Posts Tagged ‘Commonwealth Fund’

GOP VP Candidate Paul Ryan Advocates “Medicare Premium Support”

Wednesday, September 5th, 2012

Now that Representative Paul Ryan (R-WI) has been selected by former Governor Mitt Romney (R-MA) as his vice presidential running mate, the debate is focusing on the Wisconsin representative’s plan to reform Medicare.  Known as Medicare Premium Support, it “refers to a system under which Medicare enrollees would pick from a menu of competing plans with a fixed government payment to help defray premium costs.  Enrollees would be on the hook for any charges above the government contribution.  But they could save money by selecting a plan with a premium below the federal subsidy.”

Ryan says that under his plan, the government’s contribution toward premiums will equal the cost of the second least expensive plan in any market — or traditional Medicare — whichever costs less.  Ryan believes that his plan is politically feasible because it doesn’t begin until 2022 with the result that it retains traditional Medicare for Americans who were 55 and older in 2011 — meaning that baby boomers are exempt from the changes.  Democrats who oppose the plan contend that Ryan’s Medicare overhaul would subject seniors to the vagaries of the private market, leaving them with little protection against rising premiums and negligible benefits.

So what is the difference between the Democratic and Republican cuts to Medicare?  The ACA stresses government control and central planning. The law creates a panel of 15 unelected government officials, called the Independent Payment Advisory Board (IPAB) to direct changes that will shrink spending by cutting physician and hospital reimbursement.  The Wyden-Ryan plan preserves the ACA’s targets for future Medicare spending, but uses competitive bidding.  Seniors would have the same benefits that they do now, and would have the option of choosing from several government-approved private insurance plans.

The Republican budget targets Medicare growth of GDP plus 0.5 percent, just as the 2013 Obama budget does. The difference lies in the fact that the GOP budget repeals the ACA, while maintaining that law’s Medicare cuts.  The Democratic budget leaves the ACA in place.

Writing in the Washington Post, Ezra Klein puts the difference in a nutshell:  “The difference between the two campaigns is not in how much they cut Medicare, but in how they cut Medicare.”

In an exclusive interview with Modern Healthcare magazine, Ryan says that “This is an idea whose time has come.  And it’s a bipartisan idea.  What Representative Ron Wyden (D-OR) and I tried to do was to plant the seeds of a bipartisan consensus.  We knew we weren’t going to pass it because of the politics.  We did this together to get the consensus-building started.”  Ryan believes that the plan’s chances for approval will greatly improve in 2013 — especially if the Romney/Ryan team wins the November 6 presidential election.  “I’m actually pretty optimistic,” he said, noting that the United States should reform healthcare on its own terms and “fix this on our terms” instead of borrowing European ideas.  “We believe there are far superior ways to get back to a patient-centered healthcare system, the nucleus of which is the patient and doctor — and not the government,” Ryan said.  “We believe consumer-driven, market-based reforms do more to alter the cost curve of healthcare inflation.”

If Ryan’s plan is enacted into law, people 55 and younger would see a change from one in which everyone gets the same set of government-paid benefits to one in which the government gives all senior citizens a fixed amount of money.  They could use this to purchase private insurance or pay a portion of the cost of enrolling in traditional Medicare.  Ryan has not said how much the premium support payment would be.  But he would limit the annual growth rate to no more than one-half percent more than the economy’s overall growth rate, even though healthcare costs are rising at a significantly faster pace.  Ryan’s plan would also raise the Medicare eligibility age to 67 from 65 by 2034.

Not so fast,” Democrats warn as partisans from both parties accuse the other side of throwing senior citizens under the bus.  “Make no mistake about it — these Republicans don’t believe in Medicare,” Obama campaign senior adviser David Axelrod said.  “They want to turn it into a voucher program.  And slowly, all the burden is going to shift to seniors themselves.  And that is not an answer to entitlement reform.”

Republicans counter that $716 billion in cuts to Medicare are already a part of the Patient Protection and Affordable Care Act (ACA).  An online video created by the Republican National Committee features Ryan saying that Democrats “have refused to make difficult decision because they are more worried about their next election than they are about the next generation.”  According to Ryan, “We won’t duck the tough issues; we will lead.”

Uwe Reinhardt, a healthcare economist at Princeton University disagrees, saying that rather than motivating insurers to control their costs, the Ryan plan will not benefit seniors.  “You’re essentially shoving these guys out on a boat, saying, ‘We’ll give you a push, but if the waves are rough, you’re on your own,” he said.  “It would really worry me if I were a middle-class American.”

6.6 MillionYoung Americans Now Have Healthcare, Thanks to the ACA

Tuesday, June 26th, 2012

More than 6.6 million young adults aged 26 and younger were enrolled in their parents’ insurance plans last year because of the Patient Protection and Affordable Care Act (ACA), the largest single-year increase in medical coverage for the age group.  The section of the law that allows young people to remain on parental plans helped boost coverage during tough economic times, said Sara Collins, vice president for affordable health insurance at the Commonwealth Fund.

The benefit for young adults is one of the most popular parts of the ACA as young adults face a labor market that makes it difficult to find a job with healthcare coverage.  Unemployment among 16- to 24-year-olds is 16.1 percent, almost double the 8.2 percent rate for the nation as a whole.  “The economy is absolutely a factor in both the large number of adults who are without health insurance and likely the number coming onto their parents’ policies,” Collins said.  The ACA “came at a really good time for young adults, in terms of the poor job market.”  Adding young adults to their parents’ coverage was one of the first provisions of the law enacted.  Approximately 71 percent of Americans polled by the Kaiser Family Foundation said they viewed that provision favorably.  The ACA in its entirety is less popular, with an approval rate of 37 percent, and an unfavorable view by 44 percent of those surveyed in May, according to Kaiser’s monthly tracking poll.

President Barack Obama’s $1 trillion, 10-year plan to overhaul the healthcare system was passed by Congress in 2010 without a single Republican vote.  Parts of the law were then challenged as unconstitutional by 26 states.  The Supreme Court is slated to rule on those objections, a decision that could overturn the law.  The head of a caucus of 21 Republican lawmakers with medical backgrounds said that no matter the outcome, he will try to preserve the coverage for young adults and for people with pre-existing medical conditions.  Representative Phil Gingrey (R-GA), an obstetrician-gynecologist, believe that the young-adult provision is “a good policy.”

Despite this, the Commonwealth Fund report found that almost 40 percent of young adults between the ages of 19 and 29 did not have health insurance in 2011.  Another finding is that more than 36 percent of young adults had medical bill problems or were in the process of paying off medical debt.  Of those young Americans, 43 percent were experiencing serious financial troubles; 32 percent had trouble making their student loans or tuition payments; 31 percent deferred education or career plans, and 28 percent couldn’t afford food, heat or rent because of medical bills.

Because of the high cost of healthcare, young Americans are not having prescriptions filled, skipping recommended tests or treatments, avoiding doctor visits and failing to get specialist care when they need it.  And, according to doctors. young adults don’t listen to medical advice once they hear how much treatment costs.

Dr. Jeffrey Hausfeld is well aware of the debt problem.  As co-owner for FMS Solutions, a collection agency that specializes in medical debt, Hausfeld has seen a 50 percent increase in the amount of debt held by young adults over the last several years.  He cited “the tremendous cost shift” to patients caused by high-deductible insurance plans, co-payments and co-insurance, said Hausfeld, an ear, nose and throat doctor who no longer practices.  “Getting sick isn’t something that a healthy 26-year-old expected to have to pay for.  They didn’t budget for it,” Hausfeld said.  “Now they’re sitting with a $10,000 hospital bill and they don’t know what to do.”

“While the Affordable Care Act has already provided a new source of coverage for millions of young adults at risk of being uninsured, more help is needed for those left behind,” Collins, said.  “The law’s major insurance provisions slated for 2014, including expanded Medicaid and subsidized private plans through state insurance exchanges, will provide nearly all young adults across the income spectrum with affordable and comprehensive health plans.”

Commonwealth Fund President Karen Davis said that the survey is a hopeful indicator at a time when millions of Americans have trouble getting access to needed healthcare.  “The new report…shows that implementation of the law has already begun to make a difference for young adults, their families and other Americans,” she said.  Allowing young adults, the majority of whom are healthy, to remain on their parents’ health plans is not as expensive as expanding coverage to populations with higher medical costs, although independent analyses estimate the expansion could boost premiums one percent to two percent.

Young Americans who had no healthcare coverage faced the greatest risk: 51 percent with a gap in coverage had a medical bill problem or medical debt.  The costs could be substantial.  One-quarter of young adults paying off medical debt owed $4,000 or more; 15 percent reported $8,000 or more in debt.  Among those who were paying off debt, 31 percent owed $4,000 or more; 21 percent had $8,000 or more; and 11 percent had $10,000 or more.

“There’s no question that young people have cut back on high-value screenings, doctor visits and therapies,” Dr. Mark Fendrick, director of the University of Michigan Center for Value-Based Insurance Design, said.  “You twist your knee playing soccer and you go to get an MRI.  But if the doctor says you have to pay 50 percent of the cost, you’re going to be less likely to go through with it,” he said.

Health Insurer OKs Reform No Matter What the Supreme Court Does

Monday, June 18th, 2012

Even if the Supreme Court declares the Patient Protection and Affordable Care Act (ACA) unconstitutional, UnitedHealth, the nation’s largest health insurer will still cover certain types of preventive care. The extensions will apply primarily to its customers who have individual policies or small-group health insurance through their employer, a minority of its 35 million total members.  The ACA, whose goal is to provide coverage for millions of uninsured people, started unfolding in 2010 after health insurers fought to block its passage.  Challenges to the law from states and other groups opposed to it wound their way to the Supreme Court.  Bob Laszewski, a consultant and former insurance executive, UnitedHealth’s move a “very smart business decision.”  The provisions are relatively inexpensive and are already factored into the coverage price.  If insurers cut these benefits, customers probably will expect a corresponding premium drop, he noted.  “It would probably be more trouble to roll these things back than go ahead with them,” Laszewski said.  “It just makes common sense to leave these things in there and not take these benefits away since they’re already priced in.”  Laszewski expects other insurers and large employers to take a similar approach.

The provisions UnitedHealth will maintain include providing coverage for dependents up to age 26 under their parents’ plan.  The company will still offer certain preventive healthcare services without requiring a co-payment.  These include yearly check-ups, screening for high-blood pressure and diabetes, and immunizations.  Additionally, UnitedHealth will continue to forgo lifetime dollar coverage limits on policies.  “The protections we are voluntarily extending are good for people’s health, promote broader access to quality care and contribute to helping control rising healthcare costs,” UnitedHealth Chief Executive Officer Stephen Hemsley said.  “These provisions make sense for the people we serve and it is important to ensure they know these provisions will continue.”

The ACA is the largest overhaul of the $2.6 trillion American healthcare system in nearly a half century.  It is designed to ultimately expand coverage to more than 30 million uninsured Americans, by setting up insurance exchanges and opening Medicaid for low-income Americans.

According to estimates, the ACA let approximately 6.6 million young adults remain on their parents’ health insurance plans last year, according to a report from The Commonwealth Fund. If the law is declared unconstitutional, Republican lawmakers may reinstate the extension of young adults dependent coverage.  Other provisions that UnitedHealth plans to maintain include providing easily understandable ways for members to appeal coverage claim decisions; and eliminating rescissions, which are considered to be retroactive policy cancellations, except in the case of fraud.  DeAnn Friedholm, director for health reform at the Consumers Union, called UnitedHealth’s actions “a positive step” and said she hopes other companies follow suit should the law be struck down.

Ronald Pollack, executive director of the consumer advocacy group Families USA and a supporter of the law, applauded UnitedHealth’s move.  “It would make a huge difference for a great number of people who would otherwise be left out in the cold in terms of getting coverage,” he said. “And hopefully, given UnitedHealthcare’s market share, this would have tremendous influence on other companies.”  Even if other large insurers follow suit, Pollack said, it would hardly make up for the loss of other provisions in the law that are set to take effect in 2014 — including subsidies to help low-income Americans buy insurance and bans against discriminating against adults with preexisting conditions.

Writing for CBS News, Stephanie Condon says that UnitedHealth’s decision “Could also alter the political fallout from the high court’s decision.  Should the Supreme Court reject President Barack Obama’s law, he could point to UnitedHealthcare’s announcement to validate his policy agenda.”

The Associated Press’ Ricardo Alonso-Zaldivar points out that dismantling the ACA could be messy.  “It sounds like a silver lining.  Even if the Supreme Court overturns President Barack Obama’s healthcare law, employers can keep offering popular coverage for the young adult children of their workers.  But here’s the catch: The parents’ taxes would go up.  That’s only one of the messy potential ripple effects when the Supreme Court delivers its verdict on the Affordable Care Act this month.  The law affects most major components of the U.S. healthcare system in its effort to extend coverage to millions of uninsured people.  Because the legislation is so complicated, an orderly unwinding would prove difficult if it were overturned entirely or in part.  Better Medicare prescription benefits, currently saving hundreds of dollars for older people with high drug costs, would be suspended.  Partially overturning the law could leave hospitals, insurers and other service providers on the hook for tax increases and spending cuts without the law’s promise of paying more to offset losses.”

Current Individual Healthcare Coverage Doesn’t Meet ACA Standards

Monday, June 4th, 2012

The majority of individual policies currently on the market could not be sold on state exchanges in 2014, according to a new report.  The report, published in Health Affairs and funded by the Commonwealth Fund, examined individual plans from several states and found that 51 percent of the plans fail to meet the minimum requirements established by the Patient Protection and Affordable Care Act (ACA).

The law says that plans sold on public exchanges must cover at least 60 percent of the costs of treating a typical patient, a figure known as “actuarial value.”  Most of the policies the researchers analyzed covered less than that, meaning the possibility of high out-of-pocket costs for patients.  To meet the actuarial value targets for “bronze plans, “the lowest category, current plans would have to pay for more care. That likely means they would be more expensive to consumers.

“The individual market of the future will sharply contrast with the market of the past decades,” said John Gabel of the University of Chicago.  They do not say whether changes to the market will be good or bad for consumers, but they are likely to be a mixed bag.  Supporters of the ACA say that new regulation of insurance products provide key consumer protections.  Opponents believe that they will drive up the cost of insurance. “Deductibles will have to be lowered,” Gabel said. “The out-of-pocket limits may have to be lower.  They will have to offer maternity benefits” as well as coverage for mental-health and substance-abuse.

People who buy individual health insurance policies typically pay higher premiums and higher out-of-pocket costs than people who have employer-provided.  Individual policies usually offer less coverage and, until the ACA fully becomes effective in 2014, can exclude coverage for pre-existing conditions.  The ACA sets minimum standards for plans sold through the state-run exchanges.  Slightly more than 50 percent of people on the individual market have policies that cover less than 60 percent of plan costs.  One-third of individual policies pay 60 to 69 percent, enough to meet the lowest thresholds under the healthcare law.

Many consumers will get more generous coverage if they purchase insurance through an exchange.  But, according to the Congressional Budget Office (CBO), the boost in benefits could also increase premiums.  “Premiums for health insurance in the individual market will be somewhat higher on average under (the healthcare law) than under prior law, mostly because the average insurance policy in that market will cover a larger share of enrollees’ costs for healthcare and provide a slightly wider range of benefits,” the CBO said.  The increases would be partially offset by other policies that would cut premiums, but still come out slightly higher.  Consumers won’t have to pay the extra costs, though, because the federal government will provide subsidies to help cover the cost of insurance.

Approximately 62 percent of people who now try to buy insurance for themselves in the so-called individual market report that they can’t find an affordable policy, said Sara Collins, vice president for affordable health insurance at the Commonwealth Fund.  People who do “often end up with coverage that’s really not adequate.”  Enhancing current plans to meet the ACA’s requirements will probably raise consumer’s up-front premiums, Gabel said.  “Other things held constant, the cost of the plan will go up,” he said.  The ACA does not allow insurers to cherry- pick only healthy customers; adding sick people to insurance pools will also raise costs, he said.

People whose policies currently don’t meet the health law’s requirements will have to “buy up” in 2014, said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans.  “Any time new benefits are added to a policy that adds to the cost of coverage.”  Premium increases can be alleviated by other changes, according to Gabel.  The exchanges should reduce administrative costs for insurers and “make for more price competition” among plans.  The ACA also limits, to 20 percent of premium revenue, the amount insurers can keep for administrative costs and profit, and creates subsidies to cut the cost of insurance for low- and middle-income people.  “Presumably a lot of people on these really crummy plans in the study could potentially be eligible for premium subsidies,” Collins said.  “It’s really going to be important that other provisions of the law address the premium growth issue.”

49 States Are Acting to Implement the ACA

Tuesday, May 8th, 2012

Although 26 states oppose sections of the Patient Protection and Affordable Care Act, a new report suggests that a majority are taking steps to implement it – no matter what the Supreme Court decides.  The Commonwealth Fund study looked at provisions of the law that went into effect in 2010, specifically the so-called “patient’s bill of rights.”  The law gave states a choice on those matters — they could regulate insurance companies or opt out and let the federal government step in.  According to the report, every state but Arizona has taken some steps to establish its own system. The “bill of rights” contains 10 provisions, including rules that insurers cannot retroactively drop coverage when a customer becomes ill, as well as one that allows parents of young adults to keep their children on their insurance policies.  Ten states have acted on all of the provisions.  Twelve have passed laws or written final regulations.  Yet others have reviewed insurance policy forms providing unofficial guidance to insurers.  “States are responding to the federal law in pragmatic ways that suit their political culture and regulatory needs,” according to the report.

Rhode Island, Maryland and Oregon led the pack in implementing the ACA.  In fact, those states were working to expand health coverage well before the law was passed.  If the ACA is overturned by the Supreme Court, these states — and others supportive of the law’s goals – will keep pursuing reforms.  “What I hear is, they still intend to proceed,” says John Holahan, director of the Health Policy Research Center at The Urban Institute.

One provision of the ACA is that states must set up public insurance exchanges where uninsured residents can shop for coverage.  So far, 16 states and the District of Columbia already have passed legislation enabling implementation of the law, or have governors who have issued executive orders to move forward.  New York was the most recent when Governor Andrew Cuomo bypassed Republican lawmakers who were holding up the state’s effort to create a state insurance exchange by issuing an executive order to proceed.  Another 20 states either have legislation pending or have received some federal grant money to move forward.  The remaining 15 states have made little or no progress.

Two-thirds of the states will have viable exchanges up and running by 2013, according to Sam Gibbs, president of the Exchange Technology Group at eHealth Inc., which runs an online insurance marketplace and is bidding to help build state-level exchanges.  According to the law, the federal government will operate exchanges in states that don’t start them on their own.  That could be difficult to achieve in states that are hostile to the ACA, because implementation requires close cooperation with state government and insurance regulators.

The exchanges will be the entry portal for individuals and families who are currently uninsured.  They will be eligible for a federal insurance subsidy in cases where family income is less than 400 percent of the federally defined poverty level.  The size of the subsidy is based on a sliding scale to hold costs as a share of income between two and 9.5 percent.  States also are required to offer dedicated exchanges for small businesses that would let employers provide a subsidy for employee coverage.  Lower-income families will be eligible for Medicaid under a dramatic federally-financed expansion.  Between the exchanges and Medicaid expansion, coverage will be extended to 23 million uninsured Americans by 2019, according to the Congressional Budget Office.

If the Supreme Court declares the individual mandate unconstitutional and doesn’t touch the rest of the ACA, insurance companies are certain to push Congress for a remedy sometime after the November elections.  This would ensure that enough healthy young people sign up for insurance to balance the ACA’s requirement that carriers accept all applicants and don’t charge high-cost premiums based on age or health risk.  A Government Accountability Office study identified nine alternatives to the individual mandate; for example, setting strict open-enrollment windows with harsh financial penalties for failing to enroll.  That tactic works for Medicare, which charges senior citizens a 10 percent annual lifetime Part B surcharge for each year of delayed enrollment.

Congressional action on a fix would depend on who controls the next Congress — but the recent track record isn’t encouraging. “Since the two parties don’t speak to one another, the odds of a federal fix aren’t very good,” Holahan said.

Writing for Think Progress, Igor Volsky says that “Indeed, it seems that the law has already created an unstoppable momentum towards change and it’s very unlikely that they will take away these new benefits or obtain efforts to modernize their operations (in an effort to reduce spending). Regardless of the Supreme Court’s anticipated ruling on the law in late June, the changes the ACA inspired are here to stay — in one form or another.”

26 Percent of Americans Had No Healthcare Coverage in 2011

Monday, May 7th, 2012

A Commonwealth Fund survey found that 26 percent of adults surveyed had no health insurance at some point in 2011.  The reasons typically were losing a job, changing jobs or becoming ineligible for Medicaid.  Fully 69 percent of respondents lacked coverage for one year or longer, while more than 50 percent had no insurance for two years or longer.  Low- and moderate-income individuals were most likely to experience a long gap in healthcare coverage.

The online survey is based on responses from a random sample of 2,134 adults aged 19 to 64.  Among respondents who had a gap in coverage, 41 percent lost their employer-sponsored insurance because of changing jobs, losing their job, working part-time, because they could no longer afford to pay their share of the premium, or because their employer stopped offering health insurance.  Another 18 percent who had qualified for Medicaid lost coverage because they made too much money or neglected to re-enroll in the program when they were supposed to.

After losing insurance, finding coverage was difficult if not impossible. Approximately one-third who lost their insurance and tried to find new coverage within the past three years were turned down, charged a higher price, or were denied because of a pre-existing condition.  Nearly 50 percent of those who lost their employer-sponsored coverage said they never bought a new insurance plan, typically because it was too expensive.

“For people who lose employer-sponsored coverage, the individual market is often the only alternative, but it is a confusing and largely unaffordable option,” Commonwealth Fund vice president Sara Collins, lead author of the survey, said.  “As a result, people are going a year, two years, or more without healthcare coverage, and as a result going without needed care.”

The holes in health insurance were a primary force in President Barack Obama’s push for the Patient Protection and Affordable Care Act (ACA). According to the survey, people without health insurance often skip necessary medical care and do not get crucial preventive services such as cancer screenings.  Over all, nearly 75 percent of women aged 40 to 64 with health insurance had a mammogram in the previous two years.  In contrast, only 28 percent of women in that age group who did not have insurance for a year or more received a mammogram.

The Commonwealth Fund’s report proves that the ACA is helping to bridge coverage gaps for young adults because of the new provision for dependent coverage that allows young adults up to age 26 to join or stay on their parents’ health insurance plan.  Nearly half (46 percent) of young adults said they had stayed on or joined a parent’s insurance policy in the last year, and about a quarter (23 percent) of parents with children under age 26 reported that they had an adult child stay on or enroll in their health plan.  Young adults in higher-income families were more likely to have been helped by the new option than those in lower-income households.  This is likely because adults in higher-income households are more likely to have health insurance with dependent coverage.  Almost two-thirds (63 percent) of working adults knew about the provision.

Writing on the Huffington Post, Jeffrey Young says that “Nearly 50 million Americans had no health insurance in 2010, according to the latest census data.  Healthcare costs, which have risen tenfold since 1980, are putting an increasing burden on families, employers, and government programs.  Costs also are driving up the ranks of the uninsured and leading fewer companies to offer health benefits to their workers.  From 2001 to 2011, the percentage of companies offering health benefits dropped from 68 percent to 60 percent, the Henry J. Kaiser Family Foundation reported.  More than two-thirds of those who lost health insurance in 2011 cited losing their job or getting a new job without health benefits as the main reason they were uninsured, according to the Commonwealth Fund survey.  Among these people, 45 percent said that they were discouraged from buying health insurance on their own because of the high cost.  Sixty-two percent of the uninsured responded that finding a new health plan was ‘very difficult or impossible,’ the Commonwealth Fund said.

At the same time, many Americans don’t know exactly what the ACA contains.  According to the survey, awareness of the health law’s provisions vary significantly depending on income.  Fifty-four percent of respondents who had incomes below 250 percent of the federal poverty level were unaware of the under-26 provision, compared to just 25 percent at or above that line.  For the high-risk pools, the totals were 63 percent and 39 percent, respectively.

“We need to do more,” said Kathleen Stoll, director of health policy for Families USA, a group that supports the health law.  She described how “it takes a while for programs like these to break through.”  People with pre-existing conditions are a specific challenge, because individual states run the high-risk pools with differing levels of publicity.

“The current system of health insurance in the United States has gaping holes, the effects of which have become increasingly pronounced during a weak economy,” Commonwealth Fund President Karen Davis concluded.  “The Affordable Care Act is beginning to close those gaps, so that people who are already struggling can maintain health care coverage that will provide for their families’ health and help ensure their financial security.”

Income Disparities Impact Healthcare Availability

Monday, April 2nd, 2012

There are limited affordable choices for Americans who do not have health insurance through their jobs, especially for those with low and moderate incomes.  Few are Medicaid-eligible, and locating a plan on the individual market equals paying high premiums.  According to the Commonwealth Fund Health Insurance Tracking Survey of U.S. Adults, 2011, nearly 57 percent of adults aged 19 to 64 in families earning less than 133 percent of the federal poverty level ($29,726 for a family of four) were uninsured for a time in 2011 and 41 percent) were uninsured for a year or longer.  In contrast, only 12 percent of adults earning 400 percent of poverty or more ($89,400 for a family of four) were uninsured during the year, with four percent having no healthcare insurance for one year or longer.

The lack of health insurance significantly makes it difficult to get needed healthcare.  Low- and moderate-income adults who were uninsured in 2011 were much less likely to have a regular source of healthcare than those who did have insurance.  Additionally, uninsured low- and moderate-income adults were more likely to cite factors other than medical emergencies as reasons for going to the emergency room.  These included needing a prescription drug or lacking a regular primary-care physician.

The survey also demonstrates how vital Medicaid and the Children’s Health Insurance Program (CHIP) are in providing health insurance to children in low- and moderate-income families.  More than 63 percent of adults with children under 133 percent of the poverty level and nearly 38 percent with incomes between 133 percent and 249 percent of poverty said that some or all of their children were covered by either program.  The Patient Protection and Affordable Care Act (ACA) will expand the ability of Medicaid and CHIP to cover children and families by targeting adults in low- and moderate-income families who are at the greatest risk of lacking health benefits through a job.

When it becomes fully effective in 2014, the ACA will provide near-universal health insurance through a broad expansion of Medicaid, premium tax credits that cap premium contributions as a share of income for people purchasing private health plans through new state insurance exchanges.  Another benefit is new insurance market rules that prevent health insurers from denying coverage or charging people with pre-existing medical conditions higher premiums.

Or, as the Washington Post’s Sarah Kliff puts it, “While the private insurance expansion could get thrown into limbo by the Supreme Court, there’s pretty widespread agreement that, absent full repeal of the bill, health reform’s Medicaid expansion is here to stay.  And that means a wide-reaching expansion of the entitlement program about two years from now.”

According to the Commonwealth Fund’s analysis, as a result of the Affordable Care Act, the majority of the 52 million adults who did not have health insurance in 2010 will gain coverage beginning in 2014.  Millions more will benefit as their ability to afford the price of premiums and out-of-pocket costs improves.

Karen Davis, President of the Commonwealth Fund, said that “The silver lining is that the Patient Protection and Affordable Care Act has already begun to bring relief to families.  Once the new law is fully implemented, we can be confident that no future recession will have the power to strip so many Americans of their health security.”

Amanda Peterson Beadle, writing on the thinkprogress.org website, notes that “The Affordable Care Act has already expanded health insurance to 2.5 million 19-to-25 year-olds, banned lifetime limits on health insurance coverage, created pre-existing condition insurance plans providing health insurance options to those who were often uninsurable, and required insurers to cover preventive care without requiring co-payments.  But the major provisions of the law to be implemented in 2014 will have the biggest effect on narrowing the income divide.”

Medical Bills Major Cause of Bankruptcies

Wednesday, February 29th, 2012

Most Americans are just one illness away from bankruptcy – even those with healthcare insurance.  Unfortunately, there are millions of other Americans who don’t have the cash to cover their medical bills.  Hospitals expect quick payment and offer insured patients little flexibility if they have difficulty paying bills.  Those unpaid bills are sent to collection agencies, and damage the individual’s credit history for years.  The crisis in American healthcare is not restricted to emergency rooms where uninsured people wait – often for long periods of time — for care.

In fact, a study has estimated that as many as 62.1 percent of all bankruptcies are due – at least in part – to medical expenses that the person simply cannot afford to pay.  And, according to the study’s authors, that might well be a conservative estimate.

“Unless you’re a Warren Buffett or Bill Gates, you’re one illness away from financial ruin in this country,” said Steffie Woolhandler, M.D., of the Harvard Medical School.  “If an illness is long enough and expensive enough, private insurance offers very little protection against medical bankruptcy, and that’s the major finding in our study.”

Yet, 75 percent of the people with a medically-related bankruptcy had health insurance.  “That was actually the predominant problem in patients in our study — 78 percent of them had health insurance, but many of them were bankrupted anyway because there were gaps in their coverage like co-payments and deductibles and uncovered services,” Woolhandler said.  “Other people had private insurance but got so sick that they lost their job and lost their insurance.”

Even patients who have coverage “may not be protected from high out-of-pocket costs when they are diagnosed with cancer,” according to a report by the Kaiser Family Foundation and the American Cancer Society.  In addition to high insurance premiums, those costs may force patients to amass debt as they attempt to pay for the care they need — or postpone or skip lifesaving treatment.  “Having insurance increases people’s ability to access care,” said Mark Rukavina, an expert on medical debt and the executive director of The Access Project, a Boston-based healthcare advocacy group.  “The good news is that they get the care, but the bad news is it’s unaffordable.”

The days of Cadillac health plans are pretty much over,” said Peter Cunningham of the Center for Studying Health System Change in Washington, which found that 20 percent of American families have problems paying medical bills.  More than 44 million Americans currently are paying off medical debt, the Commonwealth Fund said, an increase over the 37 million in 2005.  Two years ago, Congress reported that 30 million Americans of working age had been contacted by a collection agency for unpaid medical bills.  One survey asks how people have been affected by their unpaid medical bills.  “Two-thirds of people say … they’ve had problems paying for some of the basic necessities — food, rent, mortgage, clothes, basic stuff,” Cunningham said. “They’ve put off major purchases.  They’ve taken money out of savings or borrowed money.  An increasing number consider filing for bankruptcy.”

Although it’s not yet known how the Patient Protection and Affordable Care Act (ACA) will impact medical bankruptcies, a study from Massachusetts since its healthcare reform became effective in 2006 offers scant good news. The study, which was published in the American Journal of Medicine, determined that between early 2007 and mid-2009, the share of all Massachusetts bankruptcies with medical grounds fell from 59.3 percent to 52.9 percent, a 6.4 percent decrease.  Because there was a sudden rise in total bankruptcies during that period, medical bankruptcy filings in the state rose from 7,504 in 2007 to 10,093 in 2009.

According to the study’s authors, “Even before the changes in healthcare laws, most medical bankruptcies in Massachusetts – as in other states – afflicted middle-class families with health insurance.  High premium costs and gaps in coverage – co-payments, deductibles and uncovered services – often left insured families liable for substantial out-of-pocket costs.”

“Despite a marked decline in the un-insurance rate in Massachusetts since the implementation of health reform, the proportion of bankruptcies that occurred in the wake of medical problems has not decreased significantly, and the absolute number of medical bankruptcies has actually increased by one third,” said David U. Himmelstein, M.D., from City University of New York School of Public Health, and the study’s lead author.

Small Businesses Can Rely on Pooled Exchanges to Cover Employees’ Healthcare Needs

Monday, February 27th, 2012

The Patient Protection and Affordable Care Act (ACA) lets some small businesses avoid buying employee health insurance.  Despite that, a new study from the RAND Corp., said few will qualify.  Starting in 2014, the ACA mandates that the majority of companies provide health insurance for employees or pay to participate in health insurance exchanges.  Companies with fewer than 100 employees can retain their previous policies under a grandfather clause or they have the option to self insure.  The goal, RAND notes, is to spread the financial risk of covering sick or high-cost enrollees across a wider pool of employers.

In 2014, insurance companies will be allowed to set premiums based on enrollees’ age, family size, where they live or tobacco use.  They won’t be allowed to consider enrollees’ gender, overall health or pre-existing conditions.  “Concerns have arisen that such cost sharing could be undermined if small employers with relatively healthy workers and dependents avoid the new regulations by self-insuring or by maintaining grandfathered health insurance plans,” according to RAND.  “Should such a trend develop…premiums offered to all businesses that remain in the exchanges could become unaffordable.”  RAND’s study came to the conclusion that most small employers will opt not to self-insure because of the potential liability and financial risk in case medical expenses rise unexpectedly.  “The self-insure option will reduce enrollment in the small-business insurance exchanges somewhat but it will not have a substantial impact on exchange premiums,” the RAND study said.

“We found that keeping the rules as they are written, particularly the limitations on maintaining a grandfathered plan, will be essential to keeping premiums affordable in small business insurance exchanges,” said Christine Eibner, RAND senior economist and the study’s lead author.  Under the terms of the ACA’s Small Business Health Options Program, or SHOP, the exchanges for individuals have targeted their opening date for January 1, 2014.

The need for SHOP exchanges is very real.  Small businesses tend to struggle to pay for health insurance for their employees, and they have much less bargaining power with insurers than big business.  According to Timothy Jost of the Washington and Lee University law school, to succeed, the SHOP exchanges will have to provide small employers with an attractive alternative to the options currently available; keep costs affordable; regulate the insurance burden; administer the program; manage enrollment periods; and protect against poor selection, which would lead to a top-heavy number of sicker individuals in the exchanges.

It is estimated that the ACA’s state health insurance exchanges for small businesses will cover nearly 10 million employees, in addition to the 15.3 million individuals who gain coverage through the individual exchanges when the law is fully implemented.  According to Fredric Blavin and colleagues at The Urban Institute and The Commonwealth Fund, SHOP has the potential to provide affordable insurance for small employers who face high premiums and administrative costs.

The reform law grants states considerable flexibility in designing their exchanges, such as allowing them to combine their small business and individual exchanges, limiting enrollment to companies with 50 or fewer employees or opening to firms of up to 100 employees through 2015, or reducing the ability of insurers in the exchange to charge premiums on the basis of age beyond what the law allows.  When they examined all options, the researchers found that merging the small business and individual market exchanges would bring two million additional people into the exchanges, for a total of nearly 27 million.  This would reduce premiums by an average of $600 per person every year, and would cut federal spending on premium subsidies by $4 billion.  Few of the other options significantly impacted coverage or costs.  The authors conclude that “these results suggest that states can make these design choices based on local support and preferences without fear of dramatic repercussions for overall coverage and cost outcomes.

“SHOP exchanges have the potential to transform the experience of small businesses and their employees when shopping for and administering health insurance,” said Sara Collins, vice president for Affordable Health Insurance at The Commonwealth Fund.

Who Has the Most Trouble Paying Medical Bills? The Sick.

Wednesday, November 16th, 2011

Americans with chronic illnesses or serious health problems are more likely to have difficulties paying their medical bills or problems getting needed care than adults with similar problems in other high-income countries.  The poll found that Americans were most likely to have problems getting needed care because of the high cost, or as a direct result of medical debt, according to the Commonwealth Fund“Despite spending far more on healthcare than any other country, the United States practically stands alone when it comes to people with illness or chronic conditions having difficulty affording healthcare and paying medical bills,” Commonwealth Fund president Karen Davis said.  “This is a clear indication of the urgent need for Affordable Care Act (ACA) reforms geared toward improving coverage and controlling healthcare costs.”

According to the researchers, the results underscore some of the biggest flaws in the American healthcare system.  The Commonwealth Fund surveyed 18,000 “sicker adults” in the United States and 10 other nations – including Australia, Canada, France, Germany, Switzerland and the United Kingdom – and asked about healthcare costs, access to care, coordination of care and medical errors.  Forty-two percent of Americans said the high costs of healthcare prevent them from seeing doctors, getting prescribed medications and avoiding treatments, an appreciably higher percentage than in the 10 other countries.

“Our system is the most disjointed in the developed world, which is the cause of many of our problems,” said Robert Field, professor of health management and policy at the Drexel University School of Public Health in Philadelphia.  “Doctors often don’t communicate with each other, so we are more likely to get duplicate tests, multiple drugs with dangerous interactions, and lost lab results.”

According to the survey, 51 percent of American adults with health problems who were 65 or younger went without care because of costs, compared with 19 percent of adults 65 and older, who were covered by Medicare.  The study found extensive gaps in access to healthcare.  More than 70 percent of  patients in Britain, Switzerland, France, New Zealand and the Netherlands were able to get same- or next-day appointments when needed.  Just half of patients in Sweden and Canada reported such rapid access.

More than 33 percent of American patients questioned paid more than $1,000 in medical costs in 2010, compared with less than 10 percent in France, Sweden and Great Britain – the nations reporting the lowest rates.

One reason why is that industrialized nations are more successful in giving patients easy access to primary care and to “medical homes” that are essentially centers for care and complex treatment.  A medical home is a single, familiar location where people receive care from accessible providers who know the patient’s medical history and the knowledge to optimally coordinate care.  The Commonwealth Fund study credits medical homes with fewer errors, poor information, coordination gaps, and emergency room visits.

“To varying degrees, care is often poorly coordinated,” said Cathy Schoen, the Commonwealth Fund’s senior vice president for policy, research and evaluation.  But the results also indicate that the use of medical homes reduced that lack of coordination and helped in other ways, said Commonwealth Fund researchers.  “Having a medical home makes a difference; it makes a difference in every country,” Schoen said.