Who Will Sell Insurance In the Exchanges? Non-profit Insurers.For Consumers, This is Great News– Part 1

Posted on May 25, 2013 by Maggie Mahar

You may have heard that big for-profit health insurers are taking a “wait-and-see” attitude toward the Exchanges –the one-stop marketplaces where small businesses and individuals who don’t receive benefits at work will be able to buy insurance.

Both UnitedHealthGroup, the nation’s largest carrier, and Aetna the third-largest, have told analysts that their involvement in the health insurance marketplaces across the country will depend on whether they find them “financially viable” for the companies WellPoint, Humana and Cigna also have indicated that they will participate in a “limited” number of markets. /

Aetna is being particularly coy. On a conference call with investors and analysts just three weeks ago Aetna officials said that if they don’t like the way the market is shaping up they “might pull their products from the online marketplaces at the last minute.”

Is this meant as a threat? One can only imagine the chaos that would ensue if Aetna began pulling out of state Exchanges at the 11th hour. The remark demonstrates how little concern Aetna has for its customers.

Doomsters say Too Few Plans Will Mean Higher Premiums

Many have been predicting that the Exchanges will fail because the big names won’t be participating. They point out that in Illinois “only six insurance carriers have told the state of they want to sell health policies on the state’s online s marketplace. “ The critics warn that if not enough companies offer coverage in the Exchanges, consumers won’t have enough choices, and their won’t be enough competition to keep a lid on prices.

Former insurance executive turned industry consultant Robert Laszewski is quick to pounce on “the Illinois numbers” as “an early indicator that insurance companies are backing away from full participation in the online marketplaces. . . I’m hearing that from other carriers in other parts of the country as well” he told Chicago’s Crain’s Business. “They are terribly fearful that if there’s a poor launch (of the marketplaces) they’re going to get blamed for a mess.”

Laszewski has been predicting “sticker shock” in the Exchanges for some time. What he ignores is that what matters most is not the number of plans available in the Exchanges, but how good they are. Quality, not quantity is what counts.

In the end, “robust competition” does not depend on the free-market chaos of 20 or 25 plans vying for market share. It turns on a few good companies offering transparent information. Then, and only then, can consumers compare them and make rational decisions.

California Disproves the Critics

California already has demonstrated that the doomsters are wrong. Two days ago, the state unveiled the offerings that will be available in its Exchanges—along with the prices. Nearly three dozen plans had submitted bids, and 13 were selected. (California exchange officials rejected bids that were too expensive, or failed to include enough choices of doctors and hospitals.)

Sure enough, the brand name for-profits are not going to peddle their products in the California Exchange.

But as it turns out, they weren’t needed to create a competitive affordable market that offers Exchange customers a wide range of choices. As I discuss below, Kaiser, which ranks #1 in the state for both quality and consumer satisfaction will be part of that marketplace.

In every region in the state, individuals who don’t have health benefits at work will be able to purchase comprehensive insurance that offers free preventive care, covers the 10 essential benefits, and caps out-of-pocket spending for less than $4,000 a year. (In North Los Angeles County, for example, Kaiser will offer a Silver Plan for just $294 a month.) This is significantly lower than expected: the Congressional Budget Office (CBO) had estimated that such comprehensive coverage would cost $5200.

Four thousand dollars might sound pricey for a middle-class family, but keep in mind that individuals reporting modified adjusted gross income (the number at the bottom of the first page of your tax return) of less than $45,960, as well as families earning as much as $94, 200 will be eligible for federal subsidies that will help them cover their premiums.

Continue reading →

POST A COMMENT

Are the Health Plans that Non-Profit Insurers Sell Less Expensive Than Those Offered by For-Profit Companies?

Posted on May 24, 2013 by Maggie Mahar

Below, a guest-post by Kev Coleman, Head of Research and Data at HealthPocket. His latest study comparing the costs of for-profit and non-profit plans can be found here .

Sometimes I groan after I complete a piece of research, knowing that the results may be seized and simplified by either end of the political spectrum .

Nevertheless, I went ahead and decided to compare premiums and out-of-pocket limits of nonprofit vs. for-profit health plans. This task is easier said than done. First, health plans vary with respect to their benefits and premium comparisons aren’t especially meaningful if there are significant disparities in covered medical services among plans. Consequently, I had to define a minimum set of benefits in order to get a decent representation of both nonprofit and for-profit plans that were similar to one another. Plans that didn’t meet the criteria weren’t included in the study.

Another problematic issue for premium comparisons is that there is a relationship between deductible amounts and monthly premiums: higher premiums often mean lower deductibles.. Comparing premiums between plans with wildly different deductible amounts isn’t fair. This issue led me to establish deductible ranges; comparisons between the plan types were performed only within those ranges.

Finally, there was the issue of location. Health insurance premiums are strongly influenced by region. This influence exerts itself on several fronts: state-specific insurance regulations that have to be satisfied; local level of competition in the market; and the medical claim trend for people living in the region. Accordingly, the premium comparisons were performed inside selected metropolitan regions and never between differing regions. Six cities were chosen as regions for premium comparisons, two from the east coast, two from the west, and two from the center of the country.

Results of the Study

The results? I found that in 47% of the comparisons a city’s nonprofit plans had the lowest average premium within a particular deductible range. For-profit health plans had the lowest premium in 39% of comparisons with the remaining 14% classified as ties since the differences between the nonprofit and for-profit averages were less than 3%.

An examination of out-of-pocket limits for these nonprofit and for-profit plans yielded similar results: Nonprofits had the lowest average limits on out-of-pocket costs in 56% of the comparisons. For-profit plans had the lowest average limits in just 28% of the comparisons.

What should we conclude based on these results? If you have strong political convictions, I can see several ways the data could be spun, particularly given the thorny issue of tax advantages that some nonprofit plans enjoy. For myself, I satisfy myself with a modest set of conclusions and let the politicos fight about the rest:

1) Nonprofit health plans are more likely to offer a lower premium than for-profit health plans

2) Removing a profit incentive from health plans as a means to make premiums more affordable cannot be supported by my study’s results since in over half the comparisons nonprofit health plans did not have the lowest premium

3) Nonprofit plans are more likely to have superior out-of-pocket cost protections than for-profit plans

It will be interesting to revisit the nonprofit/for-profit premium comparisons once the new Affordable Care Act plans are released. The Essential Health Benefits will effectively commoditize plans and health status will no longer be a factor in availability or price of coverage. As a result, so premium differences and provider networks could assume greater importance to consumers shopping for health insurance.

One of the issues not addressed in this study is the question of health plan quality (e.g. clinical outcomes, customer satisfaction, adherence to best practices, etc.). Health plans are more than premiums and the lowest cost plan might not be the wisest consumer choice if quality scores are unacceptably low. I plan on analyzing the same plans used in this study from the perspective of their quality scores to shed some light on the relationship of quality to the premium differences discovered.

Note from MM: — I am glad that Coleman ends by emphasizing that consumers need to consider quality as well as price. If insurance doesn’t protect you, it’s not worth the money, no matter how low the premiums.

As it happens, I began comparing the quality of non-profit vs. for-profit insurance plans a couple of weeks ago, and will be publishing a post on the topic in a few days. I’ll invite Coleman to come back and report on his results as well.

2 COMMENTS SO FAR -- ADD ONE

Why Do Republicans Continue to Try to Repeal Reform? (A Method to Their Madness)

Posted on May 24, 2013 by Maggie Mahar

(A longer version of this post originally appeared on Healthinsurance.org There, you will also find a link to an HIO post showing how each Representative voted—and who didn’t vote.)

Last week the House voted—for the 37^th time—to repeal the Affordable Care Act. Everyone knows that repeal will never pass the Senate. Some suggest that legislators might better spend their time (and our tax dollars) figuring out how to create jobs.

Even the Congressional Budget Office (CBO) couldn’t take this 37^th vote seriously. When preparing for this latest showdown, Republican Paul Ryan requested an update to CBO’s July 2012 estimate that repealing the ACA would cost more than it would save, increasing the deficit by some $109 billion over the coming decade (2013-2022.)

CBO replied to his request: “Preparing a new estimate of the budgetary impact of repealing the Affordable Care Act would take considerable time – probably several weeks – for CBO and the staff of the Joint Committee on Taxation, because there are hundreds of provisions in the ACA and those provisions are already in various stages of implementation. . . We have just finished the time-consuming task of updating our baseline budget projections and need to finish our analysis of the President’s budgetary proposals.”

I like economist Jared Bernstein’s paraphrase of CBO’s response: “You guys go ahead and keep gettin’ your crazy on … over here we’re kinda busy doin’ actual work, so can’t help you right now.”

CBO added that when it does have time to do an update, it expects similar results. Repealing health care reform would add to the deficit.

Are Republicans Crazy . . . Or Cunning?

You might think that by continuing to obsess over a bill that will never succeed, Republicans are once again exhibiting their self-destructive tendencies. But I would argue that House Republican leaders are not crazy, at least not in a way that is easy to understand. They’re cunning.

Ask yourself this: How many people skimmed or half-heard the news stories telling them that the House had passed a bill to repeal Obamacare?

This helps to explain why 12 percent of all Americans believe that the ACA already has been scrubbed. Every time a commentator mentions “health care reform” and “repeal” in the same sentence, the words will sink into that morass of half-truths and fictions that we call “the conventional wisdom.”

Even if people realize that the ACA is now the law of the land, many take the repeated efforts to kill reform as a sign that there is something very wrong with the legislation.

After all, they think: “why would Republicans spend so much time trying to overturn a law if there wasn’t something terribly wrong with it?”

Of course House Republicans also voted against re-authorizing the Violence Against Women Act. (Until it became crystal clear that they were once again tossing the women’s vote under the bus.) Then there was the time when they voted unanimously to support an anti-abortion bill that redefines rape as “coercive” (as opposed to voluntary rape?) GOP solidarity is not necessarily a sign of clear thinking.

POST A COMMENT

A New “Sardonic”Edition of Health Wonk Review

Posted on May 24, 2013 by Maggie Mahar

This edition, hosted by Brad Wright, of Wright on Health takes an original approach to the bi-weekly round-up of the best healthcare posts of the past two weeks: It’s excellent—I urge you to check it out. Just keep in mind that the descriptions of the posts are largely tongue-in-cheek.

(I would provide more detail about the newest edition of HWR, but my lap-top rolled over and died two days ago. As a result, I don’t have the time to give newest edition of HWR the attention it deserves.)

I hope you will.

POST A COMMENT

Health Insurance and Tax Breaks: New Rules for the Self-Employed

Posted on May 18, 2013 by Maggie Mahar

If you, your spouse or an adult child is self-employed, no doubt you already know just how expensive insurance is in the individual market. Moreover, you know how difficult is to find comprehensive coverage when you’re buying your own insurance. For example, most policies don’t cover pre-natal care, or child-birth– a huge problem for young women.

But under the Affordable Care Act everything changes. Beginning in January, you will be able to purchase a policy in your state’s Exchange—a one-stop marketplace where you can shop for plans. They will be easy to compare because all policies sold in the Exchanges must cover “10 essential benefits” including pre-natal care, maternity, dental and vision care for children, rehab and mental health care. There will be no no co-pays for preventive care and the deductible does not apply.No matter how much care you or your family need, there will be a cap on your out-of-pocket expenses of roughly $6,000 for a single individual or $12,000 for a family. (These rules apply to anyone buying their own insurance in the Individual Exchange, whether they are self-employed, unemployed, or work for an employer who doesn’t offer affordable, comprehensive health benefits.)

Lower Premiums, Subsidies

In the Exchange, you will automatically become part of a large group, and as a result, premiums will be lower than the premiums you would papy today for similar coverage.

Moreover, depending on your income, you may be eligible for a subsidy. For example, a 30-year-old couple with joint income of $45,000 would receive a subsidy of roughly $2700 and wind up paying $4,000 a year for comprehensive coverage that includes free preventive care. (This is a national average)

What You May Not Know about Health Insurance and Tax Deductions

You probably are aware that if you are self-employed and buy your own medical, dental or long-term care insurance, you can deduct premiums for an individual or a family plan on your income tax.

But did you know that if:

You Have Children under 27, you also can deduct premiums you pay for them–even if they are no longer your dependents?

You or Your Spouse Receive Medicare, the IRS has now ruled that you can deduct Medicare premiums for Parts A, B, C and D? This is in addition to the deduction for insurance that you or your spouse buy in an Exchange.

How Much Can You Deduct?

To calculate your allowable health insurance deduction, take your self-employment income, and subtract the 50% deduction for self-employment taxes. Then subtract any retirement contributions made to SEP-IRA, SIMPLE-IRA, or Keogh plan. The remainder is how much you can deduct for health insurance expenses.

POST A COMMENT

Health Wonk Review: Oncologists Tell the Truth about Cancer Drugs; Will There Be Enough Plans to Choose From in the Exchanges? What Does Oregon’s Research on Medicaid Tell Us? And More . . .

Posted on May 10, 2013 by Maggie Mahar

The newest edition of Health Wonk Review is up on Managed Care Matters.

There, host Joe Paduda calls attention to an eye-opening post by The Health Business Group’s David E. Williams.

Williams reports on what oncologists say about cancer drugs in “The Price of Drugs for Chronic Myeloid Leukemia (CML); A Reflection of the Unsustainable Prices of Cancer Drug.” The article, which was published in the journal, blood, includes candid comments from more than 100 experts They tell us that:.

Many costly treatments aren’t worth the money
New treatments with tiny orno benefits often cost a multiple of existing therapies
Despite their reputation for penny-pinching, health plans are often not aggressive in negotiating price
Patients are already suffering mightily from high costs –and it impacts quality of life and survival as well as financial health
Society as a whole cannot afford to pay the high prices charged for so many of the new therapies

(I’m reminded of “A Very Open Letter from an Oncologist published on HealthBeat in 2009.) It’s encouraging to see more oncologist stepping forward to telll the truth about cancer drugs..)

.As Williams observes these insights “come from people who know what they’re talking about and who have traditionally been sympathetic to drug makers and unperturbed about costs.”

But now, the companies that make these drugs have taken greed too far.

Paduda also highlights Health Affairs just-released research indicating that the decline in inflation could result in a reduction of $770 billion (yup, that’s “billion” with a B) in public program health care costs over ten years. “

But is the trend sustainable? John Holahan and Stacy McMorrow of the Urban Institute are “cautiously optimistic.” Paduda agrees: “there’s no question there are fundamental changes occurring that are affecting care delivery, pricing, and reimbursement.”

Continue reading →

4 COMMENTS SO FAR -- ADD ONE

The Independent Payment Advisory Board and Medicare Spending: New Research Suggests a Change in Our Medical Culture

Posted on May 7, 2013 by Maggie Mahar

Launch of the ACA’s controversial Independent Advisory Board– a panel charged with recommending ways to curb Medicare inflation — has been delayed until 2016. Does this means that the IPAB’s critics have won?

No. IPAB was, from the beginning, only meant to serve as a backstop. The law says that the board will be asked to recommend places where we could pare Medicare spending if—and only if—Medicare inflation begins to outstrip inflation in the rest of the consumer economy.

But over the past three years Medicare spending has decelerated; it is no longer growing faster than the economy as a whole. This is why Medicare’s chief actuary has decided to put IPAB on hold.

Some observers argue that as the economy recovers from the Great Recession, the nation’s health care bill is bound to climb. I disagree. Particularly in the case of Medicare, I don’t think that the economic downturn explains most of the slowdown.

I believe that reform is already having an effect on health care inflation: Four years of debate over the Affordable Care Act has made us more aware of the waste in our health care system. Patients are asking more questions, and providers know that they are going to be held accountable for that waste.

We Still Need IPAB as a Backstop

That said, in the future, spending could pick up–and we may need IPAB. This is why President Obama has made it clear that he will veto any attempt to eliminate the Board.

It is important to know that IPAB exists, as a reminder to drug companies, device makers, nursing homes and others that, one way or another, we can no longer afford a system that is wasting $1 out of $3 of our health care dollars on over-priced, unnecessary tests and treatments that, too often, put patients at risk without benefits.

If, and when, IPAB is asked to recommend cuts it will use medical evidence to decide where to trim. IPAB is likely to recommend lower payments for certain services and products that medical research tells us are now “overvalued”–based, not on cost-benefit analysis, but on patient outcomes. If patients who fit a particular medical profile are not helped, Medicare should not cover the treatment for those patients.

As I have explained in the past, IPAB is not the panel of bean counting bureaucrats that Obamacare’s opponents suggest. IPAB will not “ration” care; it is charged with making care more rational by letting Science–rather than lobbyists– decide what Medicare should cover. Moreover, Congress can veto IPAB’s recommendations, if legislators can agree on ways to achieve equal savings– without rationing care, or shifting costs to seniors.

Continue reading →

12 COMMENTS SO FAR -- ADD ONE

PSA Testing: An About-Face

Posted on May 7, 2013 by Maggie Mahar

If you thought U.S. doctors would never accept evidence-based medicine, consider this: Just last week, in a stunning about-face, the American Urological Association(AUA) announced that it no longer recommends routine annual PSA testing for men under 55.

The organization added that “men ages 55 to 69 who are considering the PSA test” for prostate cancer “should consult their doctors about the test’s benefits and risks.”

The potential “benefit of preventing prostate cancer mortality in 1 man for every 1,000 men screened over a decade” should be weighed “against the known potential harms associated with screening and treatment [which include side effects such as incontinence and impotence } For this reason, “ shared decision-making is recommended for men age 55 to 69 years that are considering PSA screening,” The AUA stressed that “ patients’ values and preferences” should direct a final decision.

.In addition, the AUA announced that “to reduce the harms of screening, a routine screening interval of two years or more may be preferred over annual screening in those men who have participated in shared decision-making and decided on screening.

I wrote about “shared decison-making” and how it could help patients considering a PSA test make an informed choice here on HealthBeat back in 2007.(Readers interested in why this protocol is so important to patient-centered medicine may be interested in this story that I wrote for Dartmouth Medicine: “Making Choice An Option.” ) Congratuations to the AUA for having the courage to take this giant step forward into the future of medicine.

“The new guideline is significantly different than previous guidance,” the organization acknowledged, noting that it “was developed using evidence from a systematic literature review rather than consensus opinion.” In other words, urologists didn’t take a vote; they looked at the Science.

Authors of the new guidelines have “learned very quickly that there really was no high-level evidence supporting the use of screening with PSA,” said urologist H. Ballentine Carter, who chaired the panel that wrote the new guidelines.”

When I last wrote about PSA testing, in July of 2012, such a radical shift in the AUAs positions would have been unthinkable. At the time, the U.S. Preventive Services Task Force (USPSTF) had given PSA testing a grade of “D”—suggesting that benefits did not outweigh risks.

In response, urologists joined forces with Republicans to threaten the autonomy of the USPSTF by supporting a House bill (H.R. 5998) that proposed to mandate “greater role for specialists and advocacy groups” in developing guidelines” while ”eliminating the Department of Health and Human Services’ secretarial discretion to withhold Medicare funding for interventions that lack convincing evidence for benefit.”

What a difference a year makes.

3 COMMENTS SO FAR -- ADD ONE

The Affordable Care Act and the Smokers’ Penalty

Posted on May 5, 2013 by Maggie Mahar

Under the ACA smokers buying insurance in the Exchanges will have to pay a 50% “Premium Surcharge.” For a 55-year-old smoker, the penalty could reach nearly $4,250 a year. http://news.yahoo.com/penalty-could-keep-smokers-health-overhaul-205840155.html Does this mean that Americans who smoke won’t be able to afford coverage?

No. In the end, most smokers should be able to get health insurance without paying a stiff penalty.

For one, it’s up to individual states as to whether they want to let insurers charge smokers more. By early April of 2013, Rhode Island, Vermont, Massachusetts and D.C. had voted to eliminate smoking premiums in their health care exchanges: The American Cancer Society, which is opposed to the surcharge, is working to persuade other states to ban it. (The ACS explains: “We’re anti-smoking, not anti-smoker.”)

I agree with the ACS that the penalty is counter-productive. If it makes insurance unaffordable for some smokers, this means that they won’t have access to smoking cessation programs, nicotine patches and other drugs that could help them quit. Keep in mind that most smokers want to quit, and these programs have proved extremely successful.

The good news is that many Americans who are addicted to nicotine will be eligible for Medicaid. In the U.S. 39 percent of adult smokers live below the poverty level. . Many more live below 133 percent of the poverty level. As states expand Medicaid, they, too, will become eligible for the program. Since Medicaid charges no premiums, they will not pay a premium surcharge.

Meanwhile, new research by the George Washington University School of Public Health and Health Services indicates that including comprehensive tobacco cessation benefits in Medicaid insurance coverage can result in substantial savings for Medicaid. The study found that every dollar spent on tobacco cessation program costs resulted in an average program savings of $3.12, which represents a $2.12 return on investment.

Under the Affordable Care Act all state Medicaid programs are required to cover tobacco cessation medications, beginning in 2014.

Finally smokers who receive health benefits from their employer are likely to find that they don’t have to pay the premium if they join a smoking cessation program.

12 COMMENTS SO FAR -- ADD ONE

Breast Cancer “Awareness”: Marketing Fear — Part 1

Posted on May 3, 2013 by Maggie Mahar

Peggy Orenstein is a brave woman. A breast cancer survivor, she has faced up to the fact that perhaps, if she hadn’t had a mammogram that revealed a tiny tumor when she was 35, it might have vanished on its own. She would not have known that it existed—and would not have undergone a lumpectomy plus six weeks of radiation. Nor would she have suffered the emotional consequences of being told, at age 35, that she had breast cancer.

At that age few of us are ready to come face-to-face with our own mortality. In last Sunday’s New York Times Magazine, she writes: “Recalling the fear, confusion anger and grief of that time is still painful.”

But sixteen years after her diagnosis we have learned more about breast cancer, and Orenstein is willing to look the truth in the eye: “As study after study revealed the limits of screening — and the dangers of overtreatment — a thought niggled at my consciousness. How much had my mammogram really mattered? Would the outcome have been the same had I bumped into the cancer on my own years later?”

Regret is a tough one. After making a major decision that has life-changing consequences, few of us want to consider that we might have made the wrong call. Instead, most women in Orenstein’s position say: “I’m so glad I had that mammogram. It saved my life!”

Orenstein herself confesses, “that is what I used to say. I even wrote that in the pages of this magazine.

But if she hadn’t had the mammogram, and the cancer wasn’t discovered until she felt a lump, wouldn’t it have spread? Wouldn’t she be dead?

No. As Orenstein point out, “Breast cancer in your breast doesn’t kill you; the disease becomes deadly when it metastasizes, spreading to other organs or the bones. Early detection is based on the theory, dating back to the late 19th century that the disease progresses consistently, beginning with a single rogue cell, growing sequentially and at some invariable point making a lethal leap.”

But science has advanced since the late 19th century, and we now know that just isn’t true. Sometimes breast cancer invades other parts of the body. Sometimes it doesn’t. The problem is that mammograms can’t tell us which cancers will spread.

The Likelihood Of Over-Treatment

What many women don’t realize is how commonplace the harmless cancers are. When someone is told she has breast cancer, she is likely to imagine a large, ugly lump, buried somewhere in her breast. Yet as Dr. David H. Gorski, a surgical oncologist at the Barbara Ann Karmanos Cancer Institute who specializes in breast cancer explains: today approximately 30% to 40% of breast cancer diagnosis” are examples of “ductal carcinoma in situ (DCI)”—cancers that begin in the milk ducts and “stay in place” (in situ). If they don’t spread, they are not life-threatening. Some researchers call DCIs “Stage Zero” cancer.

A recent study found that DCIS incidence rose from 1.87 per 100,000 in the mid-1970s to 32.5 in 2004,” he adds. “That’s a more than 16-fold increase over 30 years, and it’s pretty much all due to the introduction of mammographic screening.” (Mammograms are especially good at spotting DCIs. Unfortunately, they are not as good at finding the very aggressive cancers that are most likely to kill us.) )

“When it comes to DCIS, we don’t have a good handle on what percentage of DCIS will progress to invasive cancer, but we do know that a significant percentage will not.” For that reason, some argue that we should not tell patients that DCIS are “pre-cancerous.” Labeling them “Stage Zero” would be more accurate.

Nevertheless, precisely because we don’t know, “oncologists tend to treat them all the same,” says Gorski. “In other words, over diagnosis leads to overtreatment.”

Continue reading →

9 COMMENTS SO FAR -- ADD ONE