Under Obamacare, Will Out of Pocket Spending Be Higher?

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Not long ago, the Fear-Mongers were warning that under the Affordable Care Act, insurance premiums would spiral, causing “sticker shock.” Then the rates were published, and it turned out that, thanks to transparent markets in the exchanges, insurers had to compete on price, and premiums are lower than expected.  

But don’t worry, reform’s opponents haven’t run out of talking points. (I expect that long after most of the country has begun to enjoy the benefits of Obamacare, out-of-touch conservatives still will be muttering to themselves – rather like Japanese officers who held out in the jungles of the Philippines after WW II ended, unable to accept the fact that they had lost the war.)

In search of a new meme, they have latched onto the idea that, in the exchanges, customers will face “Staggering Out-of-Pocket Costs.” Sure, premiums may look low they say,, but wait until you try to use the policy and find yourself laying out $6,000. . Not long ago, Fox News summed up the argument: If the policy you bought in the individual market is cancelled because it doesn’t conform to the ACA’s rules, and you are forced to purchase coverage in an exchange, co-pays and deductibles will soon make you realize that the ACA is really “The Unaffordable Care Act.” 

Fox picked up the theme from a Bloomberg News story that went viral:“Obamacare Deductibles 26% Higher Make Cheap Rates a Risk,”  the Bloomberg headline screamed. As evidence, Bloomberg pointed to a survey of seven states, done by HealthPocket Inc., that compares the average deductible a consumer will face if he purchases a Bronze Plan in an Obamacare exchange to the average deductible in the private-sector market where 5 percent of Americans have been buying their own coverage. (These are the policies that are disappearing because they don’t meet the ACA’s standards.)

It turns out that the survey greatly exaggerates out-of-pocket spending in the Exchanges by focusing only on Bronze plan.  Meanwhile, the media ignores the most important number: what is the Maximum that an insurer can ask you to pay out of pocket?

The problem with many of the policies that are now being cancelled is not just that they were studded with holes  (some didn’t cover hospitalization; some didn’t cover chemo), but that in many states, a family could be asked to pay $30,000—or more—in co-pays and deductibles. . In a few states, there was no cap on the a patient’s liability.I This is how families lose their homes.

I’ve written about this here on healthinsurance.org. Read the entire post and, if you like, come back here to comment.

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Generic Drug Prices—All Over the Map

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Did you know that the price you pay for a generic drug can vary by as much as 447 percent (or $749) depending on where you shop? When Consumer Reports called 200 pharmacies around the country to get prices for five blockbuster drugs that had recently gone off patent their investigators found that a month’s supply of generic Lexapro (the antidepressant escitalopram) cost just $7 at Costco yet $119 at RiteAid. Generic Lipitor (the cholesterol-lowering atorvastatin), was $15 at the online FamilyMeds.com and $144 at Target.

Naomi Freundlich has written an outstanding post about the wild variations in pricing on ReformingHealth.org. There, where she reveals that even a breast cancer drug can fetch $450 at one store (CVS) and $14 at a “local, independent drug store.”

Freundlich concludes that such disparities are not a sign of “free market competition.”“Without price transparency there is no free market —only bargains for those with the means to research prices or those lucky enough to use a nearby pharmacy that offers lower prices on generic drugs. For the millions of other Americans—many uninsured or with large deductibles—who have never considered that prices on their generic medications could vary so dramatically, the so-called free market is a sham.”

I would add that just as the government regulates prices for other necessities –namely gas and electricity—we should join the rest of the developed world, and regulate drug prices

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A New Edition of Health Wonk Review—Does Barack Obama Remind You of Richard Nixon? . . . Will Most States Expand Medicaid? Do All Non-Profit Hospitals Deserve a Tax Exemption? Why Didn’t Anyone From J&J Go to Jail?

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Brad Wright has hosted the most recent edition of Health Wonk Review http://www.healthpolicyanalysis.com/2013/11/07/if-you-like-the-health-wonk-review-you-currently-have-you-can-keep-it/, a round-up of some of the best recent healthcare posts in the blogosphere. It’s an excellent read.

Wright begins with a post by John Goodman, published at the NCPOA Health Policy Blog, and titled “The Selling of Obamacare.” There, Goodman acknowledges, “As for the president himself, he is a complete enigma to me. I’ve never felt that I understood him.’  Goodman goes on to prove his point by comparing Barack Obama to Richard Nixon.

According to Goodman, when “the President suggested that most people will be completely unaffected by the new health law . . . he was lying.” After all millions who buy their own insurance in the individual market place are now getting cancellation notices. The President “looked directly into the TV camera and said something that was blatantly untrue . . . over and over and over and over again. You have to go all the way back to Richard Nixon to find something comparable.”

That’s one way of looking at things,” Wright observes, “but it’s certainly not the only way. Over at the Colorado Health Insurance Insider,/ Louise Norris counters with these words:

“Much has been said recently about how the ACA is causing a tidal wave of policy cancellations, and resulting in people losing coverage that they would prefer to keep.  The frustrating part about this – as has generally been the case with every big uproar about the ACA – is that we’re not really getting a complete picture of what’s going on, and it’s hard to see the reality through all the hype and hysteria.

I agree.

Here is the larger picture: in fact, most Americans will not be affected by Obamacare. The vast majority are insured by their employers. Medicare, Medicaid or the military. Of the 311 million people who now live in the U.S., just 15 million purchase their own insurance. They represent 5% of the population. And only some of the 5% who buy their own coverage are getting those cancellation letters,

We are talking about less than 3% of the population –far from “most people.” 

The folks I worry about most are those who should qualify for Medicaid under the Affordable Care Act, but live in states that have refused to expand the program. (Often they are not eligible for Medicaid simply because they don’t have children, no matter how poor they are.)

Wright offers hope by spotlighting Joe Paduda’s post on Managed Care Matters. There, he asks: “What’s happening with Medicaid Coverage?”

 
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Did You Know That 6 to 7 Million Americans Will Qualify for “Free” Health Insurance In the Exchanges? “Affordability May Not Be a Roadblock” to “Signing Up 7 Million” in 2014 –Credit Suisse

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If you know someone who is uninsured, or buys her own insurance in the individual market– and lives in Texas, North Carolina, Missouri, Oklahoma, Louisiana, Mississippi, or Alabama– chances are greater than 1 in 3 that under Obamacare she will qualify for health insurance that will cost her nothing. That’s right—her government tax credit will cover the entire premium.

It gets better. After shopping the state Exchanges during the first two weeks of October, McKinsey & Co, a leading global management consulting firm, discovered that people who are currently uninsured (or who buy their own insurance) in Florida, Wisconsin, Georgia, South Carolina, Tennessee, Virginia, Maine, Indiana, Kansas, Nebraska, Utah, Idaho, Montana or Alaska– stand a 1 in 4 chance of qualifying for a $0 policy.

How can that be? McKinsey explains that their income will makes them eligible for a government subsidy that will be larger than the policy’s premium.  Americans earning somewhere between $11,490 and 400% of the FPL ($48, 950 for an individual, $62,040 for a couple, $94,200 for a family) will receive subsidies. The lower your income, the larger it will be, and the more likely it is that your premium will be Zero .

This table from Credit Suisse reveals that in many states, uninsured Americans earning less than 175%  of the Federal Poverty Level (roughly $20,100 for an individual; $21,750 for a couple;  $34,170 for a family of three;  $41, 200 for a family of four) will be able to find zero-premium plans. Even if you earn somewhat more, it’s well worth the time it will take to check with your state marketplace.  You may discover that while coverage isn’t free, your subsidy will bring the cost down to as little as $20 a month.

Credit Suisse analyst Ralph Giacobbe agrees that roughly “6.5 million Americans … will be eligible for a $0 premium plan.” As a result, he believes that “affordability may not be a roadblock” to achieving the Congressional Budget Office projection that 7 million people will buy insurance in the exchanges in 2014

“Simply put, we don’t see any logical reason why anyone in this population wouldn’t take free healthcare coverage vs. remaining uninsured.”

The only question is this: How many people will hear about the free plans? Can we count on the media to inform the public? (Hat tip to the New York Times for publishing a front-page story about the McKinsey research.) Now, I would love to see the story on FOX – and in Forbes.

You can help spread the word. Do you know someone who is single, earns somewhere between $11, 490 and roughly $20,100 (175% of the FPL) and does not  have employer-sponsored insurance?  A graduate student?  Your cousin’s son?

Do you know   a family of three with income under $34,170 (175% of the FPL)  Perhaps the stay-at-home Mom down the street who just had a baby?

Good News for 20-Somethings and 30-Somethings

McKinsey reports that about half of those who will be able to purchase zero-premium insurance will be under 39 years old.

I originally published this story on  the Health Insurance Resource Center Blog. Click  there to  read the rest of the post—and find out more about the cap on the  co-pays and deductibles that someone with a $0 premium plan would pay.  

You can comment on the Health Insurance Resource Center Blog, or  you come back here to respond.

 

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What Happened When NYC’s Bellevue Hospital Found Itself (Literally) Underwater

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These days, if a patient is in trouble, it is not likely that one doctor will save him. Medicine has become a Team Sport. Wise doctors consult with other doctors, and when a patient is hospitalized they listen to the nurses who may well have seen and heard things that the doctor needs to know.

In an emergency, both nurses and physicians need to be able to collaborate with many other professionals, both inside and outside of the hospital. The tale below, which was originally published in Pulse-voices from the heart of medicine illustrates how when residents, nurses, paramedics, EMTs and an attending physicians at another hospitals work together,  lives can be saved..

In this remarkable story, no one pulls rank on anyone else. Hospitals don’t compete: they help each other. A disaster seems to have brought out the best in everyone.  Ideally, health care reform will mean that in the future care that is patient-centered—not hospital-centered or doctor-centered—will become the rule, and not the exception.

Let me add that what Lois Isaksen says about Bellevue is true—it is “the Statue of Liberty of hospitals—give me your tired, your poor, your weak, your uninsured.”


After the Flood: Remembering Sandy

By Lois Isaksen

 

We’d just received word: within hours, Hurricane Sandy would hit New York City. As an emergency-medicine resident at NYU/Bellevue Hospital Center, I was working as fast as I could–examining patients, suturing wounds, setting bones, running families to the hospital pharmacy before it closed.

The lights flickered once, but I did not take it as the omen it was.

~~~~

Hours after the storm had struck and the lights had gone out, I wandered about in the dark, searching by my cell-phone light for a cane.

The cane was for our cranky, homeless patient Bruce, the last to be discharged. He refused to stay anywhere but here, because he did not trust other doctors. He loved us, cursed us and threw things at us, all at the same time.

Meanwhile, my colleagues kept making “field trips” to the stairwell to check the water level. The flood was rising up the basement stairs, brackish and filled with floating debris.

Bellevue underwater? Impossible!

Bellevue is the country’s oldest public hospital. It is the Statue of Liberty of hospitals–”give me your tired, your poor, your weak, your uninsured…”  Bellevue has never closed its doors on anyone.

But the rising floodwaters had changed all that.

After Bruce got his cane, we received word that the ICU patients, on the tenth floor, were running out of time, power and oxygen reserves. With the elevators down, they would all have to be carried out and transferred elsewhere.
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The Truth About Obamacare’s Exchanges

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          Paul Krugman: “There are two remarkable things about this kind of doomsaying. One is that the doomsayers haven’t rethought their premises despite being wrong again and again — perhaps because the news media continue to treat them with immense respect.”

If you Google “Obamacare,” “Exchanges,” and “Disaster,” more than 20 million articles will pop up.

One month into a six-month enrollment process, the Media Pundits have spoken.

In truth, there are two tales to be told: one that is getting widespread coverage, and one that is not.

The stories that you are Not hearing come from folks like Michael Cadigan, the president of a New Mexico law firm who enrolled his firm’s four employees the day his state’s Exchange opened. “I thought it was going to be an administrative nightmare,” he confesses. Instead, he quickly found a policy “that will cost $1,000 less a month than I’m currently paying.” 

Or, Randall Bennett: His family will be paying more for the coverage he signed up for in Utah’s Exchange, but it will be significantly better than what they had before. This year, Bennett reports he has been paying a $420 monthly premium with a $2,000 annual deductible. Next year, he’ll be paying a $720 premium, but the deductible will be only $500 and his family will be getting maternity and dental coverage — something they couldn’t  get in the individual market before Obamacare came along.

As for the application process, Bennett says: “Before, trying to get insurance was so difficult that surprisingly even with all of the bugs, I still found [the Exchange website] simpler (In the past, people attempting to buy their own coverage in the individual market had to provide carriers with detail medical information, in order to prove that they were not suffering from a pre-existing condition. Under Obamacare, that isn’t necessary. Insurers can no longer use your medical records as an excuse to jack up your premiums.

“So for us this is a huge win,” Bennett concludes, “because we’re paying what we think is fair. And yes it’s more than before, but we actually have coverage that we like now.”

As of October 24, Cadigan and Bennett were just two of some 700,000 Americans who have filed applications in the Exchanges. The truth is that Obamacare’s websites are working– though not in all states.

Make no mistake: enrolling millions of American in Obamacare represents an enormous challenge. But we know that it can be done — because it is being done, and done well– in many states.

Unfortunately this is not a story that sells newspapers, especially when a program is as controversial as Obamacare.

State vs. Federal Exchanges

The marketplaces that are working best are in states that chose to set up their own Exchanges.

Originally, conservatives in Congress argued that states should be able to construct—and control– their own online sign-up sites. The Affordable Care Act offered them that opportunity.

But after thinking it over, 26 states (24 of them led by Republicans) refused. In these 26 states, it was left to the Feds to run “Healthcare.gov.”

Health IT pioneer Fred Trotter says he is “not at all surprised” by what happened next: Computers and human navigators have been overwhelmed by the sheer size of a sprawling project. Technical glitches have created virtual gridlock.

“When you get a tremendous amount of traffic going to any site on the internet a single computer can’t handle it,” Trotert told Ezra Klein in a recent interview. “You have to have more than one computer sharing a task. At modern sites like Amazon and Ebay . . . the main innovation they’ve pioneered is using lots of computers at the same time to answer one query.”

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Insurers “Had a Seat at the Table” when Reformers Hammered Out the ACA, but Things Didn’t Work Out Quite As They Expected . . .

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What This Means for Health Insurance Stocks–and Your Premiums

When Congress passed the Affordable Care Act (ACA) in 2010, liberal critics feared that the Obama administration had “cut a deal” with for-profit insurers.  Single-payer advocates,were particularly incensed when reformers invited the insurers’ lobbyists to the table to help hammer out the details of the legislation.  Some charged that, in return for the industry’s support, the administration agreed to a mandate that would force 30 million uninsured to buy private-sector insurance (or pay a penalty,) thus guaranteeing carriers millions of new customers, and billions in new revenues.

“It pays to be one of the few sellers of a product the government is going to force everyone to buy and provides subsidies to help them do it,” one Obamacare opponent sniped. 

Why Health Industry Insiders Were Offered Seats at the Table

At the time, I didn’t believe that the administration was selling out to the health care industry. Reform’s architects offered insurers, drug makers and device-makers seats at the negotiating table, in part because because they hoped to persuade them to help fund reform – and they succeeded.

Ultimately, the industry agreed to shell out over $100 billion in new fees and taxes to help fund the legislation. Those contributions are critical to financing subsidies for low-income and middle-income Americans.

The Obama administration also did nott want to watch re-runs of the “Harry & Louise” television ads that helped torpedo “HillaryCare.” Here too, they prevailed.  In a new series of 2009 ads, the make-believe TV couple were all smiles: “A little more cooperation, a little less politics, and we can get the job done this time,” Louise declares.

Still, some feared that the administration was giving away the store. “No wonder the cost of reform keeps going up and up and up,” said  Bill Moyers.  “Could it be” he asked, “that Harry and Louise are happier because, this time, they’re in on the deal?” 

              But Didn’t the  Administration Capitulate On the “Public Option”?

Skeptics on the Left also believed that  reformers agreed to quash the “public option”—a government insurance plan that would compete with private sector carriers.
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Health Wonk Review – Rich and Varied Offerings

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Joe Paduda has hosted the newest edition of Health Wonk Review, a bi-weekly roundup of some of the best healthcare posts in the blogosphere. You will find it at Joe’s blog,  Managed Care Matters.:

Here are just a few highlights:

  • Over at HealthBusinessBlog David E Williams  responds to a relative’s question : Why are Obamacare’s opponents so vehement?The bottom line, says David, is that “some opponents have whipped themselves into a lather over their revulsion to all things Obama and are living in an echo chamber where these views seem rational. It would be better for everyone if they went back to the Birther madness.”

    I agree. This is not about healthcare, and it is not about money. The Congressional Budget Office has told us that the ACA will not add to the deficit..  As David points out many of the ideas in the Affordable Care Act were originally Republican ideas. It is not a radical plan for health care reform; it is a moderate plan. And Obama himself is a moderate. Why then do they hate him with such a passion? I’ll leave it to you to answer that question.

  • In a post titled “We’re all in this together” Louise Norris confides that under the Affordable Care Act, her family’s insurance premiums will rise sharply. (They had a high deductible plan with low premiums. The ACA outlaws such high deductibles because in too many cases, insurers sell them to low-income and lower-middle income families who then cannot afford to use them. So they put off getting healthcare until they are very, very sick.)Meanwhile, Louise and her husband earn too much to qualify for premiums. But they’re not angry. “We support [reform]” she explains, “because something like this isn’t supposed to be all about us. In the case of healthcare reform, our higher premiums will help ensure that our friends and neighbors and fellow citizens have access to affordable health insurance.”  Joe writes: “Thanks for the reminder, Louise!” I agree wholeheartedly. (btw Louise is a health insurance broker.)

 

 

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Breast Cancer: Catching Up With Amy Berman, a Woman Who Chose Life Over Longevity

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HealthBeat readers may remember the two-part post that I wrote about Amy Berman back in October of 2011.

Part 1 began:  “When Amy Berman was diagnosed with Stage IV breast cancer a year ago, she made a courageous choice. Instead of fleeing death, she decided to pursue life.  Rejecting chemotherapy, radiation and surgery, she chose palliative care instead.” 

                                   Our War on Cancer

Berman knew that her stage IV cancer could not be cured. As a nurse, she also knew what women who undergo aggressive treatment endure—and that, despite that treatment, many will never escape the disease.

As Clifton Leaf points out in his new book The Truth in Small Doses, when people talk about the strides that we have has  made in our War On Cancer, they greatly exaggerate our success. When it comes to breast cancer, for example, 30 years after we launched the way, the number of women per 100,000 who die of breast cancer had actually grown from 28.4 per 100,000 in 1970 to 29.2 per 100,000 in 2000.

Over the next 10 years, the death rate fell to 26.2 per 100,000 women. But we know that this was mainly because we have gotten better at detecting breast cancer early, when the tumors are small and easily removed.  By contrast, most of the caustic drugs designed to defeat cancer have disappointed.

Of  “the myriad compounds that have set the research community abuzz, the ones that have already built up billions of sales,” Leaf observes, “there is little evidence” that “they have had more than a modest effect on long-term patient outcomes. Taken together, this multitude of drugs has been responsible for about a quarter of the reduction seen in the standardized death rate.”

Granted five-year-survival rates have improved. But this, too, is largely because we are diagnosing cancer earlier.  In the past, if the disease was detected when a woman was 65 and she died at 67, we would say she died of cancer. Today, if a tumor is detected when she is 62, and she lives a few months past 67, she has made it to the five-year mark and is counted as a “survivor.”  Thus Elizabeth Edwards’ name was added to the roll of victories–even though breast cancer killed her.

By measuring our progress in terms of five-year-survival rates we “transform nearly six hundred thousand annual deaths into a victory-in progress,” Leaf notes. This allows us to hide from what he calls “an unshakable reality: the rising toll from cancer is plain to see, but this method of counting is so firmly established and so commonly used by health care researchers and policymakers, that few remember anymore that it’s a statistical sleight of hand.”

Even If She Could Not Be Cured, Why Didn’t Berman Try to Buy More Time?

After she was diagnosed, Berman secured an appointment a pre-eminent researcher/clinician in the field of inflammatory breast cancer.

He was clear about what she should do: Chemo, radiation and a mastectomy, followed by more chemo. This he told her, is “what I recommend for all of my patients.”

In part 2 of my 2011 post, I quoted her memory of that conversation:

“I pressed him, ‘Why do the mastectomy?’ I asked, puzzled. ‘The cancer has already spread to my spine. You can’t remove it.’

“His brow furrowed: ‘Well, you don’t want to look at the cancer, do you?’

“He made it sound like cosmetic surgery,” she recalled. “Considering that a total mastectomy includes months of pain and rehabilitation, I thought that worrying about the view was secondary.”

She continued to press him.

“But what about the side effects of radiation?’ I asked. ‘I’ve heard they are terrible’.

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