California Health Care Workers To Get Bonuses Of Up To $1,500 Through Newsom’s Budget Deal

CA legislature OK's Newsom bonuses for health care workers | The Sacramento  Bee

Source: The Sacramento Bee, by Cathie Anderson

Taxypayer-funded retention bonuses are indeed coming to California’s frontline health care workers after Gov. Gavin Newsom and legislative leaders reached a budget deal Monday setting aside money to thank medical professionals who have worked through the COVID-19 pandemic.

Full-time workers stand to get the biggest potential payments, up to $1,500: up to $1,000 from the state of California and up to $500 in a match from their employers, according to the text of Assembly Bill 184.

Part-time workers will get as much as $1,250, a maximum of $750 of which comes from the state and $500 from their employers.

Physicians will receive up to $1,000 from the state. Managers and supervisors are ineligible for the payouts.

The bonuses will go not only to workers at general acute-care hospitals, government-operated hospitals, skilled nursing facilities and physician practice groups but also to employees at acute psychiatric hospitals, many nonprofit clinics, hospital outpatient clinics, and at any heath facility owned or operated by the state of California or any state department.

“The Legislature finds and declares that stability in the California health care workforce will further its efforts to manage the COVID-19 pandemic and address other public health issues that face Californians,” legislators wrote in laying out their rationale for the bonuses. “Providing California health care workers in 24-hour-care facilities with retention payments … will advance California’s effort to promote stability and retention in California’s health care workforce.”

Legislators noted that the size of the individual payments could drop, depending on how many people take part in the bonus program. They have set aside $1.3 billion for the purpose, and they also provided instructions for a dispute process if physicians or workers feel they have been shortchanged, first requiring them to appeal to their employers before seeking assistance from state agencies or the courts.

Any employer that willfully withholds bonuses is liable to the employees for the unpaid amount and interest, and they may have to pay the employees’ legal fees.

Anthony Cava, a spokesperson for the Department of Health Care Services, said the agency is still working out the operation details of this effort. He could not answer questions about when the money would be distributed.

Full-time employees must have worked at least 400 hours in person and part-time workers at least 100 hours at a facility over a 91-day period in 2022. The state department will determine that employment window after the legislation is enacted.

Employers must pay out funds within 60 days of receiving them and cannot use the funds to cover or replace other payments owed to employees or physicians.

Employers and physician organizations have to report names, addresses and other information for those receiving the payments. The measures are intended to ensure that neither employees nor doctors receive more than one retention bonus, even though they may work at more than one eligible facility.

Health Care Startups Turn to ‘Coaches’ to Help Patients Cope and Monitor Treatment

Northwestern in the News - Northwestern Now

Source: Kaiser Health News, by Darius Tahir

In 2011, Sean Duffy and Adrian James were sitting in San Francisco’s Dolores Park debating what to call some workers at the company they founded, Omada Health.

Omada, which launched that year, provides virtual treatment for chronic conditions. The company addresses the conditions through a team of employees — some traditional clinicians and others meant to give encouragement to patients as they manage the day to day of hypertension, prediabetes, and other conditions. This second group was crucial, they thought. The founders ended up asking patients what title to use.

Was this person a “concierge”? Patients thought that sounded like someone who helped with their bills. A “guide”? To what destination? The founders settled on “coach.” Patients liked the term: It suggested someone who could give support and make them “feel less alone,” Duffy said, as they dealt with their health challenges.

This decision was an early marker in an eventual tech company trend. Since then, dozens of similar startups focused on health coaching have emerged, often backed by big bucks. A review by KHN — of news releases, the industry database Crunchbase, and sites like LinkedIn — found nearly 50 companies with almost $7 billion in venture capital funding.

These startups offer people or software to provide motivation, direction, or moral support for managing what goes awry with the human body, including chronic conditions, musculoskeletal ailments, obesity — even attention-deficit/hyperactivity disorder and eczema. Business models vary. Some startups take payments directly from consumers; “anti-diet” app Wellory asks for $45 a month. Other startups get monthly per-member funding from companies to offer regular coaching for their employees. Some services tout 24/7 access and average connection times of 60 seconds. With some, coaches escalate serious issues to more highly credentialed clinicians.

The enthusiasm behind coaching is, on its face, a curious turn for an industry that likes to boast of its billion-dollar pills and spooky-sophisticated artificial intelligence.

“As these digital health startups got going, they realized technology is not enough to drive change,” explained Michael Yang, the managing partner at investors OMERS Ventures, who has invested in coaching startups. Patients might need to eat better, follow the physical therapy plan, talk through emotional turbulence, and more.

Coaches — whether they’re people or software — can support patients between formal visits to the doctor. That kind of encouragement can be important for sticking to a care plan — a critical thing in a world where good habits mean a lot for keeping healthy. Whether a patient needs a team to assist with the physical aspects of recovering from orthopedic surgery or help avoiding triggers for behavioral health conditions, these coaching companies are an app or a website away.

“The model has become extremely de rigueur,” Yang said. At many startups, coaches are “doing the lion’s share of the labor.”

Still, many people in the health care industry are ambivalent about this trend. Some think it adds a human touch to a part of the economy that can be defined by brusque doctors and incomprehensible bills. Others wonder whether it’s simply a way to leverage cheap labor.

Supporters say coaches get deeply involved, even performing tasks that would go undone otherwise. “We need alternative workforces to fill in some of these gaps,” said Omada’s Duffy. At Omada, coaches wear a lot of hats: They review glucose data while tracking patients’ lifestyle changes and can provide empathy in a way that other people in the health care system aren’t providing. Coaches are “folks who ask questions before casting judgments,” Duffy said.

Giving by-the-book care to people with diabetes — or others with chronic conditions — requires many more workers than the health care system has, Duffy said. So a coach — whose salary is typically in the tens, rather than hundreds, of thousands of dollars — looks like a solution for many startups.

“‘Coaching’ is a way to avoid having to have clinical licenses or FDA approvals,” Bob Kocher, an investor at Venrock, wrote in an email. “It allows you to start serving patients way faster.”

Coaches already play a role in established institutions.

Dr. Pushpa Raja, a psychiatrist in the Department of Veterans Affairs’ Greater Los Angeles system, said peers play a prominent role at the VA. Often, people with a given condition interact with veterans who have the same disease. “They can relate to patients in a different way,” she said. “They can cheerlead patients towards goals. They can coach patients in planning out and strategizing.”

They’re also integrated into a team with psychiatrists and primary care physicians, which means they can pass on observations — for example, if someone’s depression is getting worse over time.

Some observers of health coaching startups are concerned they don’t have the same ability. Coaches might be able to “do a lot of the minutiae that are annoying” to doctors, said Liz Chiarello, a sociologist at Saint Louis University in Missouri who studies medical organizations, but a surge in these workers could “fragment our health system even further.” A behavioral health coach at a given startup might need to elevate an issue to a psychiatrist or primary care physician — and whether the startups’ coaches have tight links with institutions that offer the next-level expertise is often unclear.

What’s more, coaches might not be trained well — and might be serving too many patients to do much good.

“I cringe when I get startups who are like, ‘We’re going to hire 100 people and train them for two weeks,’” said Yang. “You’re not going to learn anything in two weeks.” For some companies’ training, “it’s pretty scary, the lack of rigor and depth,” he said.

Coaching qualifications may not be all they appear, either.

Wellory promises to match users to a nutrition coach after they take a quiz. Those coaches, in turn, suggest healthy foods for users. But some quiz-takers — like Dr. Seth Trueger, a Northwestern Medicine emergency room doctor; and a KHN reporter — were matched with a coach who described herself as “RDE,” short for “registered dietitian eligible.” It’s a term for nutritionists who have completed most, but not all, of the requirements necessary to qualify as a registered dietitian.

But RDE is not a professional designation, according to the Commission on Dietetic Registration, and anyone using it should stop “immediately.” The commission is the credentialing agency of the Academy of Nutrition and Dietetics, the trade group for food and nutrition professionals. Wellory removed the reference after KHN contacted the company about the issue.

Yang said some startups think of coaches as almost a “call center model,” with plans to hire dozens of coaches who support tens of thousands of patients.

Some startups are indeed using small teams. Take Homethrive, a new company fresh off raising $20 million to support caregivers for older adults or other patients. The company aims to use a combination of tech tools and social workers to provide caregivers with everything from emotional support and connections to recommendations for wheelchairs and walkers.

David Grabowski, a professor at Harvard Medical School who specializes in aging and long-term care, said there’s a huge opening for these companies to fill. Caregivers may be unsure about how to complete certain daily tasks, like bathing or picking up patients. But, just as much, “it’s the loneliness, it’s the feeling you’re in this by yourself,” he said.

Still, Homethrive is relying on a small workforce. The company serves about 20,000 members, co-founder Dave Jacobs said. It currently employs 40 social workers who deliver “episodic” support during the “most intense” situations, like deciding whether to move patients into homes, Jacobs said. For everyday situations, it relies on technology to connect patients to resources.

Grabowski has questions about such models. “I definitely wonder if 40 social workers is sufficient” to handle such situations, he said.

Coaching startups are an extremely heterogeneous field. Yang said that he has seen startups that do coaching well but that he’s unsure how much benefit the public is deriving. “Are we doing the population a good service at the end of the day?”

Californians Brace For Increased Healthcare Premiums If Federal Subsidies Expire

Californians brace for increased healthcare premiums if federal subsidies  expire - Los Angeles TimesSource: Los Angeles Times, by Melody Gutierrez and Anabel Sosa

For the last two years, Syd Winlock has had a major burden lifted from his surgically repaired shoulder.

Federal subsidies passed as part of a temporary pandemic relief package have drastically cut how much he pays in healthcare premiums, allowing the Sacramento-area small-business owner to purchase an insurance plan during the last two years that provided better coverage for his shoulder and knee replacements.

Those federal subsidies, however, will expire at the end of this year if Congress does not extend the program. His “very manageable” price — about $700 a month for him and his wife — will increase to $2,300, Winlock said.

“Even if we went to a lesser-type policy, it would still be about $1,800 a month,” Winlock, 63, said. “I mean, that’s more than my mortgage.”

Roughly 150,000 lower- and middle-income Californians would be similarly priced out of coverage by the rising premiums if the federal subsidies are not extended, a Covered California analysis recently estimated.

The federal subsidies were passed in early 2021 as part of the Biden administration’s American Rescue Plan Act, which temporarily provided help to Americans to recover from the economic and health effects of the COVID-19 pandemic.

Under the act, health insurance premiums were capped at 8.5% of a household’s income. That significantly dropped monthly payments and led to more consumers signing up through Covered California, the insurance marketplace created by the 2010 Affordable Care Act for working-age people who aren’t covered by a health plan at their job.

Enrollment in the state’s exchange has hit a record-high 1.8 million, of which Covered California reported that 92% received some form of subsidy.

“These enhanced subsidies have fundamentally delivered affordability and delivered on the promise of the Affordable Care Act in the way that it was intended,” said Jessica Altman, executive director of Covered California.

“There were a lot of people who said things like, ‘Oh, my gosh, you know, for the first time I can afford my health insurance and my child care….’ This is particularly important given the inflationary environment we are in now.”

More than 1 million lower-income earners — individuals making between $17,775 and $32,200 and families of four with income between $36,570 and $66,250 — would see their premiums more than double if Congress doesn’t extend the program, according to the Covered California analysis. Monthly premiums for middle-income earners would increase, on average, by $272 per member next year.

John Baackes, the chief executive of L.A. Care, a health insurance plan serving Los Angeles County’s poorest and most vulnerable residents, said that although the enhanced subsidies don’t expire until the end of the year, the window for Congress to act is growing smaller because of its monthlong August recess. At that point, legislation typically slows down in an election year.

Baackes said health plans will need time to send renewal notices to consumers of anticipated rates for the 2023 coverage year, which are mailed in October.

“So we’re very concerned about it,” Baackes said. “The American Rescue Plan provided increased subsidies that are really a wonderful thing. And many of our members benefited from it.”

With open enrollment beginning one week before the Nov. 8 midterm elections, Democrats on Capitol Hill are increasingly eager to prevent consumers from receiving notices about huge increases in insurance premiums before voters go to the polls. But the debate about whether to extend the subsidies or — as some have pushed — make them permanent has been hamstrung by wrangling over the price tag and the effect on skyrocketing inflation.

Keeping the subsidies an additional three years would cost $74 billion, while the price tag for making them permanent is $220 billion over the first 10 years, according to the Congressional Budget Office.

Gov. Gavin Newsom and state lawmakers proposed spending $304 million in separate state healthcare subsidies to lessen the burden if the federal program is not extended. That money, which is included in a state budget that is expected to be finalized this month, would offset premium increases for more than 700,000 residents.

However, those state-funded subsidies will cover only a fraction of the federal premium discount currently available under the American Rescue Plan, which provided $1.7 billion to California in each of the last two years to help with healthcare costs.

“Nearly half of the folks in Covered California are paying less than $10 a month,” said Anthony Wright, the executive director of Health Access California, a consumer group that is pushing Congress to make the increased federal subsidies permanent. “We live in a high-cost-of-living state, so people will have to make decisions about how much healthcare they can afford.”

That worries Tuan Nguyen, a caregiver in the Silicon Valley city of Milpitas. Having been diagnosed six years ago with a rare and painful disorder called glossopharyngeal neuropathy, Nguyen said he has to buy more costly insurance coverage that allows him to see particular specialists.

“I need the healthcare plan,” said Nguyen, 44. “I need to see my doctor. I need my treatment. These are things that are a necessary part of my life, and they’re all very expensive and getting much harder to afford.”

Reducing the number of uninsured residents in the state has been a top priority for Newsom and legislative leaders, who in 2019 approved legislation creating a fee for anyone who does not have insurance. The individual mandate was intended to induce younger and healthier individuals to buy coverage through Covered California to widen the pool and lower rates overall as Democratic leaders move California closer to universal coverage.

As part of that effort, California has incrementally expanded eligibility for Medi-Cal, the state’s healthcare program for the poor, to certain age groups of low-income people regardless of immigration status. California’s pending budget would offer Medi-Cal to the final remaining age group in 2024, opening the healthcare program to residents 26 to 49 years old regardless of immigration status. Newsom said the move will make California “the first state in the country to achieve universal access to health coverage.”

Miranda Dietz, a research and policy associate at UC Berkeley Labor Center, said the significant increase in the number of Californians with health insurance over the last two years would be in jeopardy without the federal subsidies. Dietz co-wrote a study in partnership with the UCLA Center for Health Policy Research that projects that as many as 1 million people will forgo insurance in California next year if federal subsidies expire.

“It makes it so it’s very disheartening to take away these extra subsidies that have been really crucial in improving affordability for folks,” Dietz said. “It’s a real blow towards that goal of universal coverage and more affordable coverage.”

The added cost of premiums “will be a real struggle for folks who are deciding between rent and groceries,” Dietz said.

For Winlock, the small-business owner, the added cost if federal subsidies are not extended would be temporary. Next year, Winlock and his wife turn 65 and will qualify for Medicare. In the meantime, he would probably look for the cheapest plan possible and hope for the best.

“We probably would look at some alternative ways to get healthcare,” Winlock said. “We certainly wouldn’t be able to afford mainstream healthcare. It is just out of our budget.”

AARP’s Billion-Dollar Bounty

AARP's billion-dollar bounty | BenefitsPRO

Source: BenefitsPRO, by Fred Schulte

In September, AARP, the giant organization for older Americans, agreed to promote a burgeoning chain of medical clinics called Oak Street Health, which has opened more than 100 primary care outlets in nearly two dozen states.

The deal gave Oak Street exclusive rights to use the trusted AARP brand in its marketing — for which the company pays AARP an undisclosed fee.

AARP doesn’t detail how this business relationship works or how companies are vetted to determine they are worthy of the group’s coveted seal of approval. But its financial reports to the IRS show that AARP collects a total of about $1 billion annually in these fees — mostly from health care-related businesses, which are eager to sell their wares to the group’s nearly 38 million dues-paying members. And a paid AARP partnership comes with a lot: AARP promotes its partners in mailings and on its website, and the partners can use the familiar AARP logo for advertisements in magazines, online, or on television. AARP calls the payments “royalties.”

AARP’s 2020 financial statement, the latest available, reports just over $1 billion in royalties. That’s more than three times what it collected in member dues, just over $300 million, according to the report. Of the royalties, $752 million were from unnamed “health products and services.”

But controversy has long dogged these sorts of alliances, which have multiplied over the years, and the latest is no exception. Are the chosen partners actually a good choice for AARP’s members, or are they buying the endorsement of one of the country’s most respected organizations with lavish payments?

“I don’t have a problem with AARP endorsing travel packages,” said Marilyn Moon, a health policy analyst who worked for the group in the 1980s. But when AARP lobbies on Medicare issues while profiting off partnerships with those who are marketing to Medicare patients, “that certainly is a problem,” Moon said.

There are reasons for concern about the latest partnership. Less than two months after announcing the AARP deal, Oak Street revealed it was the subject of a Justice Department civil investigation into its marketing tactics, including whether it violated a federal law that imposes penalties for filing false claims for payment to the government. Oak Street has denied wrongdoing and says it is cooperating with the investigation.

Companies like Oak Street, whose funders have included private equity investors, have alarmed progressive Democrats and some health policy analysts, who worry the companies may try to squeeze excessive profits from Medicare with the services they market mainly to people 65 or older. Oak Street hopes it can cut costs by keeping patients healthy and in the process turn a profit, though it has yet to show it can do so.

AARP has stood for decades as the dominant voice for older Americans, though people of any age can join. Members pay $16 a year or less and enjoy discounts on hundreds of items, from cellphones to groceries to hotels. AARP also staffs a busy lobbying shop that influences government policy on a plethora of issues that affect older people, including the future and solvency of Medicare.

Perhaps not as well known: that AARP depends on royalty income to help “serve the needs of those 50-plus through education, programs and advocacy,” said Jason Young, a former AARP senior vice president.

“Since our founding, AARP has engaged with the private sector to help advance our nonprofit social mission, including by licensing our brand to vetted companies that are meeting the needs of people as they age,” Young told KHN in an email before leaving his AARP position last month.

For years, AARP has drawn intermittent scrutiny for its longtime partnership with UnitedHealthcare, which uses the AARP seal of approval to market products that fill gaps in the traditional Medicare program — gaps filled by private insurers.

The arrangement has brought in hundreds of millions of dollars in annual royalties, according to court records.

Young said AARP “advocates for policies that are in the best interests of seniors without regard to how it may impact revenue or any licensing agreements.” He said AARP “has taken many strong stands against the insurance industry,” citing opposition in 2017 to proposed legislation that AARP said could have hiked seniors’ premiums by as much as $3,000 a year.

John Rother, who left AARP in 2011 after more than two decades as its policy chief, said business interests were “never a consideration” in these decisions. “I can absolutely say that was never the case,” Rother said. “We separated those operations.”

But that alliance raises alarms among critics who see a conflict of interest that undermines the group’s credibility to speak for all seniors on critical Medicare policy issues.

AARP “is in the insurance business,” said Bruce Vladeck, who ran the Medicare program for several years during the Clinton administration. “There ought to be accountability and visibility about it,” he said.

In 2020, a conservative group called American Commitment went further, concluding that AARP “has grown into a marketing and sales firm with a public policy advocacy group on the side.”

Keeping people healthy

In a November 2021 conference call with analysts, Oak Street Health CEO Mike Pykosz said he was “thrilled” to be the first primary care medical provider endorsed by AARP, a decision he said would “enhance our ability to attract and engage patients.”

The company offers “value-based” care to more than 150,000 Medicare patients. AARP officials would not discuss why the group had picked Oak Street Health, except to say that it favors experiments that could improve the quality of medical care and hold down costs.

Oak Street receives a flat monthly rate from insurers for each patient. That “allows us to focus on those services that have the greatest impact on keeping people healthy, such as behavioral health and screening 100% of our patients for the social determinants of health — including food and housing insecurity,” Erica Frank, the company’s vice president of public relations, said in an email.

Frank said Oak Street sees patients in many places where primary care is “either hard to come by or not available.” The company’s patients are seen almost eight times a year on average, versus just three visits for the average person on Medicare, Frank said.

Many of Oak Street’s treatment centers are in communities where poverty levels exceed national norms. The centers typically feature distinctive green and white colors throughout and contain a “community room” with a big-screen television that is also used for activities such as exercise, cooking, and computer classes.

Oak Street participates in a pilot project called “direct contracting,” which Medicare advanced in the final days of the Trump administration. In direct contracting, medical providers accept a set fee to cover all of a person’s medical needs.

In a Senate Finance Committee hearing on Feb. 2, Sen. Elizabeth Warren (D-Mass.) argued that direct contracting rewards “corporate vultures.” Warren said companies could pocket as much as 40% of their payments as profit.

Supporters argued these concerns were overblown, but the federal Centers for Medicare & Medicaid Services, or CMS, announced a redesign of the pilot program in late February.

The scope of the Justice Department review of Oak Street is unclear. According to the company, DOJ is investigating whether it violated the False Claims Act and is seeking documents related to “third-party marketing agents” and “provision of free transportation” to patients.

Amanda Davis, an AARP senior adviser for advocacy and external relations, said the group learned of the DOJ matter when Oak Street disclosed it publicly on Nov. 8, 2021 — less than seven weeks after their joint venture was announced. “We are closely monitoring this issue’s development and expect all providers to fully comply with all laws and regulations,” she wrote in an email.

Likewise, AARP will not say how much Oak Street paid to become a partner, only that the fee is “for the use of its intellectual property” and that “these fees are used for the general purposes of AARP.” Some feel that’s not enough.

“I think the vast majority of people signing up for these products are not aware that AARP is paid a very large amount for use of their name,” said Dr. David Himmelstein, a physician and professor in the City University of New York’s School of Urban Public Health at Hunter College. He added: “If you are making hundreds of millions selling [health] insurance, it gives you a strong interest in assuring that product remains attractive for people to buy.”

Promoting independence

Since its founding in 1958 by a retired high school principal, AARP says it has acted “to promote independence, dignity and purpose for older persons.”

The AARP Foundation provides services such as passing out more than 3 million meals in low-income neighborhoods during the pandemic and assisting older people with tax preparation and legal matters. AARP also awards millions of dollars in annual grants to a wide range of organizations. (KFF, which operates KHN, received a $100,000 grant from the AARP Public Policy Institute for “general support” of KFF’s work on Medicare in 2020 and a similar amount the two previous years related to Medicare policy issues.)

Last year, AARP spent more than $13.6 million on lobbying, according to Open Secrets. More than 60 AARP lobbyists opined on dozens of legislative proposals, from bills intended to protect seniors from scammers to holding nursing homes accountable, according to the campaign finance watchdog group.

Although many supporters argue that AARP pursues worthy goals, criticism of its business dealings goes back years. A 2008 media exposé reported that some AARP members had overpaid for insurance policies because they assumed AARP had the cheapest deal. In 2011, a congressional investigation led by House Republicans found it “unlikely that AARP could survive financially, with its current expenses, if the hundreds of millions of dollars in annual insurance industry revenue disappeared.” The report also questioned whether AARP deserved its tax-exempt status as a nonprofit.

AARP’s health insurance pacts, which UnitedHealthcare refers to as a “strategic alliance,” have been challenged in nearly a dozen federal lawsuits as well — though AARP has prevailed so far.

One group of lawsuits has targeted a type of co-branded AARP-UnitedHealthcare policies called Medigap, which Medicare enrollees buy to pay for items such as copayments for hospital stays and doctor visits. These policies cover about 4.4 million people, according to the company.

AARP receives 4.95% of the premium, which it takes as its royalty, according to court filings. Several lawsuits have argued that amounts to an illegal commission because AARP is not licensed to sell insurance, court records show. The lawsuits cite AARP records showing annual income of hundreds of millions of dollars from the sales.

Federal judges have consistently dismissed such cases, however, ruling that state regulators had approved the rates or that buyers didn’t suffer any real damage.

Helen Krukas, a retiree who lives in Boca Raton, Florida, is appealing in the U.S. Court of Appeals for the District of Columbia Circuit. She claims AARP failed to disclose that it was “syphoning” 4.95% of what she paid for her policy.

In a deposition, Krukas testified that she “always thought of AARP as a club that negotiates on the behalf of retired people” and “it didn’t even occur to me to look anyplace else” for a policy. “Had I known that they were receiving money for it, I would have gone and shopped around with other brokers,” she said.

Calling for transparency

AARP has also faced challenges for another type of UnitedHealthcare Medicare policy it has promoted in recent years, called Medicare Advantage.

Critics cite a range of fault-finding government reports, audits, and whistleblower lawsuits targeting such products.

Dr. Donald Berwick, a former administrator of CMS, said Medicare Advantage plans have devised “legal ways” to game the billing system so they get paid “a lot more for writing down things that don’t have much to do with the actual needs of the patients.”

AARP, which strongly supported the 2003 law that created Medicare Advantage, has received a fixed monthly fee from UnitedHealthcare for use of its name in marketing the health plans, according to the 2011 congressional investigation. How much AARP wouldn’t say, then or now.

Medicare pays the insurer a fixed monthly payment for each patient, which rises proportionally to each patient’s burden of illness. More than two dozen whistleblower lawsuits have accused health plans, including UnitedHealthcare, of ripping off Medicare by exaggerating how sick patients are.

Medicare Advantage plans offer tempting extra benefits, such as eyeglasses and hearing aids, and proponents say they cost seniors less than traditional Medicare. But many policy experts argue the plans soak taxpayers for billions of dollars in overpayments every year.

UnitedHealthcare spokesperson Heather Soule told KHN via email that the company “sees incredible value in Medicare Advantage.” When compared with original Medicare, Medicare Advantage “costs less, has better quality, access, and outcomes with greater coverage and benefits and nearly 100% consumer satisfaction,” according to the company.

But the Justice Department’s civil fraud case alleges that UnitedHealthcare reaped $1 billion or more in illegal overcharges. The company has denied the allegations, and the case is set for trial late next year.

As the debate over how to contain Medicare costs intensifies, reformers say AARP should be an ally, not a beneficiary of industry largess.

“It’s hard to know whether they’re advocating for their business interests or for the seniors that they are supposed to represent,” said Joshua Gordon, director of health policy for the Committee for a Responsible Federal Budget, a nonpartisan group.

Healthcare Spending Could Drop $11.4B Next Year If ACA Premium Subsidies Expire, Research Finds

Health care spending would drop $11.4B without premium credit expansion |  BenefitsPRO

Source: Healthcare Dive, by Rebecca Pifer

Dive Brief:

  • * Healthcare spending could drop by more than $11.4 billion next year if enhanced premium tax credits enacted in the American Rescue Plan expire, new research finds.
  • * Hospital spending would decline by $3.8 billion, while spending on physician practice services would drop by $1.3 billion, according to a report from the Robert Wood Johnson Foundation and the Urban Institute published Wednesday. Prescription drug spending would decline by $3.4 billion and spending on other services outside of hospital and doctors’ offices would fall by $2.8 billion.
  • * Plummeting health services spending would happen due to lost credits potentially leaving more than 3 million people currently on Affordable Care Act plans without insurance, and therefore less likely to spend on care, researchers said.

Dive Insight:

The $1.9 trillion ARP legislation passed in March 2021 increased subsidies for coverage in the ACA marketplaces and expanded the number of people they’re available to. The more generous financial aid increased coverage affordability and enrollment, which reached a record high for 2022.

Those enhancements will expire in 2023 unless Congress extends them. The subsequent price hikes would hit about 13 million people across the U.S. and could lead to millions losing coverage, according to estimates.

The new research from the Urban Institute and the RWJF puts a price tag on the loss of provider revenue stemming from that drop in coverage.

Using an Urban Institute simulation model, researchers estimated healthcare services spending for the non-elderly, including uncompensated care provided to uninsured patients with and without the enhanced financial aid. The model excludes health insurance premium loads or administrative cost, as that spending doesn’t go to providers.

The research found that total spending on health services would reach almost $2.097 trillion next year if the enhanced ARP premium tax credits are extended and drop to roughly $2.086 trillion without them.

“The reason why we’re seeing this large decline in health spending is because uninsured people use less medical care,” Urban Institute senior fellow Matthew Buettgens said in a statement on the report.

Florida, Georgia, North Carolina, South Carolina and Texas — states that would see the greatest coverage losses if the subsidies expire — would have the biggest drop in spending, ranging from 1.3% to 1.9%.

California, Massachusetts, New York and Vermont would see virtually no change in spending, as they have state programs providing enhanced premium tax credits or cost sharing reductions before the ARP was passed that will remain in place.

The political fallout from failing to renew the subsidies would likely be severe, as news of spiking insurance premiums would hit voters right before the midterms.

President Joe Biden has pushed Congress to make the subsidies permanent. Though the effort has stalled in Congress, vulnerable Democrats in swing states are now pushing for leadership to fast-track legislation extending the subsidies, according to Politico.

Employers Pay 224% Of Medicare Prices For Hospital Services

Employers pay 224% of Medicare prices for hospital services | BenefitsPRO

Source: BenefitsPRO, by Scott Wooldridge

Employer-sponsored health plans paid on average 224% of what Medicare paid to hospitals for the same services at the same facilities, according to a new study from RAND Corporation. The report covers billing for hospital inpatient and outpatient services in 2020.

The study said that there were significant variances in prices across states or geographic areas and added that the difference in cost seemed to be linked to hospital market share rather than hospitals’ share of Medicare and Medicaid patients.

The researchers found that in Hawaii, Arkansas, and Washington, relative prices were under 175% of Medicare, while other in states, such as Florida, West Virginia, and South Carolina, relative prices were at or above 310% of Medicare.

In addition, the study found that prices for COVID-19 hospitalization were similar to prices for overall inpatient admissions and averaged 241% of what was paid for Medicare patients.

“Employers can use this report to become better-informed purchasers of health benefits,” said Christopher Whaley, the study’s lead author and a policy researcher at RAND, a nonprofit research organization. “This work also highlights the levels and variation in hospital prices paid by employers and private insurers, and thus may help policymakers who may be looking for strategies to curb health care spending.”

Cost variation: a “defining characteristic” of US health care

The researchers described the wide variation in prices paid for medical services as “a defining characteristic of the U.S. health care system.”

In 2019, the study said, spending on hospital services accounted for 37% of total health care spending for privately insured Americans and came to approximately $434 billion. “Hospital price increases are key drivers of growth in per capita spending among the privately insured,” the study added.

RAND researchers found the difference between employer prices and Medicare prices was actually a bit lower since a previous study in 2018, when employers paid 247% of Medicare costs. The researchers said the change was because of an increase in claims among states that generally pay lower rates for hospital costs.

Transparency in pricing has been a challenge for the health care industry. Despite efforts by both providers and government regulators to create more transparency, both employers and consumers lack useful information on pricing. And the public data that does exist has gaps, due in part to the fact that many hospitals have not yet complied with recent regulatory requirements.

An Indiana case study: employer pressure lowered prices

The study concludes by looking at efforts in some states to address relatively high hospital prices. In Indiana, employers in the Fort Wayne area were able to prompt price changes at the Parkview Health System in that community, which the RAND study had identified as having some of the highest prices in the country.

“Equipped with information on negotiated prices, employers were able to place pressure on a large hospital system and TPAs to achieve lower prices for their workforce,” the study said. “Other employer and policymaker pressures in Indiana led the Indiana University Health system to announce plans to reduce prices to the national average rate.”

Hospital association response: “Unfounded conclusions”

The American Hospital Association (AHA), however, quickly released a statement saying the RAND conclusions were an over-reach and unfounded.

“The report looks at claims for just 2.2% of overall hospital spending, which, no matter how you slice it, represents a small share of what actually happens in hospitals and health systems in the real world,” said AHA President and CEO Rick Pollack. “Researchers should expect variation in the cost of delivering services across the wide range of U.S. hospitals – from rural critical access hospitals to large academic medical centers. Tellingly, when RAND added more claims as compared to previous versions of this report, the average price for hospital services declined.”

The Ball Is Back In Newsom’s Court On Single-Payer Health Care In California

Single-payer health care advocates rip Gavin Newsom for 'flip-flop'Source: San Francisco Chronicle, by Sophia Bollag

The ball is back in Gov. Gavin Newsom’s court when it comes to creating a single-payer health care system in California. In January, when Newsom was asked if he supported a bill to create a universal, government-run health care system in California, he dodged the questions, saying he was waiting for a report from a state commission studying the issue.

On Monday, the commission finalized that report, which found that health care costs will skyrocket by 30% in nine years under the current system and advocates an overhaul that would eliminate distinctions among private and government coverage, in favor of a new system to provide health care to all Californians.

The Democratic governor has long said he supports creating such a system in California but has not endorsed specific legislation to do so. Now that the report is out, it’s not clear what steps he may take to get there.

“We have been following the progress of the commission’s work, and look forward to reviewing and discussing the final report with the Legislature and stakeholders,” Newsom spokesman Alex Stack wrote in a statement. He pointed to other ways the governor has worked to expand health care access, including by expanding eligibility for the state’s health coverage to more undocumented immigrants.

Newsom’s secretary of Health and Human Services, Dr. Mark Ghaly, chaired the commission and committed in the report to assign staff to coordinate with President Joe Biden’s administration. That’s a significant step toward overhauling California’s health care system, advocates say, because the state would need approval to repurpose the billions of federal dollars that flow into the current system.

“That’s really the key next step, and depends upon the governor’s leadership,” said Michael Lighty, a consultant working with the National Union of Healthcare Workers to advocate for a single-payer system. “This is really a new day for health care reform in California.”

The commission’s report stops short of explicitly endorsing a universal, government-run health system in California, as proponents of so-called single-payer health care had hoped, and instead leaves the door open for private health insurers to have some role in a new system. But the report does endorse a major shakeup to a “unified financing” system. The report outlines several options for how that system could look, including a “single-payer” system that would eliminate private insurance.

Carmen Comsti of the National Nurses United union, was the lone commissioner to vote against sending the report to Newsom and the Legislature on Monday, arguing it didn’t go far enough in specifically recommending to the Legislature how to implement single-payer in California.

“This report falls short of presenting clear, concrete, formal actions to get us to single-payer,” she said. “We bury the lead on single-payer and its benefits. The report scarcely uses the phrase single-payer at all.”

Newsom has long said he supports a single-payer system. Since taking office, however, he has not endorsed legislation to transition to single-payer, but has taken other steps toward expanding health care within the existing system.

He said in January that he believes it’s “inevitable” that the United States will transition to a single-payer system eventually, but stopped short of laying out a plan for how he would work toward it. He pointed to the commission’s report as a critical next step.

Any overhaul of the health care system will meet major resistance from many parts of the industry. That was illustrated earlier this year when a coalition of health care organizations and business groups, including the California trade groups representing doctors, hospitals and health insurance plans, came out in fierce opposition to a single-payer bill in the Legislature.

The bill, AB1400, was shelved by its author before coming up for a vote on the Assembly floor.

Ned Wigglesworth, a spokesman for the coalition, said the group is still reviewing the commission’s report and doesn’t want to comment yet. Previously, however, the group blasted the concept of single-payer health care. During the debate over AB1400, the coalition wrote that it would “immeasurably disrupt the health care that millions of Californians rely on every day” by forcing them all onto a government plan.

Anthony Wright, executive director of the consumer advocacy group Health Access, told The Chronicle he thinks the report could have made clearer recommendations on how to implement single-payer. Wright, who supports transitioning to single-payer and voted in favor of the report, said it’s still a significant step.

He said the discussions with the federal government that Ghaly commits to in the report are particularly consequential. In the meantime, he said there are many piecemeal steps the Legislature can take toward expanding health care access to more people and laying the groundwork for a big transition that will take many years.

“It would be a mistake to think there’s just going to be one bill. … This is too big a project,” he said. “There’s some fairly big conceptual pieces that need to pass the Legislature. It can’t all be done piecemeal, but I think it needs to be an iterative process.”

Five Facts about the Small Business Health Care Tax Credit

The IRS wants you to know that, if you are a small employer, there is a tax credit that can put money in your pocket. The small business health care tax credit is available through the small business health options program, also known as the SHOP marketplace. Employers must have fewer than 25 full-time equivalent employees, pay an average wage of less than $50,000 a year, and pay at least half of employee health insurance premiums. The IRS offers these five facts about this credit:

  1. The maximum credit is 50% of premiums paid for small business employers and 35% for small tax-exempt employers.
  2. To be eligible, you must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program Marketplace or qualify for an exception to this requirement.
  3. The credit is for eligible employers for two consecutive taxable years beginning in 2014 or later. You may be able to amend prior year tax returns to claim the credit for tax years 2010 through 2013 in addition to claiming this credit for those two consecutive years.
  4. You can carry the credit back or forward to other tax years if you don’t owe tax during the year.
  5. You may get a credit and a deduction for employee premium payments. Since the amount of your health insurance premium payments will be more than the total credit, if you are eligible, you can still claim a business expense deduction for the premiums in excess of the credit.

Healthcare Issues Among Millennials

Transamerica Center for Health Studies (TCHS) finds that Millennials are struggling with the cost of healthcare while facing some health issues at a young age. The survey reveals the following:

  • The most common reason that the 11% of uninsured Millennials didn’t get coverage before the ACA deadline is that they did not know how to apply for insurance.
  • 60% of the uninsured are women; and 68% of the uninsured are unemployed.
  • 21% of Millennials can’t afford their routine healthcare expenses. An additional 26% can afford it, but with difficulty.
  • 70% say that cost is very important when looking for healthcare.
  • 66% of Millennials say that a $200 a month premium is not affordable.
  • Nearly half of Millennials skip care to reduce their healthcare costs.
  • More than half of Millennials have a chronic illness or health condition. The most common conditions are depression (17%), weight issues (15% overweight and 7% obesity), and anxiety disorders (14%).
  • 64% rely on their mom/step-mom as their primary source for health advice and healthcare guidance; 36% rely on their dad/step-dad; and 26% rely on their spouse or partner.

Obamacare Significantly Reduces Cost of Mental Health Care for Young Adults

The Affordable Care Act (ACA) has significantly reduced out-of-pocket behavioral health care costs for adults 19 to 25, according to a study published in the Psychiatric Services Journal. Young Latinos, African Americans, and other racial and ethnic minorities saw the greatest reduction in out-of-pocket behavioral health expenses. This demographic often has higher unemployment and lower salaries, so they are less likely to seek behavioral health services. The ACA’s dependent coverage provision has reduced the number of uninsured young adults by at least three million. The ACA allows young adults to remain on their family’s health plans until they turn 26. Because of this, the expansion of health care access is also expected to increase the number of users of mental health and substance abuse treatment services. Behavioral health conditions often emerge during the 19 to 25 year age range. Also, this age group has a higher rate of serious mental illness than other adults.

Last Updated 06/29/2022

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