Category: Health Alerts

Will You Ever Understand Your Medical Bill?

stress(A version of this Health Alert was published by Forbes.)

It is hard to exaggerate how painful the medical billing process is for patients. Steven Brill, an entrepreneurial lawyer turned journalist, became one of the most famous critics of American health care when Time magazine published a long article by him in 2013. It was a wide ranging criticism of pretty much everything in U.S. health care, which grabs and keeps our attention because it uses the absurd hospital bill as the fulcrum for his case:

The first of the 344 lines printed out across eight pages of his hospital bill — filled with indecipherable numerical codes and acronyms — seemed innocuous. But it set the tone for all that followed. It read, “1 ACETAMINOPHE TABS 325 MG.” The charge was only $1.50, but it was for a generic version of a Tylenol pill. You can buy 100 of them on Amazon for $1.49 even without a hospital’s purchasing power. Dozens of midpriced items were embedded with similarly aggressive markups, like $283.00 for a “CHEST, PA AND LAT 71020.” That’s a simple chest X-ray, for which MD Anderson is routinely paid $20.44 when it treats a patient on Medicare, the government health care program for the elderly.

(Steve Brill, “Bitter Pill: Why Medical Bills Are Killing Us,” Time, February 20, 2013)

It is hard not to get carried away on a wave of outrage when reading stories of patients faced with ridiculous bills, which (even if they can understand them) they might never be prepared to pay. A new crop of entrepreneurs is hoping to solve this problem.

A Health Reform Agenda to Replace Obamacare

The most pressing goal of health reformers in Congress should be to replace all the costly provisions in Obamacare with the consumer-friendly health plans Americans prefer. In the process, reformers must change the way medical care is financed so that consumers have control over their health care dollars, as well as the means to pay for medical care over their lifetimes. As a starting point, Congress should repeal the individual and employer mandates and taxes of the Patient Protection and Affordable Care Act (ACA).

Pittsburgh Insurer Highmark Swings for the Fences on Obamacare Bailout

1(A version of this Health Alert was published by Forbes.)

Health insurers have not had much to cheer about lately, when it comes to Obamacare. They have been losing money on exchanges, and there is little hope that will change. So, a large health plan in Pittsburgh has asked judges to give it Obamacare money the Administration promised, but Congress declined to appropriate.

As reported by Wes Venteicher and Brian Bowling of the Pittsburgh Tribune-Review, Highmark lost $260 million on Obamacare exchanges in 2014, and claims it is owed $223 million by taxpayers. Unfortunately, it received only about $27 million. And things are getting worse. To date, Highmark has lost $773 million on Obamacare exchanges.

It is not that Highmark has been singled out by anybody. On the contrary, the Administration announced last year it was only going to pay about 13 cents on the dollar for all insurers’ exchange losses, via Obamacare’s “risk corridors.” This was not the Administration’s preferred course of action. The Administration wanted to pay insurers one hundred cents on the dollar, which it had promised them.

DC Federal District Court: Obamacare’s Unappropriated Subsidies Illegal

The Affordable Care Act (ACA) requires all U.S. residents to enroll in health coverage. Americans with incomes too low to afford coverage qualify for premium subsidies to help them with the cost. The ACA also has provisions where Americans earning near the poverty level also receive cost sharing reductions to assist with out-of-pocket costs below their deductibles. That may be about to change; DC Federal District Court ruled the cost sharing reductions are unconstitutional.

Taxpayers Increasingly Victimized in Obamacare Exchanges

-18(A version of this Health Alert was published by The Hill.)

Recent news has renewed attention on Obamacare’s health insurance exchanges (misleadingly called “marketplaces” by the Administration).

America’s largest health insurer, UnitedHealth Group, will all but withdraw from the Obamacare exchange business. Having sold plans in 34 states this year, the company will participate in only a “handful” next year. With 795,000 beneficiaries, UnitedHealth Group indicates it will lose $650 million in the exchanges this year – over $800 per enrollee.

Other insurers are sticking it out. Notably, Anthem, another leading for-profit insurer, which has nearly one million Obamacare enrollees, is positive about its future in the exchanges. In its latest quarterly earnings call, Anthem anticipated a profit of three to five percent. However, that is not likely to happen until 2017. Further, the insurer said it needs the federal government to take unspecified actions to “stabilize” the market. Anthem’s optimism is surprising.

Common Sense Solution to Opioid Abuse is Being Ignore

With opioid addiction on the rise, Congress has taken up the issue of drug abuse. This week the U.S. House will likely approve more than $100 million in funds for substance abuse treatment and training for emergency medical technicians and emergency room personnel. Many Democrats in Congress are requesting even more — much more. Some Democrats think an additional $600 million is needed to combat drug abuse and slow the epidemic of drug overdoses.

Health Insurers Shift More Costs To Taxpayers In Obamacare Exchanges

money-burden(A version of this Health Alert was published by Forbes.)

America’s health insurers are undergoing a crisis of consensus with respect to their engagement with Obamacare. Between 2010 (when the Affordable Care Act was signed), and 2014 (the first year of taxpayer-subsidized coverage in the health insurance exchanges), it was widely understood that health insurers had scored a big win. After all, which other industry could get the federal government to pass a law mandating individuals purchase its product or service as a condition of residency in the United States?

This view was reflected in the stock market’s valuation of health insurers, which outperformed the S&P 500 Index. Since then, of course, we have learned that insurers have been losing money on Obamacare’s exchanges. Further, they have lost the sympathetic ear of the Congressional Republican majority, which has prevented insurers extracting as much taxpayer funding as they had expected from the Treasury. We should not expect insurers which continue to participate in exchanges to just keep losing money. In fact, the evidence indicates some insurers have quickly learned how to shift more costs onto taxpayers, despite failing to win an explicit political commitment to do so.

The Obamacare Chickens have Come Home to Roost for Former Head of CMS

The second most powerful women in health care, Marilyn Tavenner, helped implement Obamacare and was one of its biggest defenders. During the rollout of the Affordable Care Act (ACA) in late 2013 and early 2014, Tavenner ran the Centers for Medicare and Medicaid Services. She now heads America’s Health Insurance Plans, the trade association for health insurers. Now that she’s no longer in government, she has to live with the mess she helped create. In a recent interview, she admits it’s not looking too good. In an interview with Morning Consult she predicted premiums will rise yet again in 2017.

The Obamacare Health Care Gold Rush is Bankrupting America

Our health care system is going to implode under its own weight. National Health Expenditures are approaching 20 percent of gross domestic product — a figure that is expected to about double over the next half century. Obamacare didn’t start the process, but it’s expediting the job started when Kaiser Shipyards requested permission during World War II to offer health coverage as a fringe benefit. This was further exacerbated in 1965 by the poorly-designed entitlement programs Medicare and Medicaid that are now draining the Treasury.

Health Reform Through Tax Credits

health-care-costs(A version of this Health Alert was published by RealClearPolicy.)

Lost in the blur of the presidential campaign, the evidence indicates the Republican Obamacare replacement plan will include refundable tax credits. In its purest form, this means each person with employer-sponsored benefits, an individual health plan, or dependent on a welfare program like Medicaid or the Children’s Health Insurance Plan (CHIP) will start with a clean slate and a fixed sum of taxpayer-funded money to choose health care of his choice. The Republican proposal will not likely go that far, but it will go a long way to introducing fairness in the tax treatment of health benefits, which is currently broken.