Sep
18

Why a Texas court case is hugely important to you.

You or your spouse may well have a pre-existing health condition, one that, back in the bad-old pre-ACA days would have made it hard if not impossible to get insurance coverage in the individual and small group insurance markets.

Those days may be coming back.

A Texas court case is scaring the bejesus out of many; the Trump Administration and several state attorneys general are suing to overturn provisions of the ACA that require health insurers to cover pre-existing conditions.

If this scares you, you’re not alone. More than half of people polled are afraid their insurance costs will go way up, and 4 out of ten think they may lose insurance coverage if insurers no longer have to cover pre-existing conditions.

An old athletic injury, skin cancer, stomach trouble, anxiety, a heart murmur, migraines, allergies – all those and many more are pre-existing conditions that, if the lawsuit succeeds, would likely prevent you from getting individual insurance coverage for those conditions – if you could get insured at all.

Before the ACA,

  • you couldn’t leave their job to try something new or retire early – a condition known as “job lock”
  • small employers’ costs went up dramatically if workers got sick or had specific conditions because their insurer wanted to dump them.

Under the ACA, insurers must cover pre-existing conditions, and can’t charge individuals, families, or small businesses more based on those pre-ex conditions.

This strikes me as eminently fair; I had cataract surgery and started getting migraines years go, and until the ACA I had no coverage for ANYTHING related to my eyes or brain. That was pretty scary; any medical care related to those rather important organs was money out of our family budget.

Here are some of the conditions that you are insured for under the ACA, conditions that would not be covered if the lawsuit succeeds.

I’m all for freedom and choice and all that stuff.

What I’m vehemently against is stupid public policy that results in you going bankrupt because an insurer won’t cover your pre-existing condition.

For those who claim the “free market” will fix this – you are smoking crack. No insurance company will cover your pre-ex condition – or your spouse’s, or kids’ – unless they are forced to.

What does this mean for you?

If Trump et al win this suit, your freedom to change jobs just disappeared.

 

 

 


Sep
5

Making “Medicaid for All” work

The US healthcare “system” is headed towards a cliff, and when it hits the edge, Medicaid may well be the replacement.

Briefly:

  • Managed Medicaid plans would be offered in every state
  • people would sign up for the plan they want, with the option of enrolling in regular fee for service Medicaid
  • funding would be from payroll taxes, individual service-based fees, and federal funds
  • provider reimbursement would be pegged to Medicare for ALL payers, eliminating payer-shopping by providers and increasing Medicaid FFS reimbursement

The details…

There are two ways this would work – Medicaid for All (MFA) becomes the way all of us get coverage, or Medicare remains in place for elderly folks and Medicaid covers everyone else.

It’s entirely possible employers continue providing basic healthcare coverage, but really, do they want to? It’s expensive and a pain in the neck. Instead, employers will be able to offer supplemental insurance (similar to what happens in Canada, the UK, and other countries) as an employment benefit.

Today, Medicaid comes in two general flavors – “classic” and Managed Medicaid.

Classic is fee-for-service Medicaid, where members can go to any provider that accepts Medicaid. Providers are paid on a fee for service basis, at rates that vary greatly between states (states set reimbursement).

Managed Medicaid is an option in almost every state. The states contract with healthplans to provide integrated Medicare and Medicaid in what are called “dual eligible” programs (members are eligible for both Medicare and Medicaid).

The Managed Medicaid (MM) plans are paid on a capitated basis – that is, a flat fee per member. That fee is based on the health status and health risks of the members; the sicker the member is, the higher the capitation amount.

This arrangement incentivizes MM plans to figure out the optimal ways to keep members healthy and keep costs down – keep them out of the ER, avoid inpatient hospital stays, and encourage healthy behaviors. If costs come in under budget, the plans make money (usually a couple percent at most). If not, the plan loses money – not the taxpayer. (MFA will be based on Managed Medicaid)

(a detailed explanation is here.)

Today, states with these plans in place enroll members in different ways. Some randomly assign members to plans, others allow more assertive competition among the plans for members. I’d expect this to continue under Medicaid for All; existing enrollment processes would be expanded, systems upgraded, and communications refined to address the broader market. Every fall, MM plans would compete for members, enrolling them before the end of the calendar year.

Individual contributions to premiums would be income-based (as under ACA today); there could be low copays for certain services but paperwork for members would be almost non-existent. (All Medicaid members today have ID cards that enable electronic record sharing, billing, and claims submission.)

Funding would be a combination of service-based fees (copays and co-insurance), payroll taxes, federal funds, and perhaps general state funds.

Remember, as employers would no longer have to deliver health insurance, those dollars could be spent on higher wages, to offset payroll taxes, or for other purposes. Similarly, individual payments for premiums, high deductibles and the like would be eliminated, altho some of those “savings” would go to higher payroll taxes to cover Medicaid for All.

Provider reimbursement would be up to the MM plans negotiating with providers – who would remain independent (unless they are employed in a health system that is also a MM plan provider). However, FFS Medicaid reimbursement would be increased to mirror Medicare’s rates.

Why this is the future

US healthcare is not sustainable. Period.

Family health insurance premiums are nearing $20,000, the number one cause for bankruptcy is medical debt, Medicare and Medicaid are the largest chunks of the federal budget, and industrial competitiveness is hampered by healthcare costs which are double the average costs in other countries.

And, 74% of Americans are worried about losing their insurance.

So, we can either keep driving off the cliff, or take an alternate route. One that will be very rocky, cause a lot of headaches and heartache, disrupt businesses and families and providers, but one that sooner or later, we’ll have to choose.

What does this mean for you?

It’s not a matter of if, but when.

Note – happy to engage in fact-based, citation-supported conversation. “I heard this” and “everyone knows” arguments are not helpful.

 


Sep
4

The case for Medicaid for All

When Single Payer becomes the law of the land, Medicaid will be the foundation.

We’ve looked at the current push for Medicare for All, the factors that I believe will drive us to some form of single payer, and posted a primer on Medicaid.

Here’s why it’s going to be Medicaid for All.

  1. Medicaid for All will spread the cost of universal coverage across states, reducing federal financing requirements.
    Medicaid is a state AND federal program; States provide a lot of the funding for Medicaid; on average the Feds contribute 63% and states 37%. This is critical, as Congress will want to spread the cost of a Single Payer solution and there’s no better way to do this than require states to pony up big dollars [State contributions vary based on a state’s average personal income relative to the national average; states with lower average personal incomes get more federal dollars.]
  2. Medicaid is already built to cover everyone.
    Medicare covers people of all ages, Medicare is very much elder-care focused.
    Adapting Medicare to handle everyone from newborns to elderly, maternity care to pediatrics will be difficult, time-consuming, and expensive. Medicaid does all this and more – today.
  3. Generally, Medicaid is less expensive than other “systems”.
    This is due to much lower provider payment and significantly lower administrative costs. Yes, this means providers are going to be paid less.
  4. Medicaid member satisfaction is pretty good; access to care is not much of an issue.
  5. Medicaid-based Exchange programs are much more successful in the Exchanges than commercially-based plans.
    The Centenes et al [Medicaid-based plans] understand the demographics of the uninsured, have lower medical costs, and already have provider networks, customer relations operations, workflows and processes set up and operational. At the end of the day, lower cost wins – and their costs are lower.
  6. Medicaid is a simple, fully-integrated healthplan.
    Medicare’s alphabet-soup of Parts A B C and D is confusing and convoluted, with different payers often covering the same individual. This increases administrative costs, member hassles, and decreases quality of care (co-ordinating pharmacy and medical care between different payers is problematic at best.
  7. Managed Medicaid plans are working.
    These plans currently exist in most states, and many have been able to deliver excellent care at lower costs through innovation and very tight focus on outcomes. One example is using paramedics to deliver care. [disclosure – I sit on the board of Commonwealth Care Alliance, a Massachusetts healthplan that serves dual-eligible members]

Tomorrow I speculate on how Medicaid for All will integrate with Medicare and employer-based coverage.

What does this mean for you?

Better care, lower costs, while a big impact on pharma, device companies, healthcare systems, and healthcare providers.


Aug
30

Medicare for All – explaining what it means and what it would cost

Yesterday we gave a brief overview of Medicare – the various parts and pieces.

Today – what exactly is the plan, who would pay for it, and how much would it cost?

Sen. Bernie Sanders, (I VT) is the original MFA (Medicare for All) advocate, and most other candidates echo his plan – which is pretty simple:

  • Everyone is enrolled in MFA
  • No one pays copays or deductibles
  • You can choose any healthcare provider
  • It isn’t really “Medicare” for all, but rather a simple “everything is covered” plan
  • Funding would come from:
    • higher taxes on high-income earners
    • re-instatement of the estate tax
    • payroll tax of 6.2% for employers
    • 2.2% income based premium for individuals and families
    • taxing capital gains as ordinary income
    • repealing tax exemption for premiums etc.

There’s been a lot of press about this, with claims and counterclaims muddying the waters  – but the net is this:

Sanders’ plan would enroll pretty much everyone.

The plan would save costs by:

  • reducing total provider compensation by 11% – 13% (physicians make a lot more money here than they do in most other countries)
  • it would do this by setting flat reimbursement rates – today employer plans pay about 40% more than Medicare, and much more than Medicaid (generally speaking).
  • However, reimbursement would be higher than today’s Medicaid rates.
  • MFA advocates note that administrative costs would be a LOT lower, as doctors and hospitals wouldn’t need the big IT operations and personnel required to track down payers and get reimbursed

MFA would be phased in over four years.

What would it cost?

That’s a tough one – the CBO won’t score it.

One Koch-funded research center came out with a report that said it would A) cost $32 trillion over ten years, and B) reduce total US healthcare costs by some $2 trillion while covering 30 million more folks. (yes, this was Mercatus’ higher estimate, but they fudged other numbers to make costs look higher, so I’m going with that figure)

Bernie and other advocates, claim savings would be higher – so the total cost would be lower.

However you slice it, you have to remember that employers and individuals would no longer be paying over a trillion dollars for healthcare every year via payroll taxes and premiums and deductibles and copays.

And yes, you’d save a lot of money by reducing provider reimbursement to Medicare rates.

Who and what gets disrupted?

Insurance companies. It isn’t clear who would administer this program, perhaps the current companies that handle much of Medicare. However, many or most commercial health plans, Medicare Advantage plans, Managed Medicaid plans (disclosure I am on the Board of one – Commonwealth Care Alliance) would shrink or disappear entirely.

Revenue Cycle Management – this huge industry would become obsolete overnight.

Millions of workers – no longer needed to handle the morass of regulations and insurer requirements

Pharma – Bernie would negotiate with pharma and medical device companies – as every other country does – to get the lowest possible prices.

Brokers and consultants. Ouch.

Remember – the US healthcare system is enormously inefficient, overall delivers mediocre-at-best results, and is not sustainable.

What does this mean for you?

Opponents of MFA would be well served to come up with a better answer than MFA, because that MFA is getting traction.

 


Mar
12

Why isn’t anyone talking about health insurance costs?

A couple years ago, we heard endless stories about how “Obamacare” premiums were shooting up, individual health insurance was unaffordable, and families were going bare because the morons that came up with the ACA screwed it up.

Now, with average premiums up 30 percent, we hear…crickets.

The reason premiums have gone up by about a third is simple; President Trump stopped the payments that subsidized low-income folks and insurers are scared he’ll stop enforcing the individual mandate. Unsurprisingly, many people dropped coverage, and insurers had to raise premiums because their risk pools worsened.  

Chart credit Charles Gaba, ACASignups.net

If CSR payments were still in place, and insurers assured the mandate would be enforced, premium increases would be less than half they are today.

What’s scary about this is how easily the media’s focus is influenced by outside efforts. Instead of informing us of this very real, and very important issue, the media is all wrapped up in arming teachers, death penalties for drug dealers, and Stormy Daniels.

What does this mean for you?

A reminder that all of us have to stay focused on the important stuff, not the shiny objects.

 

 


Dec
4

Why the GOP tax bill increases health insurance premiums

I received several emails from readers challenging my statement Friday that the GOP tax bill will result in higher health insurance premiums.  Here’s how.

Briefly, the Bill lets you buy health insurance after you get sick – without a penalty. It’s as if this guy was signing up for auto insurance post-crash…

Both the House and Senate versions of the bills end the penalty for those who don’t have health insurance. This penalty does 2 things; it financially penalizes those who go without coverage, and it generates funds that help pay for healthcare for others.

What the tax bills DON’T do is change the requirement that insurance companies cover anyone who applies.

Imagine if you were able to buy auto insurance after you crashed. Why would you bother to sign up and pay those premiums if you didn’t have to?

BTW, there’s a ton of research and history that shows what a bad idea this is, how much damage it does to insurance markets, and what we can expect.

Folks, this is just ONE example of the dumb ideas in this bill, from people who claim to understand how the free market works.

What does this mean for you?

Insurance rates are going to go up. 

 


Oct
13

President Trump announced two major policy changes yesterday; one will do little to affect healthcare markets and insurance, the other will have a drastic and almost immediate impact.

Cost Sharing Reimbursement payments help those making less than 250% of the poverty level pay for deductibles and other costs.

Ending CSR payments will force health insurers to:

  • increase premiums by almost one-fifth to offset the loss of CSRs; this is already happening in many markets…many had already done this, but others are sure to do so immediately
  • and/or stop selling insurance immediately and cancel policies already in effect, ending coverage for poorer Americans.

Here’s the funny thing; ending CSRs will INCREASE costs to the taxpayers because people who no longer get the payments will get tax credits – and others will too..

The reaction from many in Congress was negative; CSRs had been funded in the Republicans’ bills to repeal the ACA, and several House and Senate Republicans expressed concern that the President’s move would harm their voters.

This may be an unwise political move as well;

Trump’s supporters (51%)…[and] eight in 10 Americans (78%) say President Trump and his administration should do what they can to make the current health care law work.

Trump’s other Executive order will have far less impact on insurance markets. In sum, the order allows insurance companies to sell policies across state lines and offer stripped down policies 

The first – selling across state lines:

  • is already allowed in 3 states, and no insurers participate because mandates do influence costs, but the underlying cost of insurance is the cost of care.
  • Contradicts Republican orthodoxy – and ACA repeal efforts – that keep states in control of insurance markets. The across-state-line sale of insurance guts state insurance regulatory authority.

As does the part of the order allowing sale of stripped down policies. These plans, known variously as association health plans, multiple employer welfare arrangements (MEWAs), and multiple employer plans (MEPs), have a pretty crappy history. Allowed years ago, many went belly-up leaving healthcare providers unpaid and members uncovered.

There’s a lot of detail to these, (see here) but the real issue is simple – policyholders often get screwed, and, like selling across state lines, MEWAs flout state regulation of insurance.

What does this mean for you?

These orders will further screw up the health insurance industry. The real effect will be to push us closer to single payer, a result unintended and with far more drastic consequences.


Aug
15

Healthcare reform implications for workers’ comp, Part 1

With Congressional efforts to repeal/replace/revise ACA behind us for now, it’s time to consider what all this means for workers’ comp.

First up – Medicaid expansion

Currently 32 states have expanded Medicaid; 19 have not. Expect more states to consider expanding Medicaid as the combination of Federal dollars and struggling hospitals makes a compelling case for state adoption.

In addition, the Trump Administration may well allow states more flexibility in expanding Medicaid, and this will likely lead to more states opting in. For example, Arkansas has applied for permission to add coverage to a more limited population…other states will almost certainly follow suit.

Other states, including Texas, are facing the dual realities that their poorer citizens’ health status is declining, and hospital financials are deteriorating as well.

A couple data points illustrate the linkage between Work Comp and Medicaid

63% of Medicaid recipients have at least one family member working full time. This varies among states, from 77% in Colorado to 51% in Rhode Island. 15% have a part time worker. Only 19% of recipients’ familes have no one working.

Many employers (e.g. those with <50 FTEs) that

  • don’t provide health insurance &/or
  • aren’t required to provide health insurance under ACA
  • &/or have a lot of part time workers who don’t qualify for employer-sponsored health insurance

recommend workers who qualify sign up for Medicaid.

The potential implications for claiming behavior are apparent.

We all know workers comp premiums are driven by employment. Most credible studies indicate Medicaid expansion increased employment in states that expanded Medicaid.

More employment = more payroll = more workers’ comp premium and more claims (NOT higher frequency, which is a percentage and not a raw number)

There’s also implications for disability filings…A just-published study found “a 3-4 percent reduction in the number of people receiving supplemental security income… in states that expanded Medicaid.”

What does this mean for you?

The work comp industry dodged a bullet when Congress didn’t repeal ACA. However, watch carefully as other efforts to de-fund and otherwise cut back on Medicaid are ongoing.

 


Aug
1

Work comp is fading, and that’s a big loss.

Hold on, because this isn’t going to end up where you think it is.

The comp insurance business is shrinking. Insurers are increasingly outsourcing claims function to TPAs, and TPAs are looking to move more claim-related activities in-house to capture more of a shrinking pie.

Sure, carriers including AmTrust and the Berkshire companies are growing by leaps and bounds, but most others are moving in the opposite direction. And yes, our friends in California have seen earned premiums increase – and as the largest state by far we can’t ignore that. However, insurer profits have remained solid while rates while the last two years have seen frequency drop – the first time this has happened since the Bush Recession.

Margins are very healthy, markets are competitive, and the business remains solidly profitable.

Over the last 22 years, only one saw a material increase in claim frequency.

After 2 years of essentially flat trend rates, 2016 saw a 5 percent jump in claim severity.

Work comp premiums have been flat since 2015 as decreasing claims costs and insurer discounts have balanced out higher payrolls. Overall, it looks like more employers have seen their premium rates decrease than increase.

Those aren’t just a jumble of unrelated facts and figures, rather a combination of causes and effects, all leading to an inescapable conclusion – industrial accidents and illnesses are less common than they used to be, and more common then they are going to be.

Implications abound.

Here’s a major one.  More insurers appear to be looking to outsource claims, generating growth and jobs in the TPA industry which is one of the few sectors that’s seeing this.

The service sector has consolidated rapidly with two huge PBMs dominating the pharmacy space; physical medicine owned by two other firms (one of which, MedRisk, is a client); Genex increasing it’s position as the largest case management provider, imaging already the domain of OneCall, and three bill review tech firms where once there were six. Other examples abound, all driven by the inevitabilities of a mature industry.

Yes, smaller companies, innovators, and new entrants can and are doing well, but these are by far the exception rather than the rule. Fact is, external factors and technology are rapidly shrinking workers’ comp.

I’m more than a bit frustrated by this.

I see work comp as one answer to the mess that is health care. We actually care about, and work to restore, functionality, an “outcome” that few in the group health, Medicaid, or Medicare world grasp.

What we do – when we do it right, which is all too uncommon – is what they should do – deliver care that gets the patient healthy again – defined as able to do what they did before, if not do it better.

Those pinheads in DC are arguing over insurance – which is NOT the problem.

They should be talking about why our nation’s healthcare is so crappy, and why healthcare we all pay for, and get, and that our loved ones get, doesn’t work a hell of a lot better than it does today.

 


Apr
5

Republicans channelling Monty Python

Why the President and Congressional Republicans are still trying to do healthcare legislation is truly a puzzle. Unhappy with their initial effort to completely blow up the insurance markets (and their political future), they’ve re-engaged in a pointless effort that is destined to fail – and wound themselves in the process.

Pointless because every concession to win votes from the Freedom Caucus guys costs votes from those slightly more moderate.  So, it’s a zero-sum game – win an arch-conservative’s support, lose a less-conservative vote.

perhaps they’re thinking the initial AHCA no-vote debacle wasn’t much of a concern…

To be fair, in the disastrous AHCA non-vote they ONLY lost one of their arms.  This time they’re looking to lose more appendages.  This is one of those “if you don’t laugh you’ll cry” moments, because ACA does need significant improvement, but – at least for now – improvements are being ignored as politics prevail.


There are a lot of reasons this is political suicide…

The President and Republican candidates committed to keeping coverage for pre-existing conditions.  The plan being discussed today would gut this entirely, leaving over a quarter of us without coverage for pre-ex.  Ignore claims to the contrary; the combination of changes to what’s covered (essential health benefits) and removal of restrictions on premiums would mean anyone in the individual or small group markets would be subject to medical underwriting (absent state regulations to the contrary).

A close friend and lifelong Republican (including experience working on Capitol Hill) emailed me this morning about this latest “reform the reform” effort using language that would peel the paint off a battleship.

Most Americans now believe the GOP “owns” health reform.  A just-published Gallup poll finds 61% of respondents said “any problems with the law moving forward are the responsibility of Trump and Republicans in Congress…”

Interestingly, ACA is now polling higher than ever, at 55% approval. That’s up 13 points since the election…

I think the Freedom Caucus guys understand their ideological purity means millions of Americans will lose insurance coverage – and thus healthcare. 

And when they do, every mother, father, aunt, uncle, and grandparent will be incensed beyond measure that their wife/husband/child/grandchild won’t get the care they need.

How that is a winning proposition escapes me, but good for the Freedom Caucus for standing up for what they believe in.

Of course, you need to have legs if you want to stand.

 

UPDATE – looks like the Freedom guys and their Republican opponents can’t agree on what the White House said the new bill would include.  Either that or the WH folks told the two parties different things.