A Health Care Reform Blog––Bob Laszewski's review of the latest developments in federal health policy, health care reform, and marketplace activities in the health care financing business.
Headline: "Exchanges Struggle to Enroll Consumers As Income Increases" It's Because of the Obamacare Dichotomy
Here is an excerpt from a post on this blog from June 21, 2014:
Why do most people express dissatisfaction with Obamacare in most of the polls? Why did Obamacare fare so badly in the last election? It seems to me that all of this has to do with who benefits and who does not.
My sense has always been that Obamacare appeals to people very differently depending on their incomes. I will call it the Obamacare dichotomy: Poorer people get by far the lowest premiums and deductibles from Obamacare and working class/middle class/wealthier people, who pay very high premiums for high deductible plans, get relatively very little from it.Kaiser Family Foundation Survey Finds Most People Who Bought Health Insurance on the Exchanges Are Happy With It
This week the administration reported that 76% of those who received a subsidy paid less than the full premium for the plans they selected. And, 69% are paying less than $100 after the subsidies––46% are paying $50 or less.
It would appear from this data that it is the lowest income people who are most often signing up for coverage. They are the ones who get the biggest premium subsidies as well as the reductions in their deductibles and co-pays.
So, the Kaiser Family Foundation has found that these people who are having their premiums and deductibles disproportionately subsidized are happy with their coverage. Hardly a surprise. If you paid for most of my insurance and cut my deductibles from the standard levels I'd be pretty happy too.
Why do most people express dissatisfaction with Obamacare in most of the polls? Why did Obamacare fare so badly in the last election? It seems to me that all of this has to do with who benefits and who does not.
Small Company Has Plan to Provide Primary Care for the Masses
Virginnia Schock seemed headed for a health crisis. She was 64 years old, had poorly controlled diabetes, a wound on her foot and a cast on her broken wrist. She didn’t drive, so getting to the people who could tend to her ailments was complicated and expensive. She had stopped taking her diabetes pills months before and was reluctant to use insulin; she was afraid of needles and was worried that a friend’s son, a drug addict, might use her syringes to inject them.
She was, however, able to make a phone call. And one day in October, in the offices of Iora Primary Care in Seattle, Dr. Carroll Haymon and Lisa Barrow, a “health coach,” huddled around a speakerphone, talking to her. Ms. Schock had recently become a patient of the practice, and the three discussed her problems — personal, financial, logistical — for nearly 45 minutes. At one point, Dr. Haymon asked why Ms. Schock had stopped taking her diabetes medication. The pills, Ms. Schock said, were too big, and they stuck in her throat.
“We can talk to the pharmacist,” Dr. Haymon said, gesturing for Ms. Barrow to add that to her list of follow-up actions. Ms. Barrow did and was able to find a version of the drug in a smaller size.
That kind of small change can make a big difference in a patient’s health — what good is the perfect drug if the patient can’t swallow it? — but the extra-mile work it took to get there can be a challenge for the typical primary care practice in the United States. Harried by busy schedules and paid on piecework model, many doctors rush from visit to visit, avoid phone calls and emails that don’t generate payments, and often fail to address the complex social issues that hamper people’s health.
This misalignment of financial incentives is a huge problem for patients, who often can’t get the care they need. But it’s also a big economic problem. The United States has the costliest health care system in the world, even as many patients suffer from preventable illnesses and die younger than their peers in other countries. The system is so full of inefficiencies that Americans are often sicker even as everyone — patients, insurers, the government — ends up spending more money on care.
Iora thinks it may be able to solve both problems and make money doing so. Its business model is meant to keep patients like Ms. Schock out of the hospital by improving service while earning a dividend on the expensive care it was able to avoid.
Contact Lens Makers and Discounters Tussle Over Price Setting
By KATIE THOMAS
Anthony D. Morrow had been wearing the same brand of contact lenses for years, so when he saw the bill for his latest order last November, he did a double take.
Rather than $169 for a one-year supply — the price he had paid, more or less, for the previous three years — the new bill for his Acuvue Oasys lenses was $270, a 60 percent price increase.
Mr. Morrow, a marketing consultant in the Los Angeles area who describes himself as a “savvier-than-usual consumer,” started digging around. What he learned upset him even more: The $100 price increase resulted from a new policy by Johnson & Johnson, the maker of Acuvue lenses, which prohibited retailers from charging less than a minimum price set by the company. That meant online dealers like the one he used, Vision Direct, could no longer offer lenses such as the Acuvue Oasys at rock-bottom prices.
One by one over the last year and a half, all four of the major contact lens manufacturers have enacted pricing policies that seek to limit what contact lens discounters can charge for certain products, setting minimum retail prices and threatening to cut off supply if dealers do not comply. The manufacturers say the policies are intended to simplify the market and shift conversations between patients and optometrists away from the topic of pricing and toward the clinical benefits of their contact lenses. In addition to Johnson & Johnson, the other manufacturers are Alcon, Bausch & Lomb and Cooper Vision.
But opponents, which include big discounters such as Costco and 1-800 Contacts as well as the nonprofit group Consumers Union, say the policies amount to illegal price-fixing and are restricting consumer choice in an industry that has long been accused of anticompetitive practices.
Earlier this month, Costco sued Johnson & Johnson, the industry’s biggest player, for what it says are antitrust violations, and a consumer class action has also been filed. 1-800 Contacts and Costco are lobbying state legislatures around the country in an effort to outlaw the practice, which is known as unilateral pricing. The Federal Trade Commission, which declined to comment, and several states’ attorneys general are investigating the issue, according to Christopher L. Lebsock, a lawyer representing consumers in the class action.
How the issue is decided could affect the buying choices of millions of Americans: Nearly 39 million consumers in the United States wear contact lenses, spending $4.2 billion annually, according to 1-800 Contacts. About 20 percent of the products sold by the four biggest manufacturers — who make up about 98 percent of the market — fall under such pricing policies, the company said. Because some of the products are best sellers, 1-800 Contacts said that about 46 percent of its sales in January and February involved products whose pricing was restricted by the new policies.
“We want consumers to have meaningful choice — to be able to bargain, to be able to get the lowest price they can and the best quality they can,” said George Slover, a senior policy counsel at Consumers Union.
This is a link to a very interesting NYT video story about the right to die.
-SPC
Is a male nurse worth $5,148 more than a female nurse?
When Linda Hippolyte first got into nursing, she thought everyone at her hospital was paid based on their experience and education.
But when she got a peek at other nurses’ salaries at Parkview Community Hospital in Riverside, she was in for a surprise.
“You could really see the difference,” she said, noting that male nurses seemed to be making more. “Why was this person who happens to be male making more than this person who is female, with the same experience?”
For nurses, as for nearly everyone else in the U.S. workforce today, it pays to be a man.
Registered nurses who are male earn nearly $11,000 more per year than RNs who are female, new research shows — and only about half of that difference can be explained by factors such as education, work experience and clinical specialty.
That leaves a $5,148 salary gap that essentially discriminates against women, who make up the vast majority of the nursing workforce, according to a study published Tuesday in the Journal of the American Medical Assn.
Approximately 2.5 million women — and the families they support — are being shortchanged by the gender-based pay difference, said the researchers who conducted the study.
“Nursing is traditionally female-dominated, and it’s a large profession,” said study leader Ulrike Muench, a nurse practitioner with a doctorate from Yale University who studies nursing, health policy and healthcare economics at UC San Francisco. “A difference would affect a sizable portion of the labor force.”
Muench and her colleagues from Yale and Vanderbilt University examined two decades’ worth of salary information from the National Sample Survey of Registered Nurses. Before the survey ended in 2008, it collected data once every four years from more than 30,000 RNs across the country. Altogether, the study sample included responses from 87,903 full-time RNs, 93% of whom were women.
In the raw analysis, the average salaries for men were $10,775 higher than for women, the researchers found. That discrepancy can be seen in every survey year going back to 1988. Though the gap appeared to narrow in the middle and late 1990s, it widened again after 2000.
Even after the team accounted for things like location, hours worked per week, years of experience and type of nursing degree, men still earned $5,148 more than women.
With nurses earning an average of $66,973 per year, that amounts to an 8% bump in pay for men.
Our View: Health study should be call for action on poverty
Portland Press Herald Editorial Board
The further south that someone lives in Maine, the more likely he is to do things that are good for his health, to avoid doing things that are bad for his health and to generally be healthy. That’s the conclusion of the University of Wisconsin’s new, county-by-county national health study, which rates Cumberland, Sagadahoc and York counties favorably compared to the U.S. median.
But the same isn’t true for much of the rest of Maine. It’s a disparity that’s closely tied to money and schooling: Those who have more do better than those who have less. To help narrow the health gap in Maine, we need to seize on opportunities to address the income and education gap, not just talk about them.
Though it’s not surprising, the social and economic divergence between different parts of the state is startling. Of the socioeconomic factors measured in the County Health Rankings, joblessness, the percentage of children in poverty and the number of deaths from accidental injuries are all far higher in the least healthy counties (Piscataquis, Somerset and Washington) than in southern coastal Maine.
At the same time, the percentage of people with at least some college education is noticeably lower in rural Maine.
These differences shape people’s lives and their health. Compared to middle- and upper-income Americans, the poor have far fewer choices regarding employment, health care, education, food and housing. For example, they’re far less likely to land the kind of job that pays enough for them to serve nutritious meals, or to live in a neighborhood with quality schools.
Policies that aim at reducing poverty, then, will also have an impact on communities’ well-being. The minimum-wage bill now before the Legislature could go a long way toward helping families in low-income areas of rural Maine, especially given the high percentage of single-parent households there, which depend on one paycheck.
The state also needs to fulfill its pledge to use federal dollars to expand workplace skill development for MaineCare recipients. Improving the programs that help Mainers transition off welfare should be a priority as well.
College credentials are critical to getting a well-paying position with benefits, so boosting aid to Maine’s public universities and community colleges should be on the agenda in Augusta. But the investment should start far earlier than that: Supporting early childhood education will help prepare kids from less-affluent families to keep up with their peers and stay in school.
The new health ranking statistics must spur action. We know enough about what makes people sick and what keeps them healthy that we should be developing and moving ahead with specific strategies. The long-term well-being of our state depends on it.
Report: Maine Gets Mixed Review on Progress Toward Health Targets
By PATTY WIGHT • MAR 25, 2015
PORTLAND, Maine - Maine has reached targets in some health indicators, but continues to lag in others. That's according to MaineHealth's fifth annual Health Index Report.
Deborah Deatrick, the organization's senior vice president of community health, says Maine hit goals in four areas: "That would include things like tobacco use, obesity, preventable hospitalizations, and cancer deaths."
But Deatrick says the state has not met targets for three other indicators: childhood immunizations, cardiovascular deaths, and prescription drug abuse and addiction. She says, overall, the report indicates that the state's health ranking is going down.
Deatrick says the report helps reveal the impact of current policies and clinical approaches on health, and clarifies the health issues to focus on the future.
AARP Statement on House Passage of Medicare SGR Reform Bill
AARP applauds bipartisan work but continues pressing to improve bill in Senate
March 25, 2015
The Honorable John Boehner Office of the Speaker
U.S. House of Representatives Washington, DC 20515
Dear Speaker Boehner and Leader Pelosi,
The Honorable John Boehner Office of the Speaker
U.S. House of Representatives Washington, DC 20515
Dear Speaker Boehner and Leader Pelosi,
The Honorable Nancy Pelosi
Office of the Democratic Leader
U.S. House of Representatives
Washington, DC 20515
On behalf of the Medicare Rights Center (Medicare Rights), I am writing to express our concern with the
House leadership’s legislative package to repeal and replace the Sustainable Growth Rate (SGR) formula
(H.R. 2). Medicare Rights is a national, nonprofit organization that works to ensure access to affordable
health care for older adults and people with disabilities through counseling and advocacy, educational
programs, and public policy initiatives. Medicare Rights provides services and resources to over 1.5
million beneficiaries, family caregivers, and professionals annually.
We are grateful to the House Republican and Democratic leadership for working to develop an SGR compromise. The SGR formula is fundamentally flawed, and permanent changes to the Medicare reimbursement system are long overdue. We support legislative efforts to repeal the SGR and to move Medicare’s volume-based payment system towards one that incentivizes quality, efficiency, and innovation. Yet, H.R. 2 does not represent a fair deal for people with Medicare—expecting too much from beneficiaries in return for too little. The legislation’s treatment of health care “extenders” and its proposed offsets leave significant room for improvement.
In particular, low-income Medicare beneficiaries deserve a better deal on health care extenders. We appreciate and strongly support making the Qualified Individual (QI) program permanent, as included in H.R. 2. The QI benefit is essential to the financial stability of beneficiaries living on fixed incomes, paying Part B premiums for individuals with incomes between 120% to 135% of the federal poverty level (about $14,100 to $15,900 per year) and less than $7,280 in assets. Still, we are disappointed that H.R. 2 does not embrace additional reforms to the QI benefit and other Medicare Savings Programs, particularly given that over $30 billion of the legislation’s offsets are secured through provisions to shift higher cost sharing and premiums to some Medicare beneficiaries.
For too long, Congress has shirked its responsibility to Medicare beneficiaries with incomes too low to afford health care costs, yet too high to qualify for needed assistance. Permanent SGR reform presents an ideal opportunity to facilitate greater access to federal assistance designed to help vulnerable beneficiaries
We are grateful to the House Republican and Democratic leadership for working to develop an SGR compromise. The SGR formula is fundamentally flawed, and permanent changes to the Medicare reimbursement system are long overdue. We support legislative efforts to repeal the SGR and to move Medicare’s volume-based payment system towards one that incentivizes quality, efficiency, and innovation. Yet, H.R. 2 does not represent a fair deal for people with Medicare—expecting too much from beneficiaries in return for too little. The legislation’s treatment of health care “extenders” and its proposed offsets leave significant room for improvement.
In particular, low-income Medicare beneficiaries deserve a better deal on health care extenders. We appreciate and strongly support making the Qualified Individual (QI) program permanent, as included in H.R. 2. The QI benefit is essential to the financial stability of beneficiaries living on fixed incomes, paying Part B premiums for individuals with incomes between 120% to 135% of the federal poverty level (about $14,100 to $15,900 per year) and less than $7,280 in assets. Still, we are disappointed that H.R. 2 does not embrace additional reforms to the QI benefit and other Medicare Savings Programs, particularly given that over $30 billion of the legislation’s offsets are secured through provisions to shift higher cost sharing and premiums to some Medicare beneficiaries.
For too long, Congress has shirked its responsibility to Medicare beneficiaries with incomes too low to afford health care costs, yet too high to qualify for needed assistance. Permanent SGR reform presents an ideal opportunity to facilitate greater access to federal assistance designed to help vulnerable beneficiaries
afford premiums and cost sharing. For example, Congress should consider aligning the QI benefit with
the Part D Low-Income Subsidy (or Extra Help program) through an increased income threshold (up to
150% FPL) and asset test, as suggested by the Medicare Payment Advisory Commission.1
AARP Statement on House Passage of Medicare SGR Reform Bill
AARP applauds bipartisan work but continues pressing to improve bill in Senate
Press Center, March 26, 2015
CONTACT:
Greg Phillips, 202-434-2560, media@aarp.org, @AARPmedia
Greg Phillips, 202-434-2560, media@aarp.org, @AARPmedia
WASHINGTON, DC—AARP applauds the House for its bipartisan work on the Medicare Access and CHIP Reauthorization Act of 2015 (H.R. 2) that permanently replaces the Sustainable Growth Rate (SGR) formula. However, we remain concerned that Medicare beneficiaries are unfairly shouldering more than their fair share of the cost of the SGR “Doc Fix,” and we urge further improvements as the bill moves to the Senate.
“AARP has long supported a permanent solution to the SGR so that Medicare beneficiaries can rest assured that they’ll be able to continue seeing their physician each year,” said AARP Executive Vice President Nancy LeaMond. “We also support the move towards greater use of quality measures and reporting and increased care coordination, among other improvements in the new physician payment formula designed to enhance value in Medicare.”
While AARP commends the House of Representatives for working together in a bipartisan fashion on this SGR bill, we are concerned that Medicare beneficiaries will now face higher out-of-pocket costs, including higher premiums and reduced coverage through certain Medicare Supplemental (Medigap) plans. The typical senior on Medigap is not wealthy—nearly half have annual incomes of less than $30,000.
AARP wants a permanent solution to the SGR formula, one that achieves a balanced and fair solution for all stakeholders—Medicare beneficiaries, physicians and other health care providers, insurers, and drug companies. AARP is ready to work with the Senate to improve this important bill.
Senate to Take Up Medicare ‘Doc Fix’ Bill After Recess
Supporters of legislation had hoped that the Senate would take up the bill before the two-week break
By
SIOBHAN HUGHES
WASHINGTON—The Senate will take up legislation to replace a formula for reimbursing doctors who treat Medicare patients when the chamber returns from a two-week recess, Senate Majority Leader Mitch McConnell (R., Ky.) said early on Friday.
A checkup for Obamacare
by Ruth Marcus - Washington Post
Not exactly. Five years after the Affordable Care Act became law, the reality of reform remains hotly contested.
When it comes to the wisdom of the law, that’s not surprising. After all, there is a legitimate ideological debate about whether it is a wise use of federal power to require individuals to obtain health insurance or a wise use of federal resources to spend so much on subsidizing coverage.
What’s more puzzling, and more disturbing, is the still-raging division over the real-world effect of the ACA. “It is important that everyone understand how absolutely fantastic it was for the people of this country,” said Senate Minority Leader Harry Reid (D-Nev.).
“It just isn’t working,” insisted Sen. Orrin Hatch (R-Utah). “In fact, it is, by most objective accounts, an unmitigated disaster.”
Here’s my take, after talking to numerous health-care experts and examining the data: Notwithstanding its bumpy rollout, the law has accomplished its goal of expanding coverage — at a significantly lower cost than expected.
Certainly, the president overpromised when he told people that, if they liked their health insurance, they could keep it; by its own terms, the law set new standards for required coverage. Certainly, some individuals, particularly younger and healthier customers, find themselves paying more; again, such winners and losers were an inevitable consequence of the individual mandate and minimum-coverage rules.
Meantime, the scariest warnings — of employers rushing to drop coverage and insurance markets ensnared in death spirals of ever-rising premiums — have not come to pass.
Where the law has yet to fully deliver on its promises — and some wonder whether it will — is in the area of cost containment and quality improvement. The growth in health-care costs has slowed dramatically, but there is a continuing debate about what role the ACA played. In any event, health care continues to consume an unacceptable 17 percent of GDP.
Blue Shield of California is under new pressure to lower rates
By CHAD TERHUNE
With billions of dollars in reserve, nonprofit insurer Blue Shield of California is facing new pressure to offer better prices for its policies.
Despite its nonprofit status, the health insurance giant is usually on par or priced slightly above its for-profit rivals, according to a review of rates and interviews with insurance agents and industry officials.
That pricing trend can be seen at the state's two biggest buyers of healthcare: the California Public Employees' Retirement System and the state's Obamacare exchange. Together, they provide health benefits to nearly 3 million people, and they've been putting pressure on health plans to rein in costs.
The San Francisco insurer's premiums are drawing renewed scrutiny since the California Franchise Tax Board stripped Blue Shield of its longtime exemption for state income taxes after an audit.
Blue Shield is protesting that decision and said it plans to remain a nonprofit health plan. Meantime, the company said it has already paid $62 million in back taxes to the state for 2013 and 2014.
The tax ruling has sparked public debate about whether the nonprofit is fulfilling its stated mission of ensuring Californians "have access to high-quality healthcare at an affordable price." There are calls for Blue Shield to draw on its $4.2 billion in financial reserves and reduce what it charges employers and consumers.
Many families and businesses say they would welcome some relief after years of big rate hikes. Since 2013, state regulators have deemed three Blue Shield rate increases unreasonable, but officials have no authority to block them.
"Blue Shield could adjust their premiums lower than for-profit companies and make that one way to fulfill their public mission," said Glenn Melnick, a healthcare economist and professor at USC. "That could stimulate more price competition across the market."
For its part, the state's third-largest health insurer said its rates are appropriate and reflect the rising cost of medical care. It also rejects the notion of tapping reserves to lower premiums as unsustainable.
Blue Shield has already earmarked a big chunk of its surplus for an acquisition. It agreed in December to buy Care1st, a Medicaid managed-care plan, for $1.2 billion and expects to complete the deal this year.
"Our prices are a direct result of the cost of healthcare," said Blue Shield spokesman Steve Shivinsky. "Hospitals and pharmaceutical companies don't charge us differently because we are a nonprofit."
Report: Maine Gets Mixed Review on Progress Toward Health Targets
by Patty Wight
PORTLAND, Maine - Maine has reached targets in some health indicators, but continues to lag in others. That's according to MaineHealth's fifth annual Health Index Report.
Deborah Deatrick, the organization's senior vice president of community health, says Maine hit goals in four areas: "That would include things like tobacco use, obesity, preventable hospitalizations, and cancer deaths."
But Deatrick says the state has not met targets for three other indicators: childhood immunizations, cardiovascular deaths, and prescription drug abuse and addiction. She says, overall, the report indicates that the state's health ranking is going down.
Deatrick says the report helps reveal the impact of current policies and clinical approaches on health, and clarifies the health issues to focus on the future.
Health On The Hill: No Senate ‘Doc Fix’ Vote Before Recess. Will Break Hurt Chances?
MARY AGNES CAREY: Welcome to Health on the Hill, I’m Mary Agnes Carey. The troubled Medicare Physician payment formula is one step closer to repeal. After 17 short-term fixes over the last decade, the House of Representatives voted overwhelming to scrap Medicare’s Sustainable Growth Rate, or SGR, and replace it with a system that pays doctors based on the quality of care rather than the quantity.
The Senate is expected to act on the measure next month. Jennifer Haberkorn of Politico Pro joins us now with the latest. Thanks, Jen.
JENNIFER HABERKORN, POLITICO PRO: Thanks, MAC.
MARY AGNES CAREY: The House voted 392-37 to pass an SGR overhaul. President Obama supported this plan and there was a lot of pressure on the Senate to act, but it didn’t. Why didn’t the chamber vote on the SGR bill before it left town for a two-week recess?
JENNIFER HABERKORN, POLITICO PRO: The Senate was wrapping up its “vote-o-rama,” which is a purely Washington term for 15 hours of straight voting on amendments to the budget. Some hoped, and some thought that they would then move to this and pass this Sustainable Growth Rate repeal immediately. But the Senate feels like they have some time – the Obama administration can delay Medicare payments, essentially delaying the cuts to doctors, for two weeks. So they have time to return to this and pass it before physicians would actually see a cut in their rates.
Also the Senate really wanted to amend this policy. It was passed by the House, they were kind of miffed that they weren’t involved. So they want to be able to vote on making some changes to policy. Those amendments are unlikely to be approved, but they want to be able to make a point. There was also some concern that they didn’t have enough time to read the legislation and then all of the budget votes, and they were skeptical of passing this at about 4 in the morning.
MARY AGNES CAREY: The Senate doesn’t come back until April 13, and that leaves a lot of time for lobbying on this package – maybe people who like it, people who don’t. What are you expecting?
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