Where Do Premium Dollars Go? Mainly to Drugs and Doctors.

Image result for images Where Do Premium Dollars Go? Mainly to Drugs and Doctors.

Source: Fierce Healthcare

Prescription drugs make up nearly a quarter of health insurance premium costs, with doctor visits not far behind, according to new research.

report (PDF) released on Tuesday by America’s Health Insurance Plans (AHIP) found that a hefty 23.3% of premium spending goes towards prescription drugs, an amount that even astonished researchers.

“What’s quite surprising is that the prescription drug piece has really started to separate from the rest of the healthcare expenditures,” Craig Burns, vice president at AHIP’s Center for Policy and Research, told FierceHealthcare.

The issue of ever-increasing drug prices has been in the national spotlight for some time, and it’s currently a major target of the Trump administration, which is seeking to control spending at the insurer and pharmacy benefit manager level.

The study also found that about 22.2% of premium dollars go to physicians and doctors. An additional 20.2% goes towards other office or clinic costs, including nurses’ salaries and equipment and supplies, while hospital stays make up 16.1%.

The research was conducted using data between 2014 and 2016 from five for-profit and 25 nonprofit insurer plans, which Burns said is representative of the sector as a whole.

A separate report by Altarum pointed to hospital spending and drugs as some of the main drivers of healthcare price growth, which is currently at a record high 2.2% compared to last year.

Comparing service costs between private premiums and Medicaid and Medicare is apples to oranges due to differences in billing and how spending is classified. However, it appears government payers score significantly better on operating costs.

Operating costs and taxes make up 15.9% of premium costs, the AHIP research found. Meanwhile, MACPAC has pinned operational spending under Medicaid to less than a third that, at about 5%.

Insurance Commissioner Candidate Statements

Source: Voters Guide CA Gov

Editor’s Comment: Senator Richard Lara, Democrat, is also on the ballot but did not submit a Candidate Statement for the Official Voter Information Guide. Lara is the author of SB 562, the Single Payer bill.

Steve Poizner

Steve Poizner | NO PARTY PREFERENCE

From 2007–2011, I served as the California Insurance Commissioner, and am seeking your support for a 2nd term of public service. My Background: I have a proven track record of success in the private sector starting and leading pioneering technology companies for over 35 years in California (e.g. my company SnapTrack invented GPS for mobile phones), and now as the founder of a nonprofit focused on expanding the innovation economy in Southern California. Why run for another term now? Californians face urgent issues: under-insured homeowners exposed to an increasing number of wildfires and floods, ongoing premium increases in health insurance markets, and the growing economic threat of cyber-crime. My record as Insurance Commissioner: We saved drivers and homeowners almost $2 billion in lower insurance rates; recovered $30 million for wildfire victims who were shortchanged by insurance companies; saved taxpayers $17 million by permanently cutting 13% of the budget (that’s a first and without layoffs!); arrested over 2500 people for insurance fraud (a record!); and restored insurance for thousands of innocent consumers after health insurance companies illegally canceled policies. Why I am running as an Independent: The California Insurance Commissioner is a regulator requiring fierce independence from insurance companies and partisan party politics. I pledge to press the Legislature to make this office officially non-partisan, and I will refuse insurance industry contributions to my campaign like I did during my first term. For a report card of my first term in office by the San Jose Mercury News, please see: www.bit.ly/Poizner

 

Nathalie Hrizi

Nathalie Hrizi | PEACE AND FREEDOM

Healthcare is a right! Abolish health insurance companies. State must create non-profit provider for all required insurance. Vote Hrizi 2018!

 

Asif Mahmood

Asif Mahmood | DEMOCRATIC

I’ve based my life’s work on a single principle taught to me by my parents: helping others is our highest calling. That’s why I became a doctor, and why I’m running for Insurance Commissioner. I was born and raised in rural Pakistan, where I attended a school that didn’t have a roof let alone chairs or desks. With my teachers’ help, I was the first person in my town to earn the grades to attend medical school and move to the United States. Now as a doctor of internal medicine, I’ve seen my patients’ struggles—ranging from insurance coverage issues, prescription drug issues, in- and out-of-network issues, follow-up issues, and support beyond medical care. I’m proud to say I’ve never asked for reimbursement from any patient who didn’t have insurance. Because of my years of experience, I’m the best person to serve Californians as Insurance Commissioner. In fact, I’ll be the first doctor to ever hold the seat. My first priority will be fixing the state of health insurance. I’ll take on Pharmaceutical companies that are putting profits before people and support Medicare for All. That’s why I refuse to take contributions from insurance companies or pharmaceuticals—because Californians are my constituents, not Big Pharma. As a Muslim immigrant from the state of California—I’m a triple threat to Donald Trump. I’ll be the first Muslim ever elected to statewide office in the country. Let’s send a clear message—it’s time to get tough on hate.

Single-Payer Issue Drives Dollars Into Gubernatorial Campaign

Source: California Healthline

Health care heavyweights are pouring money into California’s gubernatorial campaign as the primary looms, ramping up support for front-runner Gavin Newsom and financing attack ads against one of his distant Democratic rivals, John Chiang.

One issue that seems to be driving health care industry donations — and the candidates’ health care rhetoric on the campaign trail — is the prospect of a government-run single-payer system.

Both Newsom, California’s Democratic lieutenant governor, and Chiang, the state treasurer, support the concept of single-payer, which would offer universal coverage to Californians, likely at a significant cost to the state. But in a twist, Newsom’s two most generous health care supporters fundamentally disagree on the idea.

The California Nurses Association union and Blue Shield of California each have contributed about $1 million to independent committees that support Newsom, according to a California Healthline analysis of campaign finance data. The powerful nurses union strongly supports single-payer health care, while that model of health care delivery could pose an existential threat to insurer Blue Shield.

“The nurses are donating heavily to Gavin Newsom because they hope that he’ll be governor,” said Thad Kousser, chairman of the University of California-San Diego’s political science department. “And Blue Shield is donating heavily because they fear that he’ll be governor.”

There are some differences between the Democratic candidates’ positions.

Chiang told California Healthline in April that his health care priority would be to implement a single-payer, government-run health care system during his first term.

After strongly supporting legislation to implement single-payer, Newsom seemingly softened his support. He told the San Francisco Chronicle in April that transitioning to a single-payer system would take “years,” and that the process would be delayed by setbacks and lawsuits.

“It is not an act that would occur by the signature of the next governor,” Newsom told the Chronicle. “There’s a lot of mythology about that.”

Fabien Levy, Chiang’s deputy campaign manager, suggested that Blue Shield is supporting Newsom and opposing Chiang “now that Newsom has tamped down expectations and said single-payer won’t easily be passed by the next California governor.”

According to a poll released this week by the Public Policy Institute of California, Newsom leads the gubernatorial race with the support of 25 percent of likely voters. Trailing behind him are Republican John Cox with 19 percent, Democrat Antonio Villaraigosa with 15 percent and Republican Travis Allen with 11 percent. John Chiang is polling in fifth place with 9 percent of likely voters, followed by Democrat Delaine Eastin with 6 percent.

However, the poll suggested that there’s room for some movement — 15 percent of those surveyed were undecided.

Under California’s “top-two” primary system, all candidates for state or congressional office will appear on the same June 5 ballot, regardless of party affiliation. The top two vote-getters advance to the November general election.

The big health care contributions to gubernatorial candidates were made through “independent expenditure committees.” Unlike the campaign committees run by the candidates themselves, which are subject to strict contribution limits, these independent committees can raise and spend unlimited amounts. They must report that spending to the California secretary of state on a regular basis, and, for big transactions in the weeks before the election, within 24 hours.

While health care interests have contributed heavily, charter school advocates have been the biggest spenders in this election as of Thursday. An independent committee supporting Villaraigosa has raised more than $17 million from charter school advocates.

The nurses union, which sponsors the independent committee “Nurses for Newsom for Governor 2018,” has raised about $1.2 million for Newsom. It used $300,000 of that money to launch a statewide radio ad campaignlast week supporting Newsom.

Chuck Idelson, spokesman for the union, said it is backing Newsom because of his support for single-payer. “It’s a major issue, there are 15 million Californians with no health coverage or who are underinsured” he said.

Blue Shield donated $971,440 to a different independent committee supporting Newsom: “Citizens Supporting Gavin Newsom for Governor 2018, Sponsored by Labor Organizations and Blue Shield of California.”

In an emailed statement, the insurer described its financial contributions as “part of our ongoing efforts to support meaningful reforms to health care at the state and federal level” without addressing single-payer directly.

Lanhee Chen, a fellow at Stanford’s conservative Hoover Institution, noted that Blue Shield and other insurers know they would have much to lose if single-payer were adopted in liberal-leaning California. By spending in the election, they expect to have greater influence in the policymaking process, he said.

“For the insurers, a single-payer system is more of an existential threat here in particular in California because of the political landscape,” he said.

Blue Shield has also loaned $1 million to a committee that opposes Chiang — one that has amassed $2.4 million in contributions, all from the health care industry.

The California Medical Association, which represents doctors, also gave $900,000 to the committee, which is called “Health Care Providers for Fiscal Accountability Opposed to John Chiang.” The California Dental Association, which represents dentists, contributed more than $500,000.

The committee has spent more than $1.8 million since April to oppose Chiang, including $1.5 million for glossy direct mailers that warn that he’s “a billion-dollar risk we can’t afford as our Governor.”

Chiang does have some health care support from a different independent campaign committee. The United Nurses Association of California/Union of Health Care Professionals has contributed $350,000 to a committee it formed called “Californians for Fiscal and Economic Leadership, primarily formed to support John Chiang for Governor 2018.”

Single-payer emerged as one of the hottest issues in California politics with the meteoric rise of U.S. Sen. Bernie Sanders (I-Vt.) in the 2016 presidential election — and his support for a government-run health care system he called Medicare for All, Kousser said.

But the policy faces significant political and financial hurdles, even in the Golden State.

SB 562, the single-payer bill that was considered by the state legislature last year, stalled because of its exorbitant price tag, estimated at $400 billion annually — with up to half of that money coming from new taxes.

This week’s Public Policy Institute of California poll showed that 53 percent of likely voters support single-payer if no new taxes would be required. If new taxes would be levied, voter support drops to 41 percent.

The state also would need to collaborate with the federal government to implement a single-payer system, Kousser said, but given the current administration’s opposition to single-payer and the Affordable Care Act, it’s unlikely the federal government would cooperate.

“All of our health care money passes through Washington, D.C.,” he said. “If Washington, D.C., won’t let it go back to California to fund single-payer, it’s a non-starter.”

Premium Hikes Reignite the ObamaCare Wars

Image result for images Premium Hikes Reignite the ObamaCare Wars

Source: The Hill

The ObamaCare premium wars are back.

The cost of health insurance plans on the ObamaCare exchanges could jump in the coming weeks, some by double digits, inflaming the issue ahead of the midterm elections.

Democrats argue the price increases are the result of what they refer to as “Republican sabotage.” They contend that, since the GOP controls Congress and the White House, the price hikes are their responsibility — and that’s the message they plan to take into the fall campaign.

“If these early states are any indication, health insurance companies are going to ask for huge hikes in the wake of President Trumpand congressional Republicans’ repeated efforts to sabotage our health-care system,” Senate Minority Leader Charles Schumer (D-N.Y.) said at a press conference last week. “And we Democrats are going to be relentless in making sure the American people exactly understand who is to blame for the rates.”

Republicans counter that it was Democrats who passed the law, enacted in 2010, in the first place and without any GOP votes. And they blame Democrats for the failure to pass a bill that was aimed at shoring up ObamaCare’s exchanges.

Democrats wrote the Affordable Care Act, so “they should look in the mirror,” Sen. Lamar Alexander (R-Tenn.), chairman of the Senate Health Committee, said last week on the Senate floor.

“And this is the very worst. When Republicans were prepared one month ago to stabilize these markets — and according to the Oliver Wyman health-care experts, to lower rates by up to 40 percent over three years — the Democrats said no,” he said.

For years, Republicans had the upper hand on health care, with the backlash to the Affordable Care Act helping them win the House in 2010, the Senate in 2014 and the White House in 2016.

During the Obama administration, Republicans railed against ObamaCare premium hikes while pledging to repeal and replace the law.

But that repeal push ended in failure last year, and Democrats say the political winds have shifted in their favor.

Democrats argue that any higher premiums this year will be a direct result of the Republican Congress and the Trump administration. They refer to certain actions by the GOP — such as the repeal of the individual mandate to have health insurance — as acts of “sabotage” that will siphon healthy people out of the ObamaCare insurance markets, leading to sicker people on the plans and higher costs.

“Thus far, Democrats have been on the defensive about premium increases,” said Cynthia Cox, a health insurance expert with the Kaiser Family Foundation. “Now they’re starting to play offense, and from our polling we’ve seen that a lot of the public now feels that the Trump administration and Congress are responsible for any problems with the [Affordable Care Act] going forward, so it may be that the politics of premium increases has changed.”

Protect Our Care, a pro-ObamaCare group, launched “Rate Watch” on Tuesday, a media campaign and website aimed at getting out the Democrat’s message that Republicans are to blame for rate hikes.

Only a handful of states have released proposed premiums for next year, as insurers are largely still hammering out what their preliminary rates are going to be.

In Maryland, the average proposed increase among insurers and plans was 30 percent. CareFirst BlueCross BlueShield, for example, requested an 18.5 percent hike for its HMO plans and 91.4 percent for its PPO plans.

In Virginia, proposed rate hikes varied widely, from 15 percent to 64 percent. Vermont’s proposed premium increases were more modest.

It’s too early to know the full picture for what premiums will look like around the country for 2019. Insurers tend to file proposed rates in the late spring and early summer, and they’re generally not finalized until early fall — a little more than a month before the ObamaCare exchanges open for business on Nov. 1.

“It’s hard to come up with a general impression … but I think what we can expect is probably another year of double-digit rate increases driven in large part by the individual mandate repeal and the expansion of short-term health plans and association health plans,” Cox said.

The Trump administration proposed a rule to increase the length of time a consumer can keep a plan that doesn’t comply with ObamaCare’s insurance regulations from three months to nearly a year. Democrats deride those plans as “junk insurance.”

Association health plans would let small businesses and self-employed individuals band together to buy coverage that doesn’t comply with ObamaCare’s rules.

Republicans say the rules will expand choice and allow people to buy cheaper alternatives to ObamaCare plans.

Some insurers have cited the repeal of the individual mandate as a factor in their decision to propose rate hikes, and at least one also included the proposed regulations from the administration as a factor.

Some insurance commissioners across the country are approaching the open enrollment period with a level of “concern and a bit of trepidation,” said Julie Mix McPeak, Tennessee’s insurance commissioner who serves as the president of the National Association of Insurance Commissioners.

In McPeak’s home state, she’s hopeful that signs are pointing to rates beginning to plateau and that Tennessee won’t see the large hikes of years past.

“My experience in Tennessee … is not typical for all of the states in the United States,” said McPeak, who was appointed to run the state’s insurance department by Gov. Bill Haslam (R.).

“I’m hearing from some of my colleagues from the national perspective that they are looking at significant rate increases,” she said.

Dave Jones, California’s Democratic insurance commissioner, said he’s worried that some insurers may leave parts of the state.

“We’re working closely with our exchange and other California agencies to do everything we can to encourage insurers to stay and to create as much stability as we can, not withstanding all of the rocks that the Trump administration is throwing at health-care reform,” he said.

If the short-term and association health plan rules are implemented, Jones said he’s prepared to file litigation aimed at stopping the regulations.

In North Dakota, the state’s Republican insurance commissioner is more optimistic.

Jon Godfread said he expects North Dakota’s marketplace will consist of three carriers selling plans across the state — an increase from last year, when areas had only one or two insurers to choose from.

As for rate hikes, he’s hoping in the low double-digits or, worst case, in the 18 percent to 22 percent range. He believes the repeal of the individual mandate won’t have much impact on consumer behavior in North Dakota because people who couldn’t afford insurance have likely already left the marketplace in the state.

“Health insurance and health care by its very nature is demographic,” Godfread said. “We may be leading into a somewhat calm year — in North Dakota, at least that’s what we’re hoping for. But that doesn’t mean my colleagues in Iowa and Nebraska and other places aren’t facing some pretty significant challenges, and we very well, that could be us next year, or it could be us this year still, too. There’s a lot of time between now and open enrollment.”

Medicare’s proposed direct-contracting model carries both rewards and risk

Image result for Medicare’s proposed direct-contracting model carries both rewards and risk images

Source: Modern Healthcare

A new direct provider contracting model under consideration at the CMS could potentially save providers billions in administrative costs, but could also threaten access to care for Medicare’s frailest and lowest-income beneficiaries.Under the proposal, the CMS would directly contract with provider practices and pay a fixed per-beneficiary per-month payment to cover various services, such as office visits, certain office-based procedures, and time spent managing care for a patient. Practices could be eligible for incentive payments if they hit savings and quality goals.

“Such a model would have the potential to enhance the doctor-patient relationship by eliminating administrative burden for clinicians and providing increased flexibility to provide the high-quality care that is most appropriate for their patients, thus improving quality while reducing expenditures,” the CMS said in a request for information seeking input from the industry.

Iora Health, a Boston-based medical practice, found that similar direct-contracting models lowered hospital admissions, and emergency department and specialist visits by 30% to 40%.

Unlike other primary-care models such as Comprehensive Primary Care Plus, which also pays a per-beneficiary per-month fee, Medicare enrollees could choose the direct-contracting model or use another primary -care provider.

The CMS is eying the model in response to comments late last year on what new priorities the Center for Medicare and Medicaid Innovation should pursue.

The agency received 1,000 comments, which were all posted April 23.

Ascension, the nation’s largest not-for-profit health system, supported private contracting in its comments. Officials for the Catholic system said this approach would make funds available to beneficiaries upfront and allow them to directly contract for primary care and related services.

The upfront funding could also be used to pay for services that are not presently covered under Medicare.

“This aspect of such a model would allow both a beneficiary and provider, in partnership, to define what has value and create competition for such services,” the Rev. Dennis Holtschneider, chief operations officer at Ascension, said in a comment letter.

In exchange for providing Medicare funds upfront, providers may face some risk as the CMS is considering holding participating practices accountable for all or a portion of a beneficiary’s total care costs.

The CMS is collecting comments through May 25 on how much risk a practice should face and whether to limit how often beneficiaries can change primary-care providers.

Doctors participating in the proposed model would face less scrutiny from Medicare billing contractors.

Since they are getting prepaid for services, they wouldn’t be required to submit claims, according to Michael Miscoe, president of AAPC’s National Advisory Board. AAPC is a trade association for medical billing professionals.

That could potentially save practices billions annually. Appealing a denial costs an average of $118 in administrative costs, totaling $8.6 billion a year, according to an analysis from Change Healthcare, a consulting firm.Specialists, however, may see revenue drop if the CMS makes participating practices responsible for a beneficiary’s total cost of care and imposes enrollment lock-ins, according to Eliot Fishman, senior director of health policy at Families USA and a CMS Medicaid official in the Obama administration.

“As things are now, Medicare beneficiaries can go to a specialist without a referral. Under this model, primary-care practices would begin to serve a gatekeeper function,” he said.

Commercial payers like the Blue Cross and Blue Shield Association said that another downside is that providers may be less willing to take on Medicare beneficiaries with severe chronic healthcare needs since practices would be on the hook for beneficiary costs.

The CMS seemed to concede this possibility, saying it is seeking feedback on how to ensure participating practices don’t cherry-pick which patients they’ll treat under the model.

In addition, there is concern that participating practices could choose to charge so-called concierge fees in exchange for premium offerings like same-day appointments, extended visits and email exchanges with doctors.

In the commercial coverage sector, such fees are common for direct-contracting practices.

Those fees tend to be paid annually and on average equal $1,500 per year, according to comments sent to the CMS. Research shows that about half of Medicare beneficiaries live on incomes of $24,000 or less, making the fees a considerable hardship.

As of now there is nothing in the request for information that would prohibit charging such fees; widespread adoption of them could limit access for low-income beneficiaries.

“It would weaken the equity of Medicare and could create a two-tiered system,” said Loren Adler, an associate director at the Brookings Institution’s Center for Health Policy.

The request for information is also silent about allowing deductibles and co-insurance fees beyond what could be charged under Medicare or whether the balance-billing prohibition would remain in place, according to Edwin Park, a research professor at Georgetown’s McCourt School of Public Policy.

Under balance billing, a provider bills a patient for the difference between what an insurer doesn’t pay for a patient’s care and what the provider chooses to charge.

The scenario occurs in direct-contracting agreements between providers and patients and was favored by former HHS Secretary Dr. Tom Price as a method to encourage more doctors to take Medicare patients.

Direct contracting between providers and beneficiaries was raised as a potential option for the CMS to explore in public comments received by several provider groups, including the American Association of Neurological Surgeons.

As things are now, physicians must opt out of Medicare for two years in order to privately contract with any patient.

“Medicare beneficiaries should not be prevented from using their Medicare benefits if they choose to see a physician who does not accept Medicare, and physicians should not face penalties or be forced to opt out of the Medicare program to contract with Medicare beneficiaries privately,” the American Association of Neurological Surgeons said in a comment.

Relaxing rules for private contracting could ultimately increase beneficiaries’ financial burden since Medicare couldn’t limit what providers charge above Medicare rates, the National Council on Aging, an advocacy organization, said in a comment to the CMS.

In the request for information, the CMS said it is aware of a wide range of direct-contracting options, such as those between patients and physicians, and said future versions of its model “could be tested in an iterative manner with additional options added over time.”

The request for information’s silence on opposing balance billing concerned policy insiders.

“There remains a significant worry that this could open the door to direct contracting with balance billing and the inevitable harm to beneficiaries that would result,” Park said.

Industry Voices—Why insurers are spending billions to acquire physician practices

Image result for Industry Voices—Why insurers are spending billions to acquire physician practices images

Source: Fierce Healthcare

A couple of giant proposed healthcare mergers have garnered a lot of attention in recent months. People want to know what CVS’ $69 billion deal for Aetna or Cigna’s $52 billion agreement to buy Express Scripts can tell us about the future of U.S. healthcare.

But a clearer picture of how the industry is changing might actually come from a string of smaller, less heralded deals.

Insurers are snapping up physician practices. UnitedHealth Group, the largest U.S. health insurance company, agreed in December to pay $4.9 billion for DaVita Medical Group, whose physicians serve some 1.7 million people a year in nearly 300 clinics. That’s the largest recent deal, but it was at least the fourth acquisition of a medical provider group by the company in 2017.

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Overall, 147 transactions last year involved physician practices, according to Bloomberg BNA. More multibillion-dollar acquisitions are to be expected this year.

Why? Insurers, employers and the government—the “payers” in the American health system—realize they need to pay for outcomes rather than procedures. In other words, they’ve come to understand that the fee-for-service model is broken, even if it still accounts for the bulk of the money flowing through the system.

More and more, insurers want to compensate doctors based on what they achieve rather than how many procedures they do. No wonder insurers want to own medical practices. It’s easier to improve healthcare services and rein in costs if you control what gets done in doctors’ offices, not insurance company cubicles. As much as an insurance organization wants to encourage getting a flu shot, for example, it’s doctors and nurses who actually talk to patients and administer shots.

RELATED: Humana buys Florida physician group amid Walmart rumors

Does this mean that your doctor is soon going to be an insurance company employee? Not necessarily. Most medical offices are too small to be swept up by insurers, which are looking for specific characteristics.

The most attractive targets for acquisition will be:

  1. Physician-led. Cost-control and quality improvement are more likely to happen when practitioners themselves have a stake in the outcome. Groups in which physicians are no longer in control of the operations and outcomes of medical care tend to be less effective. And hospital-led medical groups tend to focus on filling beds—the most expensive way to provide medical care.
  2. Strong in primary care. Primary care is the entry point for most patients and where doctors are focused on the whole patient, not just one condition. It’s a strong platform for any practice’s future growth—and the key to preventing illness rather than just treating it.
  3. Diversified. Covering enough specialties to provide a broad spectrum of patient care is important for patient retention and satisfaction, with access to strong cardiology, endocrinology and gastroenterology being key.
  4. Wired. A medical group must have up-to-date technology to collect and analyze patient data. Higher quality outcomes and lower costs come hand in hand when better data and information are available. Real-time analytics drive better prevention and enable strong physician groups to achieve better population health outcomes.

Driving these transactions isn’t just a sense among insurers that the only way to grow their business is through owning medical practices. There’s also the influence of public policy and government programs—specifically, the growth of Medicare Advantage. MA is an option for Medicare beneficiaries in which an individual signs up for a health plan instead of receiving their care through the fee-for-service delivery system. Medicare Advantage, also known as Medicare Part C, has grown steadily and now accounts for over a third of all enrollees in the government’s retiree healthcare program.

Universal Coverage Bills Move Forward, With Questions

Image result for Universal Coverage Bills Move Forward, With Questions imagesSource: Capital Public Radio

A bill that would expand health care coverage to undocumented adults has moved forward in the California state Assembly, part of a push by Democratic lawmakers to create universal coverage, after a single-payer bill stalled last year.

Allowing undocumented adults onto Medi-Cal could get California a third of the way there. The UC Berkeley Labor Center says it would expand access to coverage to more than a million people. But the bill and the universal coverage effort generally still face a major hurdle—how to pay for them.

“This is an incredible cost,” said Assemblyman Chad Mayes (R-Yucca Valley).

Legislative staff will “score” the bills when they reach the Appropriations Committee, but for now proponents have not addressed that cost or how to pay for it.

“I can say without getting into specifics that it’s less than the size of our surplus, and something that will have to be dealt with,” said the bill’s author Assemblyman Joaquin Arambula (D-Fresno).

That surplus is one-time and estimated at $6 billion. Proponents of the measure will have to identify how they’ll cover that cost continuously and get buy-in not only from lawmakers, but a governor who wants to bank that surplus for the next recession.

The Assembly measure passed along party lines. The Senate Health Committee passed a similar measure last month.

Other bills the Assembly Health Committee passed Tuesday would increase state subsidies for insurance bought on the Covered California health exchange.

One measure would see the state shoulder a larger portion of co-pays and deductibles for individuals earning up to 50,000 dollars.

“Almost 400,000 Californians who are in this income range remain uninsured,” said Beth Capell of advocacy group Health Access. “We think in part because the idea that paying premiums for coverage with a deductible of over $6,000 does not seem like a very good choice.”

Two other measures would increase state funding for premiums. None of those bills have a cost attached to them yet or a source of funding.

California Hospitals Must Cough Up Millions To Meet Charity Care Rules

Image result for California Hospitals Must Cough Up Millions To Meet Charity Care Rules imagesSource: California Healthline

California Attorney General Xavier Becerra has ordered three California hospitals to pay out millions of dollars to local nonprofits, declining their requests to be freedfrom charity obligations required under state law.

The hospitals, based in the Central Valley and Los Angeles, argued that there isn’t as much need to support charity care because millions more people have health insurance under the Affordable Care Act, and therefore don’t need as much financial help to pay medical bills.

Becerra’s refusal signals his agreement with health consumer advocates, who argue that patients still are struggling to pay their bills, even when they have insurance. While it applies to just a few hospitals, the decision sends a message to hospitals around the state, some of which want similar relief.

The California Hospital Association sent a letter to Becerra in September, saying that 32 hospitals wanted more “flexibility” in their charity care obligations.

Two hospitals, Saint Agnes Medical Center in Fresno and PIH Health Hospital in Downey, had also requested to reduce their charity care obligation but withdrew their proposals before Becerra made a decision.

“We were thrilled” by the attorney general’s decisions, said Jen Flory, a policy advocate with the Western Center on Law & Poverty, which advocates for health care for low-income Californians.

Flory said the letters show that Becerra understands there are still “unmet needs” for financial assistance for people who have high-deductible plans or can’t afford their out-of-pocket costs.

“Many of them may not be presenting in the emergency room, but that doesn’t mean that there’s not additional outreach that hospitals could do” to help these patients afford their care, Flory said.

The three hospitals were issued denial letters by the attorney general’s office on Friday.

As a result, petitioner Mission Community Hospital in Los Angeles is required to pay about $1.7 million to at least one local nonprofit organization providing medical services for low-income and homeless residents, for failure to meet its charity care requirement in fiscal year 2016.

Emanuel Medical Center in Turlock is to pay about $1.9 million for the poor to meet its 2016 requirement. And the University of Southern California’s Verdugo Hills Hospital must donate almost $1.7 million to local medical service providers to meet its 2017 requirement.

A spokesperson for the USC hospital said the lump sum mandated by the attorney general is on top of what it is already spending on free care and services to the community, such as health seminars and screenings.

Under state law, California’s attorney general can set specific charity care requirements for hospitals when a nonprofit hospital merges or is acquired by another nonprofit or for-profit company.

Separately, federal law requires nonprofit hospitals to provide an unspecified amount of free or discounted care — or other charity, such as donations to community groups — in exchange for tax breaks.

Analysis: Most Short-Term Health Plans Don’t Cover Drug Treatment or Prescription Drugs, and None Cover Maternity Care

Image result for Short-Term Health Plans Don’t Cover Drug Treatment or Prescription Drugs, and None Cover Maternity Care images

Source: Kaiser Health News

A new Kaiser Family Foundation analysis of short-term, limited duration health plans for sale through two major national online brokers finds big gaps in the benefits they offer.

Through an executive order and proposed new regulations, the Trump Administration is seeking to encourage broader use of short-term, limited duration health plans as a cheaper alternative to individual market plans that comply with the Affordable Care Act’s requirements. Repeal of the individual mandate penalty – which currently applies to people buying short-term plans – is also expected to boost enrollment starting next year.

The analysis examines 24 distinct short-term insurance products currently marketed in 45 states and the District of Columbia through eHealth or Agile Health Insurance. It finds:

  • 43 percent do not cover mental health services;
  • 62 percent do not cover substance abuse treatment;
  • 71 percent do not cover outpatient prescription drugs; and
  • None of the plans cover maternity care.

In seven states – Alaska, California, Hawaii, Maryland, Montana, New Mexico and Utah – none of the available short-term plans cover any of these four benefit categories. When short-term plans do cover mental health, substance abuse, and prescription drugs, the analysis finds they almost always include meaningful limitations and exclusions that would not be permitted in ACA-compliant plans.

Short-term plans traditionally have been marketed to people who experience temporary gaps in coverage.  Unlike ACA-compliant plans, short-term policies can deny or restrict coverage to people with pre-existing conditions and are not required to cover essential health benefits. They also can include dollar caps on coverage and higher deductibles that would not be allowed under ACA-compliant individual market and group health plans.

The analysis confirms that these short-term plans often have premiums much lower than ACA coverage – often 20 percent or less than the lowest-cost bronze plan available through the ACA marketplace in the same location.

To the extent that healthy individuals opt for cheaper short-term policies instead of ACA-compliant plans, adverse selection would raise the cost of coverage for people with health conditions who remain in the ACA-compliant market. Tax credits would offset those higher premiums for low- to moderate-income people who qualify for them, though middle-income families not eligible for subsidies would likely face premium increases.

5 Takeaways From CMS’ Final 2019 ACA Marketplace Rule

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Source: Modern Healthcare

The CMS issued a 523-page final rule late Monday that agency officials said is meant to give states more power to regulate their individual and small-group health insurance markets. The rule also furthers the Trump administration’s agenda of chipping away at Affordable Care Act rules in lieu of a full repeal, which congressional Republicans haven’t been able to pull off.

Here are five highlights:

States’ choose-your-own-benefits adventure

The CMS handed states the reins to determine which essential health benefits individual and small-group plans must offer, starting in 2020. States will be able to either adopt another state’s 2017 benchmark plan; replace one or more of its benefit categories with that of another state’s; or completely build a new essential benefits package from scratch so long as the new plan is not too generous and is in line with a “typical employer plan.” The CMS defines a typical employer plan as either one of the state’s 10 base-benchmark plan options from the 2017 plan year, or one of the five largest group health insurance products by enrollment, not including self-insured plans.

Even with this extra leeway, plans will still have to offer the 10 essential health benefits required by the Affordable Care Act, such as maternity care or mental health coverage. When the change was proposed in October, policy experts were wary of giving states greater power over essential benefits, saying the move could lead to skimpier coverage in the marketplace. The CMS made adjustments to the proposal, such as tweaking the definition of a typical employer plan, to relieve some of their concerns.

Only rate hikes of 15% or more will get a review

The CMS is upping the rate increase threshold that triggers a review by state regulators to premium hikes of at least 15% for 2019. This is seen as way to reduce states’ and insurers’ regulatory burden given the significant rate increases over the past few years. Currently, insurers who planned to increase rates by 10% were required to submit their rates to regulators for review. The agency is also exempting student health insurance coverage from rate review requirements, effective July 1.

More ‘Get Out of Health Insurance Free’ cards

HHS is allowing a big chunk of Obamacare customers to drop their insurance in 2018 without having to pay an individual mandate penalty. The CMS is allowing insurance exchanges to extend exemptions to the penalty based on a lack of affordable coverage available in an area. And additional CMS guidance released Monday allows anyone who lives in a region with just one health insurer or none at all to claim a “hardship” exemption from the penalty for as far back as 2016. Those who only have access to an insurance plan that covers abortion may also get out of the penalty if they object to abortion coverage.

The individual mandate penalty was zeroed out starting in 2019, but the new exemptions would affect all those still subject to the penalty for 2018 if they don’t buy coverage. Though there were some close calls leading up to the last open-enrollment period, there are no counties without at least one insurer offering exchange plans in 2018. Still, eight states and about a quarter of ACA enrollees have only one insurer to choose from. Three states—California, Oregon and New York—require nearly all their insurance plans to cover abortion services, according to the National Women’s Law Center.

License to innovate

The CMS went ahead with its proposal to promote innovative plan designs by eliminating standardized options from the federal marketplace in 2019. “We believe that encouraging innovation is especially important now, given the stresses faced by the individual market,” the agency said in its proposed rule. Standardized options share cost-sharing structures and benefit designs, and were initially proposed as a way to simplify shopping for consumers.

This is a major win for the health insurance industry, which opposed introducing standardized options to the exchanges in 2017, viewing them as stifling competition and creativity. Insurers previously were not required to offer standardized plans, though the CMS encouraged them to do so and displayed the plans on HealthCare.gov.

Loosening up the MLR

Starting next year, the CMS is relaxing the rules surrounding how much of an insurer’s premium income must be spent on medical claims and quality improvement activities, a figure known as the medical-loss ratio. Insurers covering individuals and small businesses today must spend at least 80% of their premiums on healthcare and quality improvement.

In 2019, states will be able to request changes to the minimum individual market MLR that insurers must meet if states can demonstrate that a lower MLR would help stabilize their markets. At the same time, to relieve insurers of the burden of identifying, tracking and reporting actual expenses related to quality improvement activities, the CMS will allow insurers the option of reporting a standard 0.8% of earned annual premium for a minimum of three consecutive years.

Last Updated 06/06/2018

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