PNHP

Medicare’s high out-of-pocket costs

Medicare’s high out-of-pocket costs

Cost Burdens by Income and Health Status

By Cathy Schoen, Karen Davis, Amber Willink
The Commonwealth Fund, May 12, 2017

Abstract

Issue: Fifty-six million people — 17 percent of the U.S. population — rely on Medicare. Yet, its benefits exclude dental, vision, hearing, and long-term services, and it contains no ceiling on out-of-pocket costs for covered services, exposing beneficiaries to high costs.

Goal: To inform discussion of possible changes to Medicare, this issue brief looks at beneficiaries’ out-of-pocket costs by income and health status.

Methods: Spending estimates based on the Medicare Current Beneficiary Survey.

Findings and Conclusion: More than one-fourth of all Medicare beneficiaries — 15 million people — spend 20 percent or more of their incomes on premiums plus medical care, including cost-sharing and uncovered services. Beneficiaries with incomes below 200 percent of the poverty level (just under $24,000 for a single person) and those with multiple chronic conditions or functional limitations are at significant financial risk. Overall, beneficiaries spent an average of $3,024 per year on out-of-pocket costs. Financial burdens and access gaps highlight the need to approach reform with caution. Already-high burdens suggest restructuring cost-sharing to ensure affordability and to provide relief for low-income beneficiaries.

From the Summary and Implications

The high financial burdens documented in this brief illustrate the need for caution. Half of Medicare beneficiaries have low incomes; one-third have modest incomes (200% to 399% of poverty). Any potential policy should first consider the impact on beneficiaries.

Access and affordability remain key concerns. In any discussions of potential Medicare reform, it will be important to pay particular attention to consequences for those vulnerable because of poor health or low income. Indeed, the findings point to the need to limit out-of-pocket costs and enhance protection for low-income or sicker beneficiaries.

http://www.commonwealthfund.org…

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Comment:

By Don McCanne, M.D.

Although President Trump has said that he is going to leave Medicare alone, we have learned that he is not a reliable source for information about pending policy changes. The Republicans controlling Congress have indicated that they want to reduce projected spending on Medicare by privatizing it and switching to vouchers (premium support) in order to ratchet down the government’s contribution to the program. So what does this report tell us about the wisdom of their intentions?

Medicare is already an inadequate program. Instead of cutting the Medicare budget further we should be expanding it to fill in the deficiencies that are leaving Medicare beneficiaries exposed to excessive debt.

The full article available at the link above discusses programs that are used to patch some of the holes, but just as patches are inadequate for the Affordable Care Act, patches have also been inadequate for Medicare, just as this report demonstrates.

We need a Medicare that meets the much higher standards of the “Physicians’ Proposal for Single-Payer Health Care Reform,” and then we need to enroll everyone in it automatically. That’s why we talk about an Improved Medicare for All.

Physicians’ Proposal for Single-Payer Health Care Reform:
https://www.pnhp.org/nhi

Alaska needs a single-payer health care system

By Alan Gross, M.D.
Anchorage Daily News, May 12, 2017

Alaska is in recession and is unable to reconcile its huge deficits, despite a 40 percent cut in government services. Thirty-five percent of the total state budget is now devoted to health care. Alaska employers struggle to keep pace with wages while the cost of providing employee health care benefits skyrockets and are the highest in the world. Many Alaskans remain uninsured or pay small fortunes for private insurance with prohibitively high copays and deductibles. The only reasonable solution to this crippling problem is to adopt a state or national single-payer government health care program.

Alaska health care prices do not simply reflect increased labor, shipping and travel costs — at most only 30 percent more than the same services in other states. Alaska doctors often charge and collect 500 percent or more, than the costs for obtaining the same service outside the state. Alaska utilizes the “80th percentile rule,” which mandates insurance companies pay at least 80 percent of what its providers bill, thereby encouraging medical fee increases with virtually no restraint. Every six months, insurance companies must reevaluate average regional fees to keep pace with this rule.

Cutting the 80th percentile rule to a lower percentage is not the answer. This would only motivate providers to raise their respective rates faster. Also, most specialty medical groups in Alaska lack real competition and have joined to form regional monopolies and set prices at will, leading to upwardly spiraling prices across virtually every aspect of health care delivery.

Doctors, pharmaceutical companies, medical suppliers and ancillary service owners (e.g., labs, imaging, physical and massage therapy) are usually well-meaning, great people trying to do good work. They are not crooks. But, money is very much on the table thanks to our broken system, and health care providers have taken full advantage of this amazing flow of Alaska dollars from the state of Alaska and from the individuals and employers who are paying for incredibly high insurance premiums, into the hands of the health care industry and its providers.

No realistic solution is currently being considered, on either a state or federal level, to adequately control health care costs. Both political parties kick this expensive and politically explosive can down the road, offering us Obamacare, health savings accounts, tax breaks, government subsidies, state reinsurance and other incentives, but these are insufficient and minor adjustments to a terminally broken system. Milton Friedman, a renowned conservative economist, admitted he had “no idea” how to control costs with our current health care system. Don’t blame health care providers, insurance companies, or the health care attorneys.  The problem is the design of our system and it needs to change.

The only solution to Alaska’s health care fiscal crisis is to create a single-payer health care system. A single-payer system will successfully cover every Alaskan, without compromising provider choice or quality of care. This has been successfully implemented in most other first world nations with high satisfaction rates. Moreover, our federal government already offers Medicare to all citizens over the age of 65. It has proven itself successful and efficient in controlling health care costs and pricing with overall high satisfaction. Our current administration in Washington is leaning toward giving individual states more autonomy related to federal Medicaid dollars. This presents a tremendous opportunity for the state of Alaska to work with our federal government to pioneer our own state-run universal health care system.

There is no free market in Alaska health care. There never will be with our current third-party payer system. It does not make us all socialists for our government to fix a broken system. Health care prices are devastating the state’s economy and the state could save hundreds of millions of dollars a year if it self-insures its citizens.

Furthermore, workers will see marked increases in wages once benefit packages become less expensive for employers to provide. No other mechanism can control the prices for health care in Alaska or for the rest of the United States.

Winston Churchill once said, “Americans always get it right in the end, after they’ve exhausted all other options.” It is time for Alaska to get it right.

Dr. Alan Gross is a lifelong Alaskan and an orthopedic surgeon who has practiced since 1994. He also holds a masters degree in public health and is a commercial fisherman. He lives in Petersburg.

https://www.adn.com…

Political divide on AHCA

YouGov, May 6, 2017

As you may know, Republican leaders in the House of Representatives recently passed a new health bill (AHCA). Do you generally favor or oppose this bill?

Favor strongly or somewhat:
Total – 31%
Democrats – 13%
Independents – 24%
Republicans – 69%

Oppose strongly or somewhat:
Total – 44%
Democrats – 70%
Independents – 40%
Republicans – 11%

Not sure:
Total – 25%
Democrats – 17%
Independents – 36%
Republicans – 20%

http://big.assets.huffingtonpost.com…

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Comment:

By Don McCanne, M.D.

This poll is being reported as showing that Americans oppose the Republican repeal and replace health care legislation (American Health Care Act) passed by the House of Representatives. It would be more accurate to state that Republicans and Democrats are divided in their support, but many remain undecided, especially amongst Independents. Neither support nor opposition reached a majority, except within the two major parties.

Unfortunately, the results indicate that political polarization remains strong between the two parties, but that a careful consideration of the implications and consequences of the policy features of the legislation seems to be lacking. That makes the assumption that we should be able to agree on what is better for America – affordable and accessible health care for all, or that individuals need to be empowered to take ownership of their health care or do without.

It is tragic that we reduce public health policies to a battle of political slogans. The health of the nation depends on getting the policies right. Too many of us seem to tune in to what our political leaders have to say, and then parrot their words. What a terrible way to try to craft rational, humane policy.

Many contend that moving forward from a political divide requires bipartisanship – compromise. No, not when both sides are wrong. Merging ACA and AHCA would only perpetuate our high costs, inequities, and wasteful administrative inefficiencies. We need to eject the politicians and move on with crafting reform based on sound policies. Perhaps it’s time to bring the sociologists into the arena.

Now is the time for Medicare for all

Single-payer program saves money

By Jessica Schorr Saxe, M.D.
Charlotte Post, May 11, 2017

Have you—or anyone you know—skipped needed health care because of cost? Since this is true of one in three Americans, you probably answered yes. Do you think this is unfair?

When I worked as a family doctor at Carolinas Medical Center-Biddle Point, I saw people every day who didn’t get needed health care because they couldn’t pay. I don’t think it’s fair. There is another kind of health care system which would eliminate this unfairness.

Amid the talk of health care change—repeal the Affordable Care Act, AKA Obamacare or replace it or improve it—more and more voices are speaking out for improving and expanding Medicare for all. This is also known as a single-payer system.

Why? Health in this country is poor, with lower life expectancies, worse infant mortality (deaths of babies before the age of one), and poorer health than other developed countries. These statistics are much worse for African-Americans than for the general population. And we spend more money than other countries—about twice as much per person as the average developed country. All of those countries provide health care for all, while we do not.

They do it by providing universal access to health care, through some form of a single-payer system. Single-payer health care refers to a financing mechanism by which one payer (either the government or an agency established by the government) pays the bills. Our current complicated system includes payments by Medicare, Medicaid, numerous insurance companies (with thousands of different plans), all of which have different rules. This unwieldy bureaucracy creates headaches—and expense—for patients, hospitals, and doctors’ offices.

We, too, could have a single-payer system if Congress passed HR 676, the Expanded and Improved Medicare for All Act, It currently has 108 co-sponsors, more than ever since it was first introduced in 2003. More than half of the Democrats in Congress, including all three from North Carolina, are co-sponsors. Rep. Alma Adams of the 12th District was the first representative from N.C. to sign on.

HR 676 would eliminate all co-pays and deductibles—so we would no longer have one-third of our country who could not afford needed care.

How would we afford to cover everyone? An article in the Annals of Internal Medicine in February noted that we would save over $600 billion. This would come from decreasing costs of administration as well as lower prescription drug costs. We would fund this program through small progressive increases in taxes.

Don’t like taxes? You are likely to find that you pay much less in taxes than you’re currently paying for health care. And the billions of dollars in savings would allow us to cover everyone.

Think of what health care coverage for all would mean. Everyone would be able to get the care they need and no longer have to make choices between seeing a doctor and paying their other bills. This would allow us to improve the health of our country. Further, we could reduce racial disparities.

Do you know anyone who suffers from lack of needed health care, anxiety over their medical bills, or getting inequitable care because of their financial limitations? Then you, too, should support improving Medicare and expanding it to all.

Dr. Jessica Schorr Saxe is chair of Health Care Justice – NC.

http://www.thecharlottepost.com…

Faso urged to change his vote

By Steffie Woolhandler, M.D., M.P.H., and David Himmelstein, M.D.
The (Hudson, N.Y.) Register-Star, May 11, 2017

Congressman Faso’s vote for the GOP’s American Healthcare Act (AHCA) that repeals much of the Affordable Care Act (the ACA or Obamacare) gravely threatens the health of thousands of his constituents.

The GOP bill would take $880 billion out of Medicaid, and another $312 billion out of subsidies that help working families buy private coverage through the ACA exchanges. Instead of helping people get care, this money would be diverted to give an $800 billion tax-break windfall to people with incomes over $200,000, as well as big insurance and drug companies. The rest of us would get virtually no tax relief.

In Rep. Faso’s district, the ACA has expanded Medicaid by 68,600 and helped another 16,500 afford new coverage through the exchange. All told, his vote threatens to strip coverage from 85,100 people in our district, would weaken protections for people with pre-existing conditions, boost premiums for people over 40, and take tens of millions of dollars from our hospitals and clinics.

The ACA is deeply flawed. It left 28 million Americans uninsured and millions more with unaffordable premiums, deductibles and copayments. But the GOP plan would make things worse. Instead of moving backward, we should move forward from the ACA to a Medicare for All plan like the one proposed by Bernie Sanders and Rep. John Conyers (HR 676).

Rep. Faso can change his vote if the AHCA comes back to the House of Representatives for a final vote after the Senate acts on it. Please urge him to vote “no” next time, and to endorse HR 676. The health of our neighbors hangs in the balance.

http://www.registerstar.com…

Medical debt and personal bankruptcy

How the Affordable Care Act Drove Down Personal Bankruptcy

By Allen St. John
Consumer Reports, May 2, 2017

http://www.consumerreports.org…

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Comment:

By Don McCanne, M.D.

It is reassuring to learn that personal bankruptcies are declining, but we should not extrapolate the conclusion that the Affordable Care Act is responsible for largely eliminating the problem of medical debt. It is still very much with us.

In 2016, about 43.8 million Americans had problems paying medical bills in the past 12 months. A Consumer Reports survey in January of this year revealed that “55 percent of consumers said they lacked confidence that they or their loved ones would be able to afford insurance to secure that care.” Affordability of health insurance and health care remains a major problem in the United States.

It is likely that the expansion of Medicaid and the introduction of generous subsidies for low-income individuals reduced the rate of medical debt amongst the 20 million people who gained coverage under ACA, but the reduction in the rate of personal bankruptcy for the other 300 million Americans was more likely due to a combination of an improved economy and the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 which made it much more difficult to file for personal bankruptcy. (The albatross of life-long debt is another story.)

When over half of Americans lack confidence that they can afford health insurance and almost 44 million are already having difficulties paying their medical bills, we have a problem. It could be virtually eliminated by enacting a well designed single payer national health program – an improved Medicare for all – that automatically includes everyone while removing financial barriers to care. Celebrating ACA is not enough.

Harvard Medical School researchers find limited access to pediatric mental health care in five major U.S. cities

Simulated patient study points to long wait times, bias against Medicaid patients and misinformation by private insurers

FOR IMMEDIATE RELEASE, May 10, 2017
Contact: Clare Fauke, communications specialist, PNHP, 312-782-6006 or clare@pnhp.org
J.Wesley Boyd, M.D., Cambridge Health Alliance, 617-833-1840 or jwboyd@cha.harvard.edu

A new study published in the International Journal of Health Services  found that access to outpatient mental health care for children—whether with a child psychiatrist or a pediatrician—is very limited, even for those with private insurance or the ability to pay out of pocket for care. Almost one-fifth of children and adolescents in the United States suffer from a serious mental disorder, but fewer than half of those needing care receive treatment. Researchers found several roadblocks to obtaining timely care, including longer wait times for psychiatric appointments versus pediatric appointments, a lack of providers accepting Medicaid patients and incorrect contact information provided by the insurer.

The study attempted to replicate the experience of a parent trying to obtain needed psychiatric care for a child. Using the Blue Cross Blue Shield (BCBS) online database of in-network providers, the authors called child psychiatrists and pediatricians in the Boston, Seattle, Minneapolis, Chapel Hill, and Houston metropolitan areas. Researchers called the offices of 601 pediatricians and 312 child psychiatrists claiming to be the parent of a 12-year-old child with depression seeking the earliest possible appointment. The authors altered their proposed method of payment, randomly stating either that they 1) carried BCBS PPO insurance, 2) carried Medicaid, or 3) were willing to pay out of pocket for care.

The roadblocks to care include the following:

  • Longer wait times for psychiatry appointments: Pediatricians were twice as likely to see new patients and to see them sooner than child psychiatrists. Appointments were obtained with 40% of pediatricians but only 17% of child psychiatrists; the mean wait time for psychiatry appointments was 30 days longer than for pediatrics. Research has shown that long wait times for mental health appointments can negatively impact a person’s engagement in care.
  • Limited access for children on Medicaid: Callers were less likely to obtain appointments for children on Medicaid (22%) than for those with private insurance (37%) or the ability to pay out-of-pocket (37%). Measures to increase physicians acceptance of public insurance, such as higher physician reimbursement and decreased administrative paperwork, may help improve access for patients with Medicaid.
  • Incorrect contact information listed by insurer: One of the most common barriers to making appointments was incorrect or outdated provider information listed on the BCBS site, suggesting that insurance companies may not be vigilant about maintaining accurate databases. “Given how difficult it can be for parents to obtain needed mental health care for their children, insurance companies need to ensure that their provider lists contain accurate information and are as user-friendly as possible,” said lead author Shireen Cama, M.D., a child psychiatry fellow at Cambridge Health Alliance and Harvard Medical School.

Analysis: Private insurers lack incentive for improving access to care

Senior author J. Wesley Boyd, M.D., Ph.D., an attending psychiatrist at Cambridge Health Alliance and faculty member in psychiatry and in the Center for Bioethics at Harvard Medical School, observed that under America’s fragmented, for-profit health insurance system, private insurers do not have an incentive to ensure better access to care. “We found that rosters of health professionals provided by insurance companies often include providers who have either left a practice location, are no longer accepting new patients, or simply aren’t listed with a correct phone number,” said Dr. Boyd. “Insurance companies profit when their enrollees are unable to access care, and patients suffer as a result. We need to take the profit motive out of health care and adopt a single payer, Medicare for all system that guarantees care for patients, not profits for insurers.”

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“Availability of outpatient mental health care by pediatricians and child psychiatrists in five U.S. cities,” Shireen Cama, M.D., Monica Malowney, M.P.H., Anna Jo Bodurtha Smith, M.D., M.P.H., Margaret Spottswood, M.D., M.P.H., Elisa Cheng, M.D., Louis Ostrowsky, M.D., Jose Rengifo, M.D., J. Wesley Boyd, M.D., Ph.D. International Journal of Health Services, May 9, 2017. A copy of the full study is available to media professionals upon request from Clare Fauke, clare@pnhp.org or 312-782-6006.

Physicians for a National Health Program (www.pnhp.org) is a nonprofit research and educational organization of more than 21,000 doctors who support a single-payer national health program. PNHP had no role in funding or otherwise supporting the studies or commentary described above.

True fix to health care system won’t come with private insurance companies

By Mark Hickling
The Vashon-Maury Island (Wash.) Beachcomber, May 10, 2017

Public roads. Public libraries. Public street lighting. Public schools. Publicly funded fire departments and police departments. Publicly funded military. These are things that We The People have established to ensure our safety and survival in this difficult world.

But there’s one item missing, one item included in the public contract of every other advanced nation: publicly funded universal health insurance.

As a nation, our unique failure to publicly fund health insurance places the well-being of We The People in the hands of profit-making private insurance companies driven, each year, to continually grow profits by raising premiums while further cutting operational costs — restricting access to health care through complex contractual means and ever-tightening networks.

The ACA, for all of its goodness, failed to address this dynamic. Instead it emboldened and empowered private insurers, handing over public money to boost their bottom lines.

The Republican House has now slapped We The People in the face, reminding us that profit making is a heartless business — a business that does not care about our health or financial survival — a business that should not stand between our loved ones and life-saving care.

We The People demand a fair and cost-efficient system, one that does not burden us (or our employers) with the incredible costs and inefficiencies of our current, outdated system.

It is time for us to join every other advanced nation in the world by switching to publicly funded health insurance: Medicare For All — America’s original, publicly funded single-payer insurer for more than 50 years, available now only to people 65 and older.

Improved Medicare For All. Let’s make this happen. Learn more about this at PNHP.org: Physicians for a National Health Program.

http://www.vashonbeachcomber.com…

Healthy Indiana patients are being dumped into lower-tier plan

More than half of Indiana’s alternative Medicaid recipients didn’t make payment required for top service

By Maureen Groppe
IndyStar, May 8, 2017

More than half the low-income people who qualified for Indiana’s alternative Medicaid program failed to make a monthly payment required for the top tier of service — a key feature of the program Vice President Mike Pence insisted on as a condition to expanding the health care program when he was Indiana’s governor.

That’s according to a new evaluation of the Healthy Indiana Plan, a program designed by Indiana health care consultant Seema Verma, who — as the new administrator for the Centers for Medicare and Medicaid Services — can now grant other states permission to impose similar monthly fees.

Opponents say the department of Health and Human Services should not allow other states to do this, because this study and other research has shown requiring poor people to pay is a barrier to care.

Verma, along with HHS Secretary Tom Price, already have told states they want to be as permissive as possible.

Of the 590,315 Hoosiers determined eligible for Medicaid during the 22 months after Indiana expanded eligibility, 55 percent either never made the first payment or missed one while on the program.

Nearly nine in 10 ended up in the lower-tier plan as a result, according to an evaluation done for the state and submitted to the federal government.

“The evaluation makes clear that Healthy Indiana’s complicated use of premium payments is not working,” said Joan Alker, executive director of Georgetown University’s Center for Children and Families. “More than half of the enrollees have missed a payment at some point, and as a result are bouncing around in and out of coverage sources or no coverage at all. These are very poor people for whom premiums are a hardship.”

Pence insisted on including monthly payments as a condition for expanding Medicaid through the Affordable Care Act. He argued the payments promote personal responsibility and better decision making by patients who have “skin in the game.”

It’s a sentiment shared by Verma. “The Healthy Indiana Plan is about empowering individuals to take ownership for their health,” Verma said during her confirmation hearing.

The insurance companies which offer the Medicaid plans say Indiana’s payment requirements and two-tiered system is more costly to administer.

http://www.indystar.com…

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Comment:

By Don McCanne, M.D.

Although we’ve covered this topic before, this report provides new evidence that the Healthy Indiana Plan is providing a disservice to eligible Medicaid beneficiaries by shifting most of them into the lower-tier plan where they lose dental and vision benefits, have more limited drug coverage, and are exposed to copayments. Since most of these individuals have no discretionary income, many do without these important services. This is the opposite of what a program designed to provide low-income individuals with affordable access to health care should be doing.

One of the major problems with our health care financing system is that we pay hundreds of billions of dollars for outrageous administrative waste. Now the insurers report that the Healthy Indiana Plan is even more costly to administer than traditional Medicaid. Just exactly what we need – more administrative waste!

Recently-appointed CMS Administrator Seema Verma worked with then Governor Mike Pence to establish this ideologically-driven but cruel policy, and now she wants to work with HHS Secretary Tom Price to expand this concept to other states. Enough! We do not need more inefficiency and impaired access to care. We need a single payer national health program – an improved Medicare for all so that all of us can have the care that we need, when we need it.

Free market is a disaster for sick Americans

By Phil Kadner
Chicago Sun-Times, May 9, 2017

Will someone please tell me what evidence exists that a free market benefits consumers in this country when it comes to health insurance? Would anyone even argue that market demand ought to determine how much a person pays when it comes to saving the life of a baby?

The average working stiff has little choice when it comes to health insurance. If you are lucky enough to have an employer who provides insurance as a benefit, that’s what you’re stuck with because going into the free market (before Obamacare) meant you were going to have to pay a king’s ransom on private insurance premiums.

Millions of Americans, of course, had no health insurance prior to Obamacare.

That’s because many of them had pre-existing conditions, which included cancer, diabetes, mental health problems, heart conditions, kidney disease and many more.

Obamacare, for the first time, required that insurance companies cover people with pre-existing conditions. That is a government regulation that offends many conservative Republicans because it interferes with the free market.

Most Americans, however, realize that given the freedom to deny coverage to sick people, insurance companies would do exactly that.

If you’re in business to make a profit, you do not want to cover people who are going to cost your company a lot of money. You would prefer to customers who are young and healthy. These are people considered low-risk individuals who still pay pretty stiff premiums to protect themselves against that day they get a serious illness, or suffer a terrible injury.

That’s how the free market health insurance system works if left alone by the government. That’s how it worked for decades before Obamacare.

I would also point out that even low-risk people with insurance were sometimes told their illness did not qualify for medical coverage, or that the treatment recommended by their doctors was considered experimental so would not be covered.

Insurance companies have their own panel of doctors and medical experts who make those decisions. Your doctor’s opinion does not override theirs. Of course, you could also file a lawsuit and spend years in court fighting their decision. That’s how the free market works.

Every other nation in the civilized world has single-payer national health insurance, which is similar to Medicare in the United States. Everyone is thrown together in one insurance pool.

Even President Donald Trump recently acknowledged that’s a better system, noting Australia’s health system is better than that of the United States.

Unlike the rest of the industrialized world, our government does nothing to control medical costs. Nor does it do anything to control prescription drug costs.

So in the free market that is the United States,  a drug company that owns the rights to EpiPens, life-saving injection devices commonly used to treat people suffering from severe allergic reactions, can increase the price of a two-injection packet to $600. The actually cost of the drug inside was valued at less than $20. The same injection pen drug duo sells for $290 in Canada.

From 2013 to 2015, the average cost of prescription drugs in the United States rose 25 percent.

Health insurance and drug companies, by the way, spend massive amounts of money on commercial advertising and political lobbying in the United States. That is the free market at work.

If you believe in health care that is more expensive, if you believe in insurance that covers fewer people, if you think it’s right to deny insurance to babies born with birth defects, then you are a true believer in the free market.

If not, join the fight for single-payer, universal health care.

http://chicago.suntimes.com…