than $22,000 a year, and 45 percent have three or more chronic conditions, according to data compiled by the Henry J. Kaiser Family Foundation.

Medicare beneficiaries spent a median of more than $3,100 of their own money on health expenses in 2007, the most recent comprehensive data, according to the AARP’s Public Policy Institute. Four million beneficiaries, or 10 percent of the Medicare population, shelled out much more. Their out-of-pocket spending topped $7,800.

With health care costs outpacing income growth, study lead author Dr. David Grande, assistant professor of medicine at the University of Pennsylvania Perelman School of Medicine, wanted to know how families are coping financially.

“My sense is that we focus so much on whether people are covered or not, which is extremely important, we forget how important it is that the coverage is adequate,” he said.

For the study, researchers interviewed 33 insured, chronically ill adults who were applying for financial assistance at a nonprofit foundation to help pay for their treatment costs. People were asked about illness-related financial challenges and their impact on housing, food, utilities, savings, borrowing and health expenses. The interviews were recorded, transcribed and coded for analysis. (more…)

Health Insurers Raise Some Rates by Double Digits

January 15, 2013June 12, 2015 J Roberts

Insurance premiums are on the rise for 2013! It doesn’t appear that the Affordable Care Act has stemmed the double-digit increases in premium rates charged by health insurers for 2013.

By REED ABELSON

The New York Times – Online

Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.

Dave Jones, the California insurance commissioner, said some insurance companies could raise rates as much as they did before the law was enacted.

Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own.

In California, Aetna is proposing rate increases of as much as 22 percent, Anthem Blue Cross 26 percent and Blue Shield of California 20 percent for some of those policy holders, according to the insurers’ filings with the state for 2013. These rate requests are all the more striking after a 39 percent rise sought by Anthem Blue Cross in 2010 helped give impetus to the law, known as the Affordable Care Act, which was passed the same year and will not be fully in effect until 2014.

In other states, like Florida and Ohio, insurers have been able to raise rates by at least 20 percent for some policy holders. The rate increases can amount to several hundred dollars a month.

The proposed increases compare with about 4 percent for families with employer-based policies.

Under the health care law, regulators are now required to review any request for a rate increase of 10 percent or more; the requests are posted on a federal Web site, healthcare.gov, along with regulators’ evaluations.

The review process not only reveals the sharp disparity in the rates themselves, it also demonstrates the striking difference between places like New York, one of the 37 states where legislatures have given regulators some authority to deny or roll back rates deemed excessive, and California, which is among the states that do not have that ability.

New York, for example, recently used its sweeping powers to hold rate increases for 2013 in the individual and small group markets to under 10 percent. California can review rate requests for technical errors but cannot deny rate increases.

The double-digit requests in some states are being made despite evidence that overall health care costs appear to have slowed in recent years, increasing in the single digits annually as many people put off treatment because of the weak economy. PricewaterhouseCoopers estimates that costs may increase just 7.5 percent next year, well below the rate increases being sought by some insurers. But the companies counter that medical costs for some policy holders are rising much faster than the average, suggesting they are in a sicker population. Federal regulators contend that premiums would be higher still without the law, which also sets limits on profits and administrative costs and provides for rebates if insurers exceed those limits. (more…)

Analysis: Employees to face healthcare sticker shock

October 29, 2012October 29, 2012 J Roberts

Here we go again. Health care premiums and out-of-network costs are expected to rise in 2013. Read more about the increases and what they mean for you.

Sun, Oct 28 2012

By Caroline Humer

NEW YORK (Reuters) – Visit to New York City orthopedist: $223. One X-ray: $50. One follow-up magnetic resonance imaging test: $766. Total bill for checking out that aching shoulder: $1,039 – all to be paid by the patient, rather than the insurer.

Healthcare has gone retail.

Over the next 18 months, between one quarter and one half of Americans who get insurance coverage through their employers will pay more of their doctor bills themselves as companies roll out healthcare plans with higher deductibles, benefits consultants say. The result: sticker shock.

“They have huge out-of-pocket costs before they get any insurance coverage, it’s a real slap in the face,” said Ron Pollack, the executive director of Families USA, a healthcare advocacy group.

High-deductible plans set a threshold for medical expenses that an individual must pay for, often in the thousands of dollars, before insurance kicks in. Studies show people on these plans are three times more likely to delay or skip care than people on traditional plans, where doctor or emergency room visits are covered by a relatively low co-payment.

These plans have been around for years, pushed by employers, insurers and industry experts who believe that consumers with “skin in the game” will drive demand for better quality care at a lower cost. It is a rationale also backed by President Barack Obama’s Republican challenger Mitt Romney.

But now corporate America’s adoption of high-deductible plans is accelerating, partly because of Obama’s healthcare reform, which requires insurance plans to provide more expansive coverage such as preventive care.

Several industry surveys forecast a two-percentage-point increase in the number of companies offering only high-deductible plans in 2013 to about 19 percent, and a larger jump of anywhere from 5 to 25 percentage points in 2014.

“2013 is almost a calm period before a period of intense change in 2014,” according to Randall Abbott of Towers Watson & Co, a Boston-based senior consulting leader at the human resources firm.

The shift means consumers will have to spend many more hours researching their treatment options and managing costs on websites like Healthcarebluebook.com, which helped budget the cost of examining the shoulder pain mentioned above.

It could also spur lawsuits against doctors whom patients may blame for not making clear whether a test or procedure would spare them future harm, legal experts say. (more…)

Big Firms Overhaul Health Coverage

October 3, 2012October 5, 2012 J Roberts

Where do the majority of American citizens get their healthcare benefits? From their employer! That may not be the case in the future. Read how two large employers are fundamentally changing the way they provide healthcare benefits to their employees even before implementation of the Affordable Care Act.

Wall Street Journal – HEALTH INDUSTRY September 26, 2012, 8:41 p.m. ET

By ANNA WILDE MATHEWS

Two big employers are planning a radical change in how they provide health benefits to their workers, giving employees a fixed sum of money and allowing them to choose their medical coverage and insurer from an online marketplace.

Two big employers are planning a radical change in the way they provide health benefits to their workers, giving employees a fixed sum of money and allowing them to choose their medical coverage and insurer from an online marketplace.

Sears Holdings Corp. and Darden Restaurants Inc. say the change isn’t designed to make workers pay a higher share of health-coverage costs. Instead they say it is supposed to put more control over health benefits in the hands of employees.

Darden Restaurants, owner of Red Lobster, is giving staff money and allowing them to choose health coverage.

Some Workers Will Choose From Array of Benefits

The approach will be closely watched by firms around the U.S. If it eventually takes hold widely, it might parallel the transition from company-provided pensions to 401(k) retirement-savings plans controlled by workers and funded partly by employer contributions. For employees, the concern will be that they could end up more directly exposed to the upward march of health costs.

“It’s a fundamental change…the employer is saying, ‘Here’s a pot of money, go shop,’ ” said Paul Fronstin, director of health research at the Employee Benefit Research Institute, a nonprofit. The worry for employees is that “the money may not be sufficient and it may not keep up with premium inflation.”

Neither Sears nor Darden would say how much money employees would receive to buy health insurance. Darden says its sum would rise as health-care costs rise. Sears declined to disclose details of its contributions strategy.

Darden did say that employees will pay the same contribution out of their own pockets that they currently do for approximately the same level of coverage. Employees who pick more expensive coverage will pay more from their paychecks to make up the gap. Those who opt for cheaper insurance, which may involve bigger deductibles or more limited networks of doctors and hospitals, will pay less.

“It puts the choice in the employee’s hands to buy up or buy down,” said Danielle Kirgan, a senior vice president at Darden. The owner of chains including Olive Garden and Red Lobster will let its approximately 45,000 full-time employees choose the new coverage in November, to kick in Jan. 1. Darden says that employees with families to cover will be given more money to buy insurance than employees covering just themselves. (more…)

Billing Errors in Health Care Abound as System Heads for More Complexity

May 14, 2012May 17, 2012 J Roberts

New coding requirements may create even more disarray in an already complex industry. The result could leave consumers with a greater sense of confusion in understanding medical bills.

Written by: Ruth McCambridge

Source: Cleveland Plain Dealer

As health care systems prepare for all of the many changes that the Affordable Care Act will entail, there is one that is relatively hidden from view: the ten-fold increase in billing codes that the federal government is planning to roll out next year (pushed back from a planned launch this year).

Stephen Parente, a professor of health finance and insurance at the University of Minnesota, claims that his research on medical billing found that up to 40 percent of claims sent between insurers and hospitals have errors. These errors, often caused by human error but sometimes the result of alleged fraud, may include double billing, billing for the wrong treatment, unexpected costs, or billing that is more than what an insurance contract allows. The American Medical Association claims these mistakes cost health care providers $17 billion last year and it blames insurance company practices, but others say the blame can be shared, and this article details many problems with hospital billing practices as well.

According to Kevin Theiss, a vice president at the Summa Health System, at the Summa Akron City Hospital, as many as 250 people may take part in the billing process, including intake workers, doctors and nurses and those who assign billing codes. He says that the potential for mistakes at the hospitals is “astronomical.” In the midst of all of this, a change is brewing that is likely to make the whole system even more impenetrable for consumers. That is, the federal government, which requires that all medical billing use the same set of 16,000 universal codes (called ICD-9 codes) to identify medical problems and treatments, is planning to increase the number of codes to 155,000. While rolling out these new codes has been delayed by a year, the project is apparently moving forward apace. Some, including the American Medical Association, are heralding the delay. Even before new codes are introduced, the complexity of the current system has created what the article describes as a “cottage industry” of experts that are there to advocate between institutional players.

“There are certified coders, ‘revenue cycle’ consultants, auditors who check claims, ‘denial management’ experts who step in for hospitals and doctors to help negotiate with payers for more money, and debt collectors who specialize in ‘accounts payable,’ or the bills hospitals and doctors think they can get the patients to pay if they press hard enough.

Consumers, in contrast, have no army of experts. They pretty much just have themselves and their bills.”

Insurers Alter Cost Formula, and Patients Pay More

May 1, 2012May 3, 2012 J Roberts

Beware of even greater out-of-pocket healthcare costs. Read the following article and learn how insurers are shifting the cost of out-of-network care to consumers.

Doug Benz / The New York Times

Despite a landmark settlement that was expected to increase coverage for out-of-network care, the nation’s largest health insurers have been switching to a new payment method that in most cases significantly increases the cost to the patient.

Jennifer C. Jaff, founder of Advocacy for Patients with Chronic Illness. She has Crohn’s disease.

The settlement, reached in 2009, followed New York State’s accusation that the companies manipulated data they used to price such care, shortchanging the nation’s patients by hundreds of millions of dollars.

The agreement required the companies to finance an objective database of doctors’ fees that patients and insurers nationally could rely on. Gov. Andrew M. Cuomo, then the attorney general, said it would increase reimbursements by as much as 28 percent.

It has not turned out that way. Though the settlement required the companies to underwrite the new database with $95 million, it did not obligate them to use it. So by the time the database was finally up and running last year, the same companies, across the country, were rapidly shifting to another calculation method, based on Medicare rates, that usually reduces reimbursement substantially.

“It’s deplorable,” said Chad Glaser, a sales manager for a seafood company near Buffalo, who learned that he was facing hundreds of dollars more in out-of-pocket costs for his son’s checkups with a specialist who had performed a lifesaving liver transplant. “I could get balance-billed hundreds of thousands of dollars, and I have no protection.”

Insurance companies defend the shift toward Medicare-based rates under the settlement, which allowed any clear, objective method of calculating reimbursement. They say that premiums would be even costlier if reimbursements were more generous, and that exorbitant doctors’ fees are largely to blame.

But few dispute that as the nation debates an overhaul aimed at insuring everybody, the new realpolitik of reimbursement is leaving millions of insured families more vulnerable to catastrophic medical bills, even though they are paying higher premiums, co-payments and deductibles.

“They’re not getting what they think they’re paying for,” said Benjamin M. Lawsky, the superintendent of the New York State Department of Financial Services, whose investigators recently found that under the switch, 4.7 million New York State residents — 76 percent of those with out-of-network coverage — are facing reimbursement reductions of 50 percent or more.

The switch “certainly creates the appearance that insurers are trying to end-run the settlement and keep out-of-network payments low,” Mr. Lawsky said.

Mr. Lawsky, who worked for Mr. Cuomo when he was attorney general, is seeking legislation in New York State to require that minimum reimbursements be linked to the new database, known as Fair Health. (more…)

Health care mandate is about personal responsibility

April 9, 2012April 9, 2012 J Roberts

Is ObamaCare dead? The decision lies with the Supreme Court which is expected to rule sometime in June. Onething is for certain, the current model of paying for and subsidizing healthcare can not remain. Whether the law is repealed or not, the current system has to change. This, all of us can agree on.

Issac J.Bailey | The Myrtle Beach Sun

“Now, it is as plain as the spectacles on Antonin Scalia’s nose that opting out of the health-care market is about as realistic as opting out of dying.” – John Cassidy of the New Yorker.

Following the debate over the Affordable Care Act has reminded me of that old saw, everybody wants to get to heaven but nobody wants to die.

The public doesn’t want private insurance companies to be able to throw people off their rolls for the sin of getting too sick, or for denying them coverage because of a pre-existing condition, something they will no longer be able to do under the Affordable Care Act come 2014.

The public wants to keep in place the Reagan-era federal law that compels emergency rooms to treat whoever shows up, no matter if that person has not a dime to his name and won’t pay no matter how many harassing phone calls bill collectors make to their home.

But the public doesn’t want to be compelled to pay for those rights.

According to a variety of studies, from the independent Congressional scorekeeper the Congressional Budget Office to independent health care industry analysts, those with insurance are subsidizing those without to the tune of maybe $43 billion every year.

The annual premiums for those with health insurance are roughly $1,000 higher to make up for the unpaid bills of the uninsured.

According to the National Coalition on Healthcare, hospitals lose about $34 billion a year providing unpaid for care – services they are required to render because of federal law dating back to 1986. The group also said that “private insurance and some public payers pay an additional $37 billion on behalf of those with no insurance.”

What’s worse is that this is probably the least efficient, most wasteful way to operate the world’s most expensive health care system.

Justice Antonin Scalia alluded to it during this week’s debate when he said that one way to solve the problem would be to simply allow insurance companies the to right to throw sick patients off their rolls.

In fact, it is. Another way to solve the problem is to no longer guarantee access to emergency medical care, meaning that if you get into a car accident and can’t speak and your insurance card isn’t visible – or you don’t have insurance – medical officials should be able to deny you care, no matter how urgently you need it.

That’ll learn Americans who are not responsible enough to either purchase insurance without being compelled or have their insurance information tattooed to their forehead in case of an emergency. (Of course, if you suffer an ugly head trauma, that tattoo wouldn’t do any good.)

The Affordable Care Act has already done a variety of things, including slowing the rise in health care costs, convincing more medical institutions to go to a pay-for-quality rather than pay-for-quantity of care model, saving seniors tens of billions of dollars in drug costs and uncovering billions of dollars in fraud.

Because it has become a political lightning rod, all of those things and the contradictions being made by opponents are being overshadowed.

Conservatives have long claimed that they are the party of personal responsibility, yet conservatives have joined with a sizable number of liberals in opposition to the individual mandate, which will require everyone above a certain age who can afford it to buy health insurance.

The individual mandate is designed to make sure as many Americans as possible are paying into a system for which each of us is benefitting, to defray some of that $43 billion bill of annual uncompensated services, to assure that the insured no longer have to pay an extra $1,000 a year to pay for the uninsured.

If not the individual mandate, then something needs to be implemented that will accomplish the same goal – something those same conservatives seem to not want to do.

Or, we can take Justice Scalia’s advice and repeal all federal laws that compel medical officials to provide services to people who can’t pay for them, emergency or not.

The problem we’ve long had with balancing our books is that we too frequently demand things for which we don’t want to pay.

The individual mandate is unpopular largely because it threatens to shift that paradigm.

Why Health Care Costs Keep Rising: What You Need to Know

May 4, 2011 J Roberts

ABC News

By HUMA KHAN

The below article provides some insights as to why healthcare costs continue to rise. Check it out!

Republicans and Democrats may disagree on what a health care bill should include, but both parties agree that dramatically rising health care costs need to be contained.

The U.S. government spent more than $2.3 trillion on health care in 2008, more than three times the $714 billion spent in 1990, according to the Kaiser Family Foundation. In 2008, U.S. health care spending averaged $7,681 per person in 2008.

To put that into perspective, the United States spends twice as much on health care as it does on food, according to the McKinsey Global Institute, even though the prevalence of disease is relatively less than in comparable countries.

At the same time, for consumers, premiums continue to rise sharply. Since 1999, they have increased 131 percent for employer-sponsored health coverage, according to Kaiser. Stories of families facing unaffordable premium hikes can be found across the country.

“Health care costs are partly so high because they have been increasing rapidly,” said Stuart Guterman, assistant vice president for the Commonwealth Fund’s Program on Payment System Reform. “There’s a long list of factors like technology and the organization of health care that doesn’t promote efficient and effective care.”

Despite President Obama’s bipartisan health care summit last month, both parties continue to bicker about what should be included in a health care bill, with each side presenting its own argument on what specific health care costs should be contained.

Some experts argue that while the health care bill, as proposed by Obama and congressional Democrats, expands benefits and seeks to implement insurance reforms that would open up coverage to a wider scope of people, it does not address the core issues behind rising health care costs. Proponents of the legislation argue that it is a start and creates the foundation for sustainable changes in the long term.

Here are some of the drivers of cost increases: (more…)

Healthcare Costs Rise, According to S&P Indices

April 26, 2011 J Roberts

Healthcare Financial Management Association

Healthcare costs continue to rise. Even though the rate of increase may have slowed, costs nonetheless continue to rise.

The average per capita cost of healthcare services covered by commercial insurance and Medicare programs increased by 6.19 percent over the 12-month period ending in February, as measured by the Standard & Poor’s (S&P) Healthcare Economic Composite Index.

Healthcare costs covered by commercial insurance rose by 7.97 percent and Medicare claim costs rose at an annual rate of 3.22 percent, according to the S&P indices. Overall healthcare costs continue to increase at a slower rate, according to the index. In the six-year history of the Composite Index, the highest annual growth rate was 8.74 percent in May 2010. With a 6.19 percent increase in February, claims costs growth rates have declined 2.5 percent in nine months.

The indices estimate the per capita change in revenues accrued each month by hospital and professional services facilities for services provided to Medicare patients and patients covered under commercial health insurance programs. The annual growth rates are determined by calculating a percentage change of the 12-month moving averages of the index levels compared with the same month of the prior year.

HHS Issues Regs on Insurance Rate Increase Disclosure and Review

January 3, 2011 J Roberts

Read about the regulations concerning the new Affordable Care Act. Insurers will now have to justify any large or significant rate increases.

New proposed Affordable Care Act (ACA) regulations announced today by the U.S. Department of Health and Human Services (HHS) are intended to bring new transparency and scrutiny to proposed health insurance rate increases. These proposed rules allow HHS to work with states to require insurers to publicly disclose and justify unreasonable rate increases.

The ACA has already begun to help states strengthen or create rate review processes, HHS said. On August 16, HHS awarded $46 million to 45 states and the District of Columbia to help them improve their oversight of proposed health insurance rate increases. This is part of $250 million that the healthcare reform law makes available to states to take action against insurers

Today’s proposed regulations will build on these efforts by requiring insurers in all states to publicly justify any unreasonable rate increases beginning in 2011, as described in an HHS fact sheet. In 2011, proposed rate increases of 10 percent or higher will be publicly disclosed and thoroughly reviewed to determine if the rate increase is unreasonable. After 2011, state-specific thresholds would be set using data and trends that better reflect cost trends particular to each state. An insurance company’s justifications for unreasonable increases will be posted on HealthCare.gov and the insurance plan’s website.

Under the proposed regulation, states with effective rate review systems would conduct the reviews. If a state lacks the resources or authority to do thorough actuarial reviews, HHS would conduct them. Meanwhile, HHS will continue to make resources available to states to strengthen their rate review processes.

In 2014, the ACA empowers states to exclude health plans that show a pattern of excessive or unjustified premium increases from the new health insurance exchanges.