Posts Tagged ‘Obama administration’

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.

Hedging Their Bets, Insurers Setting Up Health Insurance Exchanges

Wednesday, February 22nd, 2012

Health insurance companies are trying to play an important role in healthcare reform as the Patient Protection and Affordable Care Act (ACA) threatens to upend their marketplace in 2014 by creating their own exchanges. Health plans are trying to lock in business before government-sponsored health insurance exchanges go online in 2014.  According to Kaiser Health News and reported by Minnesota Public Radio, the largest insurers are creating their own private insurance exchanges to protect themselves against competition from the public exchanges.

The implementation of the ACA is the most significant change to healthcare since Medicare and Medicaid came on line in the 1960s – and the impact for health insurers is virtually unfathomable.  Less than two years from today, the federal healthcare law will bring more restrictions on premium increases, millions of new customers, and the ability for consumers to comparison shop online for the best deal on their health insurance.

According to Sabrina Corlette, research professor at Georgetown’s Health Policy Institute, these are just some of the changes coming in 2014. Just how insurance markets will shake out is anyone’s guess, she said.  “Insurance companies are grappling with the uncertainty like everybody else and trying to look two years down the road and how to position themselves,” Corlette said.  “(What) also needs to be watched closely (is) that it’s working for the consumer.”

According to the Obama administration, 28 states are in the process of establishing insurance exchanges under the ACA, despite multiple lawsuits and a spring date with the Supreme Court.  Fourteen states, including some with Republican governors, have passed legislation or have the authority in place to set up the regulated insurance markets, according to a report by the Department of Health and Human Services (HHS).  Other states have passed executive orders or authorized studies to demonstrate the value of exchanges.  The goal is to bring coverage to 16 million uninsured Americans in 50 states and the District of Columbia.

In their most recent demonstration of progress in health reform, administration officials promised to provide assistance to states that miss the 2013 deadline to ensure their participation.  “We’re going to meet states where they are, and…we’re going to work with them to get them as far down the path as we can,” said an anonymous administration official.

According to the report, some states such as Nevada, Alabama, Mississippi, all with Republican governors, and others are making significant progress.  The irony is that many of these “red” states are also suing the administration over the ACA’s constitutionality.

How does a red state that has taken a lead in lawsuits against the ACA reconcile these differences?  Writing in the Richmond Times Dispatch, Michael Martz says that “Six bills have been filed in the legislature proposing varying ways to set up a benefits exchange, which is required under the federal healthcare reform law that (Governor Bob) McDonnell opposes and the state hopes to overturn in the U.S. Supreme Court.  But the governor is discouraging legislators from approving any of the bills during this session, despite looming federal deadlines that some lawmakers and insurers fear will leave Virginia with a less-competitive federal exchange for individuals and small businesses to buy health benefits.  The state would have to submit a plan for the exchange this year to the U.S. Department of Health and Human Services (HHS) no later than January 1, 2013, to ensure that the entity can begin operating a year later.”

“There is plenty of time to act,” the McDonnell administration said in a series of “talking points” on why legislation is not currently needed.  “There is no need for members of the General Assembly to make untimely and unnecessary decisions surrounding creation of an exchange during the 2012 session.”

States Want Feds to Move Faster on ACA Rules

Tuesday, February 21st, 2012

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

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

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

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

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

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

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

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

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

Healthcare Providers Must Innovate to Trim Costs

Wednesday, February 8th, 2012

A top official from the Centers for Medicare and Medicaid Services (CMS) recommended that providers — including hospital executives — should research technology-driven changes in their systems with the goal of improving care and reducing costs.  “We need to decide now whether to make the commitment to adopt innovation that will fundamentally change the way we operate, change the way we deliver care, change the way we think about these organizations that we run,” Dr. Richard Gilfillan, acting director of the CMS’ Center for Medicare and Medicaid Innovation, said.  “This is not an abstract notion; this is a very concrete question that each of us will have to answer.”

Healthcare leaders who join in such an overhaul in their care delivery will likely find that the main obstacle is in changing how they are paid, Gilfillan said.  “We can ask people to keep folks from going back to the hospital, but if we pay health systems for putting more people in the hospital, we’ll get what we have today: a lot of hospital care,” he said.  Medicare will encourage private payers to change payment approaches by undertaking its own changes.  Specifically, Gilfillan said, once his office identifies payment practices that result in improved clinical outcomes and reduced spending, the HHS secretary will implement those throughout Medicare administratively.  “As you can see, this is a powerful tool for changing the way we deliver care,” Gilfillan said.

The large number of senior citizens covered by Medicare and low-income Americans covered by Medicaid suggests that any changes that serve those patients could soon be adopted throughout the system.  “The reality is that over the years, the private sector has by and large followed Medicare’s lead in payment systems,” Gilfillan said.  “Medicare has been the most innovative payer if you look back over the last 30 years.”  With $10 billion in funding through the end of 2019, Gilfillan anticipates rolling out additional initiatives before too long.  These could encompass ideas that emerge at an “innovation summit”.

Created by the Patient Protection and Affordable Care Act (ACA), the Innovation Center works to test and support innovative new healthcare models that reduce costs and strengthen the quality of care.  “The Affordable Care Act gives us tremendous new tools to innovate and improve our health care system,” said Health and Human Services Secretary Kathleen Sebelius.  “We discussed how we can work together to make innovative ideas a reality in communities across the country.”

“The level of real excitement surrounding this conference shows not only that people who know healthcare recognize the urgent need for better health and better care at lower cost, they also are ready to move forward with solutions,” said CMS Acting Administrator Marilyn Tavenner.  “The fact that all of these disparate interests share the aim of better healthcare and are willing to work for it not only means that we’re going to have the best ideas on the table, but also that we’re going to have the expertise and the resources that will ultimately ensure better health at a lower cost will be within the reach of every American,” Gilfillan said.

In the meantime, the Obama Administration also released a new report highlighting the success of the Center for Medicare and Medicaid Innovation.  The Center for Medicare and Medicaid Innovation’s role is limited to testing payment incentives and healthcare delivery methods within Medicare and Medicaid, as well as the Children’s Health Insurance Program.

As States Create Health Insurance Exchanges, Insurers Are Benefiting from the ACA

Wednesday, January 25th, 2012

The same insurance companies that spent millions of dollars working to defeat the Patient Protection and Affordable Care Act (ACA) claiming it would raise costs and disrupt coverage, are seeing their profit margins soar to levels not seen since before the recession and are benefiting financially from the law, a Bloomberg Government study shows.

Insurers recorded their highest combined quarterly net income of the past 10 years after the law was signed in 2010, said Peter Gosselin, the study author and senior healthcare analyst for Bloomberg Government. The Standard & Poor’s 500 Managed Health-Care Index rose 36 percent in the period, four times higher than the S&P 500.  “The industry that was the loudest, most persistent critic of this law, the industry whose analysts and executives predicted it would suffer immensely because of the law, has thrived,” Gosselin said. “There is a shift to government work under way that is going to represent a fundamental change in their business model.”

Health insurers gave $86.2 million to the U.S. Chamber of Commerce to oppose the law after Obama administration officials disparaged their desire to chase profits by raising customer premiums.  America’s Health Insurance Plans (AHIP), still claims the law will increase costs and cause consumers to lose coverage.  Even so, the insurers saw their average operating profit margins expand to 8.24 percent in the six quarters since the ACA became law, compared with 6.88 percent during the previous 18 months.

One significant finding of an annual California Employer Health Benefits Survey released by the California HealthCare Foundation, a research and grant-making non-profit organization, is that in California fewer companies provided healthcare coverage for their employees last year; those that did raised premiums for coverage. According to the survey, premiums have risen 153 percent since 2002, a rate more than five times the increase in California’s inflation rate.  During the last two years alone, the proportion of state employers offering coverage to workers fell to 63 percent from 73 percent, according to the survey.

“This is a departure from previous years and could be an early sign of future changes,” the foundation report noted in commenting on data collected between July and October 2011 in interviews with 770 private firm benefit managers.

Increasing costs and shrinking coverage are speeding up, said Anthony Wright, executive director of Health Access California, a group that advocates for expanded health insurance coverage.  “They are frankly multi-decade trends,” he said. “What is notable is that this is more significant than usual.”  What’s been a “gradual erosion of employer-based coverage in good years” has evolved into “a steep one in bad years,” Wright said. “To be down to 63 percent (of California companies offering coverage) is huge.  It used to be up over 80 percent.”

There is good news, however, in the fact that 13 states have functioning health insurance exchanges, two have pending legislation to establish them, while another five are planning their exchanges. Health insurance exchanges are state-regulated standardized healthcare plans where individuals can purchase health insurance and be eligible for federal subsidies.  The remaining 30 states are moving more slowly.  For example, Pennsylvania is gradually moving toward a health insurance exchange.  “Pennsylvania has taken steps towards the establishment of an exchange, which I think is positive — there are other states that have moved more aggressively, including states whose governors are part of the lawsuit,” said Sharon Ward, director of the Pennsylvania Budget and Policy Center, a non-government organization that supports the federal health care law.  Two states — Louisiana and Arkansas — have opted out of the insurance exchange program.

Insurers are of two minds regarding the issue of insurance exchanges. Some favor the programs because they would help them to reach more consumers.  Consumer advocacy groups and insurance analysts claim that exchanges would increase competition to the industry, with the ultimate result of cutting prices nationwide.

Writing in the Green Bay Press Gazette, Jeff Mason, CEO of the BayCare Clinic, believes that, generally speaking, healthcare payments need fixing. According to Mason, “Healthcare finance is complicated even in the best of times.  Unfortunately, it isn’t the best of times.  We’re in a climactic period in healthcare when the finance mechanisms don’t work anymore.  Employers can’t continue to pay the spiraling healthcare costs.  Providers can’t continue to shift their low-reimbursement government work to employers. The government can’t expect any more free care out of providers.  Right now, our clinic collects less than half of what we charge to all of our customers in aggregate.  We collect 11 cents of every dollar we charge to Medicaid, and 13 cents of every dollar we charge to Medicare.  This is considered our “low-pay” business, and is extremely difficult to manage financially.

“This physician/hospital payment problem is a government experiment that started in the 1980s and has gone terribly wrong.  It followed the concept that a large purchaser of a service should get a better price and began discounting government payments to providers.  Medicare started by shaving a few percent, but then it got larger and larger.  All along, health care providers were shifting the shortfalls to the private employers.  At the same time, health care expense continued to grow as we obtained more expensive new medications and new technologies to improve patient treatments.”

ACA Gives 2.5 Million Young Adults Healthcare Coverage

Tuesday, December 27th, 2011

The number of young adults who have no medical coverage has contracted by 2.5 million since the Patient Protection and Affordable Care Act (ACA) took effect, according to a new analysis by the Obama administration.  That decline is 2½ times larger than earlier government and private estimates, which showed about one million Americans ages 19 – 25 had acquired coverage.

Obama administration officials said they now have more comprehensive data and are slicing the numbers more precisely than the government typically does, in an attempt to identify the impact of a popular provision in the law.  Thanks to the ACA, young adults can remain on their parents’ health insurance plans until their 26th birthdays.  Families have flocked to sign up their offspring, making the transition to work in a challenging economic environment a bit easier.

Thanks to the Affordable Care Act, 2.5 million more young adults don’t have to live with the fear and uncertainty of going without health insurance,” said HHS Secretary Kathleen Sebelius.  “Moms and dads around the country can breathe a little easier knowing their children are covered.”

“This comparison makes it clear that the increase in coverage among 19 to 25 year-olds can be directly attributed to the Affordable Care Act’s new dependent-coverage provision,” according to an Assistant Secretary for Planning and Evaluation (ASPE) brief.  “Furthermore, the coverage gain for young adults was entirely due to an increase in private coverage (from 49 percent to 58 percent), with no change in Medicaid coverage during this period.”

“The increase in coverage among 19- to 25-year-olds can be directly attributed to the Affordable Care Act’s new dependent coverage provision,” according to the Department of Health and Human Services (HHS).  “Initial gains from this policy have continued to grow as…students graduate from high school and college.”

That age group previously recorded the highest uninsured rate. Now, 26- to 35-year-olds have that dubious distinction by a narrow margin, according to the Centers for Disease Control and Prevention.

According to the HHS survey, nearly 36 percent of Americans ages 19 – 25 — more than 10.5 million people — were uninsured in the third quarter of 2010, before the law’s provision took effect.  The majority of employer-based health plans began carrying the provision January 1, 2011.  By the 2nd quarter of 2011, the proportion of uninsured young adults had fallen to slightly more than 27 percent, or about eight million people.

And just who are these young adults?  Some are transitioning from school to work. Others are trying to start their careers by working at low-wage jobs that don’t usually come with healthcare coverage.  Some – known as the “invincibles” – pass up job-based health insurance because they don’t think they’ll need it and prefer some extra money in their paychecks.

Similarly, the National Center for Health Statistics has documented a broadly similar trend, only not nearly as spectacular.  According to administration officials, those statistics do not focus on the change from calendar quarter to calendar quarter, as the new HHS report does.  Instead, they pool data over longer time periods; that tends to dilute the law’s perceived impact.

Medicare Advantage Premiums to Fall Four Percent in 2012

Tuesday, October 4th, 2011

The Obama administration’s announcement that Medicare Advantage insurance plans premiums will decline in 2012, at a time when enrollment is expected to rise, is good news for the leading health insurers in that segment.  Wall Street analyst Ana Gupte said that the announcement suggests strengthening support in the administration for the privately-run versions of the government’s Medicare program, which covers the elderly and disabled.  Medicare Advantage plans offer basic Medicare coverage with extras like vision or dental coverage oratremiums lower than standard Medicare rates.  Health and Human Services Secretary Kathleen Sebelius said that Medicare Advantage premiums will average four percent less in 2012, and insurers running the plans believe that enrollment will rise by 10 percent.  “Overall, we were very encouraged by the announcement and see this as reinforcing our bullish thesis on the Medicare Advantage and (prescription drug coverage) segments,” according to Gupte.

It’s highly unusual to see healthcare insurance premiums falling. Reduced premiums and growing enrollment are the opposite of what insurers and Republicans predicted would happen to Medicare Advantage after the passage of the Patient Protection and Affordable Care Act (ACA).  The ACA cut payments to fee-for-service Medicare Advantage plans by about $136 billion over the next 10 tears.  Right before the law passed, American’s Health Insurance Plans predicted that “millions of seniors in Medicare Advantage will lose their coverage, and millions more will face higher premiums and reduced benefits.”  So what accounts for the drop?  The decrease in premiums doesn’t have a lot to do with policy decisions made in the ACA.  It’s three outside factors that are putting downward pressure on Medicare.  One is that Medicare costs are growing more slowly.  Both in Medicare and in private insurance, the recession has seen patients using fewer medical services.  This looks to be especially true in Medicare, where seniors might have more limited resources because they tend to live on a fixed income.  The latest S&P Healthcare Economic Indices data indicates that Medicare spending appears to be rising at a slower rate than just a few years ago.

Jonathan Blum, director of the Centers for Medicare and Medicaid Services (CMS) Center for Medicare, said the more affordable costs and growth forecasts demonstrate that companies are still interested in offering such plans despite new consumer protections under the healthcare law and payment caps to insurers.  According to Blum, “We can say with complete accuracy that despite projections in 2010 that the program will decline, the program has grown and will continue to grow.  The plans have made a very strong statement that they intend to commit to the program.  Plans that do a better job serving the needs of their Medicare members should be rewarded and all plans should be encouraged to improve their performance.” 

Healthcare insurers warned that seniors can expect more costs and receive fewer benefits from their Medicare Advantage plans after payment cuts take effect.  They point to projections from the Congressional Budget Office, which predicted Medicare Advantage enrollment would fall to just 7.8 million participants in 2019.  “Medicare Advantage plans remain committed to the program and are doing everything they can to preserve benefits and keep coverage as affordable and possible for beneficiaries,” said Robert Zirkelbach of America’s Health Insurance Plans (AHIP).  “However, as these cuts take effect in the coming years, Medicare Advantage beneficiaries will face higher out-of-pocket costs, reduced benefits, and fewer health care choices.”  The group and its insurer members, who opposed many of the healthcare reforms before they passed, are now committed to implementing the law.

“Many people raised fears that under the Affordable Care Act, beneficiaries would see their Medicare Advantage options shrink and their premiums rise,” Sebelius said.  “Instead, we have seen just the opposite.”

Some in the industry are looking at other ways to bring Medicare costs down.  According to the Fierce Pharma website, “Healthcare industry leaders are poised to make their own deficit-reduction suggestions — including some that might not win them points in a popularity contest.  Uncertain what budget cuts the deficit-reduction committee might propose, the Healthcare Leadership Council has come up with its own proposal that would ask Medicare beneficiaries to endure more belt-tightening themselves.  The group is aiming to put forward an alternative more palatable than across-the-board Medicare cuts mandated by the deficit-reduction bill if the “supercommittee” doesn’t agree on its own plan.  And it’s betting that its proposal will be easier to bear than budget-cutting ideas floated in the past, such as drug re-importation.  The council, which includes Big Pharma executives, hospital companies and insurers, crafted a plan that would raise the Medicare-eligibility age little by little to 67 from 65, beginning in 2014. It would hike co-pays and deductibles.  It would require well-off seniors to pay higher premiums.  And it would add private-sector competition to traditional Medicare coverage, pitting government-subsidized private insurance plans against regular Medicare.  Requiring seniors to pay more might be considered a non-starter; after all, consumer groups, particularly AARP, have vociferously fought against such moves in the past.  But the council figures that provider-based Medicare cuts will end up costing beneficiaries when all is said and done.  ‘This thinking that we’re protecting beneficiaries because we’re only cutting providers — that’s mythical,’ said Mary Grealy, the council’s president.”

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.

No More Surcharges on Pre-existing Conditions

Tuesday, September 20th, 2011

There’s good news for Americans who lack healthcare insurance and have pre-existing medical conditions.  As of July 1, 2011, the Obama administration reduced the premiums  these people pay to purchase high-risk insurance plans that the federal government operates in 17 states and the District of Columbia.  Called pre-existing condition insurance plans (PCIPs), this coverage for people with medical conditions that often make then unable to buy insurance on the individual market was created by the Patient Protection and Affordable Care Act (ACA). 

Virginia and six other states will slash their premiums by 40 percent; other states and the District of Columbia will see cuts of between 15 and 25 percent; Mississippi will cut its rates by just two percent.  The revised rates give greater consideration to state-specific data and closely track the standard rates for individual policies in each state.  “Now, the program has been up and running for six to nine months, we’ve had an opportunity to redefine the methodology,” said Steve Larsen, director of the Center for Consumer Information and Insurance Oversight at the Department of Health and Human Services. 

Advocates for consumers and federal officials hope that the reduced premiums will encourage additional people to opt into the plans.  Although approximately 375,000 people were expected to sign up for the PCIPs, just 21,454 had enrolled as of April 30, 2011.  The biggest roadblocks are seen as high premiums and a legal requirement that enrollees lack healthcare insurance for six months prior to joining the program.

Another provision of the law could have the potential to make the plans even more affordable.  Some insurers are already cutting premiums to meet the new “medical loss ratio” requirements.  (Medical claims paid are considered losses in insurance jargon.)  If difficult economic times continue and people cut back on medical care, other insurers may follow suit.  “Plans are getting nervous about how big the rebates they’re going to have to pay are,” said Timothy Jost, a law professor at Washington and Lee University who’s a consumer representative to the National Association of Insurance Commissioners.

Compared to the legal requirement that people be uninsured for six months before signing up for the new plans, high premiums are probably a bigger stumbling block to enrollment, experts say. They can’t really do anything about the six months, because that’s in the law,” says Kansas Insurance Commissioner Sandy Praeger, who heads the health insurance and managed care committee for the National Association of Insurance Commissioners.  “But they can bring down the cost, which will help.”

The trend to ever-increasing healthcare premiums has led some organizations to ask for an extreme solution. Recently, the Greater Boston Interfaith Organization (GBIO) and Health Care for All issued a plea to freeze healthcare premiums for one year to sort out a better solution for healthcare companies and individuals alike.  The freeze’s supporters argue that the price hikes of health insurance have not evened out, despite the fact that more people are facing economic difficulties.  During the year-long freeze, the hope is that consumers will be better educated to find the best deals for their insurance and that companies could find ways to better meet their customers’ needs.

The cost reduction has made a major difference to Kathleen Watson of Lake City, FL, who had been uninsured since 2004 when COBRA coverage under her husband’s previous policy expired.  Because she has leukocytosis — a constantly elevated white blood cell count — locating affordable coverage was impossible.  Watson found herself in an even more difficult position in 2009 when she was diagnosed with non-Hodgkin lymphoma and developed an antibiotic-resistant bacterial infection while hospitalized with pneumonia.

When the ACA created the new plans for people with pre-existing medical conditions, Watson looked into coverage.  Unfortunately, the $605 monthly premium was more than she could afford on what she earns running a medical transport business.  When she learned that rates in the three plans were being reduced by 40 percent, Watson checked out the plans again.  This time, she signed up for an affordable $363 a month that started July 1.  “I’m just happy to have insurance now,” Watson said, noting that she immediately needs a CT scan and a lung biopsy to check out enlarged lymph nodes in her right lung, bladder and colon.  “Hopefully it does what it says.”

Discussions about further reductions could be in the works.  “It’s possible,” that the medical loss ratio requirements might further depress PCIP premiums, Larsen said.  “I wouldn’t care to speculate about that.”

Virginia Appeal Confirms the ACA’s Individual Mandate

Monday, September 19th, 2011

The Obama administration won a round in the legal battle over the Patient Protection and Affordable Care Act (ACA) when a federal appeals court tossed out two lawsuits in Virginia.  The 4th U.S. Circuit Court of Appeals ruled in both lawsuits — one filed by Virginia Attorney General Kenneth Cuccinelli, the second by Liberty University – that the plaintiffs did not have legal standing to sue.  This is a rejection of the first case that ended with a ruling that the healthcare reform law was unconstitutional.  Additional cases remain active, including the lawsuit filed by 26 other states, which means that the issue has by not gone away.

Virginia argued that it had the right to challenge the individual mandate – a key proviso of the law that requires people to buy health insurance by 2014 or pay a tax penalty – because it interferes with a state law that says residents can’t be forced to purchase health insurance.  According to the court, “To permit a state to litigate whenever it enacts a statute declaring its opposition to federal law” would “convert the federal judiciary into a forum for the vindication of a state’s generalized grievances about the conduct of government.”  During oral arguments, a lawyer for the Obama administration said that the case “fails at the outset” because the mandate is applicable to individuals and not the state.  After the decision was handed down, Cuccinelli expressed “disappointment” that the case was thrown out.  According to Cuccinelli, “the Court did not even reach the merits on the key question of Virginia’s lawsuit – whether Congress has a power never before recognized in American history: the power to force one citizen to purchase a good or service from another citizen.”

In the case brought by Liberty University — a private Christian school — the court said in a 2 – 1 ruling that it was blocking the case because a federal tax law stripped it of jurisdiction to decide the issue.  The Court was the first to rule that the individual mandate is essentially a tax.  Because the mandate cannot be enforced until 2014, the Court ruled that the Anti-Injunction Act “strips us of jurisdiction” from hearing a pre-enforcement challenge.  “What the Court said is that the penalty for not complying with the mandate functions as a tax that cannot be challenged until it has been assessed,” said Kevin Walsh, a law professor at the University of Richmond School of Law.

Virginia Governor Bob McDonnell reacted to the ruling, saying “Today, a three judge panel, consisting of two judges appointed by President Barack Obama and one by former President Bill Clinton, found that Virginia lacks standing to challenge the individual mandate provision of the federal healthcare law.  We respectfully disagree with the panel’s reasoning.  To conclude that a state has no standing to challenge an expensive and burdensome federal mandate on its citizens that the state has banned in its law, might cause James Madison and George Mason, Virginia’s principal drafters of our nation’s founding documents, to promptly roll in their graves.  To dismiss a Virginia statute as a basis for standing, declaring it to be ‘quintessentially political,’ and asserting that a state cannot be a ‘constitutional watchdog’ undermines our precious principles of federalism.  This decision must be promptly appealed.

“As federal courts across the country continue to come to differing conclusions on the merits of cases arguing the unconstitutionality of the federal healthcare law, today’s decision further exemplifies why these cases should be expedited to the nation’s highest court.  It is the Supreme Court that will ultimately determine whether the federal mandate on every citizen to purchase health insurance violates the U.S. Constitution.  States and businesses continue to expend time and money and languish in uncertainty as they try to come into compliance with a law that may ultimately be ruled unconstitutional.  It is exasperating that the President and the Justice Department oppose a prompt resolution of this case through an expedited appeal.  America needs finality in this case,” according to McDonnell.

Judge Diana Gribbon Motz, who was appointed to the bench by President Clinton, wrote that the only apparent function of the state law was “to declare Virginia’s opposition to a federal insurance mandate.”  The state law was enacted just days after President Obama signed the ACA into law.

Writing in U.S. News & World Report, Scott Galupo says that “Cuccinelli and co. follow a long trail from the 18th century British jurist William Blackstone to the Dred Scott case to the New Deal to the present day.  The conservative team, at first, makes a tight, prudential case against the Obamacare mandate that I, in my nonprofessional capacity, happen to favor.”  Parsing Cuccinelli’s statement about the decision, Galupo notes that “In plainer, get-to-the-point English: We grant you the social safety net established under the ‘Roosevelt Settlement.’  We recognize Congress’s power to regulate interstate commerce.  We even grant that this power could conceivably deliver universal healthcare.  But for Pete’s sake, don’t try to include ‘inactivity’ — that is, not buying a health insurance plan on the private market — under its purview.  Because, once you regulate the act of doing nothing, what’s left to regulate?  Er, nothing.  Thus, does the state’s power to tax and police become theoretically unlimited?  But, later in the body of the piece, Team Cuccinelli begins to play other, more presently familiar cards.  Glenn Beck fans will recognize the faces in the rogue’s gallery: Justice Oliver Wendell Holmes, progressive philosopher John Dewey, and others who, this argument goes, created the post-New Deal legal and philosophical edifice.  Wouldn’t you know it, this welfare-state stuff constitutes a violation of natural law — which, ipso facto, means economic laissez-faire — and a lurch into moral chaos.  Echoing the newly popular Hayek, Cuccinelli’s article asserts the primacy of economic rights while characterizing as relativistic the not-exclusively-liberal jurisprudential argument that personhood and dignity precede the marketplace.  (Last I checked, I’ve never seen an unborn baby sign a contract.)”

The Obama administration remains optimistic about the ACA.  “When it ends, we are confident we will prevail,” White House adviser Stephanie Cutter said.