PNHP

Medicare Advantage Raises Costs: MedPAC Refutes AHIP Claims

Medicare Advantage Raises Costs: MedPAC Refutes AHIP Claims

For the record: MedPAC’s response to AHIP’s recent “Correcting the Record” blog post, March 3, 2021, by MedPAC Staff

“A recent blog post (“Correcting the Record”) from America’s Health Insurance Plans (AHIP) provides an inaccurate description of how the Medicare Payment Advisory Commission (MedPAC) compares spending in the Medicare Advantage (MA) program to Medicare fee-for-service (FFS) spending. The blog questions MedPAC’s long-standing assessment that, when properly compared, Medicare spends more overall for enrollees in Medicare Advantage than the program would have spent for similar beneficiaries enrolled in traditional FFS Medicare.[1]…

Since 2004, our MA status report has presented a comparison of MA and FFS spending levels. This comparison aims to make an apples-to-apples comparison by accounting for a variety of differences between the two programs, such as:

  • the health status of MA and FFS enrollees,
  • the geographic distribution of MA and FFS enrollees,
  • Medicare spending for hospice services and graduate medical education (both direct and indirect), and
  • the tendency of MA plans to submit more diagnosis codes for their enrollees, which causes the risk scores for MA enrollees to be higher than the risk scores for similar FFS enrollees. . . .

When such adjustments are made, it is clear that Medicare spending for MA beneficiaries exceeds that for comparable FFS beneficiaries.  . . . we find that, since 2004, MA spending has consistently been higher than FFS spending, although the difference between them has varied over time (Figure 1).

Figure 1. Medicare has paid more to MA plans than FFS Medicare spending would have been for the same enrollees, 2004–2021

Figure 1_500px

Comment:

By David Himmelstein, M.D. and Steffie Woolhandler, M.D., M.P.H.

Private insurers garnered $278 billion from Medicare in 2019, a figure expected to rise steeply in the years ahead.  Their overhead averages 18% of their total premiums – equivalent to about $50 billion in 2019 alone.  In contrast, the overhead of traditional Medicare is only 2.3%.

MedPAC – the official Medicare advisory panel – has long estimated that private Medicare Advantage (MA) plans raise Medicare’s costs because the plans selectively recruit (and receive premiums for) healthier than average seniors who would cost Medicare little if they stayed in traditional Medicare; selectively disenroll the expensively ill; and “upcode” to make their enrollees look sicker than they actually are, boosting their premiums.

America’s Health Insurance Plans (AHIP) – the private insurers’ trade group – recently issued a report disputing MedPAC’s figures, and claiming that the MA program is actually a money saver.  The MedPAC’s staff’s rejoinder makes it clear that AHIP is dead wrong.

The MA program enriches private insurers but impoverishes the federal treasury.  It’s high time we ended it.  A Medicare for All reform must exclude MA, and the enormous waste it imposes on our health care system.

http://healthjusticemonitor.org…

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Sustained & Robust Support for Single Payer in California

Polling on California Recall and Medicare for All, Lake Research Partners, May 3, 2021

A new poll shows that likely voters in California strongly support  a state Medicare for All healthcare system, and that Governor Newsom seeking permission from the Biden Administration to fund the new system with federal dollars would strengthen his support in the upcoming recall election and among his potential supporters in the regularly scheduled re-election next year. …

Overall, likely voters in California support a state Medicare for All system by a +26-point margin,  with 60% of voters supporting it and 34% (comprised largely of Republicans) opposing it.

Among  “base” voters (those voting strongly or not-so-strongly “No” on the recall), 86% support Medicare for All (a +76-point margin of support). Core constituencies important to Governor Newsom’s recall effort also support Medicare for All at high margins, including registered Democrats (+73), women (+33), voters under 50 (+42), Latinos (+43), and AAPI voters (+48). Support for Medicare for All remains strong (52% to 34%) even when a comparative message is tested attacking Medicare for All, with the new system maintaining extremely high support (75%) among those who would vote “No” on the  recall, and strong majority support (62%) among swing voters.

How the question was asked:

Supporters say Medicare for All will guarantee every Californian quality care with no premiums, co-pays, or deductibles, while ending the extreme health care inequities exposed by COVID-19. It would lower costs by eliminating insurance company profits and waste while reining in excessive drug and hospital prices. The state would expand care with existing funds plus more equitable taxes on large businesses and the wealthy, while we would have free choice of doctors, pharmacies, and hospitals, and would pay less for it.

Opponents say Medicare for All will require 350 billion dollars a year more in taxes, nearly tripling the state budget and making it impossible to fund priorities like better schools, ending homelessness, fighting climate change, managing drought and wildfires, and improving transportation. They say that under a one-size-fits-all health care, consumers lose choices and bureaucrats ration care. They say we should improve our current system which already covers 93 percent of Californians, not adopt a costly system of government-run medicine.

Comment:

By Jim Kahn, M.D., M.P.H.

This remarkable poll was conducted for political purposes, and not widely publicized. But it is indeed worthy of note, and cause for optimism. It was conducted by Lake Research Partners, a highly respected firm known recently for work with the Biden campaign. Their polling is sophisticated and reliable.

The key finding is that 60% of California voters favor single payer — still 52% after hearing the pro and con arguments. This balanced presentation is essential for understanding the robustness of support.

Among voters leaning “no” on the Gov. Newsom recall ballot (mainly, Democrats), support is a sky-high 86%. 6 out of 7 voters. And voting tendency for Newsom increases if he pursues single payer.

The voters are speaking. Are the politicians listening?

http://healthjusticemonitor.org…

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We Can Heal From Hate Crimes by Practicing Solidarity

By Christopher Cai, M.D.
JAMA Internal Medicine, Perspective, June 21, 2021

This was not how I envisioned my residency interview starting. I wipe my sweaty hands on my pajama pants, smile politely and apologize to the camera. “Sorry. Great question…I was born in Los Angeles,”I clarify, after being asked if I was born in China.

At another interview, I am asked about the race of my partner, with whom I am couples matching, and what it is like to be in an interracial relationship. I cannot help but wonder if my White colleagues are being asked these questions. I hope I will get a question about my health policy interests or, at least, the hobbies I had written about on my application. But instead, I am asked whether I would be interested in working with researchers in Wuhan, China.

After these interviews, I feel tokenized, at times labeled not Chinese enough, at times too Chinese. Why did I apologize for my interviewer’s questions? Why did I remain so polite?

I wonder if my experience is tied to the rise in racially motivated acts against Asian American individuals, particularly Chinese Americans, which have risen nearly 150% during the COVID-19 pandemic.1 Later, when 8 women, 6 of whom were Asian, were murdered at a mass shooting in Georgia, my mother and sister called me and told me, “Stay inside. It doesn’t matter if you live in a progressive or diverse city. You never know what people are thinking.”

These experiences have led me to reflect on what it means to be a Chinese American physician. In medicine, many Asian American physicians enjoy privileges that Black, Latinx, and Native American physicians do not. When I walk by a police officer in the hospital, my pulse does not quicken. When I applied to medical school, I had physician role models who looked like me. When I purchased health insurance earlier this year, I did not worry about racially biased actuarial algorithms. These are just a few examples.

Yet Asian Americans still face discrimination. The 1882 US Chinese Exclusion Act made nearly all Chinese immigration illegal; its effects were fully reversed by 1965, allowing my parents to immigrate to the US. Although Asian/Pacific Islander (AAPI) individuals are overrepresented in medicine compared with the general population, we are underrepresented in academic leadership positions.2 Furthermore, some AAPI subgroups, such as Southeast Asian or Hmong American individuals, continue to be underrepresented in medicine,3 Asian/Pacific Islander individuals continue to be inadequately sampled in federal surveys, making literature on AAPI health disparities relatively sparse.4 Indeed, the category Asian/Pacific Islander itself is problematic, because it merges 60% of the world’s population based on a broad marker of geographic origin, lumping together individuals from places as far apart as Pakistan and American Samoa and erasing vast differences in culture, history, and economic opportunity. 5

Asian American individuals are often told we are a “model minority,” or even sarcastically, “next in line to be White.”6 We may even believe this trope ourselves at times. Yet, this stereotype diminishes the diversity in Asian cultures. It tokenizes Asian American individuals as industrious and harmless; we are a “model minority” because we purportedly seek apolitical careers in the sciences that do not challenge the status quo. Finally, it drives a wedge between Asian American individuals and other racial and ethnic minority groups on worthwhile issues, such as affirmative action, reinforcing White supremacy in the process.

As I process these hate crimes, I feel tempted to fall back into my ingrained “model minority” mindset: how could these hate crimes be occurring if I have done what White America has asked of me? Yet, I know this is a harmful and racist idea; although my family hoped to avoid racism in America, “becoming White” is not part of the American dream. I know many of my colleagues in medicine have faced similar, or worse, discrimination. To heal from anti-Asian hate crimes, I will instead be looking to practice solidarity with other people of color in medicine while acknowledging my own privileges and racial biases.

On the interpersonal level, such solidarity may include addressing microaggressions toward colleagues and patients when they occur on the wards. It includes recognizing and actively unlearning the internalized biases that I have accumulated as a medical trainee. Am I undertreating the pain of my Black patients? Am I speaking over my nonmale colleagues during rounds? It means supporting protests against police brutality, which disproportionately affects Black, Latinx, and Native American patients and colleagues. It means sharing, citing, and celebrating the work of all our colleagues who are underrepresented in medicine, broadly defined.

To heal, we must also practice solidarity by advocating for policies that dismantle structural racism in medicine and broader society. Racism affects all people of color, and it will take multiracial coalitions to create policy solutions. As Asian American individuals, we must continue to organize and advocate for affirmative action, more effective regulation of firearms, reparations for Black and Brown communities, universal health care without cost-sharing, and other evidence-based reforms.7,8

Solidarity means recognizing our privileges and our strengths. It means simultaneously acknowledging the ways we benefit from White supremacy and reforming the policies that uphold White supremacy. It means recognizing that all individuals have a moral imperative to be antiracist. It means celebrating and nurturing our own racial consciousness, which White supremacy often asks us to erase in favor of assimilation, survival, and a less painful future for ourselves and our children.

Additional Contributions: I thank Samuel Dickman, M.D., Planned Parenthood South Texas, for his kind and helpful feedback on the manuscript. He was not compensated for his contribution. I also thank my mother and sister for granting permission to publish this information.

Conflict of Interest Disclosures: In medical school, Mr. Cai served as a paid health policy fellow to U.S. Representative Pramila Jayapal and an unpaid board member and paid summer researcher of Physicians for a National Health Program.

doi:10.1001/jamainternmed.2021.2754

https://jamanetwork.com…

References

  1. California State University Santa Barbara. Fact sheet: anti-Asian prejudice March 2020. Accessed March 16, 2021. https://www.csusb.edu…
  2. American Association of Medical Colleges. Increasing Asian inclusion in academic medicine and leadership. Accessed March 16, 2021. https://www.aamc.org…
  3. American Association of Medical Colleges. Diversity in the physician workforce: facts & figures. Accessed April 11, 2021. https://www.aamcdiversityfactsandfigures.org…
  4. Chen JA, Zhang E, Liu CH. Potential impact of COVID-19-related racial discrimination on the health of Asian Americans. Am J Public Health. 2020;110 (11):1624-1627. doi:10.2105/AJPH.2020.305858
  5. United Nations Department of Economic and Social Affairs. World population prospects. Accessed April 12, 2021. https://population.un.org/wpp/
  6. Hong CP. Minor Feelings: An Asian American Reckoning. One World; 2021.
  7. Bassett MT, Galea S. Reparations as a public health priority—a strategy for ending Black-White health disparities. N Engl J Med. 2020;383(22): 2101-2103. doi:10.1056/NEJMp2026170
  8. Woolhandler S, Himmelstein DU, Ahmed S, et al. Public policy and health in the Trump era. Lancet. 2021;397(10275):705-753. doi:10.1016/S0140-6736 (20)32545-9

Demand Medicare for All

By George Bohmfalk, M.D.
The Aspen Times, Letters, June 19, 2021

Gov. Jared Polis may have signed the so-called “Colorado Option” bill, but no one should be under the illusion that it is actually a public option.

It’s highly unlikely that anyone will notice more than a trivial effect on insurance premiums, despite the best efforts of its sponsors. The bill leaves all health insurance in the hands of private companies, which are the source of the system-wide administrative bureaucracy that devours 34% of every health care dollar. The myriad accounting and regulating requirements in this new law guarantee that billions more will be spent on paper shuffling rather than on health care.

It needn’t be this complicated or costly. An efficient single-payer Medicare for All program can reduce administrative overhead to less than 5%, as Taiwan proved with their plan, designed by Harvard health policy experts. Medicare for All can save enough in administrative overhead to provide comprehensive tax-funded first-dollar coverage (zero deductibles, co-pays, or Medigap policies) to every American and lower health care costs around 10% for both households and businesses. We most certainly can afford Medicare for All; we’re presently spending much more than it would cost. We can’t afford, and should stop trying, to solve our health care crisis by tinkering with a structurally failed system. Rather than struggling to lower premiums, we should simply get rid of them. Demand the Medicare for All Act.

https://www.aspentimes.com…

Expensive Drugs are Becoming Ultra-Expensive

Ultra-Expensive Drugs And Medicare Part D: Spending And Beneficiary Use Up Sharply, Health Affairs, June 2021, by So-Yeon Kang, Daniel Polsky, Jodi B. Segal, and Gerard F. Anderson

Drugs with exceptionally high prices have sparked debate on their sustainability and affordability. We refer to these as “ultra-expensive” drugs, defined as drugs with average annual per beneficiary total spending in excess of the annual US per capita gross domestic product ($62,996 in 2018). In the context of Medicare, this includes both Medicare’s and the beneficiary’s responsibilities. Our findings show a rapid increase in the share of Medicare Part D spending on these drugs compared with other drugs.

It is a limitation of our study that we analyzed only Medicare Part D data and thus could not draw any conclusions regarding Medicaid or private insurance.

Medicare Part D spending for ultra-expensive brand-name drugs, 2018:

  • 122 – Total number of drugs
  •  278,000 – Total number of beneficiaries
  •  $24,550,000,000 – Total spending
  •  $175,513 – Average spending per beneficiary per drug

(The table also includes a section for drugs that are only expensive, defined as those that were not ultra-expensive but whose annual per beneficiary total spending was more than the yearly average Social Security benefits of retired workers [$16,848 in 2018]. These expensive drugs were consumed by 651,000 beneficiaries at an average of $34,451 per drug for total Medicare Part D spending of $21,552,000,000.)

The number of ultra-expensive drugs covered by Medicare Part D increased from 23 in 2012 to 122 in 2018.

We note that sixty-one drugs (50 percent of ultra-expensive drugs in 2018) entered the market as ultra-expensive drugs between 2012 and 2018; 31 percent were on the market but not ultra-expensive in 2012 and became ultra-expensive by 2018.

One challenge for policy makers is that half of these ultra-expensive drugs are new, and their sustained therapeutic and economic benefit for the price has not yet been demonstrated.

The concentration of Part D spending on the growing number of beneficiaries using ultra-expensive drugs suggests that policy makers should pay attention to this drug category.

Comment:

By Don McCanne, M.D.

Drug spending is out of control and getting much worse. By the standards in the article, the newly released, likely-ineffective Alzheimer’s drug, aducanumab, at $56,000 per year, is considered onl expensive and not ultra-expensive.

Imagine, single drug pricing per beneficiary in excess of the per capita GDP. Wasn’t the equivalent of taking a full year’s Social Security retiree benefits for a single drug enough?

Perhaps the most important statement in this article, which is decidedly an understatement, is that “policy makers should pay attention to this drug category.”

Perhaps we should approach Sen. Joe Manchin, as a moderate conservative, and explain the situation to him so he can lead a unified Congress to do something about it. But, wait a minute, wasn’t it his daughter, Heather Bresch, as CEO of Mylan, who purchased the company, Abbott, that sold the EpiPen brand of epinephrine, and then increased its price by 461 percent?

Sadly, this Congress has already shown its lack of concern by its inaction; this price gouging is taking place under its very nose. No, we need to elect a Congress that will not only pay attention, but one that will actually do something about it. We certainly can no longer leave it up to the pharmaceutical industry to come up with fair pricing for its products.

http://healthjusticemonitor.org…

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Medicine Must Meet the Moment on Racial Justice

AMA Doctors Meet Amid Vocal Backlash Over Racial Equity Plan, U.S. News, June 12, 2021, by Lindsey Tanner

The nation’s largest, most influential doctors’ group is holding its annual policymaking meeting amid backlash over its most ambitious plan ever — to help dismantle centuries-old racism and bias in all realms of the medical establishment.

The dissenters are a vocal minority of physicians, including some white Southern delegates who accuse the American Medical Association of reverse discrimination.

Dr. Gerald Harmon, the group’s incoming president, is a 69-year-old white native of rural South Carolina who knows he isn’t the most obvious choice to lead the AMA at this pivotal time. But he seems intent on breaking down stereotypes and said pointedly in a phone interview, “This plan is not up for debate.”

The six-day meeting that began Friday is being held virtually because of the pandemic. It offers a chance for doctors to adopt policies that spell out how the AMA should implement its health equity plan. But some white doctors say the plan goes too far.

Announced last month, the plan is unusually bold for the historically cautious AMA, acknowledging that racism and white privilege exist in the medical establishment and have contributed to health disparities laid bare during the coronavirus pandemic.

Portions of the plan include the language of critical race theory, referencing the theft of native lands and centuries-old white supremacy. The dissenters took offense and attacked the plan in documents recently leaked online. One leaked draft of a letter intended for AMA executives called portions of the plan “divisive, accusatory and insulting.”

“White males are repeatedly characterized as repressive and to some degree responsible for the inequities. This … implies reverse discrimination,’’ the letter said. It was signed by Dr. Claudette Dalton, a member of the AMA’s Southeastern delegation, four other physicians and five state delegations representing 68 AMA delegates.

Medical Journals Blind to Racism as Health Crisis, Critics Say, NY Times, June 2, 2021, by Apoorva Mandavilli

The top editor of JAMA, the influential medical journal, stepped down on Tuesday amid a controversy over comments about racism made by a colleague on a journal podcast. But critics saw in the incident something more pernicious than a single misstep: a blindness to structural racism and the ways in which discrimination became embedded in medicine over generations.

“The biomedical literature just has not embraced racism as more than a topic of conversation, and hasn’t seen it as a construct that should help guide analytic work,” said Dr. Mary Bassett, professor of the practice of health and human rights at Harvard University. “But it’s not just JAMA — it’s all of them.”

Following an outcry over the incident, editors at JAMA on Thursday released a plan to improve diversity among its staff, as well as in research published by the journal.

Comment:

By Eagan Kemp

In a country that has consistently refused to come to terms with its racist history, it should come as no surprise that the medical profession is also in need of a reckoning.

Almost no aspect of American life is untouched by decisions and institutions that empowered white men over everyone else, even in matters of life and death. And there are few places where the consequences are more deadly than in the practice of medicine. The disturbing examples are numerous, whether the Tuskegee Syphilis Experiment; exposure of Black, Japanese-American, and Puerto Rican soldiers to mustard gas and other chemicals during World War II; or the complicity of numerous doctors in the torture regime of the Bush Administration. The list goes on and on. The practice of medicine in the services of evil remains a stain on the profession and on the country.

But racism in medicine is not just a list of egregious episodes. Every day, insurance coverage, access to care, and health outcomes are often far worse for Black, Indigenous, and other people of color than for white Americans. Structural racism pervades our health care system, just as it pervades the rest of American society.

Indeed, public policy issues in the U.S. are typically debated through the lens of race — often implicitly — and health care is no different. Opposition to universal health care has often reflected an unwillingness to extend benefits to Black, Indigenous, and other communities of color.

As Jeneen Interlandi highlighted in her crucial piece, which is part of the 1619 Project:

One hundred and fifty years after the freed people of the South first petitioned the government for basic medical care, the United States remains the only high-income country in the world where such care is not guaranteed to every citizen. In the United States, racial health disparities have proved as foundational as democracy itself. “There has never been any period in American history where the health of blacks was equal to that of whites,” Evelynn Hammonds, a historian of science at Harvard University, says. “Disparity is built into the system.”

It is crucial to remember that the American Medical Association was initially a whites-only organization, necessitating the creation of the National Medical Association in 1895 by twelve black doctors in Atlanta, GA. In 2008, the AMA formally apologized “for its past history of racial inequality toward African-American physicians.”

The opposition of the AMA to universal coverage has often come from its unwillingness to see Black and Brown Americans as worthy of the same quality of care experienced by white Americans. We only have to look back at their attempts to block Medicare and other health reforms. The AMA’s opposition to universal health care continues today, though many doctors and medical students are undertaking heroic efforts to push the AMA away from its opposition to universal health care and toward supporting health care justice generally and Medicare for All specifically. But let’s be clear, Medicare for All wouldn’t immediately solve issues of racism in medicine, but it would finally end the coverage gap and improve access to care for millions. It would also allow the collection of better disaggregated data, improving our ability to address health disparities.

The time has come for change, and doctors must meet the moment and lead on directly addressing racism in health care. Doctors should not take this racial justice reckoning as a negative thing or feel disempowered in their work. Doctors — and all Americans — must individually and collectively engage with their own complicity with institutions that undermine progress on racial justice and make changes personally, professionally, and societally starting where they can. In few other places is that task as crucial as it is in medicine.

http://healthjusticemonitor.org…

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Colorado’s Pseudo-Public Option

By Adam Gaffney, M.D., M.P.H.

On Monday, lawmakers in Colorado passed a bill that would establish what some might call a “state public option” plan, although that’s not what it is. The bill would require, as the Colorado Sun and Denver Post describe, private insurance companies to offer a health plan on the individual and small-marketplaces with premiums that are 15% lower in 2025 than they are today after adjustment for medical inflation; if that goal was not met, the state could potentially regulate payment rates under these plans.

The bill was heavily opposed by state Republicans and, variably, by healthcare industry players. Its advocates tried to achieve more. But unfortunately, the impact of the law is likely to be paltry, potentially even difficult to perceive. If that pans out, it could be used to discredit the notion of true public health insurance.

For one thing, as the Colorado Sun describes, the source of the 15% savings is not entirely unclear. It quotes one of the bills’ chief sponsors: “The spirit of this bill is to ask everyone to come to the table to work on decreasing cost and increasing access.”  But these plans would still be run by private insurers, so there is no reason to expect any savings on insurer administration — the primary source of savings under Medicare for All according to the Congressional Budget Office. On the other hand, government rate-regulation (or the threat of it) might give insurers more leverage to reduce reimbursements to providers. Whether this process will succeed, however, is uncertain. After all, Colorado is following in the footsteps of Washington state, which passed a quasi-public option in 2019. Premiums for these “public option” plans (which are actually private insurance plans sold on the marketplaces that pay rates tethered at a percentage above Medicare) were actually 5% higher in 2021 relative to 2020 ACA marketplace plans, per Bloomberg Law.

But the reach of these plans, even if they achieved modestly lower premiums, will also be highly limited. They are available only to those buying insurance on the individual and small-business market. They would hence provide no benefits for those with employer-sponsored coverage and high premiums or deductibles, or for those with holes and gaps in their public insurance plans. Moreover, although they have been advocated as a tool to expand coverage, they are unlikely to be more affordable for the vast majority of uninsured individuals even if they achieve lower premiums. That is because, under the ACA, premium contributions for marketplace plans are set as a proportion of income for all those earning under 400% of the federal poverty level, which is now also the case for those of any income under Bidens’ America Rescue Plan (at least through 2022). Hence, there is no real popular constituency for these programs: at best, if totally successful, they would mostly serve to bring about a modest reduction in government expenditures on ACA subsidies, with little gain in coverage, access, or affordability of care for patients.

And that is not just a policy problem, but a political one. To bring about meaningful change in healthcare, you need a powerful popular constituency behind you, because invariably you encounter opposition from powerful interests. This sort of reform, however, fails to generate such a constituency; its weakness is, in this sense, a feature and not a bug of its design. In contrast, although single-payer reform poses far larger political obstacles for passage, it is unique in that it could benefit nearly every segment of society, and hence potentially help generate the constituency needed to achieve it.

http://healthjusticemonitor.org…

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Medicare for All Explained Podcast: Episode 58

Interview with Diane Archer (Part 2)

June 15, 2021

Just Care USA founder and president Diane Archer outlines needed improvements to the Medicare program along the lines of what a single-payer system would provide: new benefits like vision, hearing, and dental, and a cap on out-of-pocket costs. “If you’re income is lower, you’re often faced to forego critical care,” she says. “The out-of-pocket costs are just prohibitive for so many people.”

Additional episodes will be uploaded twice monthly. Subscribe in iTunes, or access a complete archive of the podcast, below.

https://medicareforallexplained.podbean.com

Concerns Mount Over Looming Surge in Bankruptcy as COVID Medical Debt Soars

By Steve Friess
Newsweek, June 14, 2021

Case numbers and daily death tolls continue to drop, the majority of U.S. adults are fully or partly vaccinated, mask mandates are vanishing and summer socializing looks like it’s back on the calendar. But even as America keeps marching steadily toward a post-pandemic future, another COVID-19 crisis looms—a debt and bankruptcy disaster fueled by mounting medical bills associated with treatment, especially among the most financially vulnerable parts of the population.

As many as 12.5 million Americans could already be saddled with COVID-related medical debt, based on a LendingTree survey conducted in March. The nationally representative poll found that 60 percent of the respondents polled had medical debt, with about 10 percent stemming from the virus; the amount typically owed ranged from $5,000 to $9,999. That suggests the collective debt for COVID treatment so far could be between $60 billion and $125 billion.

That number will inevitably grow sharply in coming months, experts say, as a trio of factors kick in: Expenses will mount for COVID “long-haulers” with ongoing health problems; more medical bills related to the virus will pass from the seriously past due stage into collections; and a panoply of government measures that were designed to help people stay afloat during the pandemic will end, from eviction and student-loan-payment moratoria to enhanced unemployment benefits, making it harder for more people to pay off the accumulating bills for treatment. That in turn is expected to lead to a spike in personal bankruptcies by the end of 2021 and into 2022.

“A lot of people are getting bills they can’t pay,” says David Himmelstein, a professor at City University of New York School of Public Health at Hunter College and author of several seminal studies on medical bankruptcy. “We’re heading towards a mounting debt crisis for many people who have been sick during this COVID period that will ripple through the economy unless something is done about it.”

Troublesome signs are already cropping up. From May 2020 to March 2021, medical debt among members of Credit Karma, a credit-monitoring site, grew 6.5 percent, by $2.8 billion, while the number of people facing past-due medical bills jumped 9 percent. In most cases, medical debt doesn’t even make it to a credit reporting agency such as those tracked by Credit Karma until after a 180-day past-due waiting period, so that uptick is only expected to spiral higher as 2021 progresses.

Especially foreboding is the latest data on bankruptcy filings. In March 2021, the number of Americans filing for personal bankruptcy protection shot up 30 percent from February, to 44,103, the biggest number since March 2020 when the pandemic first took hold in the U.S. Rising medical bills and the ending of government pandemic-aid programs are key factors driving the increase, says Jonathan Carson, co-CEO of Stretto, a software company whose technology manages the online filings in most personal and corporate bankruptcy. He says, “It’s gonna be a turbulent ride for the consumer.”

That’s just the start of what’s to come, experts say, given that even before the pandemic medical debt was the leading factor in personal bankruptcy filings, associated with two-thirds of them, according to an American Journal of Public Health analysis. “It’s been just a little over a year since COVID started, and it takes sometimes, a year or two for the medical debt issue to start rearing its head,” says Allison Sesso, executive director of RIP Medical Debt, a non-profit that has bought and retired nearly $4 billion of outstanding debt since 2014. “We’re just on the cusp. It’s going to get ugly.”

Plus, it’s not just COVID-19 sufferers who are in a financial bind now. After medical debt, the other leading cause of personal bankruptcy is unexpected job loss, that other hallmark of a pandemic that resulted at its height in a national 14.7 percent unemployment rate. Add in the looming end on June 30 to the Centers for Disease Control’s national moratorium on evictions—more than 8.3 million renters, or 15 percent of the national total, are behind, according to the Census Bureau—and the expected resumption in October of collection of federal student debt payments.

“The magnitude of the coming medical debt crisis is not yet clear,” says Brian Martucci, finance editor at MoneyCrashers.com, a personal finance website. “But given that tens of millions of Americans lack health insurance and hundreds of thousands have been hospitalized with COVID since the pandemic began, it’s certain that many individuals and families will face or are already facing life-changing financial trauma.”

‘I Don’t Know What I’ll Do’

Count retired bookkeeper Sherry Hoak, 65, among those already hit hard by the physical, emotional and financial fallout of COVID. Once or twice a week, she sits at her kitchen table in Fort Worth, Texas with her daughter Cindy Cox, who helps her mom make a few calls to the debt collectors. It’s about all that Hoak, a COVID survivor now grappling with heart and lung ailments that she didn’t suffer from prior to the virus, has strength for since returning home from a two-week hospital stay in January. Her husband Ken Hoak was less fortunate; he was infected around the same time as his wife and died on January 28 in the same hospital, Harris Methodist, after a month on a ventilator.

“My mother doesn’t have enough money to pay everybody what they want right now,” says Cox, 40, who took four months off from working as a teacher to care for Hoak full time after her release from the hospital. Hoak’s total debt: more than $6,500 and climbing. “Everybody says, ‘Oh, we’ll get her on a payment plan,’ but she doesn’t have enough money to do $30 here and $40 here and $30 here,” says Cox. “That adds up quickly.”

Cox has gone through every household bill with her mother looking for places to reduce costs and Hoak plans to raise additional money to pay off her medical debt by selling her motorhome and one of the two cars she owned with her husband. The couple had planned a retirement that relied on both of their Social Security checks as well as their pensions; now Hoak will get only her own Social Security check and pension.

Meanwhile, she’s been seeing two or three doctors a week for various COVID long-haul symptoms including fatigue and breathing problems and the family had to buy a $2,500 motorized scooter because she can’t walk. The hospital debt alone is more than $3,500 and a flood of other bills arrive routinely “and they just keep getting darker and darker in the shades of red they’re printing these bills in,” Cox says. “When she was in the hospital, they used all these out-of-network labs and providers that she didn’t have a choice about. They come in, they take your blood. So we’re getting six or seven bills from different places.”

As so many others have done, Cox started a GoFundMe crowdsourcing campaign in April hoping to raise the $3,500 she needs to settle the hospital bill; so far they’ve received just $475 from six donations. “She’s ongoing sick, and she can’t just go get a part-time job and pay these things off,” Cox says. “They’re going to $5 and $10 her into bankruptcy.”

Similar tales of economic desperation appear all over both GoFundMe as well as the Facebook group called Survivor Corps, a 166,000-member community of COVID long-haulers. Beth Eppler, who posts in the group, is a former CrossFit athlete who was living near Ocala, Florida, when she simultaneously got the flu and COVID-19. She wasn’t hospitalized, but she did lose her job as an accountant in November because she was too weak to return to work; unable to pay her rent and with her landlord threatening eviction, she moved back to hometown of York, Pennsylvania, and got a different job. In February, she had two surgeries for COVID-related kidney ailments—a $13,000 bill for the second operation just arrived—and lost the new job, too, because she was still too fatigued to work. Eppler says she now tosses the bills in the trash and has blocked the numbers that were delivering threatening text messages warning her of what she owes.

“I was healthy, now I can’t do anything,” she says tearfully. “I’m sick. It’s depressing. I still can’t taste, I still can’t smell. I still sleep 12 hours a day. I had a life. I had a vibrant life. Now I have no savings, I have no 401(k)—the only money I have in the bank right now is $3,082, and that’s got to pay the rent until I can find a job. I have nothing to sell. I have no jewelry; no parents, no siblings to help. I don’t know what I’ll do.”

Holes in the Safety Net

It wasn’t supposed to be like this. A variety of government and private programs were put in place early in the pandemic to shield COVID patients from high out-of-pocket medical expenses. But many of those safeguards have either expired, were often not properly implemented or didn’t cover key ways people could be on the hook for treatment costs.

Several major insurance carriers, for instance, announced policies early in the pandemic to fully cover COVID-related treatments, by waiving deductibles, co-pays and other cost-sharing requirements for insured members. Most of the companies, though, rescinded those policies months ago, even though the pandemic was ongoing. Among them: UnitedHealthcare’s cost-sharing moratorium ended in October, Humana’s in December, Aetna’s in January and Blue Shield of California’s in February.

The $2.2 trillion Coronavirus Aid, Relief and Economic Security Act (CARES) passed in March of 2020 also contained key provisions, designed to protect uninsured Americans and those who received care from providers outside of their insurance network, a common occurrence during hospital stays where patients have no control over who attends to them. The legislation allowed providers to bill the government directly for treating the uninsured and made it a condition of receiving aid from the $175 billion Public Health and Social Services Emergency Fund established to help financially struggling hospitals, medical practices and other healthcare providers that patients would not be billed more for COVID treatment than what insurers paid out at in-network rates.

But plenty of patients slipped through the billing cracks. In cases where insurers didn’t waive co-pays or health care providers did not take federal assistance, some patients are being besieged by bills, especially if their coverage comes from one of the industry’s increasingly common high-deductible plans. Older patients on traditional Medicare who don’t have supplemental coverage to help with cost sharing are also especially vulnerable to high out-of-pocket treatment costs.

Meanwhile, experts say that hospitals and health care providers frequently failed to use correct billing codes for COVID expenses or incorrectly delineated treatments for post-COVID maladies as unrelated to the disease itself. “It wasn’t like you actually had to match the aid you received to patients receiving care,” says Elisabeth Benjamin, vice president of health initiatives at the New York-based anti-poverty advocacy non-profit Community Service Society.

Agreed Brianna Wells of the Greenlining Institute, a non-profit advocates for economic equity for people of color, who authored a March 2021 report on the medical debt crisis that focuses on its disproportionate impact on minorities in California: “There seems to be a disconnect between the protections in the CARES Act to prevent people from acquiring medical debt due to COVID-19 and hospital practices. That means that even though people were supposed to be protected from treatment costs, they’re still facing high out of pocket costs for these services.”

A lot of this—billing errors, surprise bills, misused federal money, a lack of communication with patients about the assistance that’s available to them—reflect pre-existing conditions that plagued the U.S. healthcare system long before COVID. Benjamin noted, for instance, that some hospitals that received billions in federal aid nonetheless continued to aggressively pursue patients to pay outstanding medical debt even as the pandemic crashed the economy itself. “The billing infrastructure hums along like it’s a wartime economy,” she says. “We’re fighting a COVID war, but the people that are stuck holding the bag are the patients.”

Himmelstein, the professor and medical bankruptcy researcher from Hunter College, sees accumulating COVID medical debt as a symptom of a bigger problem regarding the use of public money for health care. “The government is spending $2 trillion every year on our system and is not exercising accountability for how that money is used and what it’s going for.” he says. “Increasingly, it’s going for investors and huge profits out of the system rather than actually ensuring people get the care they need and that they’re not in financial trouble. There’s no plan for dealing with long-term illness other than if you’re sick enough, long enough, and you’re finally bankrupted and you happen to live in the right state, then you’ll qualify for Medicaid. If not, then they’re just totally out of luck. But being bankrupt and qualifying for Medicaid is hardly a good outcome either.”

Persistence Pays Off

The kind of persistence and awareness it takes to make sure providers are behaving properly can be exhausting, as DaJuan Hunter discovered. The 40-year-old JetBlue flight attendant was hospitalized for a week in July with COVID-19 in Munster, Indiana, and returned home to receive a $25,000 bill for his stay followed by a flood of other bills from “anybody else who touched me.”

Uninsured Adults Nearing Medicare Age More Likely to Die from Cancer

Cancer Outcomes Among Medicare Beneficiaries And Their Younger Uninsured Counterparts, Health Affairs, May 2021, by Gerard Silvestri, Ahmedin Jemal, K. Robin Yabroff, Stacey Fedewa, and Helmneh Sineshaw

Abstract: Proposals for expanding Medicare insurance coverage to uninsured Americans approaching the Medicare eligibility age of sixty-five has been the subject of intense debate. We undertook this study to assess cancer survival differences between uninsured patients younger than age sixty-five and older Medicare beneficiaries by using data from the National Cancer Database from the period 2004–16… We found that uninsured patients ages 60–64 were nearly twice as likely to present with late-stage disease and were significantly less likely to receive surgery, chemotherapy, or radiotherapy than Medicare beneficiaries ages 66–69, despite lower comorbidity among younger patients. Compared with older Medicare patients, younger uninsured patients had strikingly lower five-year survival across cancer types. For instance, five-year survival in younger uninsured patients with late-stage breast or prostate cancer was 5–17 percent lower than that among older Medicare patients. We conclude that… expanding comprehensive health insurance coverage to people approaching Medicare age eligibility may improve cancer outcomes in the US.

Comment:

By Isabel Ostrer, M.D.

Cancer is a leading cause of death in the United States. However, there are stark disparities in cancer outcomes among different populations. Lack of insurance is an unfortunate and unnecessary contributor to these disparities.

In this Health Affairs paper, we learn that uninsured patients ages 60-64 with a new cancer diagnosis had significantly worse one-, two-, and five-year survival rates compared to their Medicare-insured counterparts — who were also older (66-69) and more likely to have comorbidities. The reasons for these discrepancies are varied but certainly include lack of access to care. Patients who are uninsured are less likely to have a usual source of primary care and to participate in cancer screening programs leading them to present with later-stage disease that is not easily curable. Of note, patients in the younger age group who had insurance coverage had better survival rates than their older counterparts, as would be expected due to age differences.

Disparities in cancer outcomes also vary by race, with Black patients faring worse than white patients. When adjusting for insurance coverage these disparities decrease, although they are not eliminated.

The authors posit that lowering the Medicare eligibility age to 60 could improve cancer outcomes and reduce disparities. Why stop at 60? Patients across their lifespan are at risk of developing not just cancer, but other conditions that respond to early treatment and intervention. Nearly 20% of adults in the 45-64 age group have diabetes. Furthemore, nearly one in five deaths among adults 25-64 is due to cardiovascular disease.

We know that insurance coverage both improves survival and reduces racial disparities in outcomes, not only for cancer but also for other medical conditions – chronic and acute. It’s time to assure that all Americans have high-quality insurance. The only way to achieve this is thorough Medicare for All.

http://healthjusticemonitor.org…

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The Buffett-Bezos-Dimon-Gawande insurance fail? A powerful policy lesson!

How Amazon, JPMorgan, and Berkshire Hathaway took on America’s health care system—and lost, Fortune, June 1, 2021, by Erika Fry

Was it a press release, or a declaration of war?

How else to explain the media and market frenzy that followed the announcement, issued on Jan. 30, 2018, that Amazon, Berkshire Hathaway, and JPMorgan Chase — three of the nation’s largest, most high-profile, and best-run companies, then with some $534 billion in revenues between them — were teaming up to take on the ever-more-expensive, ever-more-complex problem that is American health care.

To those who had toiled in the world of employer-sponsored health care for decades, trying but never really succeeding to come up with new ways to control costs and improve outcomes … the statement, from three powerful CEOs, was cause for celebration.

Five months in, the team announced another star would lead the venture: Atul Gawande, the surgeon and influential New Yorker writer whose clear-eyed analysis of America’s dysfunctional health care system had earned him the admiration of Barack Obama and Buffett. In March 2019, the venture finally got a name, Haven.

The project officially sputtered to an end earlier this year. Even with its star power, Haven couldn’t break the black box that is U.S. health care.

So, did Haven make a difference? Some argue the effort undermined progress by raising the obvious question: If they couldn’t do it, who can? In a recent Kaiser Family Foundation survey of very large employers, 85% of top executives think government support will be necessary to control costs and provide coverage.

Gawande goes further and has recently argued that the employer-sponsored system can’t be fixed. Noting how many Americans lost their health insurance in a global pandemic, he said, “A job-based system is a broken system.”

Comment:

By Don McCanne, M.D.

I contend that the Haven health reform effort of Warren Buffett, Jeff Bezos and Jamie Dimon, along with Atul Gawande, was a spectacular success, as an experiment in health policy. They proved beyond any reasonable doubt that the private sector is incapable of fixing our highly dysfunctional health care financing system. The only model that has shown promise is a single payer Medicare for All system. But you cannot set that up as an employer-sponsored system; it will have to be a public system for all the people.

http://healthjusticemonitor.org…

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