Viewing entries tagged with 'ICYMI'
ICYMI: The market clout of Massachusetts providers is a “main driver of the state’s spiraling health care costs”, investigation finds
Posted by The Campaign on January 29, 2010 at 4:30 PM
A year-long investigation into the rising costs of health care in Massachusetts, which are growing by 7.5 percent each year, found that hospitals and physicians are leveraging their market power and driving up health care costs in the state. The Boston Globe reports on the investigation by the state attorney general’s office. Here are some key findings:
- “Massachusetts insurance companies pay some hospitals and doctors twice as much money as others for essentially the same patient care, according to a preliminary report by Attorney General Martha Coakley. It points to the market clout of the best-paid providers as a main driver of the state’s spiraling health care costs.”
- “Coakley’s staff found that payments were most closely tied to market leverage, with the largest hospitals and physician groups, those with brand-name recognition, and those that are geographically isolated able to demand the most money.”
- “’These rising costs are unsustainable. If we don’t do something about it, the only thing we’ll be able to afford is health care. No one will have money for food or housing,’[said Coakley].’’
- “The report shows that a small group of about 10 hospitals statewide command significantly higher payments than the other 55, ranging from 10 to 100 percent more than their competitors for similar work.”
- “Investigators found that Massachusetts health care costs, which are growing by 7.5 percent annually, are mostly the result of rising prices, not patients getting more imaging tests, surgery, and other procedures.”
For the full article, click here.
To read the preliminary report, click here.
ICYMI: AHIP, BCBSA, Employer Group Joint Letter on Immediate Reforms in Current Legislation
Posted by The Campaign on January 15, 2010 at 3:10 PM
ICYMI: American Academy of Actuaries Comment Letter on Health Care Reform Legislation
Posted by The Campaign on January 15, 2010 at 10:43 AM
The American Academy of Actuaries sent a letter to Speaker Pelosi and Majority Leader Reid providing comments on the Senate-passed health care reform legislation.
From the press release:
“The individual mandate language should be strengthened,” Uccello said. “The viability of health care reform depends on attracting lower-risk individuals. Strengthening the mandate through higher financial penalties and non-financial incentives would increase the likelihood that these individuals will purchase coverage.”
Here are a few highlights from the letter:
On individual mandate:
- An individual mandate is an integral component of both bills. Such a mandate is necessary to ensure that adverse selection will not lead to dramatic premium increases or a premium spiral. However, the financial penalties associated with the bills’ individual mandates are fairly weak compared to coverage costs, especially during the first years of the Senate plan when the financial penalties are being phased in.
On age rating:
- Moving to a narrow limit on premium variations by age, such as the proposed 2-to-1 and 3-to-1 limits, could result in dramatic premium changes, compared to what individuals are facing currently. In particular, younger individuals in states that currently allow underwriting and wider premium variations by age could see much higher premiums than they face currently (and may have chosen to forgo).
On MLR requirements:
- Imposing unrealistically high medical loss ratio requirements may threaten plan solvency by making it difficult for premiums to cover claims and expenses. In particular, it would be difficult for insurers in the individual market to satisfy the loss ratios that are typical in the current small and large group markets. Imposing such requirements could result in individual market insurers exiting the market.
- From a practical standpoint, it would be difficult to impose a minimum loss ratio requirement in 2010, as contained in the House bill. Plans typically file their premiums six to 12 months before they become effective, and need time prior to rate filing in order to develop the rates. Therefore, a sufficient lag time would be needed between the enactment of the legislation and the effective date of the minimum loss ratio provision.
On CLASS Act:
- However, given the way the program is structured, severe adverse selection would result in very high premiums that are likely to be unaffordable for much of the intended population, threatening the viability of the program.
- Without significant program changes to minimize adverse selection, the program would not be sustainable in the long term without premium increases or benefit reductions.
ICYMI: Tulane University Dean Says Coverage Requirement Important to Help Control Costs
Posted by The Campaign on January 14, 2010 at 5:19 AM
Here at the Campaign for an American Solution blog we have talked a lot about our support for ending pre-existing condition restrictions coupled with a coverage requirement. Policymakers and economists have recognized that these two policies go hand in hand because if they are not coupled the cost of coverage for Americans could skyrocket (see this study.)
Here is a quote from Tulane University Dean Dr. Karen DeSalvo from today's New Orleans Times-Picayune:
But Dr. Karen DeSalvo, vice dean for community affairs and health policy at Tulane University, said that without a mandate for younger healthier Americans to purchase insurance, the cost of providing coverage for the uninsured will remain high, mainly because pools of insured will disproportionately consist of people facing potential health problems.
"In the absence of some sort of mandate for people, you run the risk that young people are going to gamble and not get insurance," DeSalvo said.
For the full article, click here.
ICYMI: Former Senator Bob Dole on the Impact of the Premium Tax
Posted by The Campaign on January 13, 2010 at 7:11 AM
In today's Wall Street Journal, former Senator Bob Dole writes about one of the pay-fors in the Senate reform bill -- a tax on premiums. Senator Dole's piece does a very good job of explaining the unintended consequences of this tax on everyday people including seniors.
Here are some key excerpts:
"Most of us agree that America's health-care system needs to be fixed. Families and businesses are struggling to keep pace with soaring costs. Too many Americans are without adequate coverage. And all of this is damaging our economy. But it will do no good to reform the system if it ends up degrading the quality of care most of us currently receive or saddling future generations of Americans with unconscionable debt."
"As always, the devil is in the details, and we'd better be paying very close attention to their rich potential for unintended consequences. For example, one provision in the Senate's version of health-care reform would impose a new tax on a number of federally-funded health-care benefits."
"In effect, the federal government would be taxing the money it provides for Medicare and a host of other important programs. By so doing, it would unintentionally jeopardize the quality of care that many of our oldest, sickest and most vulnerable citizens depend on."
"The Senate legislation imposes this yearly premium tax on for-profit and not-for-profit health plans, generating an estimated $60 billion in tax revenues over its first nine years. Government-run programs would be exempt from the tax. However, the tax would be levied on Medicare, the Children's Health Insurance Program, Medicaid, and Tri-Care for the families of military dependents when delivered by a private-sector plan."
"...health plans specializing in Medicare, Medicaid and other government programs...are strictly bound by federal contracts and frequently operate at or near cost, serving America's older, higher-risk and higher-cost patient populations. Since they have no profits with which to absorb the tax or any ability to pass it on, they'll have only one option—to reduce the health-care services they provide. Certainly this isn't what the Senate intends."
For the full article, click here."Nonetheless, some 10.2 million Americans who now choose to purchase Medicare Advantage through private providers because it gives them better benefits at lower cost may be hurt. These are frequently lower-income elderly people with a multitude of serious health problems. The services they receive allow many of them to remain in their homes close to friends and family during their final years, rather than be moved into nursing homes where their care would be far more expensive and their days much emptier. They would be among the victims of this new federal tax."
ICYMI: Former Comptroller General David Walker Says Current Reform Bills Fail Four Pronged Test
Posted by The Campaign on January 12, 2010 at 6:02 AM
The former comptroller general of the U.S. David Walker, someone who knows something about the fiscal state of the United States looks at what the reform bills will mean for the till. According to Walker, the bills both fail a four pronged test.
Here are some key highlights:
"Rather than just paying for itself, fiscally responsible health care reform should meet a four-pronged test based on realistic assumptions. First, it should pay for itself over 10 years. Second, it should not add to federal deficits beyond 10 years. Third, it should result in a significant reduction in the tens of trillions of dollars in unfunded health care promises the federal government already has. Fourth, it should result in total health care costs as a percentage of the economy lower than what would occur absent reform."
"Based on independent analyses performed by various government and private-sector organizations, the current bills pending in the Congress do not meet this four-pronged test. In addition, to the extent they allegedly meet any of the tests, they do so by relying on very optimistic assumptions relating to provider reimbursements and other factors."
"In addition to meeting these four tests, any health care reform bill should contain mechanisms to ensure that its projected cost-related outcomes become a reality. Namely, it should have automatic adjustment mechanisms in place if the predetermined cost-related targets are not met. It should also provide for a capable, credible and truly independent group that can help pursue adoption of evidence-based practice and other approaches designed to reduce costs and the rate of increase in such costs. In addition, we need a bipartisan Fiscal Future Commission to engage the American people and make recommendations on a range of tough health care, tax, Social Security and other choices that Washington has been punting on for far too long."
For the full article click here.
ICYMI: NAIC Letter to Capitol Hill Outlines Concerns With Certain Provisions of Reform Legislation
Posted by The Campaign on January 07, 2010 at 2:38 PM
The National Association of Insurance Commissioners (NAIC) sent this letter to Speaker Pelosi and Majority Leader Reid. Here are a few highlights:
· “State insurance regulators have extensive experience and expertise in regulating health insurance. They are also closer to consumers and have a better understanding of the markets they regulate than a single national regulator in Washington, D.C. could have. For these reasons, consumers are best served by insurance regulation that is located firmly at the state level.”
· “Reforms such as guaranteed issue, community rating, and the elimination of preexisting condition exclusions can encourage young, healthy individuals to wait until they get sick to purchase health insurance coverage, especially in the individual market. While both bills include provisions designed to mitigate this risk, we are concerned that overly broad exemptions and insufficient penalties will prompt many to opt out of insurance coverage, endangering the viability of the entire reform package.”
· “ Furthermore, we are concerned that application of rating rules to large group coverage will have the unintended consequence of encouraging these businesses to self-insure in order to evade this provision.”
· “On a related issue, we are concerned that businesses that lack the size and resources to safely self insure may be encouraged to do so in order to avoid these reforms. Failures of these self-insured plans would have a devastating impact on the businesses, employees and health care providers. We urge conferees to consider taking steps to ensure states have authority to protect consumers from this danger.”
· “If federal regulators are given the authority to deny premium increases that are needed to maintain the solvency of a company or to exclude carriers from the marketplace in response to these needed premium increases, the ability of state regulators to ensure the financial stability of companies could be severely compromised.”
· “We are concerned that a loss ratio of 80% in the individual market may not be readily achievable by many insurers. These companies have already entered into contracts with agents and brokers that obligate them to pay specified levels of commissions, and have expenses associated with underwriting and marketing that they will not be able to reduce until guaranteed issue requirements and health insurance Exchanges are implemented.”
· “While promoting competition is an important element of fostering healthy insurance markets, it is unlikely that a repeal of the McCarran-Ferguson antitrust exemption for health and medical malpractice insurers will lead to more competition and lower premiums. The business of insurance, while exempted from federal antitrust law, is still subject to state antitrust enforcement actions.”
· “Many provisions of both the House and Senate bills, if enacted on their own, would cause adverse selection that would raise premiums for all, as younger healthier individuals and businesses forego coverage. It is crucial that the effective dates of these important reforms be coordinated with implementation of the individual mandate and subsidies that will mitigate the risk of adverse selection.”
ICYMI: New Govt. Data Show Net Cost of Insurance Continues to Decline
Posted by The Campaign on January 05, 2010 at 8:34 AM
CMS today released the latest National Health Expenditure Accounts data showing health care costs continue to grow faster than the overall economy. This means reducing costs will remain a central focus of the reform debate.
One critical part of the new NHE data release is the percentage increase in the cost of private health insurance. Here is the key finding on this component of the NHE data:
"The net cost of private health insurance-the difference between premiums and benefits- declined to $92.0 billion in 2008, a decrease of $2.6 billion from 2007. As a result, the net cost of this insurance continued its recent decline as a share of total premiums from 13.7 percent in 2003 to 11.7 percent in 2008." (p. 153)
For the full report, click here.
ICYMI: AHIP Statement on National Health Expenditures Data Release
Posted by The Campaign on January 05, 2010 at 5:49 AM
AHIP's Statement on today's release of the National Health Expenditure Accounts data:
AHIP Statement on National Health Expenditure Data
Washington, DC – New National Health Expenditure Accounts data released by CMS show that health spending in the United States grew at 4.4 percent in 2008. Although the recession has brought a reduction in the rate of increase in health care costs, the data show costs continue to grow faster than the overall economy and the portion of GDP devoted to health care continues to increase.
“The latest national health expenditure data demonstrate why health care reform needs to include a long-term strategy to reduce the growth of health care costs. Health care spending continues to rise faster than the economy as a whole, further straining family budgets and crowding out of other urgent domestic priorities, such as education, energy, and the environment,” said Karen Ignagni, President and CEO of America’s Health Insurance Plans (AHIP).
According to CMS, “Despite the slowdown, national health spending reached $2.3 trillion, or $7,681 per person, and the health care portion of gross domestic product (GDP) grew from 15.9 percent in 2007 to 16.2 percent in 2008. These developments reflect the general pattern that larger increases in the health spending share of GDP generally occur during or just after periods of economic recession.”
This is consistent with national data and information received from health plans showing that health care costs are expected to increase even further in 2009 due to the underlying growth in the cost of health care services.
Moreover, surveys from the past month continue to show Americans are concerned about the impact reform will have on their health care costs.
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Providing Health Benefits for Over 200 Million Americans.
ICYMI: Kaiser Family Foundation's Drew Altman on Delays in Benefits in Reform Bill
Posted by The Campaign on December 22, 2009 at 8:34 PM
In an article from the Associated Press entitled "Pain before gain in health care overhaul", the AP quotes Kaiser Family Foundation president Drew Altman saying this about the bill:
"There's going to be an expectations gap, no question about that. People are going to see their premiums and out-of-pocket costs go up before the tangible benefits kick in."
For the full article, click here.
