Out Of Sight. Out Of Mind. Out Of Money.

You may be forgiven if you haven’t been focused on the looming health insurance crises. Most of us are on information overload. With the daily revelations of inappropriate business deals and the on again / off again nature of the summit with North Korea, who has time to contemplate the administration’s ongoing war with Obamacare (Patient Protection and Affordable Care Act)? That’s our job.

Over 150 million Americans get their health insurance at work. The premiums are paid by their employers. The employees’ portion, if any, is deducted from their paychecks. Most of our clients on individual coverage (non-group) have the premiums deducted automatically from their credit cards or checking accounts. The premiums are a huge issue in November, when the clients see next year’s price, and January, when that first higher amount comes out of the account. Otherwise, the cost of insurance is just another part of that great American mystery, “I work hard, but I can’t seem to save any money!”

There are, of course, lots of Americans challenged by the recent changes in health insurance, our method of accessing and paying for health care.

It is fair to say that President Trump and the Republican-controlled Congress, having failed at repealing Obamacare, have quietly settled on sabotage. The strategy might work.

The first salvo was President Trump threatening last spring to eliminate the funding for the Cost Sharing Reduction. The risk of losing millions of dollars chased insurers like Anthem Blue Cross out of the market. He can play politics with the health care of millions of Americans, but the insurers who must answer to shareholders cannot. Those insurers that remained in the market were forced to substantially increase their premiums. Anthem’s decision to leave as well as the pricing moves by those that stayed were confirmed when Trump eliminated the funding in October.

Premiums are about to take another unnecessary jump. The Congressional Budget Office is projecting a 10% annual increase due to the most recent tax bill that eliminated the penalty for failing to carry compliant health insurance beginning 2019. Killing the Individual Mandate will cost us 10% per year! Without the (negative) incentive to retain coverage, many healthy Americans will drop their major medical policies and either go bare or purchase short term policies. You can’t fund a health care system with just the sick and the responsible. Premiums will rise exponentially. The CBO estimates that this alone will cause 4 million more Americans under age 65 to join the ranks of the uninsured in 2019.

The increase in premiums has been forcing more Americans to choose less comprehensive policies. Our top selling contracts may cover preventive care at 100% without copays or deductibles, but your child’s strep throat, with office visits, testing, and Rx, may cost you $100 or more. It is not unusual for someone to have a $5,000 or $6,500 deductible. That amount seems incidental if you have a major claim over $100,000. But lots of people have smaller claims, under $10,000, and find that they are paying the entire bill.

The average American has about $1,000 in savings. Where will that person find $4,000 or $5,000 the next time he/she slips on the ice or trips on an uneven sidewalk?

The limitations, restrictions, and network reductions of our new health plans are ignored or forgotten until you get sick or injured. And then it is too late. And then no amount of stories about Korean missiles will get your mind off your bills.

DAVE

www.cunixinsurance.com

Picture – Surprise! – David L Cunix

There Is A Doctor In The House

Health Insurance Issues With Dave has interviewed doctors, hospital executives and other members of the health care industry. Today is the first time I’ve handed the keys to a guest columnist.

I am proud to introduce my high school friend Gregg M. Gaylord MD. Dr. Gaylord is a Fellow in the Society of Interventional Radiology and is in the independent practice of medicine in Milwaukee, WI. He graduated U. of Cincinnati College of Medicine in 1981, and is Board Certified in Diagnostic/Interventional Radiology.

“I’m mad as hell…”

This famous line from the movie “Network” pretty much sums up how I feel about the now ubiquitous health care “network”. Nearly every health insurance plan comes with some form of network that either pays only for services provided by physicians, hospitals, and other providers in-network (IN), or has a higher copay and deductible if you choose to go out-of-network (OON).

Networks of providers are formed by payers such as Medicare Advantage and health insurance plans who solicit special pricing from major medical centers and professional medical groups as well as medical labs, surgery centers, hospitals and other entities. In exchange for accepting what are usually lower fees, the IN providers gain exclusivity under the insurance plan. If you aren’t accepted into the network or won’t accept their contract, you can’t treat patients and expect to get paid by the insurance plan. Independent individual providers are often excluded from networks, particularly on the individual “Obamacare” exchange plans. Some plans will pay for OON benefits, but at a much higher cost to the patient. Deductibles are often doubled and depending on the type of plan, coverage can also be reduced by a significant percentage. In many cases, a plan pays ZERO for out-of-network care except for emergencies. And many of these plans have no network providers – therefore no coverage - outside of the state where you purchase the plan (again, unless there is an emergency, though once the emergency subsides you once have to use an IN provider).

Not every plan has a narrow network. Some plans still offer a broad choice, but these are often group policies provided at your job or through Medicare and Medicaid programs that offer a variety of options though at vastly different premium pricing. If you are fortunate enough to have a broad choice of providers, you can usually keep your doctor. But this is not always the case, and many employers are also limiting their plans to those with a narrow network in order to stave off – at least temporarily - large premium increases.

So what’s the beef? Purchasing a plan in the individual market usually comes with a narrow network plan with a narrow list of IN providers that has no OON benefits. If your doctor is not in the network, too bad. Pay for your own care out of pocket. Don’t like the hospitals in your plans network? Again, too bad. Pay for it yourself. The sales pitch is that your plan will reduce costs and therefore reduce premiums, and that by narrowing the network, health care providers will work together to provide higher quality of care.

But is it working? No one is sure at this point. Some plans are showing a relative premium reduction of 6-7% compared to plans with broader networks. But premium prices are still headed up. Predictably, by narrowing networks there is an incentive for hospitals and health providers to merge and consolidate services – a trend that started during the early Clinton years but is now accelerating. This has led to upward price pressure in many markets. And perhaps even worse, these consolidated models have yet to prove long-term quality improvement on a broad scale. Unfortunately, we know that failure to prove better quality has not prevented this model from moving forward. One example of failure to prove benefits prior to implementation of policy is the requirement for nearly all physicians and hospitals to utilize Electronic Health Records. The benefits of EHR’s have yet to fully materialize, but the unintended consequences have included physician burnout, less time for nurses and doctors to interact with patients, and more and more reporting requirements that seem to add nothing to quality health care at this point.

Will narrow networks also lead to unintended consequences? In 2017 for the first time in the United States, independent physician-owned practices are no longer the majority. Employed physicians and independent physicians each constitute about 47% of physician practices. In many cases, employed physicians are seeing drastic income reductions – something that may or may not prove beneficial to the system as a whole. But a disturbing trend is the loss of autonomy in decision making which is being replaced by decision-making algorithms, management economic decisions, and incentives to increase referrals and therefore income “within the network”. Worse yet, in some cases physicians are being punished for not generating sufficient income to the system. Perhaps this will end with newer models of health care that shift responsibility and risk to the providers and the incentives will be to provide less care at lower cost. Will higher quality result? No one knows.

Bottom line? As networks narrow there is an incentive for providers to merge, and there will be fewer and fewer networks and hence physicians and hospitals to choose from. The doctor-patient relationship is being fractured ever more by third party payers and managers. Patient choice might become a thing of the past, and in some case already has.

What will the response be by the very human providers? There seems to be a reversal brewing from the employed physicians who are seeking to go back to the independent physician or independent physician group model as they feel less and less valued in a system that places remote management in charge of decision making. Some call this the “corporatization” of medicine – something that is already highly developed in the United States.

Until then, many providers are “Mad as hell”. And at some point – I wonder – will they “Not take it anymore”?

Gregg M. Gaylord MD

Special thanks again to Dr. Gregg M. Gaylord for providing us with his insight to the changing landscape of the health care industry.

www.cunixinsurance.com

Picture provided by Dr. Gaylord

 

 

 

The Truth, And Getting Fired, Will Set You Free

Here is the key question: Did Dr. Tom Price, a longtime Republican Congressman from Georgia and, most recently, the Secretary of Health and Human Services (HHS), know that dismantling the Patient Protection and Affordable Care Act (Obamacare) was a terrible idea for all of the last eight years or did he just now realize the negative impact of his actions and advocacy?

Dr. Price recently spoke at the World Health Care Congress, an important meeting of the major stakeholders of the health care industry. In a moment of clarity, the former champion of the repealing of all that is Obamacare said this about eliminating the Individual Mandate:

There are many, and I’m one of them, who believes that that will harm the pool in the exchange market. Because you’ll likely have individuals that are younger and healthier not participating in that market, and consequently that drives up the costs for other folks within that market.

Don’t worry. Within in a day he was walking back his statements, claiming that he was being quoted out of context. As this blog has long contented, the first casualty of the creation of the PPACA was intellectual honesty. Dr. Price is now hoping that nonpoliticians, such as his current employer, a health care staffing company, will focus on his new understanding of insurance basics. Dr. Price is also hoping that his old buddies in the Republican controlled Congress will ignore his moment of candor and welcome him back in the club when he comes calling.

There are any number of Republicans who, now that they have chosen to not run for reelection, have suddenly been gifted with clarity and/or honor. Exhibit one for most people was John McCain’s July 2017 thumbs down, the final vote to defeat the Republican’s attempt to repeal Obamacare. Most Americans forget that two other Republican Senators, Susan Collins of Maine and Lisa Murkowski of Alaska, had already voted against the poorly crafted measure. Were they the only three members of the majority who knew how disastrous repealing the PPACA without a real replacement would be for American, or did a number of cowards and hacks breathe a sigh of relief when McCain stood up in their place?

Now the airwaves are filled with the brave and honorable. Charlie Dent (R-PA), Jeff Flake (R-AZ), and Bob Corker (R-TN) are just a few of the guys who suddenly feel compelled to share their thoughts on a variety of issues. And, one by one, as members of Congress and this administration become ex-Congressmen and ex-federal employees, we will get more honesty about both domestic and foreign policy. The input from insiders, no longer shackled by partisan talking points may help us to create better health care regulation.

First, we will have to forget so much of what these politicians said in the past. We need to say that it is all right now. Because the truth, no matter when it is delivered, should be welcomed. And it will set you free.

DAVE

www.cunixinsurance.com

Picture – The Adult in the Room – David L Cunix