Consumer Costs Continue to Increase in 2017 Exchanges

By Caroline F. Pearson, Elizabeth Carpenter and Chris Sloan
Avalere, January 18, 2017

Plans sold in exchange markets in 2017 feature higher premiums, growing consumer out-of-pocket costs, and more restricted access to providers and hospitals than in previous years, according to a new analysis from Avalere.

Premiums Increase Dramatically, Especially for Low-Cost Silver Plans

Following several years of single-digit premium growth, premiums increased 12 percent on average for silver plans in 2017 — from $496 per month in 2016 to $554 per month in 2017, this, according to the Avalere analysis.

Furthermore, premiums for popular low-cost silver plans (i.e., those with the lowest or second-lowest cost premiums in each region) increased 25 percent in 2017.

Fewer PPOs Offered on Exchanges

Avalere experts note that in 2017, only 31 percent of all plans sold in exchange markets are preferred provider organizations (PPO) or point of service (POS) plans. By comparison, in 2014, nearly 52 percent of plans sold on exchanges were PPO or POS products. In general, PPOs include a wider network of providers and cover more out-of-network care than health maintenance organizations (HMOs) and exclusive provider organizations (EPOs).

Out-of-Pocket Costs Also Rose in 2017, Particularly Deductibles

In addition to premiums, out-of-pocket costs for exchange products continue to rise, according to Avalere analysis of plans offered in the exchanges. Average deductibles for services and drugs jumped by 20 percent for silver plans in 2017 to $3,703.

http://avalere.com…

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Comment:

By Don McCanne, M.D.

For plans sold in the exchanges in 2017, not only have the premiums gone up 25 percent for the popular low-cost silver plans, but the average deductibles for silver plans have increased 20 percent, and over two-thirds of plans now have more restrictive networks (with only 31 percent allowing out-of-network coverage with the penalty of higher cost sharing).

The instability and uncertainties are innate characteristics of the market for individual health plans. These problems would disappear with a single universal risk pool covering everyone – a single payer national health program, aka an improved Medicare for all.

Doctors hail reintroduction of Medicare-for-all bill

Saying status quo is ‘unacceptable’ and GOP plans even worse, physicians group says it’s time to move forward to single-payer plan

Physicians for a National Health Program, January 25, 2017

A national physicians group today hailed the reintroduction of a federal bill that would upgrade the Medicare program and swiftly expand it to cover the entire population, saying it’s the only workable and equitable way to move forward in U.S. health care.

The Expanded and Improved Medicare for All Act, H.R. 676, introduced last night by Rep. John Conyers Jr., D-Mich., ranking member of the Judiciary Committee, with 51 other House members, would replace today’s welter of private health insurance companies with a single, streamlined public agency that would pay all medical claims, much like traditional Medicare works for seniors today.

The full text of H.R. 676 will be available at Congress.gov in the next few days, but is expected to be unchanged from the version introduced in the last Congress.

The doctors group says that an improved-Medicare-for-all system, also known as “single payer,” would vastly simplify how the nation pays for care, saving hundreds of billions of dollars on administrative overhead that could be used to improve patient health, restore free choice of physician, and eliminate copays and deductibles.

“International experience shows that single-payer financing systems, like the one described in Rep. Conyers’ bill, are the fairest and most cost-effective way to assure that everyone gets high-quality care,” said Dr. Carol Paris, president of Physicians for a National Health Program, a nonprofit research and educational group of 20,000 doctors nationwide.

Paris continued: “The Affordable Care Act, despite its modest achievements, has shown itself incapable of providing universal health care. With nearly 30 million Americans still uninsured, and tens of millions who are underinsured, the doors to health care remain shut to many in need.

“The status quo is unacceptable,” she said, “and the ideas pushed by the Republican majority in Congress, which are based on even more privatization and patient cost-sharing, would only exacerbate our problems and lead to an additional tens of thousands of unnecessary, preventable deaths.”

Paris, a Nashville, Tenn.-based psychiatrist, continued: “In contrast, an expanded and improved-Medicare-for-All program would assure truly universal coverage, cover all medically necessary services, including dental, vision and long-term care, and would remove the growing financial barriers to care – high premiums, copays, deductibles and coinsurance – that our patients and their families are increasingly facing, often with tragic results.

“In addition to the enormous administrative savings from a single payer, such a program would also have the financial clout to negotiate with drug and medical equipment suppliers for lower prices. And doctors would have more time to spend with their patients, instead of dealing with mountains of paperwork and haggling with insurers. The key step is removing the private health insurers from the picture.

“Recent Kaiser and Gallup surveys have shown that nearly 6 in 10 Americans, 58 percent, support a Medicare-for-all approach, with the Gallup poll finding that 41 percent of Republicans favor replacing the ACA with ‘a federally funded health care program providing insurance for all Americans,’” she said. “And surveys show physician support is also strong and growing. Hundreds of labor, civic and faith-based organizations have endorsed this model of deep-going reform.

“The time for fundamental health care reform is now,” Paris said. “No more tweaking. No more incrementalism. No more ‘political feasibility’ arguments. It’s time for Congress to stop putting the interests of private insurance and Big Pharma over constituent needs. It’s time to make H.R. 676, Improved Medicare for All, the law of the land.”

Physicians for a National Health Program (www.pnhp.org) is a nonprofit research and education organization of more than 20,000 doctors who support single-payer national health insurance. It was founded in 1986.

H.R. 676, Expanded and Improved Medicare for All Act:
https://www.congress.gov…

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Comment:

By Don McCanne, M.D.

Finally, good news for a change!

Coverage and Access for Americans With Chronic Disease Under the Affordable Care Act: A Quasi-Experimental Study

By Hugo Torres, MD, MPH; Elisabeth Poorman, MD, MPH; Uma Tadepalli, MD; Cynthia Schoettler, MD, MPH; Chin Ho Fung, MD; Nicole Mushero, MD, PhD; Lauren Campbell, MD, MPH; Gaurab Basu, MD, MPH; Danny McCormick, MD MPH
Annals of Internal Medicine, January 24, 2017

Background:

Half of Americans have at least 1 chronic disease. Many in this group, particularly racial/ethnic minorities, lacked insurance coverage and access to care before the Patient Protection and Affordable Care Act (ACA) was enacted.

Objective:

To determine whether the ACA has had an effect on insurance coverage, access to care, and racial/ethnic disparities among adults with chronic disease.

From the Results:

Despite improvements after ACA implementation, large proportions of adults with chronic disease continued to lack coverage or access. Overall, after the ACA took effect, 14.9% of persons with chronic disease nationally continued to lack insurance, 22.8% had to forgo a physician visit, 18.1% did not have a personal physician, and 27.6% did not have a checkup. In addition, we found the persistent lack of coverage and access after ACA implementation was particularly great among racial minorities, despite the greater gains as a result of the ACA. Approximately one fifth of blacks had persistent post-ACA gaps, ranging from 17.5% lacking coverage to 26.8% forgoing a physician visit. Approximately one third of Hispanics had persistence post-ACA gaps, ranging from 29.7% lacking coverage to 32.9% forgoing a physician visit.

http://annals.org…

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Comment:

By Don McCanne, M.D.

Many people have benefited by gaining access and coverage under the Affordable Care Act, but this study shows that far too many people with chronic disease have been left out, particularly amongst blacks and Hispanics.

We can do far better. An improved Medicare for all, with automatic enrollment of everyone, would close the gaps without spending any more than we do already. That would be vastly superior to any of the proposals that are currently being considered as a replacement for ACA.

Repealing the Affordable Care Act will kill more than 43,000 people annually

By David Himmelstein and Steffie Woolhandler
The Washington Post, January 23, 2017

Now that President Trump is in the Oval Office, thousands of American lives that were previously protected by provisions of the Affordable Care Act are in danger. For more than 30 years, we have studied how death rates are affected by changes in health-care coverage, and we’re convinced that an ACA repeal could cause tens of thousands of deaths annually.

The story is in the data: The biggest and most definitive study of what happens to death rates when Medicaid coverage is expanded, published in the New England Journal of Medicine, found that for every 455 people who gained coverage across several states, one life was saved per year. Applying that figure to even a conservative estimate of 20 million losing coverage in the event of an ACA repeal yields an estimate of 43,956 deaths annually.

With Republicans’ efforts to destroy the ACA now underway, several commentators have expressed something akin to cautious optimism about the effect of a potential repeal. The Washington Post’s Glenn Kessler awarded Sen. Bernie Sanders (I-Vt.) four Pinocchios for claiming that 36,000 people a year will die if the ACA is repealed; Brookings Institution fellow Henry Aaron, meanwhile, predicted that Republicans probably will salvage much of the ACA’s gains, and conservative writer Grover Norquist argued that the tax cuts associated with repeal would be a massive boon for the middle class.

But such optimism is overblown.

The first problem is that Republicans don’t have a clear replacement plan. Kessler, for instance, chides Sanders for assuming that repeal would leave many millions uninsured, because Kessler presumes that the Republicans would replace the ACA with reforms that preserve coverage. But while repeal seems highly likely (indeed, it’s already underway using a legislative vehicle that requires only 50 Senate votes), replacement (which would require 60 votes) is much less certain.

Moreover, even if a Republican replacement plan comes together, it’s likely to take a big backward step from the gains made by the ACA, covering fewer people with much skimpier plans.

Although Aaron has a rosy view of a likely Republican plan, much of what they — notably House Speaker Paul D. Ryan (R-Wis.) and Rep. Tom Price (R-Ga.), who is Trump’s nominee to head the Department of Heath and Human Services, which will be in charge of dismantling the ACA — have advocated in place of the ACA would hollow out the coverage of many who were unaffected by the law, harming them and probably raising their death rates. Abolishing minimum coverage standards for insurance policies would leave insurers and employers free to cut coverage for preventive and reproduction-related care. Allowing interstate insurance sales probably would cause a race to the bottom, with skimpy plans that emanate from lightly regulated states becoming the norm. Block granting Medicaid would leave poor patients at the mercy of state officials, many of whom have shown little concern for the health of the poor. A Medicare voucher program (with the value of the voucher tied to overall inflation rather than more rapid medical inflation) would worsen the coverage of millions of seniors, a problem that would be exacerbated by the proposed ban on full coverage under Medicare supplement policies. In other words, even if Republicans replace the ACA, the plans they’ve put on the table would have devastating consequences.

The frightening fact is that Sanders’s estimate that about 36,000 people will die if the ACA is repealed is consistent with well-respected studies. The Urban Institute’s estimate, for instance, predicts that 29.8 million (not just 20 million) will lose coverage if Republicans repeal the law using the budget reconciliation process. And that’s exactly what they’ve already begun to do, with no replacement plan in sight.

No one knows with any certainty what the Republicans will do, or how many will die as a result. But Sanders’s suggestion that 36,000 would die is certainly well within the ballpark of scientific consensus on the likely impact of repeal of the ACA, and the notion of certain replacement — and the hope that a GOP replacement would be a serviceable remedy — are each far from certain, and looking worse every day.

https://www.washingtonpost.com…

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Comment:

By Don McCanne, M.D.

Fact Checkers sometimes traverse minefields, and The Washington Post’s Glenn Kessler really blew it when he gave Bernie Sanders Four Pinocchios for telling the truth about the potential lethal consequences of repealing the Affordable Care Act. Fortunately the Washington Post has now published a response from noted experts on the topic – Professors David Himmelstein and Steffie Woolhandler.

Oregon faces obstacles expanding health insurance to all residents, study finds

By RAND Corporation
Medical Xpress, January 19, 2017

Researchers from the RAND Corporation and Health Management Associates were asked by the Oregon Health Authority to analyze three proposals put forward by policymakers as potential ways to expand health coverage among the uninsured and compared the likely outcomes to the existing health care system.

Researchers used several modeling techniques to analyze how each of the options would affect outcomes on insurance enrollment, payments from households to support health care, total health spending in the state and other impacts. They also assessed the regulatory aspects of each of the proposals.

The single-payer option, introduced as a bill in the Oregon House, would use public financing to provide privately delivered health care to all Oregon residents, including those currently enrolled in Medicare and Medicaid. The proposal would pool state and federal outlays for current public programs, and add additional revenue from new state income and payroll taxes. The plan would cover 100 percent of health care costs for residents with incomes under 250 percent of the federal poverty line and 96 percent of health costs for other residents.

The Health Care Ingenuity Plan would pool revenue from state and federal outlays for Medicaid and ACA marketplaces with addition revenue generated from a new state sales tax. The plan would create a public financing pool to provide basic health insurance for most nonelderly Oregon residents. Medicare would continue to cover seniors and the disabled.

Cost sharing of the private health plans would vary depending on enrollees’ incomes, with the average share of costs covered by the plan ranging from nearly 100 percent for those with incomes below 138 percent of the federal poverty level to 70 percent for those with incomes above 250 percent of poverty. Enrollees could purchase private supplemental insurance to cover cost sharing and additional benefits.

The third proposal, a so-called public option, would create a state-run health plan to cover essential health benefits outlined by the Affordable Care Act and would compete with private plans in the ACA marketplaces. Enrollees in the public option would be eligible for federal advance-premium tax credits and cost-sharing reductions. The public option would set provider reimbursements levels equal to Medicare fee-for-service rates and would require providers who participate in other state health programs to participate in the plan.

Researchers found that both the single-payer option and the Health Care Ingenuity Plan increase coverage relative to the status quo and reduce financial barriers to care.

Under the single-payer plan, researchers assumed the state would have power as the sole purchaser of health care to set payment rates for most providers at 10 percent below the status quo. Overall, there would be little change in health system costs because the increase in patient demand would be offset by lower payments rates and administrative savings.

Under the Health Care Ingenuity Plan, researchers expect there would be higher system costs because Medicaid enrollees and the uninsured would be shifted into private insurance plans, which typically reimburse providers at significantly higher rates than the Medicaid program. These higher payment rates would increase system costs, expand the supply of providers and ease congestion. Researchers also estimate that under the plan, three-fifth of state residents would purchase supplementary insurance to reduce their individual cost sharing.

Researchers estimate that the public option would cover about 9,000 additional Oregon residents, leaving the share of the population who are uninsured at 5 percent. But many people already buying coverage through the ACA marketplaces would likely shift to the public option, saving the average enrollee about $850 per year.

https://medicalxpress.com…

A Comprehensive Assessment of Four Options for Financing Health Care Delivery in Oregon:
http://www.rand.org…

Download full report (147 pages total; Summary is 12 pages):
http://www.rand.org…

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Comment:

By Don McCanne, M.D.

This study can be very helpful to those who are considering comprehensive health care reform on a state level. RAND has shown that a single payer system would cover everyone without increasing total health care spending; private health insurance for the nonelderly plus Medicare for seniors and the disabled would cover everyone but would increase total spending; and providing a state-run health plan (public option) would have only a negligible impact on coverage and spending.

Health policy wonks should read the full study, and reform activists should read at least the 12 page summary. As with any study of this type, certain assumptions are made and differing emphases can be placed on various features of the reform models. For these reasons this study warrants at least the following comments.

For the single payer model, the authors assumed that payment rates for health care providers would be reduced ten percent below the current average Oregon rates. That supposedly would keep total spending at the same level by offsetting the increased volume of care for those who are newly insured and for those who have a significant decrease in their cost sharing.

The authors assume that services would be less available because of the payment reductions, contending that some providers would reduce their supply of care or perhaps even leave the state. They state that this would lead to “congestion” – greater consumer demand with diminished provider availability. This could result in excessive queues or in the need to travel greater distances for care.

This conclusion derives partly from the fact that they assumed that the administrative savings would be much smaller than several other studies have shown. Although a study demonstrating the tremendous administrative burden placed on the providers was included in the appendix, the authors did not factor in the savings that would accrue for the providers by eliminating the private insurers and simplifying the public payment procedures through a single payer. In fact, one of the reasons for reducing payments is that the amount recovered by eliminating the administrative waste is quite significant.

Another factor is that when the volume increases more room is made for the more pressing problems which partially displaces care that is of little or no value. Thus health care value actually increases when there is some pressure on the schedule. Also the use of other health care professionals such as nurse practitioners and physician assistants can help meet the increased demand at a lower marginal cost.

Also their modeling at a ten percent reduction in average payments is still quite a bit above the Medicare rates that are paid in Oregon. Most providers would not find that having absolutely everyone covered with higher than Medicare rates to be particularly onerous. Besides, most dedicated professionals would be satisfied with reasonable payments for their services. Those who are not perhaps should look for income opportunities that would shift them into the one-percenters – a breed not really welcome in health care.

Another point that should be made is that the two comprehensive models are characterized as a public model that would cause “congestion” (queues for non-urgent services) versus a private model that would increase spending. But the two most objectionable features of the private insurance model are given only fleeting acknowledgment in this study. Those are the very high deductibles and other cost sharing and the limited choice in care because of narrow provider networks. In the single payer model, cost sharing is dramatically reduced or eliminated, and there is only one provider network that includes the entire legitimate health care delivery system. Although high cost sharing and narrow networks may reduce spending in the private insurance model, they are not needed in a publicly administered single payer model.

This study also has important lessons for those who insist that we must enact single payer on the state level before we attempt to enact a national program. For those who believe that enacting a state-level public option will eventually lead to single payer, this study shows that it would have only a negligible impact in reducing the uninsured and in controlling costs. Pass it and then nothing else will happen for years to follow.

The other lesson for state reform activists is that there are major barriers to enacting a bona fide single payer system at the state level – barriers that will most likely require federal legislation. As long as we need to carry the battle to the national level, we might as well go for a national single payer program – an improved Medicare for all. Please do continue to work for beneficial changes at the state level, but please do not let it diminish your advocacy for health care justice for the entire nation.