Posts Tagged ‘Government Accountability Office’

As Many As 112 Million May Have Pre-existing Conditions

Wednesday, May 16th, 2012

Between 36 million and 112 million Americans have pre-existing conditions, according to the Government Accountability Office (GAO).  Previously insurers have been able to deny coverage to sick people or offer policies that don’t cover their pre-existing conditions.  The Patient Protection and Affordable Care Act (ACA) prohibits insurers from charging higher prices to people with pre-existing conditions.

Americans with pre-existing conditions represent between 20 and 66 percent of the adult population, with a midpoint estimate of 32 percent.  The differences among the estimates can be attributed to the number and type of conditions included in the different lists of pre-existing conditions.

The GAO compared several recent studies that tried to determine how many adults have pre-existing conditions,  based on the prevalence of certain common conditions.  Hypertension, mental health disorders and diabetes are the most common ailments that lead insurers to deny coverage, GAO said.  The report doesn’t say how many of those people are presently uninsured, but the insurance industry said that number could be relatively low.  Most people have insurance through an employer that is available irrespective of pre-existing conditions, according to America’s Health Insurance Plans (AHIP).  The trade association stressed that requiring plans to cover everyone is closely linked to the individual mandate, which the Supreme Court could strike down this summer.  There is widespread agreement that the two policies must go hand-in-hand — the Obama administration told the Supreme Court that if it strikes down the mandate, it should also toss out the politically popular requirement to cover people with pre-existing conditions.

Adults with pre-existing conditions spend $1,504 to $4,844 more annually on healthcare, and the majority — 88 to 89 percent — live in parts of the country “without insurance protections similar to the Affordable Care Act provisions, which will become effective in 2014.”

GAO’s analysis found that nearly 33.2 million adults age 19-64 years old, or about 18 percent, reported hypertension in 2009.  People with hypertension reported average annual expenditures of $650, but expenditures reached $61,540.  Mental health disorders and diabetes were the second and third most commonly reported conditions.  Cancer was the condition with the highest average annual treatment expenditures — approximately $9,000.

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.”

Obama Administration Reverses Itself on Patient Disputes With Insurers

Wednesday, July 13th, 2011

The Obama administration has fine-tuned rules that give patients greater clout in disputes with health insurers, changing the standards in ways that disappointed leading advocates for healthcare consumers.  The rules are designed to guarantee patients the same rights to appeal if their insurers do not cover care that is considered necessary.  The federal standards, part of the Patient Protection and Affordable Care Act (ACA), replace a patchwork of varying state policies.  The rules allow patients to protest to their health plans; if they do not succeed, they can take their complaints to an outside arbiter.  Department of Health and Human Services (HHS) officials issued the rules 11 months ago, but they have revised them.  Insurers and employers have long wanted limited appeal rights; conversely, consumer groups have argued for stronger patient protections.  In the new version, the grounds to protest an insurer’s decision are narrower than consumer groups prefer.

Writing on the Becker’s Hospital Review website, Rachel Field says that “The earlier rules governed consumers’ right to appeal denials by health plans.  The overhaul gave members in group and individual health plans the right to appeal the denial of coverage to an independent review panel.  The administration’s new rules give beneficiaries less time to prepare an appeal, less information about the reason for the denial and limitations on which denials can be appealed.  According to the report, patients can still appeal if their coverage is cancelled by an insurer, and decisions by external review panels are still binding.  Employer-sponsored plans that are self-insured will have to use at least two independent review organizations to make sure decisions remain unbiased.”

Because states lack the authority to regulate self-insured health plans, there has been no requirement allowing beneficiaries to appeal denials to an independent panel.  The health law extends that right to more than 44 million Americans covered by self-insured plans that will lose their exempt status this year.  “The right to an external appeal is considered one of the most important consumer protections that you can have,” said Steve Larsen, director of the Center for Consumer Information and Insurance Oversight at the HHS.  “Consumers do not want insurance companies making medical decisions for them or for their families.”  According to Larsen, states will have extra time to revise local external appeals rules so that they can conform to the federal standards.  Insurers won’t have to comply with new state rules that incorporate federal requirements until January 1, 2012.

The revised rules come at an appropriate time.  Although few people want to a fight with their health insurer, it may be worthwhile.  A recent Government Accountability Office report found that more claims problems resulted from annoying but often clear-cut billing and eligibility issues than from disagreements over whether care was medically necessary.  Plus, the odds are about 50/50 that if a patient appeals an insurer’s decision, the patient will win.

Not everyone agrees with the action. “The Obama administration gave in to the insurance industry and large employer lobby on rules that would, for the first time, give rights to patients with certain employer-paid health plans to challenge a healthcare denial.  These consumers need the protection of independent reviews the most because they usually have no legal remedy for a wrongful decision to deny care under an errant 1987 Supreme Court ruling.  Health reform was intended to strengthen the public’s ability to make insurers provide the coverage patients are promised.  The administration should reverse the changes in this regulation that undermine that promise,” said Carmen Balber, Washington director for Consumer Watchdog.