Posts Tagged ‘healthcare insurance’

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.”

When Uninsured Have Dental Pain, They Often Head to the ER

Wednesday, April 11th, 2012

Greater numbers of Americans , especially those who lack insurance coverage, are turning to the emergency room for routine dental care.  This choice frequently costs 10 times more than preventive care and offers far fewer treatment options than a dentist’s office.  The majority of these ER visits are to treat toothaches that could have been avoided with regular checkups but went untreated, often due to a shortage of dentists, particularly those who treat Medicaid patients.

The number of ER visits nationally for dental problems increased 16 percent from 2006 to 2009, and a report from the Pew Center on the States states that the trend is just getting started.

In Florida, more than 115,000 dental patients visited the ER in 2010, costing more than $88 million.  That included more than 40,000 Medicaid patients, a 40 percent increase when compared with 2008.  Many ER dental visits involve repeat patients seeking additional care.  In Minnesota, nearly 20 percent of all dental-related ER visits are return trips because emergency rooms generally are not staffed by dentists.  They are equipped to offer pain relief and medicine for infected gums but not much more.  Because many patients can’t find or afford follow-up treatment, they return to the emergency room.  “Emergency rooms are really the canary in the coal mine.  If people are showing up in the ER for dental care, then we’ve got big holes in the delivery of care,” said Shelly Gehshan, director of Pew’s children’s dental campaign.  “It’s just like pouring money down a hole.  It’s the wrong service, in the wrong setting, at the wrong time.”

For example, in 2009, 56 percent of children enrolled in Medicaid received no dental care.

Visiting ERs for dental treatment “is incredibly expensive and incredibly inefficient,” said Dr. Frank Catalanotto, a professor at the University of Florida’s College of Dentistry.  Preventive care such as regular teeth cleaning can cost $50 to $100, as opposed to $1,000 for emergency room treatment that may include painkillers for aching cavities and antibiotics from resulting infections, Catalanotto said.  Infections can be dangerous, particularly in young children, who often have fevers and suffer from dehydration from preventable dental conditions.  In Florida 200 children were hospitalized in 2006 for those types of infections.  The recession has only worsened the trend, according to Catalanotto.  When someone in the family is laid off, dental tends to take a back seat to food and other necessities.

The Wisconsin Hospital Association has estimated that 32,000 patients with dental problems visit hospital ERs every year. The fees paid to dentists by state health programs such as BadgerCare Plus are the fifth-lowest in the country, according to a report by the Pew Children’s Dental Campaign.  Raising the fees paid to dentists is not likely in the short term given the state’s budget, said Matt Crespin, associate director of the Children’s Health Alliance of Wisconsin, an affiliate of Children’s Hospital and Health System.  “That’s why some of those innovative models have to be looked at,” according to Crespin.

Pekin Hospital in central Illinois has seen a significant increase in ER patients with “very poor dental health,” said Cindy Justus, the hospital’s ER nursing director.  They include uninsured patients and drug abusers, and many are repeat patients.  “There’s just not a lot of options” for them, Justus said.  Shortages of dentists, most notably in rural areas, are part of the problem, Gehshan said.

In Illinois’ Cook County, — which includes Chicago — ER dental visits rose nearly 77,000 between 2008 and 2011.

The cause of the problem is too little financing for dental care in the healthcare system. “And when you lose adult dental coverage like California did in 2009, that creates an even bigger problem,” Gehshan said.  “We do have a safety net, and it’s not big enough,” she said.  In fact, she said, California’s dental care system can only handle about 70 percent of the need in the state, and that’s if the system were actually at full capacity.

Amazingly, 25 percent of all California children have never been to a dentist.  As a result, when those children and their parents end up in the emergency room, using time and resources that could be better spent on non-dental emergencies, that costs California’s taxpayers money, Gehshan said.

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.

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.

Most Unemployed Americans Have No Healthcare Insurance

Tuesday, September 27th, 2011

Nearly 75 percent of unemployed Americans can’t afford needed healthcare or have their prescriptions filled; another 50 percent struggle with medical bills or medical debt.  As many as 60 percent of working Americans depend on employer-based health insurance;  when 15 million working-age adults lost their jobs between 2008 and 2010, an estimated nine million also lost their health insurance, according to the Commonwealth Fund report.

The report also concludes that when the most important provisions of the Patient Protection and Affordable Care Act (ACA) are fully in effect in 2014, unemployed people will have more health insurance choices.  Unfortunately, the current lack of options has led to a health and financial crisis for many Americans who lost their health insurance benefits along with their jobs.  The report’s researchers analyzed data from the 2010 Commonwealth Fund Biennial Health Insurance Survey.

“It’s clear from this report that losing a job and health insurance simultaneously is a serious threat to a family’s health and financial stability,” Commonwealth Fund President Karen Davis said.  She noted that “the Affordable Care Act will assure that families already struggling with the devastation of unemployment will still be able to get the health care they need and will be protected if they become seriously ill.”

The survey of 3,033 adults was conducted by Princeton Survey Research Associates International between July, 2010, and November, 2010.  The results indicate that many individuals who lost health coverage are carrying medical debt or skipping needed healthcare or neglect to fill prescriptions because of cost.  In 2010, two of five (40 percent) adults aged 19 to 64 — or 73 million people — reported difficulty paying medical bills, being contacted by a collection agency about unpaid bills, having to change their way of life to pay bills.  This is up from 34 percent, or 58 million people, in 2005.  Increasingly, cost is becoming a barrier to getting needed care. 

Approximately 70 percent of adults who earned less than 200 percent of the federal poverty level and lost their jobs and health benefits became uninsured, compared with about 42 percent of those at or above 200 percent of the poverty level.  Just eight percent of lower-income workers continued their coverage through COBRA after losing their jobs, compared with about 21 percent of those with higher incomes who chose COBRA. 

“Clearly, COBRA subsidies made a big difference for millions of unemployed people who had no other option for affordable health insurance coverage,” Michelle Doty, vice president at the Commonwealth Fund said.  “As the economy continues to struggle to recover, extending those subsidies would assure that workers, particularly those with lower incomes, could maintain their health insurance.”

The report  — which advocates for universal coverage — the Commonwealth Fund said that 60 percent of those left uninsured during the recession were unable to find a replacement plan they could afford and 35 percent were refused coverage by insurers.  “Once you are unemployed and uninsured, it’s nearly impossible to afford COBRA or buy an individual policy,” said Commonwealth Fund Vice President Sara Collins.

Walgreens: One-Stop Shopping for Healthcare Insurance

Monday, August 15th, 2011

The nation’s largest drugstore chain is planning to begin selling health insurance this fall.  Walgreens, which operates 7,742 drugstores in all 50 states, the District of Columbia and Puerto Rico, will sell health insurance products with different price ranges and coverage levels nationally through a private health insurance exchange.

According to Walgreens officials, “As always, we’re looking at a number of options in light of healthcare reform as we continue to seek ways to help our customers better navigate today’s healthcare system.”  Health reform mandates the creation of federal and state-funded public health insurance exchanges by 2014 that will offer subsidized insurance for people who lack insurance. Multiple companies, many not typically associated with health insurance, are also expected to jump into the embryonic but lucrative market for health insurance exchanges — estimated to be worth billions of dollars — prior to 2014.  These include retailers, financial services providers and a major payroll processer that are actively planning to create their own private health insurance exchanges.  Walgreens neither confirmed nor denied the report,  but it’s expected that the insurance plans will be available online, in-store or via call centers and will be branded by national insurers in some instances.  Walgreens currently offers flu shots and vaccinations at its “take care clinics” so this new move is seen as a bid to become a one-stop shop for healthcare needs.

The investment banking firm TripleTree,  which focuses on the healthcare and technology market, estimates that between 2014 and 2019, as many as 36 million Americans will buy their health insurance from exchanges.  “For retailers, (creating a private insurance exchange) is a way to generate more revenue from a new business,” Chris Hoffman, TripleTree’s chief marketing officer, said.  “Those companies that get their exchanges up and running before 2014 could also succeed in stealing customers away from the public exchanges.”.

Hoffman pointed out one crucial distinction between public and private health insurance exchanges.  Consumers who qualify for government subsidies can participate only in public exchanges, and not private exchanges.  Still, Hoffman said that private exchanges will attempt to stay competitive with public exchanges by offering other incentives to join, such as loyalty programs that tie in discounts and bundling other types of insurance like life insurance along with their health insurance products.

By entering into a partnership with some of the nation’s biggest health insurers, selling health insurance is a natural evolution in Walgreens’ process of becoming a one-stop shopping destination for all healthcare needs.  Some forms of insurance will be branded by national insurers and others will be “private label” insurance products sold through Walgreens’ exchange.

Writing on the bizmology website, Alexandra Biesada says that “I wouldn’t be surprised if it’s true.  Walgreen has rushed to fill gaps in our nation’s fractured healthcare system, opening hundreds of in-store Take Care Clinics, worksite healthcare centers and by offering a slew of healthcare services, including immunizations and counseling for chronic conditions, such as diabetes.  It also provides products and services to pharmacy patients and prescription drug and medical plans through its Walgreens Health Services unit.  Already a leader in healthcare services, offering health insurance is a logical next step for Walgreen.  With the ranks of the uninsured and underinsured swelling, consumers are being steered to health insurance exchanges under the Patient Protection and Affordable Care Act (aka the healthcare reform bill) passed into law in March 2010.  In addition to the creation of federal and state-sponsored health insurance exchanges, the private sector, including retailers such as Walgreen, is expected to enter the market.  While only consumers enrolled in government-sponsored exchanges are eligible for subsidies, privately-sponsored exchanges could still be competitive by offering subscribers other incentives to join their network.  Some retailers, Sam’s Club comes to mind, already offer select customer groups services, including group health insurance.  So the idea of buying coverage from a retailer, rather than through an employer or broker, isn’t unprecedented.  Walgreen has moved quickly to capitalize on the transformation of our healthcare system and is looking for growth opportunities beyond its vast network of retail stores.”

HHS Issues Guidance for State Healthcare Exchanges

Wednesday, July 27th, 2011

The Department of Health and Human Services (HHS) has proposed a structure for health insurance exchanges that gives states significant flexibility in how and when they set up open marketplaces designed to boost competition.  HHS announced a sliding deadline for states to create the exchanges, allowing them to receive conditional approval if they are in advanced preparation by 2013.

Additionally, states that are not ready by the final 2014 deadline can delay opening the exchanges until 2015 or later.  States that are still deciding whether to establish health insurance exchanges have sought clarity on how these insurance marketplaces will function.  The federal government previously had provided few details on this key part of the Patient Protection and Affordable Care Act (ACA).

The rationale for the exchanges is to create convenient access to an open marketplace of insurance plans that lets uninsured people and small businesses join together to negotiate affordable rates.  States had faced a January 1, 2013, deadline to decide if they would participate in the program.  Those opting to participate are expected to create governance and information technology structures virtually from scratch to have the exchanges in full operation by 2014.

“If we don’t have significant progress made by the end of the year, the IT experts tell us it’s going to be really hard to meet the deadline,” Kansas Insurance Commissioner Sandy Praeger said.  She is working to establish an exchange despite a lack of legislation in her state to move forward with it, not to mention a conservative governor who strongly opposes the health law.  “The health insurance market is often broken, especially for small businesses,” said HHS Secretary Kathleen Sebelius.  Sebelius said the exchanges would share three key features: They will serve as one-stop shops for comprehensive insurance needs; create competition between insurers based on price and quality; and provide basic coverage to all Americans.  “This is how members of Congress get their health insurance today,” she said.  “And once these reforms are fully in place, buying insurance will become much more like buying a home appliance or an airline ticket.”

Meanwhile, HHS announced three new initiatives to help states improve the quality and cut the cost of care for “dual eligible” – the approximately nine million Americans who qualify for both Medicare and Medicaid.  The programs include a demonstration program to try out two new financial models to better coordinate care for people who are eligible for both government programs; a demonstration program to help states upgrade the quality of care for people in nursing homes that focuses on cutting hospitalizations; and setting up a technical resource center to help states improve care for high-need high-cost beneficiaries.  “By improving care to the most vulnerable of our citizens, we can improve the quality of their lives and prevent wasteful spending,” Sebelius said.  “Governors and their staff have been looking for tools to help them accomplish these important goals.  I am pleased that we can continue our strong partnership with the states to do this.”

These moves couldn’t come at a better time.  It is estimated that the growth in the uninsured adult population continued in 2010 — particularly among the number of long-term uninsured and poorer uninsured.  Americans of all ages who were uninsured during the last year reached 60.3 million in 2010, an increase of nearly two million when compared with 2009, according to a report by the National Center for Health Statistics, a division of the Centers for Disease Control and Prevention.

Private health coverage continued to decline while public coverage increased, especially for children.  Among non-elderly adults, 61.1 percent had private coverage in 2010, a 1.7 percent decline.  The rate of privately insured children fell 1.9 percent to 53.8 percent.  While greater numbers of adults became uninsured, fewer children on the whole lost coverage.  That’s largely because the percentage of kids with public coverage — Medicaid and the Children’s Health Insurance Program (CHIP) — increased to 39.8 percent, up nearly two percent.  “Medicaid and CHIP have been a real success story,” said Tom Buchmueller, PhD, a University of Michigan health economist.  State expansion of children’s health programs began increasing the percentage of publicly covered children beginning in 2008.

Sebelius was joined by Washington State Governor Christine Gregoire,  who said the 135,000 dual eligible residents of her state cost $1 billion annually in healthcare costs.  Though they represent only 12 percent of the Medicaid caseload, they total more than one-third of the spending, she said.  “If we could just reduce the cost of two percent a year by investing in community-based solutions rather than nursing homes, which is what our patients want anyway, by helping them avoid psychiatric hospitalizations, we believe we could save at least $10 million a year just with that small segment – that high-risk segment of our dual eligible population.  This is our costliest population, with the greatest need, yet we’re not able to focus on what’s right for them,” Gregoire said.  “The opportunities you’ve provided us will make this possible now.”

Man Robs Bank of $1 to Gain Access to Needed Healthcare

Thursday, July 7th, 2011

Few news stories have provided more compelling testimony about how the nation’s healthcare system fails millions of people is the report that a North Carolina man robbed a local bank of just $1 so that he could have multiple healthcare problems treated in jail.  Richard James Verone,  a 59-year-old unemployed man with multiple health issues, robbed a local bank so he could go to prison and receive treatment for his conditions — he said it was the only way he could get healthcare.

Verone has an undiagnosed growth in his chest, two ruptured back discs, and a foot problem.  His medical condition made working difficult after his 17-year career as a Coca-Cola delivery driver ended.  He tried living off savings and part time jobs, but that proved inadequate.  He applied for Social Security but only received food stamps with no resolution to his medical problems.  When robbing the bank, Verone gave the teller a note explaining that he only wanted $1.  He did not want to frighten anyone and was not doing it for the money.  After the teller handed him a dollar, Verone said “I’ll be sitting right over here on the chair waiting for the police.”  When the police arrived, Verone was sitting on a sofa inside the bank.  “I’m sort of a logical person and that was my logic,” Verone said.  “If it is called manipulation, out of necessity because I need medical care, then I guess I am manipulating the courts to get medical care.”

Verone faces charges for larceny from a person, which is unlikely to keep him behind bars for more than one year.  He is being held in Gaston County Jail, where he has already been seen by several nurses, on a $2,000 bond.  If his sentence is too short, Verone said he plans to rob again.

“The pain was beyond the tolerance that I could accept,” Verone said.  “I kind of hit a brick wall with everything.”  Verone said he “exercised all the alternatives” before the bank heist.  As the day approached, Verone paid his last month’s rent, donated his furniture and moved into a hotel.  Before going to the bank, he mailed a letter to the Gaston Gazette outlining his plans.  According to the letter, “When you receive this, a bank robbery will have been committed by me.  This robbery is being committed by me for one dollar,” he wrote, wanting to make clear that the motive for his crime was strictly medical and not monetary.  “I am of sound mind but not so much sound body.”

Writing in the San Francisco Chronicle, John Thorpe says that “After depleting his life savings and realizing he had, literally, nowhere else to turn, Verone committed the crime, hoping he could get the medical care that he so desperately needs.  This is what America has come to?  Otherwise honest folks, with nowhere to turn in life, have to resort to fake-robbing a bank with the hopes they’ll be arrested so they can receive medical care?  There is absolutely no reason for an allegedly civilized country, particularly one as wealthy as America, to pass the buck on providing healthcare for everyone.  Yes, everyone: the employed and the unemployed; the sick and the healthy; old and young.  Before you scream ‘oh no, socialism!!!’ stop and consider what you mean by that.  How do socialist systems pay for healthcare?  Taxes are collected from businesses and citizens, and a portion of those taxes go to cover the healthcare costs of everyone in the plan – in other words, everyone in the country.

“How do health insurance systems pay for healthcare?” Thorpe asks.  “Premiums are collected from businesses and employees, and a portion of those premiums go to cover the healthcare costs of everyone in the plan.  The difference between the two?  Socialized care costs less (because it has a much larger pool of people to draw from), covers everyone at all times, and prevents people from purposefully committing crimes to get treated.  Insurance systems ARE socialized systems, except they don’t cover everyone and allow a corporation – an entity that neither receives nor provides the medical treatment – to skim a profit off the top.  In what sort of twisted mind is that the rational way to provide medical care?  It’s not like the marketplace can rationally set prices for healthcare.  A dying man has no ability to check prices and compare services before deciding which hospital he’ll take his heart attack to.”

Robert Oak of the Economic Populist agrees with Thorpe.  “He (Verone) got his healthcare and how many others are committing felonies so they can get food, shelter and medical attention to save their lives?  If we cannot get universal single payer, perhaps all of America should behave as Verone did, so finally, we could all get some healthcare.  What’s wrong with this picture?”

Suzy Khimm of Mother Jones, points out that the cost of caring for Verone for the year that he is likely to be incarcerated does not come cheaply.  “The story is telling not just because it shows the sad desperation of uninsured Americans who have trouble finding healthcare — but also how costly it is to leave such problems unattended.  James Verone may have only robbed the bank of one dollar, but the cost of jailing him for just one year in North Carolina is over $23,000, not to mention the legal fees his case will rack up as well.  Similarly, if he wasn’t in prison, and his health problems worsened, he could end up in an emergency room, where the state would again have to help foot the bill if he couldn’t pay.  Insuring him would likely be the cheapest option — which is one reason why Democrats have made universal coverage a priority under federal health reform.”

Verone concludes “I didn’t have any fears.  If you don’t have your health you don’t have anything.”

Healthcare Costs Have Doubled in Just Nine Years

Wednesday, June 1st, 2011

"Where does it hurt?"

American families have seen their healthcare costs rise by more than 50 percent over the last nine years, a trend that shows no sign of reversing, according to a report from the actuarial consulting firm Milliman, Inc.

Healthcare show few signs of dropping, according to a report released Wednesday by the actuarial consulting firm.  When you add in employers’ contributions, this year’s total healthcare cost for a family of four more than doubled to $19,393 from the $9,235 reported in 2002.  The 2011 figure represents a seven percent increase compared with 2010.  The primary reason for the rising costs are primarily due to price increases in categories like pharmacy, inpatient or outpatient hospital care and doctors’ office visits.  Lorraine Mayne, one of the report’s authors, said these charge increases are a bigger factor than changes in how Americans use healthcare.  Even the passage of the Patient Protection and Affordable Care Act, which started phasing in during 2010 and aims to eventually cover millions of uninsured people, had virtually no impact on healthcare costs in 2011, Mayne said.  She doesn’t believe that new law will have any “direct, immediate impact” on the trend.

In an important finding, the study found that employers are making workers shoulder an even bigger share of total health care expenses.   The employee portion of costs paid for a family of four covered by employer-sponsored health insurance will rise to approximately $8,008 this year from $3,634 in 2002.  That is an additional $84 a week from household budgets for healthcare.  Of the $1,319 yearly increase, workers’ out-of-pocket costs rose 9.2 percent in 2011.  That outpaced the 6.6 percent increase in 2010.  Payroll deductions for insurance coverage climbed 9.3 percent this year, an increase over the previous year.  Adding insult to injury, employers’ share of their workers’ healthcare costs fell six percent in 2010, compared with eight percent the previous year.  Of the $19,393 annual cost, employees’ share is moving closer to 50 percent, according to Mayne.  “Employees are paying $8,000 of the $19,000.  That’s a decent amount much larger than other areas of consumer spending.  What we’ve observed in the past few years is employers have increasingly been offering health plans with higher deductibles and co-insurance, co-payment limits,” she said.

The rise in outpatient care is making the difference. For three consecutive years, outpatient care has led all other categories in cost increases – as high as 90 percent.  “Unit costs are increasing both because the same services have increased in price and also because new, more expensive services continue to emerge,” the report says.  Hospital costs represent the second reason for last year’s increase (for the most part because acute care is so expensive), followed by physician care, drug costs, and other types of care, such as durable medical equipment and home healthcare.  People can rein in some costs by moving to a different part of the country, according to Milliman.

Healthcare was costliest in Miami,  where spending averaged $23,362.  New York came in second at $22,785 and Chicago third at $21,996  The three lowest-cost cities were Phoenix, which averaged $17,336; Atlanta, which averaged $18,292; and Seattle, which averaged $18,536.  “These cost differences result from variation in local practice patterns and from differing costs for health care goods and services,” said Chris Girod, a Milliman principal and consulting actuary.

The Affordable Care Act: A Tale of Two Studies

Monday, May 23rd, 2011

A study of medical bills under the Patient Protection and Affordable Care Act (ACA) determined that most households will be able to afford premiums and related expenses after paying bills for food, child care, transportation and other necessities, according to the Commonwealth Fund. The mission of The Commonwealth Fund is to promote a high performing health care system that achieves better access, improved quality, and greater efficiency, particularly for society’s most vulnerable, including low-income people, the uninsured, minority Americans, young children, and elderly adults.

Approximately 8.5 to nine percent of American families living closest to the poverty line could not afford basic necessities and typical medical bills proposed by the health reform law.  The ACA requires individuals to purchase insurance by 2014, although with occasional exceptions.  The ACA restricts household out-of-pocket costs and subsidizes plans available through insurance exchanges to people with low-incomes.  Fewer households in high cost-of-living states could afford healthcare expenses, according to the Commonwealth Fund study.  The report included projections of spending on necessities, premiums and out-of-pocket costs for households between the federal poverty line and 500 percent of the threshold.  Those insured by safety net or state run insurance exchanges were not factored into the study.

Even with implementation of the ACA, some families across all income levels would continue to struggle to afford coverage because of steep out-of-pocket costs.  According to the report, 17 percent of families of four earning up to $44,700; approximately 25 percent of families earning between $44,700 and $67,050, would struggle with healthcare costs.  The data examines costs in 2014, the first year the ACA will be fully implemented and the start of state-based health insurance exchanges.  The law provides federal subsidies for the lowest-income people to buy insurance.  Americans with incomes between 133 and 399 percent of the poverty level are eligible for income-based tax credits.  Some low-income people will be eligible for subsidies to make up for out-of-pocket costs.  Americans who make less than 133 percent of the poverty level are eligible for Medicaid.

“The Affordable Care Act is very good news for millions of Americans who are struggling to afford health care, going without health insurance, or skipping the care they need because they can’t afford it,” said Commonwealth Fund President Karen Davis. “The new law makes health insurance and health care affordable for nearly all families, and introduces delivery system reforms that have the potential to greatly improve quality and efficiency.  If implemented well, new entities like accountable care organizations may bring even greater savings and affordability than this report predicts.”

Although the Commonwealth report is positive about the likelihood that more families will be able to afford health insurance, Craig Pollack, M.D., M.H.S., assistant professor of medicine at Johns Hopkins, and Katrina Armstrong, M.D., from the University of Pennsylvania, are not as upbeat about the ACA.  The physicians warn that as a result of certain provisions in the ACA, wealthy hospitals and physician practices might “cherry-pick” similar institutions and create Accountable Care Organizations (ACOs).  In this way, they can avoid poor and minority-heavy patient populations who will be treated elsewhere to cut costs.  ACOs encourage patients to seek care within their own network, which highlights the disparities between networks.

According to Pollack, hospitals and physician practices that treat too many minorities may be unable to join ACOs and will fall further behind in the cost and quality of care that is likely to occur in such networks.  “There is ample evidence of racial and ethnic disparities in healthcare,” Pollack said.  “Hospitals and private practices that care for greater numbers of minorities tend to have larger populations of Medicaid and uninsured patients.  These patients have less access to specialists, and their hospitals and practices tend to have fewer institutional resources than their counterparts.”