Posts Tagged ‘Kaiser Family Foundation’

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.

Sick Americans Worry About the Cost of Their Healthcare

Tuesday, June 5th, 2012

Many Americans who have been sick or injured over the last year worry about the high cost of healthcare, and struggle to ensure that their care is appropriate, according to a new poll by the Robert Wood Johnson Foundation (RWJF), National Public Radio (NPR) and Harvard School of Public Health.  RWJF commissioned the poll to enhance understanding of Americans’ experiences and attitudes towards the cost and quality of medical care.

Fully 87 percent think the cost of care is a serious problem.  Approximately two-thirds – 65 percent — believe the cost of care has soared over the last five years.  In addition to the general public, the poll studied sick Americans’ experiences with and perceptions of the costs and quality of medical care.  “Sick Americans” (27 percent of adults surveyed) are defined as those who said they had a serious illness, medical condition, injury, or disability requiring significant medical care or who had been hospitalized overnight in the past year.

Many sick Americans had problems with the cost of their own medical care.  More than 40 percent reported that the cost of their medical care has caused a “very serious” (20 percent) or “somewhat serious” (23 percent) problem for their finances.  They also reported that expensive healthcare costs affected their ability to access care.  One in six sick Americans could not get the medical care they needed (17 percent).  Among the sick Americans who could not receive care, 52 percent report that it was because they could not afford the needed care, and 24 percent say it was because their insurers refused to pay for it.  Finally, 11 percent of sick Americans said they had been turned away by a doctor or hospital for financial or insurance reasons when they tried to receive care.

One of those people is Fresno, CA resident Amber Cooper, who has health insurance from her job in the accounting department of a small manufacturing company.  Then the company changed their insurance plan.  According to Cooper, “We were in a conference room…and I had heard rumors but didn’t know if it was true, and I started crying in front of everyone and actually had to excuse myself to gather myself together and go back in.  Unfortunately, the rumors had come true with potentially devastating consequences for Cooper, who had a liver transplant at the age of 10 and takes a medication twice a day so her body won’t reject her liver.

Every year my company changes the insurance.  And instead of giving us three different choices for insurance plans, they were changing to one, which was a high-deductible plan with no prescription coverage,” she said.  Cooper was devastated.  Her anti-rejection medicine costs more than $1,000 a month, a price that she could not afford to pay on her own.

Cooper found help at the HealthWell Foundation, which pays for her medication.  Still, she can’t afford the $300 monthly blood test to make sure she’s not rejecting her liver.  “It is scary because the only way to tell if you’re going to go into rejection is by the blood work.  Your numbers will be a little bit crazy, and then the doctors will be like, ‘OK, you need to get in and we need to check you out and make sure you’re OK.’  So I really took a risk not getting that blood work done.  But I couldn’t afford to get it done. I really couldn’t,” she said.

Cooper isn’t alone.  Health insurance has been changing noticeably “beneath the surface,” said Drew Altman, president and CEO of the Kaiser Family Foundation, a private, nonprofit, nonpartisan research group. “In plain language, it’s becoming skimpier and skimpier and less and less comprehensive.  This affects not only how people seek healthcare — they’re more reluctant to get it if they can put it off.  But it also affects family budgets in a very real way, especially as we’re still coming out of recession and families are still crunched by a weak economy,” Altman said.

Paul Fronstin of the Employee Benefit Research Institute says this is a national trend.  “Deductibles have gone up. Co-pays have gone up.  You see cost-sharing for out-of-network services have gone up,” Fronstin said.  “It seems to have accelerated in the last few years.  Healthcare is just continuing to take a bigger bite out of take-home pay.”  According to Fronstin, the economy is causing more companies to cut back on coverage because of the math: It’s the only way they can keep up with rising healthcare costs.  “Employers are trying to manage those costs.  They’re trying to keep those cost increases as close to inflation as possible.  And they’re doing everything they can to get their workers to think twice about the healthcare that they are using,” Fronstin said.

Little-Known ACA Proviso Stirs Controversy

Wednesday, May 9th, 2012

There’s a largely unseen battle raging among consumer advocates, physician groups and some Democrats in Congress over a key benefit in the Patient Protection and Affordable Care Act (ACA) — tax credits that will help millions of people purchase insurance.

According to Kaiser Health News, “At issue is a section of the law that outlines when low- and moderate-income employees can opt out of their employer’s coverage and instead get federal subsidies to buy insurance through new state-based marketplaces, called exchanges.  The debate over who qualifies for subsidies has been overshadowed by more-polarizing issues such as the government’s authority to require most people to buy insurance.  But if the Supreme Court upholds the law — or even most of the law — the way the tax-credit dispute is resolved will help determine how many people can get subsidized coverage.  A proposed Treasury Department rule says workers and their families cannot qualify for those subsidies unless their employer’s plan is unaffordable because it exceeds 9.5 percent of their household income.”

Consumer advocates are steadfast in their opposition to the rule because it bases affordability on how much an employee might pay for individual coverage, rather than on the cost of covering their entire family.  As a result, many workers won’t be able to afford family coverage, yet their spouses and children will be ineligible to get help to buy insurance.  Approximately 3.9 million dependents might be impacted, according to one estimate.

“The proposed rule excludes people Congress intended to cover,” said Bruce Lesley, president of First Focus Campaign for Children, who sent a letter to Treasury signed by more than 100 advocacy groups, including the American Academy of Family Physicians, the Children’s Defense Fund, the March of Dimes and the National Council of La Raza.  The letter asks President Barack Obama and congressional leaders to take “administrative action or legislation” to spell out what Congress intended.

Treasury officials are drafting final rules, which are expected to be released soon.  “We are working with consumers, businesses and all interested parties to ensure women and families get the affordable care they need,” Treasury Department spokeswoman Sabrina Siddiqui said.

Supporters of the proposed rule, primarily employer groups and insurance brokers, say it is in keeping with the wording in the ACA that defines affordability in terms of the cost of “self-only coverage.”  Critics, including the National Partnership for Women and Families, say it allows for basing the affordability standard on the cost of family coverage. The group notes that Treasury officials plan to use the cost of a family plan as a basis for exempting some people from penalties for not buying insurance.  “It’s unlikely that Congress intended affordability to be determined one way” for penalty fines and another for subsidies, according to the groups.

Several Democratic lawmakers who played key roles in writing and passing the law say the proposed rule is not what Congress intended.  “The notion that Congress wrote the law in a manner that would exclude many families from access to more affordable coverage…is simply incongruent,” according to Representative Sander M. Levin (D-MI), the ranking Democrat on the Ways and Means Committee, and Representative Henry A. Waxman (D-CA), the ranking Democrat on the Energy and Commerce Committee.

Employers and taxpayers have a lot at stake in the way this rule is interpreted. For every worker who forgoes “unaffordable” job-based coverage in favor of subsidized insurance, the employer pays either a $3,000 per subsidized-worker penalty or $2,000 per employee.  The government’s stake will be less if more workers retain job-based coverage and fewer people seek subsidies.  At the same time, tax credits are the main way the law is expected to help low- and middle-income Americans buy insurance if they don’t have access affordable employer-based coverage.  By 2019, for example, the Congressional Budget Office (CBO) estimated that the government will spend $70 billion in tax credits to help 18 million people buy coverage through the exchanges.

Workers paid an average of $921 for an individual health insurance policy last year. That equals 18 percent of the total cost of the plan, according to an annual survey by the nonpartisan Kaiser Family Foundation and the Health Research & Educational Trust.  An employee’s share of a family plan averaged $4,129, or 28 percent of the total cost.

Based on those figures, a worker earning $40,000 will be ineligible to get subsidies because the $921 is less than 9.5 percent of income, even though the cost of the family plan exceeds that cap. In that scenario, the worker’s dependents will be ineligible to receive subsidies.  The policy is certain to impact women, who are 2.5 times as likely as men to be insured as a dependent, the hardest, according to the National Partnership.

“It will force more people into not having an affordable option,” said Dana Cope, executive director with the State Employees Association of North Carolina.  According to Cope, family coverage costs increased the ranks of the uninsured in North Carolina, where the state subsidizes employee coverage, but does not contribute toward family insurance.  “State employees…who earn on average $41,000…cannot afford to cover their dependents,” Cope said.

Consumerism Comes to the Healthcare Market

Wednesday, May 2nd, 2012

While the nation waits for the Supreme Court to hand down its decision on the constitutionality of the Patient Protection and Affordable Care Act (ACA), businesses and their employees are voting with their wallets for one approach that’s already available: Account-based health insurance plans (ABHPs), which combine lower premiums in exchange for high deductibles.

Consumer-directed health insurance is the foundation of market-oriented health reform solutions and will be offered as an option in the public health insurance exchanges if the ACA is found to be constitutional.  At present, 59 percent of major employers have an account-based health plan option, an increase of 53 percent when compared with last year, according to a survey by Towers Watson and the National Business Group on Health.  More importantly, employee enrollment in ABHPs has risen at companies offering them as a choice.  This year, 27 percent of eligible employees are enrolled, a 35 percent increase over 2011.  That finding is similar to a Fidelity Investments report showing a 61 percent surge in sign-ups for health savings accounts (HSAs) among its client companies — the largest one-year gain on record.  ABHPs are linked to tax-advantaged HSAs, because contributions can be used to accumulate funds to pay costs not covered by the high-deductible plans.  Reduced premium costs are the key driver.

Employers anticipate that their healthcare costs to rise 5.9 percent in 2012, according to the Towers/NBGH survey.  Total yearly premiums paid by employers and workers for high-deductible plans in 2011 were 10 to 19 percent lower than for managed care or traditional point-of-service plans, according to a Kaiser Family Foundation study. According to Kaiser, the average annual cost for individual coverage through a high-deductible plan last year was $4,793 — 15 percent lower than for a PPO managed care option.  “Everyone saves some money, and that really matters in tough economic times,” said Helen Darling, president and CEO of NBGH.

The downside is that high-deductible accounts shift much of the burden to the employee.  Out-of-pocket expense can be painfully high in the event of illness.  By law, there is a maximum yearly out-of-pocket liability of no more than $5,950 for single coverage and $11,900 for family coverage, although the Kaiser survey reports that the average maximum out-of-pocket cost in plans for single coverage was $3,304.  Supporters of ABHPs say that a higher out-of-pocket responsibility will create smarter, more careful healthcare consumers — which is expected to slow the rapid growth of healthcare spending.

As some employers adopt health plans that require patients to pay more out of their own pockets, demand for medical pricing information is on the rise.  In response, a new crop of entrepreneurial companies is providing price transparency tools to self-insured employers.  “The consumerism movement is finally getting wired,” said Cyndy Nayer, president, CEO and founder of the Center for Health Value Innovation in St. Louis, who believes pricing transparency in health care will lower costs by fostering competition.  “This is one of the best disruptive technologies.”

The dearth of price information in healthcare has been a major driver of ballooning costs, medical cost containment experts say.  Managed care had made pricing of individual medical services unknown to health care consumers.  Providers participating in HMOs had traditionally been paid on a per-head-per-month — basis, while insurers’ negotiated discounts off fees charged by doctors participating in their preferred provider networks were rarely disclosed to patients.  Because health insurance has been primarily paid for by employers, employees had little incentive to shop around for medical care.

Mitt Romney Says “No” to Medicare on His 65th Birthday

Monday, March 19th, 2012

Even though he just celebrated his 65th birthday, GOP presidential hopeful Mitt Romney isn’t signing up for Medicare or Social Security.  According to an aide, Romney plans to keep his private health insurance plan although there is no word on whether he accessed that plan through a former employer or bought it on the individual market.  Ironically, if elected, Romney wants to offer senior citizens the choice of enrolling in the traditional program or purchasing private insurance with some financial help from the government.

Romney’s decision puts him in a tiny minority. The vast majority of seniors participate in Medicare.  Nearly all seniors are automatically enrolled in Medicare Part A, which covers hospital care, although they can opt not to use it.  Another 95 percent enroll in Medicare Part B, which covers physician services, according to the Kaiser Family Foundation.

“It was personally meaningful in me to be enrolling in the program I ran.  It made me feel one step closer to the beneficiaries,” Dr. Donald Berwick, who left his post at the Centers for Medicare and Medicaid Services (CMS) at the end of 2011, said.  “It validated what I had thought — which was that it was remarkably easy [to sign up].  Any president, at any age, should be committed to these important programs,” Berwick said.

By contrast, two of Romney’s competitors — Newt Gingrich and Ron Paul — are already 65, the age at which most Americans become eligible to enroll in Medicare’s coverage of hospital treatment, physician visits and other medical care, including prescription drugs.  Gingrich has a Medicare Advantage plan, administered by Blue Cross Blue Shield, according to his campaign.  Medicare Advantage plans are run by private insurance companies, who receive a fixed monthly payment from the federal government.  Gingrich frequently plugs Medicare Advantage and wants to expand the proportion of seniors who enroll in it from the current 25 percent.  Congressman Paul has a federal government-sponsored Blue Cross Blue Shield employee health insurance plan.  He has said that he would not change any aspect of Medicare for current beneficiaries but would let younger people opt out of the program and use medical savings accounts or other ways to pay their own healthcare costs.

According to NPR’s Julie Rovner, “Romney is clearly making a political point.  Wealthy people like him ought to pay more for their Medicare benefits (if they get them at all) and that perhaps 65 is a little young to qualify, too.  ‘Wealthier seniors will receive less support,’ under the changes Romney has proposed for Medicare, according to his website. http://www.mittromney.com/issues/medicare At the same time, he is proposing to ‘gradually raise the retirement age to reflect increases in longevity.’  But could his political point cost him more down the road if he changes his mind?  Maybe.  Medicare charges penalties for those who wait to sign up.  It’s the program’s way of ensuring that people don’t wait until they get sick to enroll.”

Beneficiaries currently have a seven-month window to sign up for Medicare: three months before their birth month, the month of their birthday, and three months after their birthday.  That means that Romney has through June to enroll if he changes his mind.  The majority of adults use the Social Security Administration website to enroll for their benefits, while others go to local district offices.

Writing for the Huffington Post, Ethan Rome, Executive Director of Health Care for America Now, says that “I’m not sure what Romney’s trying to prove, but what his action says is clear: I’m not like the Americans who enroll in Medicare.  I’m special.  I’m rich.  I’m better than you.  Ask yourself: If Romney doesn’t need or want Medicare for himself, will he protect it for the rest of us who do?  Of course not.  Instead, he’ll continue to support the Republican plan to eliminate Medicare as we know it.  He’ll work to turn Medicare into a voucher program that will saddle seniors with thousands of dollars in out-of-pocket health care costs.  Because, after all, what senior can’t afford to spend an extra $6,400 a year on doctors and hospitals?  Before Medicare, seniors were left at the mercy of the private market and therefore virtually uninsurable.  Without insurance, even brief hospital stays could impoverish them.  The result was that the elderly went without the care they needed — unless their families were rich.  Most seniors were one illness away from bankruptcy.”

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.

States Want Feds to Move Faster on ACA Rules

Tuesday, February 21st, 2012

Although the Patient Protection and Affordable Care Act’s (ACA) major provisions don’t go into effect until 2014, states and insurers must be prepared to enroll some 32 million Americans who currently lack insurance coverage into Medicaid or private insurance programs.  According to Kaiser Health News, the fly in the ointment is that to successfully unveil their individual programs in just two years, the states must make important crucial decisions and take actions this year.

It will be difficult for many states to meet fast-approaching deadlines, and some may not make it, said Brett Graham, managing director at Leavitt Partners, a consulting firm.  Two years is surprisingly brief and many states need information from the federal government detailing the various insurance exchange options and precisely which benefits must be included in health plans.  Complicating the situation is the fact that states are competing for a limited pool of information technology vendors to give them the help they need.  “It’s a pressure cooker,” said Graham. States are “in a position where they have to act with imperfect information.”

Next New Year’s Day, the Department of Health and Human Services (HHS) will certify which states are ready to run their own exchanges.  To earn certification, a state must put in place laws to fund the exchanges’ continuing operations.  While the federal government is providing financial help up front for the creation of exchanges, states will assume the cost once they are underway.  HHS can issue a conditional certification for those states that are making progress but need more time.

Only 14 states and the District of Columbia have made significant legislative progress toward creating exchanges, according to a Robert Wood Johnson Foundation report prepared by the Urban Institute. The study’s authors reach the conclusion that because of the ACA, the percentage of the population that is uninsured will decline in all 50 states and Washington, D.C.

While some states are aggressively moving forward, “at the other end are states that say, ‘no way, no how, we’re not doing it.’  Montana, Texas, Louisiana, Florida, they are not going to build it and they’re playing a game of chicken,” said Graham.  “They’re waiting for the Supreme Court,” hoping it will declare the ACA unconstitutional in June.

The majority of states cannot make up their minds about whether to build their own exchanges and or participate in the proposed federal model. It’s ironic that some states that are participating in the Supreme Court challenge have taken action: Colorado, Washington and Nevada have set up exchanges.

According to the Robert Wood Johnson/Urban Institute report, “Without action by these states, their populations will still benefit from health reform through the expansion of Medicaid/CHIP, but will have to rely on the federal government to create exchanges, as called for under the ACA.  This creation will be dependent on adequate federal resources and political support.”

According to the Robert Wood Johnson Foundation and the Urban Institute, 15 states have made “little or no progress” implementing insurance exchanges where individuals and small businesses can buy private insurance.  The states that haven’t started working on creating exchanges are among the states with the most residents eligible for federal subsidies to help buy insurance.  According to the analysis, the federal government has the ability to establish and run a substitute in any state that does not establish its own exchange.

Creating a full or partial federal exchange also could be a problem, although some healthcare analysts are unsure whether it will be any easier for the federal government.  It faces the same brief timeline as the states.  While Obama administration officials say they have the money to fund exchanges, many healthcare analysts aren’t so certain.  Most state legislatures will adjourn for the year by March or April — before the Supreme Court hands down its ruling — according to the National Conference of State Legislatures.  Special sessions after the ruling would be virtually impossible in an election year.

Public Perceives Supreme Court Justices As Biased Over ACA’s Legality

Monday, February 6th, 2012

Approximately 60 percent of Americans believe that the Supreme Court justices who will hear the Patient Protection and Affordable Care Act (ACA) will base their judgments more on personal ideology than a legal analysis of the individual mandate, according to a recent Kaiser Family Foundation poll.

Only 28 percent believe the justices will base their decision on the mandate without regard to politics and ideology.  The poll also asked about general views of the Supreme Court and found that 75 percent of the public believe that justices sometimes let their personal politics sway their decisions.  Seventeen percent said justices more often than not decide cases based on legal analysis.  The court is expected to hear oral arguments in March in a case brought against the Patient Protection and Affordable Care Act (ACA) by 26 states.

The Kaiser poll found that the individual mandate, a requirement that most Americans purchase health insurance by 2014 or pay a fine, remains unpopular — 67 percent of Americans opposed the provision and just 30 percent supported it.  Overall, approximately 37 percent of Americans view the health law favorably, while 44 percent have an unfavorable view.

In terms of the “repeal and replace” agenda that House Republicans are pursuing, it’s not really winning over the public.  According to the Kaiser poll, 50 percent of respondents would prefer to expand the law or keep it in place; just 40 percent want to repeal it outright or replace it with an alternative.  That could be a problem, since House Energy and Commerce Health Subcommittee Chairman Joe Pitts said that a “replace” plan is on the subcommittee’s to-do list, at approximately the same time that the Supreme Court is expected to rule.  Pitts hopes that his caucus will be able to seize the opportunity to sway public opinion: “We’ll have a window of opportunity to — with everyone looking — to explain that the Affordable Care Act is not fully implemented yet.  A lot of people think it is.  So we’ll use that opportunity in that window to discuss the full ramifications of the Affordable Care Act and what we’ll replace it with.”

For example, Justice Elena Kagan (who was Solicitor General at the time the ACA was passed and has recused herself from the Supreme Court case) and noted Supreme Court litigator and Harvard Law Professor Laurence Tribe, who worked for the Justice Department at the time, had an email exchange in which they discussed the pending healthcare vote.  “I hear they have the votes, Larry!!  Simply amazing,” Kagan wrote to Tribe in an email.

“So healthcare is basically done!” Tribe responded to Kagan.  “Remarkable.  And with the Stupak group accepting the magic of what amounts to a signing statement on steroids!”  The “Stupak group” refers to then-Representative Bart Stupak (D-MI), who masterminded a group of House Democrats who had indicated they would not vote for the ACA if it permitted federal funds to pay for abortions.  Ultimately, Stupak and his allies voted for the bill, even though no additional language was added that would prevent federal funding for abortions.

Writing for KSL.com, contributor Curt Mainwaring muses on what will happen if the Supreme Court upholds the ACA. “If the Supreme Court rules that ACA is constitutional, healthcare costs will likely continue to rise — although at a slower rate than if the law were determined to be unconstitutional.  Healthcare costs currently make up approximately 18 percent of gross domestic product.  If expenditures continue on their current trajectory, ‘the share of GDP devoted to healthcare in the United States is projected to reach 34 percent by 2040.’  In more intimate terms, the Department of Health and Human Services demonstrates individuals paid approximately $1,000 per year in healthcare costs in 1960, more than $7,000 per year in 2007, and are projected to pay more than $13,000 per year by 2018.

“Simply put, this kind of a rise in healthcare costs is unsustainable — and these kinds of projections are part of the reason ACA was created in the first place.  Nevertheless, claims of ACA’s positive impact on the economy have likely been overestimated.  ACA focuses heavily on reducing the cost of health insurance — a factor that will likely result in reduced insurance costs.”

Will Cuts in Healthcare Save the Federal Budget?

Tuesday, December 6th, 2011

Healthcare budget and policy experts are waiting for Washington to eventually face the difficult task of finding even more savings to cut the deficit.  They anticipate that health spending — which makes up more than 20 percent of the federal budget — will be targeted.  Some healthcare leaders are already planning to redirect a debate they’re expecting in 2013.  They hope to prevent spending from being shifted from one part of the system to another.  Jack Lewin, chief executive of the American College of Cardiology, said that proposals to address the basic causes of high healthcare costs have mostly been ignored in Washington.

“We talk about them all the time, but there’s nothing that we’re doing in any of these proposals to get that done,” Lewin said.  “What we would like to get on the table that’s not there is a paradigm shift in thinking about how you control costs.”  According to Thomas Scully, a former Medicare administrator under President George W. Bush and now a senior counsel at Alston & Bird, an Atlanta-based law firm, “There’s going to be a Round Two (of cuts), but after the election, because of the economic pressures exerted by the national debt.”

Proposals include reducing payments to providers; asking beneficiaries to pay more for coverage; and raising the Medicare eligibility age.  The healthcare interests that might take another hit in 2013 want to start planning now.  Several key healthcare leaders – the majority of whom have been through other cost-cutting campaigns — say efforts to reduce spending too often transfer costs from the federal budget and individuals, insurers, doctors and hospitals.

These worries have caused “people from dramatically different quarters to start thinking about what to do to get their hands around this” and redirect the conversation, said Karen Ignagni, president of America’s Health Insurance Plans.  “I’ve been talking to a range of stakeholders about how to work together…to urge policymakers to look at what’s already out there now and build on it.”

The Patient Protection and Affordable Care Act (ACA) is one element of this debate.  Administration officials and other supporters of the law say it will help drive down costs through initiatives designed to promote primary care, emphasize on preventive medicine, study treatments to evaluate their effectiveness and rate hospitals and other providers on quality.  Other healthcare authorities counter that the law will not strongly impact costs because its reforms are small and will mature incrementally.

Additionally, the law saves money by cutting Medicare payments to hospitals and other providers; it also places some unwelcome standards on health plans.  For example, insurers cannot reject people with pre-existing conditions, must justify rate increases of 10 percent or more, and send rebates to consumers if they don’t spend a minimum of 80 percent of premiums on healthcare.

Writing in the Washington Post, Drew Altman and Larry Levitt – both with the Kaiser Family Foundation — note that “Healthcare costs are driving people into poverty.  Indeed, if the burden of healthcare expenses were not taken into account, then 10 million fewer people would have been classified as poor.  One of the biggest jumps in poverty under the new method is among people with private health insurance.  We tend to think of such people, most of whom get coverage through their jobs, as being better equipped to handle the cost of getting sick.  But even those who are insured are increasingly vulnerable to high healthcare costs, in no small part because, as costs keep rising, employers have shifted more of the burden onto workers.  The share of employees with an insurance deductible of $1,000 or more for single coverage has tripled in the past five years.  The trend is especially strong among small businesses, where half of workers faced a deductible of at least $1,000 in 2011.  For those on the edge of poverty, a big medical bill could send you over it — even if you have insurance.  The effect of healthcare costs is particularly acute for the elderly, with the proportion of seniors living in poverty increasing from nine percent under the official census measure to 16 percent under the alternative measure.  An astounding 49 percent of seniors are living at or below twice the poverty level, a threshold at which people are still considered low-income (up from 35 percent under the official method).

“It’s up to us to get really serious with the agenda so that, when the time comes after the election, we are prepared to offer serious proposals that deal with costs and that do not impair the quality of care,” said Ron Pollack, executive director of the consumer group Families USA.

Employer-Susidized Healthcare Insurance at a New Low

Wednesday, November 23rd, 2011

Fewer than half of  America employers – just 44.5 percent in the 3rd quarter, a decline of more than five percent in three years, — contribute to their employees’ healthcare coverage, according to a Gallup and Healthways Inc., poll.  The firms, which surveyed more than 90,000 adults, blamed the decline on high unemployment, under-employment and an increased number of employers who do not offer health insurance to their workers.

Employer-sponsored health insurance is one of the pillars of the $2.6 trillion U.S. healthcare industry.  Unfortunately, companies have scaled back benefits and raised employee charges to cope with fast-rising healthcare costs and anemic economic growth.  The latest figure was 5.3 percent below the 2008 high of 49.8 percent, when the companies began tracking trends in employer-sponsored health insurance.  “The health insurance system in the United States is experiencing numerous changes.  Governments and businesses have and will continue to cut back and/or reform their health coverage offerings,” according to the pollsters.

There was also an increase in the ranks of those covered by government plans from Medicaid, Medicare and military programs, which was up 2.2 percentage points since 2008 at 25.1 percent but off a 2010 high of 25.7 percent.

According to the Kaiser Family Foundation, there were 41 million uninsured American adults and 24 million adults under retirement age receiving the Medicaid program for low-income people and other public insurance plans last year.  Medicare covers an estimated 48 million beneficiaries.  The survey found higher levels of health insurance coverage among young people aged 18 to 26, which the pollsters attributed to a provision of the ACA that allows parents to cover grown children under their insurance plans.  Other portions of the law, including tax credits for small businesses, did not appear help those aged 25 to 64, whose uninsured ranks increased.

One large employer cutting back on healthcare coverage is Wal-Mart, the nation’s largest private employer.  Citing rising costs, the retailer told its employees that all future part-time employees who work less than 24 hours a week will no longer be eligible for any of the company’s health insurance plans.  Additionally, new employees who average 24 hours to 33 hours a week will no longer be able to include a husband or wife as part of their healthcare plan, although children can still be covered.  This is a massive shift from a few years ago when Wal-Mart expanded coverage after being criticized because so many of its 1.4 million workers could not afford or did not qualify for coverage — sending many of them to Medicaid.

“Over the last few years, we’ve all seen our healthcare rates increase and it’s probably not a surprise that this year will be no different,” said Greg Rossiter, a Wal-Mart spokesman.  “We made the difficult decision to raise rates that will affect our associates’ medical costs.  The decisions made were not easy, but they strike a balance between managing costs and providing quality care and coverage.”

There’s also some good news on the employer-subsidized healthcare front. Nearly 75 percent of medium-to-large employers plan will continue to offer their workers health insurance once the major provisions of the ACA take effect, according to a survey by consulting firm Towers Watson.  According to the survey of 368 mid-to- large-sized companies, 71 percent plan to continue to offer healthcare benefits to their employees through 2014, the year that everyone will be required to have health insurance and state-based health insurance exchanges will kick off.  Approximately one-third of the companies are not certain if they will continue offering insurance, or, if they stopped providing insurance, whether they would compensate employees by offering pay raises.

“With so much still unknown regarding both the short- and long-term impact of healthcare reform, most employers will not make wholesale changes to employer-sponsored health plans in 2012,” said Ron Fontanetta, senior healthcare consulting leader at Towers Watson.