Pages
Stay In Touch
More
Thanks for dropping by! Feel free to join the discussion by leaving comments.
Follow Us
A recent survey conducted by the National Business Group on Health showed that more and more employers are passing the increasing health costs to their workers. The organization, which represents big companies, said more than half of the employers it interviewed plan to make employees pay for a greater share of their healthcare costs.
Companies are moving away from co-pays, wherein workers pay a set amount for healthcare services and the plan pays for the balance. In its place, the employers are charging workers a portion of the full amount called co-insurance. It creates greater awareness among the consumers of the total cost of their healthcare. The companies believe that this awareness was not felt in co-pays.
According to Helen Darling, the president and CEO of the National Business Group on Health, the shift from co-pay to co-insurance is a move toward “a more aggressive consumerist system.”
The same survey showed that employer healthcare premiums may probably increase by 7.2 percent in 2012.
“Employers are facing a multitude of challenges posed by rising health care costs, the weak economy and the financial and administrative impact of complying with the new health reform law,” added Helen Darling. “As a result, employers are being much more aggressive in their use of cost sharing techniques.”
However, companies are now looking for ways to defray health costs increases while keeping their employees satisfied. One initiative is offering employee wellness programs, which have been proven to decrease the companies’ healthcare expenses.
At a time when health care insurance providers are posting comfortable profits, it hardly seems appropriate – or justifiable – for them to increase their premiums; and yet, they continue to do so.
On Thursday, Department of Health and Human Services Secretary Kathleen Sebelius issued a rule on procedures on conducting reviews of premiums, by federal and state insurance experts. A feature on The New York Times shared the following statement from Secretary Sebelius: “Health insurance companies have recently reported some of their highest profits in years and are holding record reserves… Insurers are seeing lower medical costs as people put off care and treatment in a recovering economy, but many insurance companies continue to raise their rates. Often, these increases come without any explanation or justification.”
The new health care law called for annual reviews of what was termed as “unreasonable increases in premiums.” Federal and state officials are expected to review premium rates in the individual and small-group insurance markets, in order to ensure that consumers are getting value for their money.
In December, federal health officials suggested placing a ten percent threshold, but insurers argued that the threshold would brand most rate increases as unreasonable. This argument, however, was rejected by the rules issued on Thursday, which went ahead and set the threshold at 10 percent.
Based on the new rule, a rate increase that is found to be excessive, unjustified, and “unfairly discriminatory,” will be tagged as unreasonable. An excessive rate increase is one where the increase is unreasonably high when compared against the benefits that the policy is able to provide.
Ethan Rome, executive director of Health Care for America Now, welcomed the rule, saying: “The days of insurance companies running roughshod over consumers and jacking up rates whenever they want are over.”
Many Americans who are facing challenges brought about by these trying economic times have undoubtedly felt a “snowball” effect of sorts. When they lose their jobs, they lose more than just a regular source of income to cover their – and their families’ – daily needs; they also lose benefits, not the least of which is health care coverage.
Each state operates a Medicaid program that ensures that every American will still have access to health care, even if their ability to pay for it changes. Medicaid is the general term used to refer to the program, but its name varies with each state; in California, for instance, it is called Medi-Cal, while Tennessee calls it TennCare.
Cindy Mann, Director of the Center for Medicaid, CHIP and Survey & Certification, shared through a post on HealthCare.gov that while it is undeniable that Medicaid programs have played an important role in providing vulnerable Americans with access to health care, it has been a struggle for states to meet budget challenges. States need to find a way to balance out reducing Medicaid spending without sacrificing their ability to meet the health care needs of their residents.
Department of Health and Human Services Secretary Kathleen Sebelius sent out a letter to governors on February 3, where she laid out tools and resources that will help states lower costs while providing quality care. Among the things discussed by Secretary Sebelius are the following:
• Changing certain benefits for people with Medicaid
• Better managing care for the sickest patients
• Purchasing prescription drugs more efficiently
• Reducing waste, fraud and abuse
The health care reform law has been met with a lot of debates and criticisms since the time it was conceived. Many have been questioning whether it could really improve America’s health care system and how long its effects can be felt. What some people might not know is that in the years to come, the health care reform law can bring so much more into the treatments that American patients receive.
A provision has been included in the law which will allow the creation of a research institute that will try to find the cure to diseases that have long plagued not only Americans, but the whole human race. The law will set aside $500 million for the new non-profit organization which will be like a “Patient-Centered Outcome Research Institute” that will act as the country’s guiding force for comparative effectiveness research. It works by comparing different measures to cure health problems to be able to find the most effective way to cure or prevent diseases.
The objective of the whole idea is to be able to save money by finding the best cure at the most reasonable expense for patients. It is also believed that comparative research will determine whether cheaper priced medicine or drugs, medical devices, and even surgical techniques can still be as good as their expensive counterparts.
The other argument is that this centralized organization might be a cause for rationing of care – particularly those pricey treatments. To prevent this in the future, the law has added that new developments and findings from the center will become mandates for treatment of diseases. They cannot be used as reasons to deny coverage for specific treatments.
As proposed, the non-profit institute will be under a 19-member board of directors which will all be appointed by the US Comptroller General. The center will run six months from the time it was approved.
According to the Congressional Budget Office, health care reform will be spending $940 billion in the next ten years. Where exactly will that amount come from? There will be new taxes. Fees will be implemented for industries involved in health care. There will be budget cuts in Medicare. That’s how the government plans to raise the money.
Let’s start with the new taxes. In the coming years, individuals making more than $200,000 a year, or married couples making more than $250,000 a year, will be paying more for Medicare. This can be accounted for by the increase in Medicare Part A (hospital insurance) tax rate from 0.9% to 2.35%. There is also a new provision that puts a 3.8% tax on additional unearned income, such as dividends or interests on investments, for those in the same compensation bracket. These taxes will be implemented by January 1, 2013 and this could bring in $210 billion from 2013 to 2019.
After talks involving White House officials and the health care sector representatives, some applicable fees were set to help raise funds. Drug manufacturers will be taking $16 billion from their budget between the years 2011 and 2019 as payment to the government. Manufacturers of medical devices will be slapped with a 2.9% excise tax on sales they make beginning on January 1, 2013. Over the same period from 2011 to 2019, health insurers will shell out $47 billion for the government.
Finally, payment cuts amounting to $40 billion in the next ten years for home health care on Medicare together with payment cuts for some hospitals would bring in an additional $22 billion by 2019.
If there’s Medicare, there’s also Medicaid on its side. Medicaid is Medicare’s helping tool for those with limited resources and incomes. It is a joint federal and state program which usually covers other benefits like personal care and doctor visits that aren’t offered under Medicare. You also get extra help in paying for Medicare prescription drug coverage if you become eligible for Medicaid. Applying and knowing your eligibility for this program, though, varies from one state to another so it is would be best to call your state for details and clarifications.
Aside from Medicaid, Medicare has also introduced four types of Saving programs to help ease the burden of drug and medical costs:
a. Qualified Medicare Beneficiary Program – Requirement is for you to be qualified for Part A (Hospital Insurance) even if you’re not enrolled.
b. Specified Low-Income Medicare Beneficiary Program – If you are working with slightly higher income than the assigned for this program, you can still be eligible but you have to qualify for Program A even if not enrolled.
c. Qualified Individual Program – This is for those who qualify for Part A and ready to apply every year. It’s a first come- first served basis with priority given to those who have received benefits the last year
d. Qualified Disabled and Working Individuals – This program helps pay for Part A if you are a disabled person under age 65 and not getting any medical benefits from your state. You should also be within the income and resources limits set by your state. If you resumed working and then lost your premium free Medicare Part A afterwards, you also belong in this program.
An added bonus to these programs is the Extra Help which helps pay for your Medicare drug prescription coverage. Under this feature, you do not pay anything for Medicare drug plan premium and deductibles and get discounted prices for your drug prescriptions. Applying for Extra Help can be done online by visiting the Social Security Website.
Human Services Secretary Kathleen Sebelius sent a letter to America’s Health Insurance Plans (AHIP), the national association of health insurers. The letter was addressed to Karen Ignagni, the President and CEO of AHIP.
Secretary Sebelius informed Ms. Ignagni that the HHS learned that there are several insurance carriers that sent letters to their enrollees, informing them that the premium increases imposed by the carriers for 2011 is because of the new health care reform law.
The Secretary gave the following stern warning: “the Administration, in partnership with states, will not tolerate unjustified rate hikes in the name of consumer protections.”
The letter, which was sent to the AHIP on Thursday, went on to say: “Simply stated, we will not stand idly by as insurers blame their premium hikes and increased profits on the requirement that they provide consumers with basic protections.”
Secretary Sebelius reminded the AHIP that the Affordable Care Act provides consumer protections and out of pocket savings that should minimize impact on premiums for most Americans. Secretary Sebelius’ letter was sent out in the wake of the release of several stories that indicated that health insurance companies were raising premium rates because of the requirements of the new health care reform law.
She also reminded health insurers that the provisions in the new law had the full support of AHIP and its member companies. Secretary Sebelius wrote Ms. Ignagni: “I urge you to inform your members that there will be zero tolerance for this type of misinformation and unjustified rate increases.”
Don Berwick, M.D., the Administrator of the Centers for Medicare and Medicaid Services, shared a milestone in one of the key steps in the implementation of the new health care reform law.
The $250 rebate checks are the first step towards closing the coverage gap – commonly known as the “donut hole” – in the prescription drug coverage of Medicare. Berwick wrote about how those who hit the coverage gap sometimes change their medication, or skip them altogether, because they cannot afford their medication. Realizing that this is something that may be dangerous and is therefore unacceptable, the Affordable Care Act aims to do away with this gap altogether.
With more than a million rebate checks sent out, it is the hope of the administration that the checks will be able to help the financial burden associated with entering the donut hole – during which time beneficiaries are expected to spend for the full amount of their medication. The checks are sent out, tax-free, without the need to request for them. The checks are mailed once a Medicare beneficiary enters the coverage gap.
Health care reform, however, remains to be a controversial issue. House Republicans opened a week-long focus on their effort to repeal health care reform, on the same day that the announcement regarding the milestone came out. Republicans counter that health care reform will increase, instead of lower, health care costs in the long run, and that it was unconstitutional to force Americans to buy health insurance.
An announcement from federal health officials on Wednesday revealed a coming increase in premiums for Medicare prescription drug plans, according to a report by the Associated Press.
The increase will start next year, with the average monthly premium charged by Medicare drug plans for standard coverage rising to $30. Medicare administrator Don Berwick shared that this represents an increase of $1 over 2010, roughly 3 percent. Consumer advocates warn seniors, however, to check the plans that they have regarding how much of an increase their particular plan will have, so that they will not be surprised if the increase for their plan is different from the average amount that was announced.
Tricia Neuman of the Kaiser Family Foundation shared: “It’s always good news when premiums don’t go up by leaps and bounds, but seniors in some of the most popular plans may see higher premiums… They need to check their plans so they don’t have unpleasant surprises.”
The increase, according to officials, will be accompanied by an improvement in benefits, especially among seniors who are saddled with high prescription drug costs. This is being attributed to the fact that the move to close the Part D coverage gap, or the “doughnut hole,” will start next year. This year, Medicare beneficiaries who reached the doughnut hole received a one-time $250 rebate check. Next year, those who reach the coverage gap will get a 50 percent discount on brand name medicines and a 7 percent discount on generics. These discounts will increase annually until the gap is completely closed, estimated to occur in 2020.
Department of Health and Human Services Secretary Kathleen Sebelius wrote a HealthCare Note posted on HealthCare.gov, focusing on efforts towards ensuring that premium dollars are apportioned by insurers more towards providing and improving the quality of health care, as opposed to administrative expenses.
Secretary Sebelius shared that the National Association of Insurance Commissioners (NAIC) has approved on Tuesday an introductory set of recommendations regarding the medical loss ratio of an insurance provider, which is part of the provisions of the new health care reform law.
The medical loss ratio provision, according to Secretary Sebelius, is a critical tool that can be used by federal and state regulators to keep insurance rates in check, as well as to protect the rights of consumers. The policy will also serve as way to focus attention on insurers that spend more on overhead and administrative expenses that do not contribute to the improvement of the quality of health care, but serve to drive up costs. Examples of these overhead expenses are marketing, medical underwriting, executive salaries, and bonuses.
Based on insurance reforms, health care providers should devote at least 85 percent of premiums on care and quality for plans sold in the large group market. Plans sold in the small group and individual markets should spend at least 80 percent of premiums on health care.
Secretary Sebelius closed her post by saying: “Working in partnership with NAIC, consumers, insurers, policymakers, and others, I am confident the medical loss ratio policy will be implemented responsibly, carefully, and swiftly… We all must continue to keep our focus on our shared goal – improved access and affordability for American consumers to high-quality health care.”
