Tag Archives: Cost of health care

Harvard Prof’s meet Obamacare and they don’t like it

Allow me to translate for you. Harvard Professors are spoiled brats. Talk about “checking your privilege” Harvard Ideas On Health Care Hit Home, Hard – NYTimes.com.

“Harvard is a microcosm of what’s happening in health care in the country,” said David M. Cutler, a health economist at the university who was an adviser to President Obama’s 2008 campaign. But only up to a point: Professors at Harvard have until now generally avoided the higher expenses that other employers have been passing on to employees. That makes the outrage among the faculty remarkable, Mr. Cutler said, because “Harvard was and remains a very generous employer.” (emphasis added)

Cry me a river.


Dilemma over deductibles: The flip/flop in health care..

Dilemma over deductibles: Costs crippling middle class.

Physician Praveen Arla is witnessing a reversal of health care fortunes: Poor, long-uninsured patients are getting Medicaid through Obamacare and finally coming to his office for care. But middle-class workers are increasingly staying away.

“It’s flip-flopped,” says Arla, who helps his father run a family practice in Hillview, Ky. Patients with job-based plans, he says, will say: ” ‘My deductible is so high. I’m trying to come to the doctor as little as possible. … What is the minimum I can get done?’ They’re really worried about cost.” (emphasis added)

The issues is deductibles…

A recent Commonwealth Fund survey found that four in 10 working-age adults skipped some kind of care because of the cost, and other surveys have found much the same. The portion of workers with annual deductibles — what consumers must pay before insurance kicks in — rose from 55% eight years ago to 80% today, according to research by the Kaiser Family Foundation. And a Mercer study showed that 2014 saw the largest one-year increase in enrollment in “high-deductible plans” — from 18% to 23% of all covered employees.

Meanwhile the size of the average deductible more than doubled in eight years, from $584 to $1,217 for individual coverage. Add to this co-pays, co-insurance and the price of drugs or procedures not covered by plans — and it’s all too much for many Americans.

I have to say, I would LOVE to have a plan with deductibles this low. Perhaps the issue is the expectation of the typical American that someone else is supposed to pay for all of their health care.

All that said, I can confidently state that a large portion of my clients have substantially larger deductibles than the averages mentioned above and I can see them delaying medical care.

Moving on the article asks the important question, albeit a bit to generally: “Why is this happening?”

Why is this happening? Many patients and doctors blame corporate greed — a view insurers and business leaders reject. Some employers in turn blame the Affordable Care Act, saying it has forced them to pare down generous plans so they don’t have to pay a “Cadillac tax” on high-cost coverage in 2018. But health care researchers point to a convergence of trends building for years: the steep rise in deductibles even as premiums stabilize, corporate belt-tightening since the economic downturn and stagnant middle-class wages.

“It’s a case of companies trying to offer workers health insurance and still generate profit,” said Eric Wright, a professor of sociology and public health at Georgia State University. “But whenever costs go up for the consumers across the board … it promotes a delay in care.”

Others disagree, saying that when people pay for their care, they shop more intelligently. Chris Riedl, Aetna’s head of product strategy for its national accounts, says her company’s research does not indicate that insured patients are showing up sick in emergency rooms with long-neglected illnesses — which to her means, “intuitively, they’re not avoiding care.”

But many doctors contend it’s only a matter of time before the middle class begins crowding ERs. They say putting off care can be dangerous, exponentially more costly and, if it continues and spreads, can threaten the health of the nation.

Read the whole thing. This is a fairly well rounded article that takes a look from all sides.



High deductibles and skipped care

Skipped care a side effect of high-deductible health plans | Local News | The Seattle Times.

Cammi Chase was thrilled to think she had solved the conundrum that is individual health insurance. Thanks to the Affordable Care Act and federal subsidies, last December Chase moved her family from an $800-a-month plan to one that cost about $240.

“I felt like we hit the jackpot,” she said.

But last spring when Chase was struck with an unexpected illness, the Seattle woman was shocked to realize how little her new health insurance plan — a Health Savings Account (HSA) with a deductible of roughly $5,000 — would cover.

Sorry, I’m confused. Why was she shocked? Does she not understand that a plan with a $5000 deductible means that the first $5000 is coming out of her pocket? Does she not realize that $5000 is a large amount of money?

The problem is that most clients can’t or won’t allow themselves to imagine that their health can take a turn for the worse, either via an accident, an unexpected illness or the development of a chronic condition. It just happens to other people. They see the low premium, which of course is a fixed cost, get an insurance card, avoid the penalty and they’re happy. They either believe they won’t become seriously ill or injured in an accident OR they think the insurance plan will change into a better plan if something happens to them.

Reading on, we see that Cammi was “banking that her health would be good”…

“I heard from the rumor mill that an HSA was the way to go because I’m self-insured,” Chase said. “I was really banking that my health would be good.” (emphasis added)

In the spring, after experiencing memory problems and swollen joints, Chase was diagnosed with latent Lyme disease.

“Immediately it included a lot of [doctor’s] visits and a lot of medication and monthly tests and lab work,” Chase said. And most of it wasn’t covered by her plan. “Every time I walk in I pay for the office visit, which is $165 each month.”

Let’s stop a moment here and note she said “most of it wasn’t covered by her plan.” Most likely that is not technically correct. I suspect the following occurred:

  • She received a network discount for the cost of her treatment
  • The amount she paid was applied towards her $5000 deductible

Of course, this situation could have been further complicated if she was seeing out of network doctors, but that’s an issue for another day.

For 2015, she used an agent, which is a path that I (of course) endorse and the result…

A financial person at her doctor’s office referred Chase to Sarah Freeman, a Seattle insurance broker who helped her find a new plan for next year. At $325 a month, the Premera Blue Cross plan she found costs a little more than her current plan, but it will pay more of her bills.

For now the family can afford the higher premiums, Chase said, but “I just hope it doesn’t continue to rise.”

A different broker mentioned in the article comments…

Despite the risks, Feltzs predicted the cheaper plans with higher deductibles will still be popular.

“I sell them all day because those plans do work for people who say they don’t go to the doctor or they rarely go,” said the broker. “They say, ‘I want to avoid the penalty [for being uninsured] and in the event that something does happen, I don’t want to break the bank.’?”

Which is a story I hear everyday as well. In the future I’m going to send this article to clients that are looking at bare bones plans.

One final note, it may seem that I’m being harsh on Cammi. I wish her nothing but the best, especially since Lyme disease can be a very serious condition with expensive medications. She is a very good example of an issue I encounter many times a week.


Do the math, a Dr. Shortage is coming

Why the Doctor Can’t See You: Newsroom: The Independent Institute.

The introductory portion of the article documents how preventive care alone has the ability to create full employment for doctors. In other words, demand exceeds supply…

When demand exceeds supply, doctors have a great deal of flexibility about who they see and when they see them. Not surprisingly, they tend to see those patients first who pay the highest fees. A New York Times survey of dermatologists in 2008 for example, found an extensive two-tiered system. For patients in need of services covered by Medicare, the typical wait to see a doctor was two or three weeks, and the appointments were made by answering machine.

However, for Botox and other treatments not covered by Medicare (and for which patients pay the market price out of pocket), appointments to see those same doctors were often available on the same day, and they were made by live receptionists.

As physicians increasingly have to allocate their time, patients in plans that pay below-market prices will likely wait longest. Those patients will be the elderly and the disabled on Medicare, low-income families on Medicaid, and (if the Massachusetts model is followed) people with subsidized insurance acquired in ObamaCare’s newly created health insurance exchanges.

John Goodman concludes…

I predict that in the next several years concierge medicine will grow rapidly, and every senior who can afford one will have a concierge doctor. A lot of non-seniors will as well. We will quickly evolve into a two-tiered health-care system, with those who can afford it getting more care and better care.

In the meantime, the most vulnerable populations will have less access to care than they had before ObamaCare became law.

They call it Obamacare.


Obamacare’s enemies are still math and reality

Unable to Meet the Deductible or the Doctor – NYTimes.com.

Patricia Wanderlich got insurance through the Affordable Care Act this year, and with good reason: She suffered a brain hemorrhage in 2011, spending weeks in a hospital intensive care unit, and has a second, smaller aneurysm that needs monitoring.

But her new plan has a $6,000 annual deductible, meaning that Ms. Wanderlich, who works part time at a landscaping company outside Chicago, has to pay for most of her medical services up to that amount. She is skipping this year’s brain scan and hoping for the best.

“To spend thousands of dollars just making sure it hasn’t grown?” said Ms. Wanderlich, 61. “I don’t have that money.”

About 7.3 million Americans are enrolled in private coverage through the Affordable Care Act marketplaces, and more than 80 percent qualified for federal subsidies to help with the cost of their monthly premiums. But many are still on the hook for deductibles that can top $5,000 for individuals and $10,000 for families — the trade-off, insurers say, for keeping premiums for the marketplace plans relatively low. The result is that some people — no firm data exists on how many — say they hesitate to use their new insurance because of the high out-of-pocket costs.

Insurers must cover certain preventive services, like immunizations, cholesterol checks and screening for breast and colon cancer, at no cost to the consumer if the provider is in their network. But for other services and items, like prescription drugs, marketplace customers often have to meet their deductible before insurance starts to help.

While high-deductible plans cover most of the costs of severe illnesses and lengthy hospital stays, protecting against catastrophic debt, those plans may compel people to forgo routine care that could prevent bigger, longer-term health issues, according to experts and research.

“They will cause some people to not get care they should get,” Katherine Hempstead, who directs research on health insurance coverage at the Robert Wood Johnson Foundation, said of high-deductible marketplace plans. “Unfortunately, the people who are attracted to the lower premiums tend to be the ones who are going to have the most trouble coming up with all the cost-sharing if in fact they want to use their health insurance.”


This is a real problem. Many members of the middle class, and certainly lower class are living pay check to pay check and adding the cost of coverage to their monthly bills is stressful to their financing. THEN, add the cost of meeting the deductibles and their lifestyle “breaks”.

My brother recently broke his arm and has no insurance. He may qualify for Medicaid or he may not. If he doesn’t, even if he received a subsidy, most likely he could not consistently pay his premiums and certainly would have significant issues meeting a deductible. I don’t know the solution. Most of my Boulder friends would say “Single Payer.”  Me, I’m for price discovery and getting insurance out of day to day medical expenses. Also, an inexpensive accident plan would have solved my brother’s problem, assuming he could consistently pay that premium.

For example, Ms. Wanderlich needs a brain scan. How much would it cost if she could shop around? I have no idea. Heck, it may cost $300 or it may cost $3000.  An internet search shows the cost of a CT brain scan lies between $825 and $4800. Let’s say that everyone who really needed a brain scan actually got one. If there was price discovery, perhaps the cost would be lower due to higher utilization of the equipment.

Also, the public needs to shop around for these services. Even if they have insurance, it should become common place to shop around.

Another family experience. Many years ago my wife needed an MRI. We were within $500 – $800 dollars of meeting our deductible, then there was 100% coverage. We found a cost of $850 or so, but the facility was an hours drive away. In Boulder, we found a price of $1200 and the facility was 15 minutes away. Since our exposure was $800 either way, we selected the more expensive facility. If circumstances had been different, that is the money was coming out of our pocket, we would have driven an hour.

There are no easy answers, but Government bureaucracy and incompetence, which is very much on display these days, are not part of the solution.


A big h/t to Michael Smith at the Facebook page, Fans of Best of the Web today for the title of this post.


Rate relief for resort areas…

New Obamacare map could cut insurance costs | AspenTimes.com.

Redrawing the maps will still leave resort county residents with some of the country’s highest Obamacare premiums.

Salazar said the new lineup of insurance regions could bring cost down between 4 to 8 percent in resort areas. That’s about $20 a month. Other rural areas in Colorado would see their costs go up 4 to 6 percent, also about $20 a month to about $366 a month.

The current premium for a 40-year-old non-smoker in the resort counties is $483 a month.

Ouch! It appears to me the whole Westerm portion of Colorado, Mesa County excepted (think Rocky Mountain Health Plans), will now have some of the highest rates in the nation.


New low for Obamacare

CNN Poll: Health care law support drops to all-time low – CNN Political Ticker – CNN.com Blogs.

Only 35% of those questioned in the poll say they support the health care law, a 5-point drop in less than a month. Sixty-two percent say they oppose the law, up four points from November.

Nearly all of the newfound opposition is coming from women.

“Opposition to Obamacare rose six points among women, from 54% in November to 60% now, while opinion of the new law remained virtually unchanged among men,” CNN Polling Director Keating Holland said. “That’s bad news for an administration that is reaching out to moms across the country in an effort to make Obamacare a success.”

According to the survey, 43% say they oppose the health care law because it is too liberal, with 15% saying they give the measure a thumbs down because it is not liberal enough. That means half the public either favors Obamacare, or opposes it because it’s not liberal enough, down four points from last month.

Sixty-three percent say they believe the new law will increase the amount of money they personally pay for medical care, which may not be a good sign for a law known as the “Affordable Care Act.”

No fooling. The troubling issues is anyone with a brain could have figured out that higher prices were coming. I’ll stop there.


Colorado’s canceled health insurance count tops 200K

Colo.’s canceled health insurance count tops 200K – The Denver Post.

More than 200,000 Coloradans are losing their health insurance because of the federal overhaul, the state Division of Insurance reported Thursday in a count of lives on health plans canceled by 23 carriers in the wake of new requirements.

The Division announced Wednesday that 106,083 people are on plans in the individual market that are getting canceled for reasons connected to the federal law.

Another 143,116 people are on canceled plans in the small-group market. They’re being directed to shop for new health insurance on Connect For Health Colorado, the state-run insurance marketplace.

It would be nice if a reporter would narrow down which companies are cancelling policies effective 12/31/2013. Anthem is mentioned, howver they are offering the option for their individual policy holder to extend their plans through 12/1/2014  whereas Rocky Mountain and at least some Kaiser individual plans are being cancelled as of  12/31/2013.

Oh but don’t worry, you can keep your plan.



What Happens if Young People Don’t Sign Up for ObamaCare?

What Happens if Young People Don’t Sign Up for ObamaCare? | Fox Business.

Herrick says insurers wanted to have the average age of enrollees around 40-41 years old, but in states like Kentucky, the average age is trending a decade higher, the WSJ reports.

“If the average age of enrollees is a decade older, and the health status is worse than expected, that will cause premiums to skyrocket,” he says.

Can Obama inspire the young invincibles? Color me doubtful.


Top Hospitals Opt Out of Obamacare

Surprise! – Top Hospitals Opt Out of Obamacare – US News and World Report.

“This doesn’t surprise me,” said Gail Wilensky, Medicare advisor for the second Bush Administration and senior fellow for Project HOPE. “There has been an incredible amount of focus on the premium cost and subsidy, and precious little focus on what you get for your money.”

Regulations driven by the Obama White House have indeed made insurance more affordable – if, like Health and Human Services Secretary Kathleen Sebelius, you’re looking only at price. But responding to Obamacare caps on premiums, many insurers will, in turn, simply offer top-tier doctors and hospitals far less cash for services rendered.

Not to mention that insurance is in many cases NOT more affordable.

Chances are the individual plan you purchased outside Obamacare would allow you to go to these facilities. For example, fourth-ranked Cleveland Clinic accepts dozens of insurance plans if you buy one on your own. But go through Obamacare and you have just one choice: Medical Mutual of Ohio.

And that’s not because their exchanges don’t offer options. Both Ohio and California have a dozen insurance companies on their exchanges, yet two of the states’ premier hospitals – Cleveland Clinic and Cedars-Sinai Medical Center – have only one company in their respective networks.

A good local example here is Colorado is Children’s Hospital is not in he Anthem BCBS network.

When looking at ACA/Obamacare plans, you must be concerned about the network. Also, if you are near a state border, travel a lot or have two residences, keep in mind that with a vast majority of the plans you are out of network for non-emergency care performed out of state.




Dropped Coverage: One Cancer-Surviving Doctor’s Story in the Age of Obamacare

The PJ Tatler » Dropped Coverage: One Cancer-Surviving Doctor’s Story in the Age of Obamacare.

And now, Obamacare is costing his own family its insurance.

What the article doesn’t make particularly clear is that Dr. Carpenter does have access to Obamacare where they don’t care about his pre-existing conditions. That is ASSUMING healthcare.gov is fixed. Which is a “Mythical Man Month” thing and may or may not happen.

But the implication of the article is “spot on”. He had insurance he liked, it covered his situation and suddently he’s losing it thanks to Obamacare and has to pay more for the replacement coverage with its 10 essential health benefits.

Why more? Because Dr. Carpenter most likely doesn’t qualify for a subsidy. He pays the full price.

Remember. President Obama promised us we could keep our plan and our doctor if we liked it? He also mentioned reductions in annual premiums too. Not just once or twice either. Dr. Carson and many others are paying the price.

Some companies are extending their current plans through 2014. Assuming Obamacare survivives, another group of individual policy holders will have to face the music of paying higher premiums.

… I’m not obivious to those Obamacare helps. I just got off the phone with potential clients who will benefit from the coverage. There is no easy answer, but there’s a better answer than this complex cluster…


Hospitals reject six ObamaCare plans

Be careful out there – Hospitals reject six ObamaCare plans | New York Post.

While most people have only 4 classes of plans to choose from, Bronze, Silver Gold and Platinum the big issue is the completeness of the network. Many plans on the Colorado Marketplace are classified as HMO’s. That translates into reduced networks.

The bottom line, if you want a larger network, especially if you travel, you should seriously consider a higher priced plan with a PPO network.


Worst Law Passed in Four Decades

Obamacare: Worst Law Passed in Four Decades Must Be Stopped, Says Stockman | Daily Ticker – Yahoo Finance. (video at link)

So why should it be repealed?

It is the worst law ever passed in the last four decades by the federal government,” Stockman argues in the video above. “It is a massive entitlement to end all entitlements. It is going to cause a fiscal hemorrhage that is not even yet anticipated. It will tie up one-sixth of GDP in the most monstrous, massive, bureaucratic snarl that you can’t imagine. So therefore this needs to be stopped before it becomes operational.”

Lauren Lyster goes on to note…

Healthcare consultants like Jon Kingsdale — who helped set up some of the state exchanges — say these online Obamacare insurance “stores” will affect only the 5% to 10% of Americans who are uninsured (where they can now shop for insurance with transparency). Americans who purchase insurance this way qualify for government subsidies so that monthly premiums are not more than 9.5% of their income.

This is only partially true. Everyone who has an individual insurance plan IS affected. I repeat, EVERYONE who has an individual insurance plan IS affected. Ok, ok, one exception, if you purchased a plan prior to March 23rd, 2010 it has grandfathered status. But lets move on….

If you have an individual plan, regardless of income, it will either terminate or changed into an Obamacare Qualified Plan (QHP) sometime in 2014. The list price of your coverage will SOAR. Perhaps you will qualify for a subsidy but there are lots of loopholes such as:

  • Family glitch
  • CHP+ for children
  • Medicaid if your income is below 133% or 100% of the Federal Poverty Level depending on the state

There is also the issue of potential partial subsidy recapture if your income increases during the year OR even worse, a TOTAL subsidy recapture if you income ends up above the 400% FPL threshold for the year. That recapture can be quite high if you live in a region with high insurance costs, such as the resort area here in Colorado.

Getting back to David Staockman’s concern, Obamacare is an ever expanding ever growing entitlement. It does nothing to control costs except make sure that most of the plans offered on the exchange have small doctor/facility networks so it will be very easy to be out of network. Furthermore, the out of network coverage will be substantially less favorable than what is found today. So when the government gets around to trying to control costs, the blunt knife of government will only result in worse care for all and a very broken system.


Study: Insurance costs to soar under Obamacare

Study: Insurance costs to soar under Obamacare – CBS News.

New research from the Manhattan Institute estimates that insurance rates for young men will rise by 99 percent. Rates for younger women will rise between 55 percent to 62 percent, according to the right-leaning New York think tank.

The precise impact of the new health law is likely to vary markedly from state-to-state, however. That’s largely because different states have had different requirements for what had to be included in health insurance policies in the past. The Affordable Care Act, commonly known as Obamacare, overrides these rules and sets a federal overlay that demands a wide array of mandatory coverages. The Manhattan Institute has drawn up an interactive map that may help forecast the rise in cost for individuals.

Avik Roy of the Institute and Forbes magazine columnist notes…

“You hear all these excuses from the [Obama] administration — that people are exaggerating the effect of the law,” he says. “But real people are getting notices from their insurers now. My blog is flooded with comments from people saying that they just got a huge premium hike.”

Then there’s the “keep your policy promise…

Additionally, the promise that you could keep your old policy, if you liked it, has proved illusory. My insurer, Kaiser Permanente, informed me in a glossy booklet that “At midnight on December 31, we will discontinue your current plan because it will not meet the requirements of the Affordable Care Act.” My premium, the letter added, would go from $209 a month to $348, a 66.5 percent increase that will cost $1,668 annually.

The conclusion…

“This is a redistribution of wealth from the healthy to the sick, from the young to the old, from the people who have always had insurance to the uninsured,” Roy said.

A standard policy for wellness and catastrophic coverage for an unexpected, unavoidable ailment or accident could have been provided for a fraction of what Obamacare coverage costs, Roy added. “Obamacare forces insurers to offer products that carry all sorts of bells and whistles that most people don’t want but everyone will now need to pay for.”

Of couse the overriding question is: “Why don’t these people have insurance”? And there are a wide variety of answers….

  • Once they see even todays rates, many people decide their fortune telling crystal ball is very clear and they can see the future. Their vision of the future tells them there is no need for insurance. Translated: They don’t see the value.
  • There is certainly a group that can’t afford the premiums
  • The “pre-existing conditions” issue. Keep in mind almost all states have (or had) state risk pools to cover those who couldn’t qualify for private individual plans. Of course affordability could still be an issue.
  • There is a group of people who decide that using the ER is the best way to receive medical care and purposely don’t have insurance.
  • And finally the group that expects the government to provide it.

The solution for all of these people is apparently Obamacare which provides:

  • Extensive up front coverage, although deductibles can be fairly high
  • Guaranteed issue with no medical underwriting
  • The 10 “essential” health benefits
  • Subsidies for applicants with household incomes in the 133% – 400%  range of the Federal Poverty Level (FPL)
  • Does very little if anything at all to lower the cost of medical care
  • Has led to Hospitals buying private practices leading to higher costs of medical treatment. (For example, if your doctor prescribes an MRI, that send you to the hospital he’s associated with. Any idea what the most expensive facility to get an MRI or CT scan is? Yep, you guessed it.

Colorado’s Insurance Commissioner Braces For Bumps In The Road

Colorado’s Insurance Commissioner Braces For Bumps In The Road – Capsules – The KHN Blog.

Colorado, which is preparing for the Oct. 1 launch of its new online insurance marketplace, expects bumps in the road as residents start enrolling in new health coverage options created by the Affordable Care Act.

“We’re going to have 500,000 new customers,” said Marguerite Salazar, the state’s new insurance commissioner, during an Aug. 19 interview – her second day on the job. “Just think of how many possibilities there are for things to go wrong there.”

She has great faith in the staff she’s now leading at Colorado’s Division of Insurance, she said, but is realistic about the big changes that are coming.

“We know it’s not going to be just a completely smooth transition as people who have never had insurance buy it and try to figure out how to use it. … Also, insurance companies, which are not used to dealing with people who are previously uninsured, are going to find themselves having different issues with their customers. The Division of insurance is going to step up to make sure we can help both sides,” Salazar said.

Many of these previously uninsured are going to have inflated expectations about how the coverage works. The plans have deductible and copays. That translates into out of pocket expenses. The concept of both paying monthly premiums and then having to pay at the doctors office will not be well received.

Since the ads say that “real” coverage is available through the Colorado Exchange, whoops there I go again, I mean “Marketplace” the “common folk” are going to expect everything to be covered as a first dollar benefit.

Prediction: Chaos