There’s just so much hidden and buried in the Affordable Care Act (ACA) that it’s like trying the find all the goodies in an Easter egg hunt. ACEP News pointed out one hidden goodie, nicely illustrated in this article from Kaiser Health News:
Under the new health law, insurance companies must extend several new protections to patients who receive emergency care. One of the biggest guarantees: Patients who need emergency treatment will have their costs covered at the same rate, regardless of whether they are treated at “in-network” or “out-of-network” hospitals.
The law also bars health plans from requiring prior authorization for emergency services. And it mandates that plans follow the “prudent layperson” rule. For example, if a person goes to the ER with chest pain, but ends up being diagnosed with indigestion, the claim has to be covered because going to the hospital under those circumstances made sense.
The provisions go into effect for every health plan issued after Sept. 23 – six months after the law was enacted — that offers emergency coverage.
This is potentially quite significant. As with so many things, the devil is in the details, and the implementation is not yet actualized. Read more »
*This blog post was originally published at Movin' Meat*
The essence of the moral hazard experience through a nice neighborly conversation:
Neighbor: These allergies are killing me.
Happy: That’s terrible. I hope you feel better.
Neighbor: I tried Zyrtec but it wasn’t doing anything for me, so my doctor prescribed ’x.’ (inaudible drug name )
Happy: Does it start with an ‘x?’ (The drugs name is Xyzal.)
Neighbor: Yes, it does.
Happy: Oh, that drug (Xyzal) is nothing more than Zyrtec, which the company slightly changed the formula of and now they get to sell it as a patented medication at 10 times the price for the next 10 years.
Neighbor: Oh, I didn’t know that. But you’re right. It was $110.
Happy: Did it help you with your allergies?
Happy: I guess you just wasted $100.
Neighbor. I didn’t waste anything. My insurance company paid for it.
Happy: Actually, we all paid for it with higher premiums.
Neighbor: (Walks away.)
The doctor doesn’t care — he’s not paying for it. The patient doesn’t care — she’s not paying for it. But everyone complains that their insurance rates are out of control. It’s not insurance company profits that are making healthcare too expensive, it’s patients and doctors who don’t care.
Bundled care solves this problem because the doctor won’t prescribe a $110 medication and offer therapies with no proven benefit over less-expensive options.
*This blog post was originally published at The Happy Hospitalist*
Corporate Hall of Shame Award
With the United States undergoing the worst recession since the Great Depression and people everywhere worried about the cost of healthcare and how healthcare reform will affect them, isn’t it great to know that some special corporate executives got a 51 percent raise in 2009?
Angela Braly, president and CEO of health insurer WellPoint, got a nice bonus that raised her salary to $13.1 million from $8.7 million the year before. Read more »
*This blog post was originally published at EverythingHealth*
Physicians aren’t exempt from the struggles with personal health insurance coverage, affordability, denied coverage, etc.
When I finished my medical training and opened my practice 20 years ago, I had to buy individual coverage. All options included a rider that excluded coverage on my uterus and ovaries due to fibroid surgery during my training, so when I had my TAH & BSO a few years later, the entire cost came out of my pocket. Fortunately I knew how to ask for cost reductions, but still.
My husband and I are both small business individuals. I have always carried our health insurance under my name (office). Over the years we have gone to a health savings account with a high deductible to keep the cost reasonable. Fortunately, we have been mostly healthy. Last month we received a letter from Assurant Health. Read more »
*This blog post was originally published at Suture for a Living*
Gary Schwitzer links to a Business Week article that says health insurance is a very uncompetitive market. Schwitzer notes this hasn’t gotten much attention, and wonders if it is a reason why health insurance premiums keep going up.
It is – and it isn’t. As with most things in health care, there’s more to it than it seems.
Business Week and Schwitzer are right that the market for health insurance is not especially competitive. Most states have one or two dominant health insurers, and a number of other much smaller players. The smaller insurers are often at a big disadvantage. I blogged about this a couple of months ago.
But the question of the cost of health insurance is something that mostly affects small employers – the companies that employ some 55 million Americans.
As companies get bigger, they minimize their exposure to the insurance market. Mid-sized employers (between about 500 and 2,500 employees) buy so-called “stop loss” coverage. Under these plans, they self-insure for some of the risk, and buy coverage for unexpectedly high expenses. It’s sort of like a high deductible plan, except it’s for the company. That market is, in fact, highly competitive, and serves many of the 14 million Americans who work for companies of this size.
Really big companies – which employ 43 million Americans – don’t buy health insurance at all. They hire a health plan to administer their expenses, but have completely opted out of the health insurance market.
So is the uncompetitive health insurance market driving health care premium increases?
It doesn’t help, but there here are three other things that we don’t talk enough about that are driving these increases:
1. State coverage mandates. Each state requires that insurers who wish to sell there comply with a huge variety of coverage mandates. In fact, there are nearly 2,000 mandates, some of which add significant costs to health insurance. Adding new mandates is a regular activity of state governments, based on the political clout of patient groups, pharmaceutical companies and others. State governments have had an important role to play in driving premium increases.
2. Guarantee issue requirements. The other thing some states have done is outlaw medical underwriting. This means that if an uninsured person gets diagnosed with an illness, he can just go out and buy an insurance policy and, for the cost of an annual premium, get all the care he needs. He can even cancel the policy after he’s done being treated, and buy one again if he gets sick again. There may be valid public policy reasons to make health insurance guarantee-issue. But the reality is that insurers have to add in additional premium to account for the fact that their risk pool includes in it much more costly individuals than otherwise would. There is no free lunch.
3. Other cost-shifting. Studies show that tens of billions of dollars a year of uncompensated health care to the uninsured is provided by medical providers. They try to offset these costs by negotiating higher payment rates from private insurers. The same is true for government-funded programs. As these programs have attempted to control costs by simply paying less, providers have tried to recoup those reductions through higher fees to health plans. In each case, the ultimate cost is passed on to the consumer. Some groups think this kind of cost-shifting adds 5-10% to annual premium rates.
There are, of course, lots of other reasons for the rapidly increasing health insurance rates. These are few of the less discussed that we ought to talk about more.
*This blog post was originally published at See First Blog*