5 Million Uninsured Children Eligible for Low-Cost Health Insurance
03 Sep
Posted by admin as Health Insurance
New research published by Health Affairs shows that almost 5 million U.S. children not covered by health insurance now are eligible for enrollment in government-funded Medicaid or Children’s Health Insurance Program.
Nationally, 82 percent of eligible children participate in these low-cost or even free health care insurance programs. However four western states and Florida have participation rates lower than 70 percent, including Nevada (55.4 percent), Utah (66.2 percent), Colorado (68.9 percent), Montana (69.3 percent) and Florida (69.8 percent). By contrast, states in the East have higher rates, including Maine (92 percent), Vermont (94 percent), and Massachusetts (95 percent). Participation in Connecticut was 85.2 percent, slightly higher than the national average.
Poorer families took advantage of the government programs at a higher rate than wealthier ones did. Families that earned more than $88,000, or twice the federal poverty rate of $44,100 for a family of four, had the lowest participation in the programs, because they did not know their children are eligible or perhaps because of the social stigma of accepting government help.
Health and Human Services Secretary Kathleen Sebelius has challenged the states, which administer the programs, to sign up an additional 5 million children over the next five years. Sebelius said the study shows that states can find and enroll the uninsured children. “The study confirms that a lot of states do a very good job,” Sibelius said. “But the study also gives us a much sharper focus on where kids are who need coverage.”
An association of state health insurance regulators voted Tuesday to adopt definitions of the types of expenses that health insurance providers can count toward patient care—and which expenses do not.
Under the federal health care insurance reform legislation signed into law in March, health insurance providers must spend at least 80 percent of an individual or small-group health plan’s premiums on health care. The insurers must spend even more—85 percent—of a large group plan’s premiums on health care.
Under the new law, the determination of the “medical loss ratio” fell to the National Association of Insurance Commissioners (NAIC), comprising commissioners from the various states. The NAIC adopted a narrow definition of medical care and quality improvements.
The health care advocacy group Health Care for America Now (HCAN) praised NAIC’s action. “Today the NAIC took a step toward ending the health insurance companies’ stranglehold on our health care,” declared Ethan Rome, the executive director of HCAN. “The top state insurance regulators from across the nation voted to put patient care above insurance company profits.”
Not surprisingly, the insurance industry saw things differently. By refusing to accept fraud prevention and other cost control measures as quality improvements, the NAIC’s actions “could have the unintended consequence of turning-back-the-clock on efforts to improve patient safety, enhance the quality of care, and fight fraud,” observed Karen Ignagni, president and CEO of America’s Health Insurance Plans (AHIP).
The NAIC’s narrow definition of quality improvements is short sighted, Ignagni maintains. “Preserving patients’ access to high-quality health care services is essential if the key goals of health care reform are to be achieved.”
In an 11-page letter to the NAIC, health insurers asked the regulators to count several industry practices as part of quality improvements:
- Fraud reduction claim reviews, “a key tool in targeting the dangerous overutilization of services, falsification of medical records, and medical identity theft;”
- Costs associated with the adoption of new billing codes that will “improve the ability of health plans to share clinical data among clinicians for quality improvement and care coordination activities, thereby promoting a better understanding of diagnoses and procedures at institutional settings of care to allow better treatment and quality improvement;”
- Review of duplicate procedures, such as imaging, which experts believe are commonly overused;
- Wellness incentives that the national healthcare reform law is counting on to reduce healthcare costs in the long haul.
Does your doctor give discounts on care? Probably, but you’ll never know unless you ask, reports Lisa Zamosky of the Los Angeles Times. That’s why savvy health insurance consumers always ask before they pay out-of-pocket expenses.
To keep their premiums lower, many people are choosing health insurance plans with higher deductibles. The federal Centers for Disease Control and Prevention reports that 20 percent of Americans with group health care insurance provided through an employer and 47 percent of Americans with individual health insurance coverage are in a high-deductible plan, with deductibles of $1,200 for self-only coverage and $2,400 for self-and-family coverage.
Even if you have deductible of only $500, you will likely have to pay out of pocket from an annual physical, which can run as high as $350. However, if you explain at the time that your health insurance is not paying for the care, you doctor might be able to adjust the cost. For example, a doctor can remove routine tests that can cost $125 or more.
Here are other ways to save on medical expenses:
Pay Cash
Ask if doctor’s office gives a discount when you pay cash. Many do. “Some providers will give anywhere from 10 percent to 60 percent off for paying cash,” says Carrie McLean, a consumer specialist with the online insurance broker eHealthInsurance.com. “It saves them time in having to bill you or set up a payment plan.”
Understand Your Treatment
The Dartmouth Atlas Project has found that up to 30 percent of medical treatments are unnecessary. One source of unnecessary treatment: Duplicate testing due to poor communication between different doctors and offices. Patients contribute to the problem by handing over the lab slip without paying attention to what test is being done. By tracking the tests that are being done, the patient might be able to eliminate duplication.
Shop for the Best Price
Do not hesitate to ask your healthcare provider how much they will charge for the service you need. Different healthcare providers charge different rates, depending on their negotiating power with the health insurance companies. Providers with a large number of patients often negotiate higher prices with the insurers. Call around to find the provider who performs the treatment for the least amount.
Think About Location
Where you obtain a service can affect how much you pay. Hospitals tend to charge more for imaging and labs than doctor’s offices and freestanding ambulatory centers do. To be certain you are comparing like procedures, ask your provider for the common procedural terminology (CPT) code. These codes are used by health care providers to bill health insurance companies and Medicare.
Ask For It In Writing
Once you have negotiated an agreement for a lower price with your doctor or clinic, be sure to get it in writing. Most medical providers do not do their own billing; they contract with a billing company. If personnel changes or even if someone goes on leave, the oral agreement might not make it to the billing department. The staff in a doctor’s office or clinic see hundreds of patients, and they could easily forget the agreement. Having written documentation will make it easier to correct any mistakes that are made.
The Patient Protection and Affordable Care Act—the national health insurance reform legislation signed into law by President Obama in March—will require all health insurance providers to cover pre-existing conditions beginning in 2014. (To see my analysis of the long-term effects of this provision see my post from September 14, 2009.) In the mean time, health insurance consumers who have been denied coverage for pre-existing conditions can begin to enroll in new “high-risk” health insurance pools administered by the Department of Health and Human Services.
Connecticut has had a program to make a comprehensive health care insurance available to eligible individuals to help meet medical costs of non-occupational injuries and diseases since 1975, when the legislature created the Health Reinsurance Association (HRA). The HRA is a non-profit association comprised of all private insurance companies and HMOs that provide health insurance in Connecticut.
The rules for the new high-risk plans will be different from the HRA rules, so federal officials suggest that people who have been without health insurance coverage should apply for the new pools.
Here are a few specifics about the plans.
Who will be eligible for the high-risk insurance plans?
To be eligible, you must be an American citizen or legal resident who has been without health insurance for at least six months because you were denied coverage due to a pre-existing medical condition. You will need a letter from a private health insurance provider stating that you were denied coverage altogether or for a specific condition.
How much will high-risk health insurance cost?
The actuarial consultant for Connecticut estimates that even with the federal subsidy, premiums for consumers in the high-risk pool will cost $436.16 a month for men and women under 30 years old. Premiums go up from there, with the cost for those 60 to 64 to be $1,187.62 per month.
Under Connecticut’s proposed plan, the high-risk pool would be managed by Connecticut’s Department of Social Services and the HRA. Only one insurance plan would be offered: United HealthCare’s PPO plan. Under this plan, patients who choose in-network providers will face $1,250 in deductibles for an individual and $2,500 per family, according to the state’s application to HHS. For obtained from out-of-network doctors, the deductibles would be $3,000 for an individual and $6,000 for a family.
Will the states be able to cover everyone?
The new federal health insurance law will cost taxpayers more than $1.05 trillion over the first 10 years, but it sets aside only $5 billion to fund the new high-risk pools. The Congressional Budget Office estimates that the program will require an additional $5 billion to $10 billion. The new law gives the Department of Health and Human Services the ability to shift money from states that are not using their funds to states that require more, but so far the Obama administration has balked at the idea of seeking additional funds for the program.
How do I sign up?
The federal government has set up a health insurance Web portal at http://www.healthcare.gov, which is now operational. Connecticut residents are sent to the Health Reinsurance Association website.
Last Friday, President Obama signed an amendment to H.R. 3962, the health insurance overhaul legislation, into law. This is the bill I discussed in my last post that prevents a 21-percent cut in fees to doctors participating in Medicare. Congress made the “doc fix” retroactive to June 1, 2010, avoiding any interruption in their payment levels. The bill not only prevented the cut, but it actually updated the formula to create the largest increase in doctor payments since 2001.
As I predicted, the bill did not create a permanent fix for the built-in cuts in physician payments. This led House Speaker Nancy Pelosi to call the health care insurance amendment “totally inadequate.”
The bill was stalled in the Senate by deficit hawks who did not want to see the measure increase the deficit. To secure passage, the increased payments are to be paid for by changes in Medicare billing regulations, antifraud programs, and revisions in pension rules that lead to corporate tax hikes.
On the surface, it sounds like the Senate addressed deficit concerns. Actually, it may have created another deficit problem. The reason is that two-thirds of the funding for the doc fix, $4.2 billion, comes from reductions in Medicare payments to hospitals. This is robbing Peter to pay Paul, and you can bet that Peter will be lobbying Congress for a Medicare “hospital fix” as soon as these cuts take hold.
The tax hikes are an interesting story, too. They are supposed to come from corporations that take advantage of new pension rules and contribute less of their corporate income to pensions. Smaller pension contributions creates more corporate profits, and thus higher corporate taxes to pay for the doc fix. Needless to say, smaller pension contributions will hurt older Americans.
Can you say “shell game?”
In my last post, I discussed how the Congressional Budget Office (CBO) twice has revised upward its estimate of the true cost of the Patient Protection and Affordable Care Act—President Obama’s national health insurance reform legislation. Now the president is calling on Congress to drive Medicare costs up even higher.
The president used his weekly radio address to urge Congress to “fix” the Medicare Part B payment system that is scheduled by law to shrink payments to doctors by 21 percent on June 15.
The scheduled reduction in Medicare payments to is just one of the factors the CBO took into account when it originally projected that the health care insurance reforms would reduce the federal deficit by $140 billion in the first ten years. Keep in mind, that reduction was not going to be due to any budget cutting or “savings.” It was to be accomplished through $420 billion in new taxes.
But immediately after the bill was signed, the CBO revised its estimates of costs during the first 10 years from $788 billion to $940 billion, a $152 billion increase that more than wiped out the expected deficit reduction. A few weeks later, the CBO added another $115 billion to the price tag for implementation costs (see my last post).
The “doc fix,” if extended (as it inevitably will be) over the next ten years, will increase federal expenditures for healthcare by another $245 billion. Of course, Congress won’t extend the “doc fix” it for ten years. It will extend it one year at a time, hoping that no one will add up the yearly amounts.
The CBO stated that its original estimates of the cost of the Patient Protection and Affordable Care Act, referred to by its number, H.R. 3590, were based on the assumption that certain spending cuts would occur:
Those longer-term calculations reflect an assumption that the provisions of the reconciliation proposal and H.R. 3590 are enacted and remain unchanged throughout the next two decades, which is often not the case for major legislation. For example, the sustainable growth rate mechanism governing Medicare’s payments to physicians has frequently been modified (either through legislation or administrative action) to avoid reductions in those payments, and legislation to do so again is currently under consideration by the Congress.
[Emphasis mine.]
In other words, the “fix” is in when comes to the true cost of health insurance reform.
Before passage of the Patient Protection and Affordable Care Act (health insurance reform), the Congressional Budget Office (CBO), the primary congressional agency charged with reviewing congressional budgets and other legislative initiatives with budgetary implications, said the bill would add $788 billion dollars in new spending over the next 10 years. Many people questioned that number. Skeptics believed that the CBO kept the price tag under $1 trillion to make the bill more palatable to a spending weary public.
After passage of the health care insurance reform bill, the CBO revised its analysis upward, from $788 billion to $940 billion, just barely under that magic $1 trillion mark.
This week, in response to an inquiry from California Representative Jerry Lewis, the ranking Republican on the House Appropriations Committee, the CBO added another $115 billion in costs for implementing some provisions of the bill. That brings the total, ten-year cost to $1.05 trillion.
A mere $115 billion won’t, by itself, break the bank. But the overall cost of the program has already gone up 25% in just two months. And the CBO says it will rise even more. In his letter to Congressman Lewis, CBO Director Douglas W. Elmendorf explained:
CBO does not have a comprehensive estimate of all of the potential discretionary costs associated with PPACA, but we can provide information on the major components of such costs. Those discretionary costs fall into three general categories:
- The costs that will be incurred by federal agencies to implement the new policies established by PPACA, such as administrative expenses for the Department of Health and Human Services (HHS) and the Internal Revenue Service for carrying out key requirements of the legislation.
- Explicit authorizations for a variety of grant and other program spending for which specified funding levels for one or more years are provided in the act. (Such cases include provisions where a specified funding level is authorized for an initial year along with the authorization of such sums as may be necessary for continued funding in subsequent years.)
- Explicit authorizations for a variety of grant and other program spending for which no specific funding levels are identified in the legislation. That type of provision generally includes legislative language that authorizes the appropriation of “such sums as may be necessary,” often for a particular period of time.
CBO estimates that total authorized costs in the first two categories probably exceed $115 billion over the 2010-2019 period, as detailed below. We do not have an estimate of the potential costs of authorizations in the third category.
The emphasis on that last sentence is mine.
The cost of the bill is certain to rise even higher because only the most optimistic forecasts were used to arrive at the published numbers.
The last I saw, there are about 110 million people who pay taxes in the United States. If the cost of this bill is spread equally among them, then the cost per taxpayer is $9590 over ten years, or $19,180 for the average household of two adults. In other words, Congress just added $1918 per year to your family tax burden for just this one program.
I recently spoke with a physician who serves as a clinical professor of medicine at a leading university. I wanted to know what he thought about the health insurance reform legislation passed by Congress in March. His answers surprised me.
Q. Were you for or against healthcare reform before bill was signed into law by President Obama?
A. I have been a doctor for 35 years, and I have supported health care insurance reform for the last 20 years—if not longer.
Q. Why?
A. The present system is unsustainable. Healthcare costs as a percentage of gross domestic product (GDP) are rising at an unsustainable rate. The total amount of money spent on healthcare, the National Health Expenditure (NHE) was just 7.2 percent of GDP in 1970. By 2005, the NHE had more than doubled as a percentage of GDP—to 16 percent. It continues to rise. By 2016 it will comprise 19.5 percent of GDP. That trajectory cannot be sustained.
Q. Are you satisfied that the health care insurance reform bill bend that cost curve?
A. No. There was a lot of talk about controlling costs, but the bill contains only minor cost-control provisions, such as promoting the use of electronic medical files. Tort reform, the first, most-obvious solution that would have cut costs 20 to 25 percent overnight, was never on the table. When the president met with the American Medical Association in June 2009, the first thing he said was that tort reform was not up for discussion. The AMA members of the audience should have walked out.
Q. So were the Republicans right to oppose the bill?
A. I don’t believe so. Many Republicans had been working on healthcare reform in the years before the president was elected. Everyone in Washington knows changes need to be made. But instead of fighting for the changes that would make a difference, the Republicans took potshots at the bill, scaring the public with talk about rationing and “death panels.” They know that a soft form of rationing already exists. They should have led a national discussion about what we can realistically expect from our healthcare system. Are we going to expect screening for newborns for all genetic disorders? Are we going to employ all technological measures at the end of life? Are we going to continue to expect instant surgery? At least the health reform bill grappled with some of these issues. The Republicans sat back and pretended everyone can have everything, even though we cannot afford it under any system.
Testing Health Insurance Reform in the “Laboratory of Democracy”
22 Apr
Posted by admin as Health Insurance
During the health insurance reform debate, I wrote several posts about the long-range consequences of government mandates that violate the actuarial principles on which insurance is based.
Specifically, I wrote that mandates requiring health care insurance companies to cover consumers with pre-existing medical conditions would force the insurers to raise their rates in an attempt to recoup the astronomical costs commensurate with accepting the ill and even gravely ill customers. I also predicted that portions of the law requiring everyone who does not have health insurance to buy it would largely be ignored by scofflaws who would choose to pay the minimal fine than the insurance premiums. These two factors alone would be enough to undermine the actuarial foundation of health insurance, causing the insurance companies to face insolvency or be subsidized by the government, opening the door to another government takeover.
You do not have to be clairvoyant to make these predictions. All you need is common sense. It is not realistic to think that consumers, especially the young, healthy consumers who are needed in the system to off-set, or partially off-set, the cost of paying for people with serious pre-existing medical conditions, will be motivated to buy insurance by a fine that is orders of magnitude smaller than their insurance premiums.
More importantly, consumers will figure out that they can wait until they are sick before they get health insurance. Under the new law, the insurance companies will have to accept them.
I thought it would take years to prove or disprove my hypotheses. As it turns out, however, the empirical evidence is already in. It comes from one of what Supreme Court Justice Louis Brandeis once called the “laboratories of democracy”: state governments. In 2006 Massachusetts enacted health insurance reforms that are similar to the ones passed by Congress this year. Now the Boston Globe is reporting that the very things I predicted on a national level are already happening in Massachusetts. In an article entitled “Short-term customers boosting health costs,” Globe staff reporter Kay Lazar wrote:
Thousands of consumers are gaming Massachusetts’ 2006 health insurance law by buying insurance when they need to cover pricey medical care, such as fertility treatments and knee surgery, and then swiftly dropping coverage, a practice that insurance executives say is driving up costs for other people and small businesses.
In 2009 alone, 936 people signed up for coverage with Blue Cross and Blue Shield of Massachusetts for three months or less and ran up claims of more than $1,000 per month while in the plan. Their medical spending while insured was more than four times the average for consumers who buy coverage on their own and retain it in a normal fashion, according to data the state’s largest private insurer provided the Globe.
The typical monthly premium for these short-term members was $400, but their average claims exceeded $2,200 per month. The previous year, the company’s data show it had even more high-spending, short-term members. Over those two years, the figures suggest the price tag ran into the millions.
“These consumers come in and get their service, and then they leave because current regulations allow them to do it,” said Todd Bailey, vice president of underwriting at Fallon Community Health Plan, the state’s fourth-largest insurer.
Not surprisingly, the health insurance providers submitted a rate increase to cover the costs of consumers gaming the system. The insurance regulators in Massachusetts denied the requests. Facing a shortfall of millions of dollars, six health insurance companies have sued the state. Boston Globe reporter Robert Weisman wrote:
A half-dozen health insurers yesterday filed a lawsuit against the state seeking to reverse last week’s decision by the insurance commissioner to block double-digit premium increases — a ruling they say could leave them with hundreds of millions in losses this year.
The proposed rate hikes would have taken effect April 1 for plans covering thousands of small businesses and individuals. Insurers wanted to raise base rates an average of 8 percent to 32 percent; tacked on to that are often additional costs calculated according to factors such as the size and age of the workforce.
Yesterday’s legal action sets the stage for a showdown between state regulators and the health insurance industry.
Governor Deval Patrick has made reining in runaway health care costs a centerpiece of his administration and his campaign for reelection — contending they are stifling the capacity of small businesses to create jobs. At the same time, health insurers argue that government is forcing them to sell policies at a loss that is unsustainable as the costs of medical services climb.
For anyone familiar with actuarial science, all of this was completely predictable. If the electorate allows the President Obama’s health insurance reform to take effect in 2014, the story will be repeated at a national level. The health insurance experiment has been conducted in the laboratory of democracy. The laws of actuarial science have proven immutable.
Eight Things to Remember about Health Insurance Formularies
04 Apr
Posted by admin as Health Insurance
- Health insurance companies develop medication formularies to meet the health requirements of most of its plan members, but no one formulary contains every medication that is required for every patient.
- Health insurance companies must notify plan members whenever they change a formulary.
- Formulary differences make up a major difference between various health care insurance plans. Some plans provide members with more medications than other plans do.
- Larger health insurance companies often can negotiate lower prices for medications than smaller companies can. The insurers then pass the savings through to the plan members.
- If a prescription medication is not on the formulary of your health insurance company, you have the option of asking your doctor to prescribe a similar medication that is on the formulary of your health insurance plan.
- You also have the option of asking your doctor to find out if your health insurance company’s formulary includes brand name medications that have lower co-payments or less expensive generic medications that can replace for your regular prescription medications.
- You can also ask your doctor about splitting higher dosage pills into lower dose sections, saving you money.
- If no suitable replacements are available on the formulary, you may request an exception to the formulary for your medication.