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When Anne Soloviev, a retiree who lives in Washington, D.C., received a prescription to treat toenail fungus, she never thought to ask how much it cost. As it turned out, she was prescribed a topical medication costing almost $1,500. (Cheryl Diaz Meyer for KHN)
During Anne Soloviev’s semiannual visit to Braun Dermatology & Skin Cancer Center in Washington, D.C., in January, the physician assistant diagnosed fungus in two of her toenails. Soloviev is vigilant about getting skin checks, since she is at heightened risk for skin cancer, but she hadn’t complained about her toenails or even noticed a problem.
The assistant noted some unusual discoloration where the nail meets the skin. “They took a toenail clipping and said, yeah, you have a fungus,” Soloviev recalled.
So the PA called a prescription into a specialty pharmacy with mail-order services, which would send medication to Soloviev’s Capitol Hill home.
It seemed like an easy fix to an inconsequential health issue. “I did not ask how much it cost — it never crossed my mind, ever,” said Soloviev, a former French teacher, who still works part time.
Then the bill came.
Patient: Anne Soloviev, 77 on March 18, of Washington, D.C.
The Bill: $1,496.09 for Kerydin, a topical medication that treats toenail fungus. Originally produced by Anacor Pharmaceuticals Inc., it is now a product of Sandoz, a Novartis division.
Service Provider: My Express Care Pharmacy, plus Braun Dermatology & Skin Cancer Center
The Medical Treatment: Shortly after the physician assistant phoned in the prescription to My Express Care Pharmacy, in Maryland, the pharmacy contacted Soloviev for her health insurance information.
Soloviev is covered by Medicare, Parts A and B, and has supplemental insurance through her late husband’s government health benefits that covers prescription drugs. She also has a health reimbursement account (HRA), which contains almost $1,500 pretax dollars each year to pay for uncovered medical expenses. She typically uses that pot of money to cover copays for the other medicines she takes regularly.
Kerydin, the toenail medication, arrived by overnight mail, and an automatic refill came a few weeks later. She began swabbing it on the two toenails, as directed, having been told it would take about 11 months to treat the fungus.
She thought little of it.
But when Soloviev went to her local CVS to pick up another medication — a statin that is usually paid for by her HRA — she discovered her reserve was empty.
Anne Soloviev’s prescription for Kerydin, at $1,496.09 per monthly refill, wiped out her entire health reimbursement account for the year. (Courtesy of Anne Soloviev)
Unbeknownst to her, Kerydin, which it turned out costs nearly $1,500 per monthly refill, had wiped out her entire reimbursement account.
What Gives: We’re talking about mild toenail fungus. The price tag is difficult to rationalize, experts said.
“Reality check — this is $1,500 for a medicine to treat [it],” said Wendy Epstein, an associate law professor at DePaul University, who researches health care law. “That’s quite a chunk of change.”
Leslie Pott, Sandoz’s vice president of communications, explained that Kerydin is patent-protected and priced “at parity” with its one market competitor, Jublia. She also pointed out that to secure a place on an insurer’s list of approved drugs — its formulary — the drugmaker often had to offer substantial discounts to insurers and various middlemen. “We have no visibility into the extent to which these discounts are passed onto patients or payers,” she wrote in an email.
When Anne Soloviev visited the dermatologist in January, the physician assistant diagnosed fungus in two of her toenails and gave her a prescription for a topical medication. “I did not ask how much it cost — it never crossed my mind, ever,” Soloviev said. (Cheryl Diaz Meyer for KHN)
There are many prescription treatment options for toenail fungus — both older medicines in pill form and newer topical treatments such as Kerydin, said Dr. Shari Lipner, an assistant professor at Weill Cornell Medicine and director of its nail unit. The patient in this case would have been a candidate for “quite a few” of them.
Patients are likely to pay less for the pills, for which a course of treatment lasts three months, compared with the newer topical treatments, she said, adding that they also seem to have greater efficacy.
In its application for Food and Drug Administration approval granted in 2014, Anacor Pharmaceuticals highlighted that a yearlong treatment of Kerydin completely cured toe fungus in 6.5 percent of patients for one trial, and 9.1 percent of patients in another.
Over-the-counter treatments are also available, but there’s not much data on them, Lipner said.
Xavier Davis, Braun Dermatology & Skin Cancer Center’s practice manager, said a drug’s price tag simply isn’t a factor when prescribers recommend a course of treatment.
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“When our providers are treating patients, we’re not treating them based on what the cost’s going to be. We look for what’s the best care for the patient,” Davis said. “If the patient calls and says that’s too expensive, then we’ll look for alternatives.”
Kavita Patel, a nonresident fellow at the Brookings Institution and a practicing physician, said this process contributes to the problem. “My sister’s a dermatologist, and she’ll do the same thing — she’ll prescribe and she doesn’t know. You’re getting at many layers of how [messed] up the system is, starting with the doctor doesn’t know.”
And patients often don’t see the actual price. Or they see it too late, when they’re at the pharmacy counter picking up medicines they have been told they need or in a roundabout way discover unexpected payouts.
In January, Soloviev’s insurance plan was billed the full price of Kerydin. Of that, $1,439.57 came from her HRA. The difference, $56.52, was covered by a patient-assistance program from the drug manufacturer, explained Jonathan Lee, a pharmacist for My Express Care.
In February, when Soloviev’s prescription was refilled, her plan was again billed the full drug price. But she didn’t know about that either. A manufacturer coupon was applied to cover what remained of her insurer’s $2,000 annual deductible and the $60 copay. Her insurance then kicked in to pay the difference.
Such patient-assistance programs and coupons are meant to insulate patients from cost sharing, so that they don’t feel a pinch from a drug’s price. But in this case, the drugmaker’s patient-assistance program apparently took effect only once Soloviev’s HRA has been wiped out, allowing the manufacturer to maximize revenue from both patient and insurer.
DePaul University’s Epstein said it took her “15 minutes to figure out what was going on” here. And, unlike the average patient, she studies this issue for a living.
Lee, the pharmacist, said even he didn’t realize that money could be withdrawn directly from a patient’s HRA without her knowledge, and he’s been in the business for the better part of a decade.
None of that is consolation for Soloviev, who said: “I just find it is outrageous for a fungal medicine to cost $1,400, to be prescribed for 11 months, and for neither the PA nor the pharmacy to warn you,” Soloviev said.
Resolution: Though she has told My Express Care not to renew the prescription, Soloviev’s HRA is depleted. For the rest of the year, she’ll have to pay out-of-pocket costs for any other medications, an expense she hadn’t planned on.
The Takeaway: For even the most informed of patients, getting a new prescription can mean walking through a financial minefield. And Soloviev hit a number of booby traps.
Bottom line, experts say, medical professionals should make the patient aware if they prescribe a high-priced medicine and explain why it’s beneficial.
Patients should play defense and ask their physicians about the cost of every new prescription. They should ask again at the pharmacy — even if that means calling a mail-order pharmacy. Because costs can vary depending on each patient’s coverage, they may need to contact their insurance carrier or the PBM that handles their medicine claims.
And if the cost is extremely high, they should ask their doctor about generic or over-the-counter alternatives.
“This is an important component of the decision a patient’s going to make,” Epstein said. “If it’s toenail fungus and not life-or-death, it strikes me … an individual might want to have relevant data.”
This is a monthly feature from Kaiser Health News and NPR that will dissect and explain realmedical bills in order to shed light on U.S. health care prices and to help patients learn how to be more active in managing costs. Do you have a medical bill that you’d like us to see and scrutinize? Submit it here and tell us the story behind it.
As a health economist, Karen Van Nuys had heard that it’s sometimes cheaper to pay cash at the pharmacy counter than to put down your insurance card and pay a copay.
So one day, she asked her pharmacist how much her prescription would cost if she didn’t use her health coverage and paid cash.
“And sure enough, it was [several dollars] below my copay,” Van Nuys said.
Van Nuys and her colleagues at the University of Southern California Schaeffer Center for Health Policy & Economics decided to launch a first-of-its-kind study to see how often this happens. They found that customers would be better off paying cash 23 percent of the time and would save an average of $7.69 using cash for those transactions.
The USC study, released Tuesday, analyzed the prices that 1.6 million people paid for 9.5 million prescriptions in the first half of 2013, based on data from Optum Clinformatics, an organization that sells anonymized claims data for analysis, and National Average Retail Price (NARP) data, which contained drug prices paid by insurers and was based on a national survey of pharmacists.
It showed that the overpayments totaled $135 million during that six-month period.
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The practice of charging a copay that is higher than the full cost of a drug is called a “clawback” because the middlemen that handle drug claims for insurance companies essentially “claw back” the extra dollars from the pharmacy. (The middlemen, known as pharmacy benefits managers, include Express Scripts, CVS Caremark and OptumRx.)
Here’s how it works: After taking your insurance card, your pharmacist says you owe a $10 copay, which you pay, assuming that the drug costs more than $10 and your insurance is covering the rest. But unbeknownst to you, the drug actually cost only $7, and the PBM claws back the extra $3. Had you paid out-of-pocket, you would have gotten a better deal.
Until Van Nuys and her colleagues went digging, no one knew how common the practice was.
“Clearly this is going on [at a] much higher frequency than most people imagine,” said Geoffrey Joyce, who directs health policy at the center and was a coauthor on the study. “You’re penalizing people for having insurance.”
(Story continues below.)
The findings cover only a small portion of the population over a short time span, so they might not be perfectly reflective of what’s going on nationally, Joyce said. But they debunk the perception that clawbacks are rare.
Steve Hoffart, who owns Magnolia Pharmacy, an independent compounding and retail pharmacy in Magnolia, Texas, said clawbacks are still happening — even though Texas legislators passed a law to prohibit them. Hoffart said he collects and sends $1,100 or $1,200 a month in clawbacks to the PBMs.
The National Community Pharmacists Association, of which Hoffart is a member, said the new research “is illustrative of just one of many ways that PBMs’ lack of transparency disadvantages pharmacy patients. … If you want to reduce prescription drug costs, policymakers must demand greater transparency from PBMs.”
The trade group for the PBMs, the Pharmaceutical Care Management Association, said that overall the PBMs bring down the total cost of prescription drugs, lowering costs for patients and insurers.
“We support the patient paying the lowest price available at the pharmacy counter,” the group said in a statement.
Pharmacy Benefit Managers: Companies In The Thick Of Prescription Drug Pricing - YouTube
The USC researchers found that brand-name drugs had the highest clawbacks — an average overpayment of $13.46 per prescription. Clawbacks on generic drugs were $7.32, on average. The drug with the most frequent clawbacks was zolpidem tartrate — generic Ambien, a drug used to treat insomnia.
Although the research team was able to obtain copay data, it didn’t have data on what the PBMs paid for the drugs, said Van Nuys, the lead study author and executive director of the Schaeffer Center’s life sciences innovation project. As a stand-in, the reserachers used the National Average Retail Price data, which existed for a short period in 2013. They included clawbacks only of $2 or more.
Sometimes, the clawbacks are stunning. The day before Hoffart testified in favor of Texas’s new anti-clawback law, a patient was charged a $42.60 copay for a generic version of simvastatin, a statin drug. The patient could have paid $18.59 out-of-pocket, and the clawback was $39.64, Hoffart said, adding that the clawback made him lose money on the transaction.
Patients often aren’t told they could pay less without using insurance unless they ask.
“If they don’t ask, they’re not going to get the information they need,” Hoffart noted.
But even then, some insurance plans prohibit pharmacists from telling patients due to gag clauses. Six states have prohibited the gag clauses and 20 more are considering similar legislation, according to the National Conference of State Legislatures.
That’s what federal officials told Idaho regulators and the state’s governor late Thursday regarding the state’s plan to allow insurers to sell health plans that fall short of the Affordable Care Act’s requirements.
But the letter from the Trump administration letter did offer an alternative: Tweak your plan a bit to make them qualify as “short-term” policies. These alternatives — which are exempted from ACA rules, including those barring insurers from rejecting people with preexisting medical conditions — offer coverage for a limited time.
“On the one hand, they’re saying they’re going to enforce the ACA,” said Sarah Lueck, a senior policy analyst at the Center on Budget and Policy Priorities. But, the Health and Human Services Department also seems to say, “if you want to roll back protections for people with preexisting conditions, we have some ideas for you,” she added. “And that concerns me.”
Idaho’s approach, announced in January, would have allowed insurers to offer “state-based” insurance plans that did not include some of the law’s consumer protections. A few weeks later, Idaho Blue Cross jumped in with five “Freedom Blue” state-based plans it hoped to sell.
Regulators in other states were watching the Idaho situation. Its move was viewed either as a brazen effort to flout federal law or an innovative attempt to stabilize the market. Regardless, it meant the Trump administration had to take position: Enforce the ACA or look away.
Here are four key takeaways from the decision and how it may play elsewhere.
1. States and insurance carriers can’t ignore federal law.
Although the letter commended Idaho’s effort to “address the damage” caused by the ACA, it said the proposed state-based plans would violate at least eight of its provisions, including its ban on setting annual or lifetime caps, charging sick people more than those considered healthy or excluding coverage for preexisting conditions.
Thursday’s letter noted that if such plans were sold in Idaho, insurance carriers might face significant financial penalties. Experts said they would be surprised if insurers wanted to take that risk.
“It’s one thing for the state to take on CMS, but quite another for carriers,” said Jan Dubauskas, general counsel for the IHC Group, which sells short-term health insurance nationally. “When I heard that, I thought, ‘This is the end for state-based plans.’”
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But Idaho Gov. Butch Otter, a Republican, was upbeat, saying the letter from Centers for Medicare & Medicaid Services Administrator Seema Verma “was not a rejection of our approach” but “an invitation … to continue discussing … what can and cannot be included in state-based plans.”
And late Friday, Idaho Blue Cross issued a statement expressing disappointment with the CMS letter, but still echoing Otter’s willingness to move forward.
The timetable going forward is not immediately clear, although both federal regulators and state officials say they are willing to talk about alternatives. Getting new short-term plans on the market would also require insurers to consider their options, modify the plans and come up with new premium rates.
2. Short-term plans get another boost.
Dubauskas and others said the Idaho decision could increase interest in short-term plans.
Such policies have been sold for years, meant as a stopgap for people between jobs. They’re less expensive than ACA plans, mainly because they can reject people with health conditions or exclude coverage for such conditions and have other limitations. Most of the plans don’t cover mental health and substance abuse treatment, few cover maternity care, and some don’t include prescription drug coverage. They generally can’t be renewed, meaning consumers must reapply and answer medical questions each time their policies expire.
The Obama administration, fearing that short-term plans would suck relatively healthy people out of the ACA market, limited them to 90-day terms. The Trump administration, however, has proposed allowing short-term plans to last for up to a year. These final rules aren’t expected for at least another two months.
Ironically, Idaho Insurance Director Dean Cameron had in January promoted the more robust “state-based” plans — like those the Blues insurer wanted to sell — as an alternative to short-term coverage.
After getting the CMS letter, he told the Idaho Statesman newspaper that short-term plans might be easier for the Trump administration to handle legally but could cause consumers more problems than what Idaho had proposed.
Critics fear that consumers will buy such plans without understanding their limitations.
“They might think it’s health insurance like they’re used to, but it’s really not, it’s really very bare-bones,” said Lueck.
3. State reactions will vary widely, creating different rules around the country.
Even if the Trump administration proposal to extend short-term coverage to a full year is finalized, states can set stricter rules.
A handful of states already do.
New York and New Jersey require many of the same rules as the ACA, but insurers wont’ sell short-term plans there.
Four states — Arizona, Michigan, Minnesota and Oregon — limit the length of the plans to 185 days, according to a survey by the Commonwealth Fund and researchers at Georgetown University.
“A small group of largely blue states have some regulation [of short-term plans], but not very many,” said Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute. “It’s possible that if this rule is finalized we will see more states start to step up and regulate short-term markets.”
Conversely, lawmakers in other states may promote short-term coverage as a lower-cost alternative to the ACA, although people with preexisting conditions may not be able to buy such plans.
“Politically, short-term plans have some appeal because lawmakers can say now there’s a cheaper option out there,” Corlette noted.
4. The increased emphasis on short-term plans could increase premiums.
Actuaries fear that short-term plans — or state-based plans like those rejected in Idaho — would help drive up costs for people who remain in more comprehensive ACA coverage.
That’s because younger and healthier people might be tempted to drop their ACA coverage, leaving a remaining pool of those who are older, sicker and costlier. That, in turn, drives up premiums — affecting millions of Americans who don’t receive subsidies and already struggle to pay.
But just how many people will jump to new, short-term coverage?
The Trump administration has estimated that about 100,000 to 200,000 people with existing ACA coverage would make the shift, while other experts suggest higher numbers.
Christopher Condeluci, a benefits attorney, said it’s unclear which estimates are correct.
The real issue to keep in mind, he said, is that an increasing number of people who don’t get subsidies are already choosing to either forgo coverage or pick an alternative, such as short-term plans.
“People are voting with their feet,” he said. “That cannot be overlooked.”
This KHN special series examines the reach and the role of Medicaid, the federal-state program that began as a medical program for the poor but now provides a wide variety of services for a large swath of America.
OAKLAND, Calif. — Gerardo Alejandrez used to punch classmates, throw chairs and curse at his teachers, conduct that forced him to switch from school to school. “I had a lot of anger issues,” the 16-year-old said recently.
Then Gerardo entered a class at Oakland Technical High School for students who have mental health or behavior issues. In that classroom, the teacher gets support from Erich Roberts, a psychiatric social worker assigned to the group. Oakland Unified School District bills Medicaid, the nation’s insurance program for low-income residents, for Roberts’ services.
Those payments officially cover the time he spends — in and out of the classroom — providing therapy and other assistance for nine Medicaid-covered youths as well as meeting with their family members. Roberts’ presence in the classroom is also an asset for the teacher and four other kids in the class who are not on government insurance. Many of the students in the class would likely drop out without the extra help, Roberts said.
Medicaid, created in 1965 to provide health insurance to the poor, now functions as a lifeline for millions of American students such as Gerardo — whose grades have improved and who wants to become a fashion designer — as well as hundreds of school districts across the country like Oakland Unified. The public insurance program has evolved so that it now finances myriad education-related services, including transportation for kids with disabilities, school clinics and counseling for children from turbulent backgrounds. Medicaid funds are now woven into the nation’s educational system.
But as Congress seeks to cut federal health spending, the use of Medicaid dollars in schools could come under new scrutiny. Critics question whether schools are the best entities to provide all the services they now do, and if the educational system has become too reliant on the health program. Educators and advocates counter that schools are the opportune place to address health-related issues and that federal law requires them to provide such benefits. And, they say, if Medicaid doesn’t pay, who will?
With a Republican administration vowing to trim Medicaid, Kaiser Health News is examining how the U.S. has evolved into a “Medicaid Nation,” where huge swaths of Americans rely on the program, directly and indirectly, often unknowingly. Medicaid’s role in schools is a telling example.
Medicaid spends only $4 billion of its $400 billion annual budget in schools — a “very small portion of the pie,” said Jessica Schubel, a senior policy analyst at the bipartisan Center on Budget and Policy Priorities. But for the school districts providing an array of services that have quietly become vital to students and families, losing this funding source would be immense, she said, “a big deal.”
Rodney Davis (right) became anxious and stopped wanting to go to school until he started seeing JP De Oliveira, a clinical counselor with the nonprofit East Bay Agency for Children. Medicaid pays for De Oliveira’s work with students at Hoover Elementary School in Oakland, Calif. (Heidi de Marco/KHN)
An Expanded Purview
The exact nature of the consequences would depend largely on the state and school districts, as jurisdictions deploy Medicaid funds differently. Since states must contribute a portion of total Medicaid funding to the federal allocation, the amount of money available for school district spending is in part determined by statehouse politics.
Generally, the federal program can help districts provide a variety of services, staff and equipment for their students. Although not all districts tap into funding, Medicaid will reimburse districts for in-school vision and hearing exams, occupational therapy for special-education students, even diabetes and asthma management. It covers wheelchairs and other medical devices so a student can attend class. In Oakland Unified School District and others around the nation, Medicaid also supports mental health services.
In 2017, a survey by the School Superintendents Association found that 68 percent of superintendents said Medicaid dollars funded school nurses, counselors and other health staff members. More than half of superintendents said they have worked to expand the number of students enrolled in Medicaid, which can increase revenue to the school districts. The funds also enable districts to pay staff salaries like Roberts’, buy medical equipment and generally bolster their education budgets, Schubel said.
Medicaid provides mental health services at Oakland Technical High School in Oakland, Calif. (Heidi de Marco/KHN)
Artwork portraying children’s feelings hangs in the office of JP De Oliveira, a clinical counselor at Hoover Elementary School in Oakland. (Heidi de Marco/KHN)
But some critics of Medicaid, notably political conservatives, question how funds flow into school districts and whether educators have wrongly plumbed the program to cover budget shortfalls. They argue that because the districts already receive other sources of federal funding for special-education and health services in schools, they don’t need federal Medicaid dollars to pay for them.
Lindsey Burke, director of the Center for Education Policy for the Heritage Foundation, a conservative think tank, argues that Medicaid expenses overall are growing too quickly. She said changes are needed to allow states and districts more flexibility and to reward “sound choices” about what to deliver using Medicaid money.
“Medicaid requires that poor children’s health care be covered, but does not prescribe that such coverage be delivered by school districts,” Burke said.
In the past, the government penalized some school districts for straying far afield from intended purposes. Ten years ago, federal investigators uncovered improper billing for school-based Medicaid services, and cases of waste and fraud in Texas, Massachusetts and New York. Dollars meant for medical care were used for children’s transportation or school officials’ salaries or benefits. Texas, in particular, was found in 2007 to have submitted close to 300 incorrectly coded claims, resulting in nearly $19 million of federal payments for costs not allowed under Medicaid’s in-school services program.
Schubel of the Center on Budget and Policy Priorities, who has studied Medicaid in schools, emphasized that school administrations “are in the business of providing education — they are not in the business of providing medical services.”
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Filling Gaps Left By The Feds
The increasing reliance by schools on Medicaid in many states is in some ways a byproduct of federal mandates to broaden educational services and a lack of specific funds to pay for them.
Among the students served by Medicaid in the classroom is Michael Walt, a 10-year-old with Williams syndrome, a genetic abnormality that causes heart problems and severe developmental delays. His school, Forestdale Elementary in Springfield, Va., provides a team of speech and occupational therapists to improve Michael’s physical and intellectual abilities.
Michael Walt, a pupil at Forestdale Elementary School in Alexandria, Va., was diagnosed with attention deficit hyperactivity disorder, autism and Williams syndrome, a condition linked to intellectual disabilities and heart conditions. Medicaid provided access to a team of therapists who taught him to walk, talk and hold utensils. (Heidi de Marco/KHN)
Lara Walt walks son Michael to the school bus in Alexandria, Va., on Oct. 4, 2017. Michael is one of over 25,700 students expected to receive special-education services in Fairfax County Public Schools this academic year. (Heidi de Marco/KHN)
Medicaid contributes $1.5 million a year on average to help pay for health services and therapy, said Fairfax County Public Schools spokesman John Torre. Their schools bill Medicaid for services including physical and occupational therapy, psychological counseling and speech-language assistance. It also pays for specialized transportation for students with disabilities, which Michael uses nearly every morning.
His mother, Lara Walt, an attorney, said services offered at school have improved Michael’s speech, gait and motor skills. He can now eat oatmeal with a spoon. Though her son may never live independently, she said, without Medicaid funds supporting special-education services, “he’d be in a much worse space.”
Across the country, JP De Oliveira, a professional clinical counselor with the Oakland-based East Bay Agency for Children, works at Hoover Elementary School in Oakland with students who are in Medi-Cal and have diagnoses that qualify them for counseling. His time with those kids is billed to Medi-Cal.
One of the students, 7-year-old Rodney Davis, is an outgoing child who became anxious last year and stopped wanting to go to school. Oliveira counsels Rodney, plays games with him and leads him in breathing exercises. “He really needs that reassurance … that everything is going to be OK,” Oliveira said.
Different States, Different Spending
While some California counties in and of themselves deploy millions of Medicaid dollars each year in classrooms, some entire states deploy little — or none. Much is unknown about exactly how Medicaid funds are spent in schools. “There is just not very good documentation of what policies states and locals have and how much they are using it,” said Nora Gordon, an associate professor at Georgetown University’s McCourt School of Public Policy.
Los Angeles Unified School District, which has a total budget of $7.5 billion and serves about 750,000 children, each year receives more than $20 million in funding from Medi-Cal, the name of its Medicaid program. The money helps pay for medical screenings, specialized equipment and health services for students at medical and mental health clinics. It is also used to enroll students and their families in health insurance plans under the Affordable Care Act.
The district has nurses to serve each school, including 12 positions that are fully funded by Medi-Cal. The nurses provide a range of services, such as immunizations and asthma treatment.
In contrast, Wyoming does not bill Medicaid for any school-based health services. Instead, its state Department of Education reimburses school districts to cover special-education services. However, schools can use federal funds available through a separate federal funding stream — IDEA — to pay for additional resources like assistive technology, supplies and some staffing, said Brent Bacon, the department’s chief academic officer. These can range from a pencil grip to hiring a job coach to help students transition out of high school.
Bacon did not give a specific reason why Wyoming does not use Medicaid funding for special-education services. Dallas Myers, director of special education for Fremont County School District 1 in central Wyoming, said these federal dollars may complicate students’ ability to access these services.
“If you use Medicaid, you cap that service at a certain allowable fee,” he said. “And we couldn’t begin to get those professional staff people to serve our kids in a rural state like Wyoming if Medicaid came into the state.”
The federal and state share of payments varies, depending on how states prioritize such funding or bill Medicaid. In 2015, California covered about half of nearly $180 million in Medi-Cal funding for school-based services. Across Virginia, Medicaid payments for school-based health services totaled $58.8 million in 2015, of which nearly half came from the state’s coffers.
Tom Smith, a legislative liaison for the Virginia Association of School Superintendents, said the loss of federal Medicaid dollars could force school districts in Virginia and elsewhere to cut other services or dip into state and local funds that will translate into cuts in other sections of the budget, like infrastructure. “Everyone will feel the pain in one way or another,” he said.
As President Donald Trump and congressional Republicans tirelessly try to dismantle the Affordable Care Act, a number of states are scrambling to enact laws that safeguard its central provisions.
The GOP tax plan approved by Congress in the last days of 2017 repealed the ACA penalty for people who fail to carry health insurance, a provision called the “individual mandate.” On Jan. 30, in Trump’s first State of the Union address, he claimed victory in killing off this part of the health law, saying Obamacare was effectively dead without it.
But before that federal action kicks in next year, some states are enacting measures to preserve the effects of the mandate by creating their own versions of it.
Maryland is on the cutting edge with legislation moving through both chambers of the Statehouse.
“We’ve been just struggling since Trump became president with how to protect the ACA in our state,” said Vincent DeMarco, president of the Maryland Citizens’ Health Initiative, a nonprofit organization that has been instrumental in pushing the measure.
Creating an individual mandate is just one way that states — generally blue states where Democrats control the legislature — seek to ensure what many lawmakers view as key advances made by the ACA don’t disappear.
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They’re looking to one another as test cases to see how state-level legislation can either buttress or alter the ACA, according to Trish Riley, the executive director of the National Academy for State Health Policy.
“One state will try one approach, others will try it,” Riley said. “It’s an experiment, and an important one.”
Time is short, since most states have limited legislative calendars and are fast approaching the deadlines for insurers to file their 2019 rate plans.
Passing and implementing these kinds of measures will be tough, said Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute. But “I think there’s still a window of opportunity for states to do something and have an impact on 2019 premiums,” she said.
Maryland’s Take On The Individual Mandate
Maryland’s effort began last April when the state legislature created the Maryland Health Insurance Coverage Protection Commission “both in response to and in anticipation of efforts at the federal level to repeal and replace the ACA,” according to a report by the state’s legislative services department and the commission itself.
The commission, chartered for three years, is charged with studying how federal action could affect the state’s health insurance market and Medicaid program and offering recommendations to mitigate any negative impacts. The panel began meeting months before the Maryland General Assembly started its 90-day session in January.
Based on the commission’s initial recommendations, Sen. Brian Feldman and House Del. Joseline Peña-Melnyk introduced the Protect Maryland Health Care Act of 2018, which lays out a framework for preserving an individual mandate in the state.
The federal individual mandate was put in place to make sure that younger, healthier people joined the insurance risk pool, helping to stabilize the market. The idea is that those relatively healthy customers help cover the insurers’ costs for sicker customers’ care, which keeps premium costs manageable for everyone.
The Congressional Budget Office estimated that 13 million people nationwide would become uninsured without the individual mandate. Some will choose to go without insurance or will not be able to find an affordable plan. Insurers could opt to leave local markets because they could not make money covering only sick patients.
Feldman said insurers and health care experts testified before the commission that Maryland’s insurance exchange would collapse in 2019 if the state didn’t act.
“Because of uncertainty at the federal level, it’s going to be up to states in this arena to pick up the slack and to enact legislation that responds to that uncertainty,” he said.
The federal mandate imposed a tax penalty on people who could afford to but chose not to buy insurance, depositing the money in a general Treasury fund.
In Maryland, the penalty fee will effectively be used, according to advocates, as a “down payment” on an insurance policy.
Beginning in 2020, if someone indicates on their taxes that they’re uninsured, the state would use the fine, plus any tax credits from the federal government, to buy an insurance plan for them.
Maryland would match its residents only with plans that cost nothing more than the fine plus the federal subsidy. So, if such a plan isn’t available in a person’s area, the state will hold on to the money in an interest-bearing account until the next open enrollment season. Then, the person has another chance to buy insurance. If at this time they don’t purchase a plan, the state will deposit the money into an insurance stabilization fund.
Politics And Policy On The Ground
Maryland is fertile ground for such health care experiments. The ACA remains popular within the state. Polling commissioned by DeMarco’s group puts the law’s support at 62 percent.
In addition, about 52 percent of Marylanders favored a state-based individual mandate, to make up for the federal provision that was repealed.
Democrats control the general assembly, but Gov. Larry Hogan, a Republican, has not offered a specific position on the issue — rather, he alluded to health reform efforts in his State of the State address. “Let’s develop bipartisan solutions to stabilize [health insurance] rates,” he said.
Ed Haislmaier, a senior research fellow at the Heritage Foundation, expressed skepticism about whether this approach will make a difference. The people who are targeted, he argued, are younger, healthier and generally lower-income. They don’t have insurance because they don’t want it, he suggested.
Jason Levitis, a senior fellow at Yale Law School’s Solomon Center for Health Law and Policy who has been instrumental in helping states craft their own versions of the individual mandate, warned that Maryland’s approach could face administrative challenges.
States that follow an approach more closely modeled after the federal mandate, he said, will have an easier time implementing it because regulators have already had five years of experience enforcing it.
Still, Levitis praised the Maryland plan: “There’s something attractive about the idea there, that you put this money … towards coverage.”
And a sampling of state proposals highlight a common theme.
“All the mandate efforts are based on the federal one,” Levitis said. “The variations are what you put on top, [how states] individually keep track of the money people pay and use it for health care services.”
He pointed to Connecticut as an example. It has two bills pending in its legislature — one that closely mirrors the federal mandate, but with slightly lower fines, and another in which the fines would be deposited into health savings accounts for the individuals.
In New Jersey, a Senate panel advanced a two-bill approach this week that would collect a fee from residents who opt against buying health insurance. These fines would then be used to help pay the health care claims of people who are catastrophically ill.
In the District of Columbia, a health care working group recommended an individual mandate nearly identical to the federal one. The plan would require City Council and congressional approval to become law.
Washington state has convened a group to study how to enforce a mandate, and no legislation has been introduced yet in California.
Meanwhile, Maryland officials also hope to learn from the experiences of other states.
For instance, lawmakers in Maryland are considering the creation of a state-based, basic, low-cost health plan as well as a fund to help insurers cope with the burden of very high-cost patients.
These efforts also come from the work of the commission.
Stan Dorn, a senior fellow with the pro-Obamacare group Families USA, said Maryland “had the foresight to see threats coming and to try to be proactive about it.”
Phyllis Petruzzelli spent the week before Christmas struggling to breathe. When she went to the emergency department on Dec. 26, the doctor at Brigham and Women’s Faulkner Hospital near her home in Boston’s Jamaica Plain neighborhood said she had pneumonia and needed hospitalization. Then the doctor proposed something that made Petruzzelli nervous. Instead of being admitted to the hospital, she could go back home and let the hospital come to her.
As a “hospital-at-home” patient, Petruzzelli, 71 this week, learned doctors and nurses would come to her home twice a day and perform any needed tests or bloodwork.
A wireless patch a little bigger than her index finger would be affixed to her skin to track her vital signs and send a steady stream of data to the hospital. If she had any questions, she could talk face-to-face via video chat anytime with a nurse or doctor at the hospital.
Hospitals are germy and noisy places, putting acutely ill, frail patients at risk for infection, sleeplessness and delirium, among other problems. “Your resistance is low,” the doctor told her. “If you come to the hospital, you don’t know what might happen. You’re a perfect candidate for this.”
So Petruzzelli agreed. That afternoon, she arrived home in a hospital vehicle. A doctor and nurse were waiting at the front door. She settled on the couch in the living room, with her husband, Augie, and dog, Max, nearby. The doctor and nurse checked her IV, attached the monitoring patch to her chest and left.
When Dr. David Levine arrived the next morning, he asked why she’d been walking around during the night. Far from feeling uncomfortable that her nocturnal trips to the bathroom were being monitored, “I felt very safe and secure,” Petruzzelli said. “What if I fell while my husband was out getting me food? They’d know.”
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After three uneventful days, she was “discharged” from her home hospital stay, and the equipment removed from her home. “I’d do it again in a heartbeat,” Petruzzelli said.
Brigham Health in Boston is one of a slowly growing number of health systems that encourage selected acutely ill emergency department patients who are stable and don’t need intensive, round-the-clock care to opt for hospital-level care at home.
In the couple of years since Brigham and Women’s Hospital started testing this type of care, hospital staff who were initially skeptical have generally embraced it, said Levine.
“They very quickly realize that this is really what patients want, and it’s really good care,” he said.
This approach is quite common in Australia, England and Canada but it’s faced an uphill battle in the United States.
A key obstacle, clinicians and policy analysts agree, is getting health insurers, whose systems aren’t generally set up to cover hospital care provided in the home, to pay for it.
At Brigham Health, the hospital can charge an insurer for a physician house call, but the remainder of the hospital-at-home services are covered by grants and funding from Partners HealthCare’s Center for Population Health, which is affiliated with Brigham Health, said Levine.
Health insurers don’t have a position on hospital-at-home programs, said Cathryn Donaldson, a spokeswoman for America’s Health Insurance Plans, an industry trade group.
“Overall, health insurance providers are committed to ensuring patients have access to care they need, and there are Medicare Advantage plans that do cover this type of at-home care,” Donaldson said in a statement.
Levine, a clinician-investigator at Brigham and Women’s Hospital and an instructor at Harvard Medical School, was the lead author of a study published last month that reported the results of a small, randomized, controlled trial comparing the health care use, experience and costs of Brigham patients who either received hospital-level care at home or in the hospital in 2016.
The 20 patients analyzed in the trial had one of several conditions, including infection, heart failure, chronic obstructive pulmonary disease or asthma. The trial found that while there were no adverse events in the home-care patients, their treatment costs were significantly lower, about half that of patients treated in the hospital.
Why? For starters, labor costs for at-home patients are lower than for patients in a hospital, where staff must be on hand 24/7. Home-care patients also had fewer lab tests and visits from specialists.
The study found that both groups of patients were about equally satisfied with their care, but the home-care group was more physically active.
Brigham Health is conducting further randomized controlled trials to test the at-home model for a broader range of diagnoses.
Dr. Bruce Leff began exploring the hospital-at-home concept more than 20 years ago, conducting early studies at Veterans Affairs medical centers and Medicare Advantage plans that found fewer patient complications, better outcomes and lower costs in home-care patients.
Caregivers reported less stress, Leff’s research found. For caregivers, traveling to an unfamiliar hospital, finding and paying for parking and trying to time bedside meetings with clinical staff, all the while worried about a loved one’s health, is wearing, experts note.
Hospitals, accustomed to the traditional “heads-and-beds” model that emphasizes filling hospital beds in a brick-and-mortar facility have been slow to embrace change, however.
There are practical hurdles, too.
“It’s still easier to get Chinese food delivered in New York City than to get oxygen delivered at home,” said Leff, a professor of medicine and director of Johns Hopkins Medical School’s Center for Transformative Geriatric Research.
Since Mount Sinai’s seven-hospital system launched its Hospital-at-Home program in New York City in 2014, more than 700 patients have chosen home over hospital care. Patients can be referred to the program from selected emergency departments as well as some Mount Sinai primary care practices and urgent care centers. And they have fared well on a number of measures.
The average length of stay for acute care was 5.3 days in the hospital versus 3.1 days of treatment for home-care patients, while 30-day readmission rates for home-based patients were about half of those in the hospital: 7.8 percent versus 16.3 percent for the two-year period ending December 2016.
Begun with a three-year, $9.6 million grant from the federal Center for Medicare & Medicaid Innovation in 2014, Mount Sinai’s program initially focused on Medicare patients with six conditions, including congestive heart failure, pneumonia and diabetes. Since then, the program has expanded to include dozens of conditions, including asthma, high blood pressure and serious infections like cellulitis, and is now available to some privately insured and Medicaid patients.
The health system has also partnered with Contessa Health, a company with expertise in home care, to negotiate contracts with insurers to pay for hospital-at-home services.
Among other things, insurers are worried about the slippery slope of what it means to be hospitalized, said Dr. Linda DeCherrie, clinical director of the mobile acute care team at Mount Sinai Health System.
“[Insurers] don’t want to be paying for an admission if this patient really wouldn’t have been hospitalized in the first place,” DeCherrie said.
Laurie Cook went shopping recently for a mammogram near her home in New Hampshire. Using an online tool provided through her insurer, she plugged in her ZIP code. Up popped facilities in her network, each with an incentive amount she would be paid if she chose it.
Paid? To get a test? It’s part of a strategy to rein in health care spending by steering patients to the most cost-effective providers for non-emergency care.
State public employee insurance programs were among the early adopters of this approach. It is now finding a foothold among policymakers and in the private sector.
Scrolling through her options, Cook, a school nurse who is covered through New Hampshire’s state employee health plan, found that choosing a certain facility scored her a $50 check in the mail.
She then used the website again to shop for a series of lab tests. “For a while there, I was getting a $25 check every few weeks,” said Cook. The checks represented a share of the cost savings that resulted from her selections.
Lawmakers in nearby Maine took the idea further, recently enacting legislation that requires some private insurers to offer pay-to-shop incentives, part of a movement backed by a conservative foundation to get similar measures passed nationally.
Similar proposals are pending in a handful of other statehouses, including Virginia, West Virginia and Ohio.
“If insurance plans were serious about saving money, they would have been doing this stuff years ago,” said Josh Archambault, a senior fellow at the Foundation for Government Accountability, a limited-government advocacy group based in Naples, Fla., that promotes such “right-to-shop” laws. “This starts to peel back the black box in health care and make the conversation about value.”
Still, some economists caution that shop-around initiatives alone cannot force the level of market-based change needed. While such shopping may make a difference for individual employers, they note it represents a tiny drop of the $3.3 trillion spent on health care in the U.S. each year.
“These are not crazy ideas,” said David Asch, professor of medicine, medical ethics and health policy at the Penn Medicine Center for Health Care Innovation in Philadelphia. But it’s hard to get consumers to change behavior — and curbing health care spending is an even bigger task. Shopping incentives, he warned, “might be less effective than you think.”
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If they achieve nothing else, though, such efforts could help remove barriers to price transparency, said Francois de Brantes, vice president and director of the Center for Value in Health Care at Altarum, a nonprofit that studies the health economy.
“I think this could be quite the breakthrough,” he said.
Yet de Brantes predicts only modest savings if shopping simply results in narrowing the price variation between high- and low-cost providers: “Ideally, transparency is about stopping folks from continuously charging more.”
Among the programs in use, only a few show consumers the price differences among facilities. Many, like the one Cook used, merely display the financial incentives attached to each facility based on the underlying price.
Advocates say both approaches can work.
“When your plan members have ‘skin in the game,’ they have an incentive to consider the overall cost to the plan,” said Catherine Keane, deputy commissioner of administrative services in New Hampshire. She credits the incentives with leading to millions of dollars in savings each year.
Several states require insurers or medical providers to provide cost estimates upon patients’ requests, although studies have found that information can still be hard to access.
Now, private firms are marketing ways to make this information more available by incorporating it into incentive programs.
For example, Vitals, the New Hampshire-based company that runs the program Cook uses, and Healthcare Bluebook in Nashville offer employers — for a fee — comparative shopping gizmos that harness medical cost information from claims data. This information becomes the basis by which consumers shop around.
Crossing Network Lines
Maine’s law, adopted last year, requires insurers that sell coverage to small businesses to offer financial incentives — such as gift cards, discounts on deductibles or direct payments — to encourage patients, starting in 2019, to shop around.
A second and possibly more controversial provision also kicks in next year, requiring insurers, except HMOs, to allow patients to go out-of-network for care if they can find comparable services for less than the average price insurers pay in network.
Similar provisions are included in a West Virginia bill now under debate.
Touted by proponents as a way to promote health care choice, it nonetheless raises questions about how the out-of-network price would be calculated, what information would be publicly disclosed about how much insurers actually pay different hospitals, doctors or clinics for care and whether patients can find charges lower than in-network negotiated rates.
“Mathematically, that just doesn’t work” because out-of-network charges are likely to be far higher than negotiated in-network rates, said Joe Letnaunchyn, president and CEO of the West Virginia Hospital Association.
Not necessarily, counters the bill’s sponsor, Del. Eric Householder, who said he introduced the measure after speaking with the Foundation for Government Accountability. The Republican from the Martinsburg area said “the biggest thing lacking right now is health care choice because we’re limited to our in-network providers.”
Shopping for health care faces other challenges. For one thing, much of medical care is not “shoppable,” meaning it falls in the category of emergency services. But things such as blood tests, imaging exams, cancer screening tests and some drugs that are administered in doctor’s offices are fair game.
Less than half of the more than $500 billion spent on health care by people with job-based insurance falls into this category, according to a 2016 study by the Health Care Cost Institute, a nonprofit organization that analyzes payment data from four large national insurers. The report also noted there must be variation in price between providers in a region for these programs to make sense.
Increasingly, though, evidence is mounting that large price differences for medical care exist — even among rates negotiated by the same insurer.
“The price differences are so substantial it’s actually scary,” said Heyward Donigan, CEO of Vitals.
At the request of Kaiser Health News, Healthcare Bluebook ran some sample numbers for a Northern Virginia ZIP code, finding the cost of a colonoscopy ranged from $670 to $6,240, while a knee arthroscopy ranged from $1,959 to $20,241.
Another challenge is the belief by some consumers that higher prices mean higher quality, which studies don’t bear out.
Even with incentives, the programs face what may be their biggest challenge: simply getting people to use a shopping tool.
Kentucky state spokeswoman Jenny Goins said only 52 percent of eligible employees looked at the shopping site last year — and, of those, slightly more than half chose a less expensive option.
“That’s not as high as we would like,” she said.
Still, state workers in Kentucky have pocketed more than $1.6 million in incentives — and the state said it has saved $11 million — since the program began in mid-2013.
Deductibles, the annual amounts consumers must pay before their insurance kicks in and are usually $1,000 or more, are more effective than smaller shopping incentives, say some policy experts.
In New Hampshire, it took a combination of the two.
The state rolled out the payments for shopping around — and a website to look for best prices — in 2010. But participation didn’t really start to take off until 2014, when state employees began facing an annual deductible, said Deputy Commissioner Keane.
Still, the biggest question is whether these programs ultimately cause providers to lower prices.
Anecdotally, administrators think so.
Kentucky officials report they already are witnessing a market response because providers want patients to have an incentive to choose them.
“We do know providers are calling and asking, ‘How do I get my name on that list’ [of cost-effective providers]?” said Kentucky spokeswoman Goins. “The only way they can do that is to negotiate.”
This story was updated on March 5 to correct François de Brantes’ title.
Congress is running out of time if members want to come up with legislation to stabilize the individual insurance market.
While Republicans and Democrats still feud over the fate of the Affordable Care Act, a bipartisan group of senators and House members has been working since last summer on measures to keep prices from rising out of control and undermining the individual market where people who don’t get insurance through work or the government buy policies.
They hope to attach a package of fixes to what should be the year’s final temporary spending bill, due in late March.
The lawmakers are up against not just the legislative clock, but also the insurance companies’ timeline. Insurers have until summer to decide if they want to continue to sell policies in the ACA marketplaces, but many start making preliminary decisions as early as April.
In the absence of congressional action, insurers say premiums will go up in 2019 due to the uncertainty — raising costs for consumers and the government.
It is by no means clear whether any package could gain the votes needed in the House and Senate. Most Republicans are loathe to be seen “fixing” Obamacare, although opinion polls clearly show they will be blamed for problems with the law going forward.
The bipartisanship extends beyond Capitol Hill. Last week five governors (three Democrats, one Republican and one Independent) released a blueprint for a health system overhaul that includes several of the stabilization ideas under consideration in Congress.
Lawmakers are looking at two primary fixes, although they could be combined.
One, pushed by Sens. Susan Collins (R-Maine) and Bill Nelson (D-Fla.), is called “reinsurance.” It is a way to guarantee the insurance companies do not face large losses. The idea is that if insurers don’t have to worry about covering the expenses for their highest-cost patients, they can keep premiums lower for everyone.
The ACA actually had a temporary reinsurance program from 2014 to 2016. It was intended to help insurers get started in a market where sick people were able to buy their own insurance for the first time. Prior to the law, most insurers did not cover many people with preexisting health conditions. If they did, it was at an extremely high cost.
Since the federal program ended, several states, including Minnesota and Alaska, have adopted, with some success, their own reinsurance programs in an attempt to hold premiums down.
Senate Majority Leader Mitch McConnell (R-Ky.) pledged to Collins in exchange for her vote on the GOP tax plan in December that he would support bringing both bills to the floor for debate.
That has not happened, although in a statement, Collins said she is “continuing to have productive discussions” with Senate and House leaders about both bills.
Meanwhile, a lot has changed, including new questions about whether the fixes would work.
For starters, state insurance regulators managed to find a workaround for Trump’s sudden cancellation of the federal cost-sharing payments. Most states allowed insurers to offset the loss of these funds by increasing the premiums for the “silver” level plans that determine how much help enrollees get to pay those premiums. So the increases end up being paid by the federal government anyway, through higher premium subsidies. The result is that most people who get government help pay the same (or, in some cases, less), while insurers are effectively being paid back for the discounts, albeit through a different mechanism.
That means, however, if the cost-sharing reduction payments were reinstated for 2018, as the original legislation called for, insurers would have to give the excess money back to the government.
Analysts agree that would only add to the confusion.
Restoring the federal payments for this year, said Joseph Antos of the conservative American Enterprise Institute, “does not lower premiums this year, so it does absolutely no good to the average person.”
Some advocates have suggested that Congress should guarantee the payments for 2019 and 2020. But Antos said that “also makes no sense, because the insurers would then think ‘Are we going to go through this again?’” They might raise premiums even more to make up for the uncertainty.
Antos — and many other analysts — agree that restoring or creating a new reinsurance program would likely do more to control premium increases.
Reinsurance “will protect premiums for the people who are actually most subject to them,” said Sherry Glied, a former Obama administration health official now at New York University. She was referring to those in the individual market who do not get government help and have been footing large premium increases for the past several years. That’s because having protection against the largest bills would allow insurers to lower premiums across the board.
Then there are the political considerations.
Many Republicans in Congress have called the cost-sharing reduction payments in particular a “bailout” to the insurance industry, and are resistant to reinstate the payments.
Republicans seem more amenable to the idea of reinsurance, because they consider it a type of “high risk pool,” which they have been pushing for years. House Speaker Paul Ryan said at an event in Wisconsin in January that “I think there might be a bipartisan opportunity there to get risk pools, risk mechanisms.”
But Republicans have made clear they want something in return for what could be considered a “fix” to the health law they despise.
Health and Human Services Secretary Alex Azar was careful to say in a meeting with reporters last week that the Trump administration has no formal position yet on the stabilization efforts. But, he said, “I think it would need to be part of an entire set of reforms there that we would want to see.” That would likely include more flexibility for states to opt out of some of the health law’s coverage requirements.
The delay has made Democrats more demanding, too. The repeal of the ACA’s penalties next year for people who don’t have insurance has changed the situation dramatically, said Sen. Murray.
“As I have made clear, the bipartisan bill I originally agreed on with Chairman Alexander will not make up for this latest round of Republican health care sabotage,” she said in a statement. “In fact, there are changes that now need to be made to our bill to ensure it meets its intended goals of keeping premiums down and stabilizing markets.”
But while Congress decides if it will take action, insurers are warning that doing nothing will lead to still higher premiums.
Premium rates for a “benchmark” silver plan could rise by 27 percent in 2019, the Blue Cross Blue Shield Association said earlier this month.
Congressional action on reinsurance and cost-sharing, the association predicted, would help push premium rates 17 percent below this year’s levels.
“Health plans are looking for certainty in the market,” said Justine Handelman, senior vice president in the association’s policy shop.
Ideally, Congress would include the funding in measures adopted in February or March, said Handelman, who spoke with reporters during a briefing at the association’s Washington, D.C., headquarters: “Most plans are filing premium rates by April.”
Kaiser Health News senior correspondent Julie Appleby contributed to this story.
Despite President Donald Trump’s boasting that “we have essentially repealed Obamacare,” a new poll shows the Affordable Care Act is more popular than ever. In fact, many people don’t know Congress repealed the ACA’s penalty for not having insurance.
The poll from the Kaiser Family Foundation found 54 percent of Americans had a favorable view of the 2010 health law that expanded health coverage to millions. That was up four points from January, and it’s highest point since the monthly survey began in 2010. (KHN is an editorially independent program of the foundation.)
The survey found 40 percent of respondents were unaware that Congress in January repealed the individual mandate penalty as part of the federal tax overhaul. It takes effect in 2019. About one in five people were aware of the repeal but believed incorrectly that it had taken effect this year.
Only 13 percent of respondents were aware that both the requirement to buy insurance was repealed and that it remains in effect for 2018.
The public’s lack of knowledge about the individual mandate likely reflects the fact that few people are affected by it. The majority of Americans have health coverage or are exempt from the mandate because their income is too low, said Ashley Kirzinger, a Kaiser polling expert.
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“Confusion over the status of the ACA’s individual mandate stems from a lot of different things, but health care policy is complicated and the public generally doesn’t pay attention to details of health policy until it directly impacts them,” she said.
The poll showed the public is also split on what’s motivating states to add a work requirement to Medicaid.
About 41 percent of those surveyed said states were looking to lower government spending while 33 percent believed states were enacting the new requirements to “lift people out of poverty.”
The Trump administration in February approved requests from Indiana and Kentucky to require some non-disabled adults to work as a condition of having Medicaid coverage. At least eight more states are waiting for a green light.
About two-thirds of Americans said states should not put time limits on how long people can be enrolled in Medicaid as long as they qualify, the poll found. Support for lifetime caps was stronger among Republicans (51 percent) than Democrats (16 percent).
A Kaiser poll from June 2017 found that 70 percent of Americans support states imposing work requirements on non-disabled Medicaid adults.
The latest Kaiser poll of 1,193 adults was conducted Feb. 15 – 20 and has a margin of error of +/- 3 percentage points.
SACRAMENTO, Calif. – In the age of Black Panther, Thor and Captain America, California’s health insurance plans bring you … A giant, androgynous red heart.
The health insurers debuted their bubbly superhero Tuesday in front of California’s stately Capitol building. The heart, who wore black booties and white, Michael Jackson-esque gloves, had no name. No matter. S/he bopped. S/he waved at school children. S/he flashed the thumbs-up. S/he made the Capitol feel a bit like Disneyland.
Passers-by couldn’t help but giggle at the insurance industry’s mute mascot. And they certainly seemed to have no clue that the anthropomorphized heart was merely the latest PR stunt in an ongoing feud between two health system titans: health insurers and drugmakers.
“It’s very cute. I don’t know exactly what’s going on. … What is happening here exactly?” asked Christine Danho, 25, an administrative assistant who stopped to snap a picture.
In recent years, the two deep-pocketed industries have pointed fingers at each other over the rising cost of prescription drugs, each side accusing the other of ripping off patients who need life-saving medicines.
“Pharma has made a practice of swarming the State Capitol with their minions working to keep drug prices sky high,” the lobbying group’s press release proclaimed.
True, drugmaker Pfizer shelled out $732,454 in 2017 to lobby California policymakers on health care, and the California Life Sciences Association, comprised largely of pharmaceutical companies, spent $522,323, according to the California Secretary of State.
But among the top five spenders in health care lobbying last year? The health plan association itself, which doled out about $1.2 million.
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Drugmakers called the health plans out on their own tactics.
“Like a broken record, the insurers continue to blame everyone else for high health care costs when their policies are making lifesaving medicines increasingly more expensive for patients,” said Priscilla VanderVeer, a vice president with Pharmaceutical Researchers and Manufacturers of America (PhRMA).
VanderVeer’s colleague, Nicole Kasabian Evans, was a spokeswoman for the health plans not so long ago, but now she helps run PhRMA’s public relations strategy in California. And she had no qualms about criticizing her former employer’s media strategy.
“Honestly, are they generating any real news out of this event?” Kasabian Evans asked. It’s nothing more than “someone in a costume hand[ing] out tchotchkes,” she declared.
The health plan group said it timed the event to coincide with American Heart Month, and highlighted three heart disease medications on a poster board whose prices have spiked in recent years.
During the first hour of the event, the heart looked lonely, hoping for a little attention. But as the sun warmed the air and an unrelated rally brought people to the Capitol steps, onlookers cozied up to the health plans’ cherry red mascot for photo-ops or grabbed free heart-shaped stress balls.
Eric Wang ran into the heart-shaped mascot while visiting California’s Capitol. He said high drug prices are “something we need to figure out.” (Pauline Bartolone/KHN)
Lila Cervantes posed for a photo with the heart mascot at the Capitol in Sacramento. When it comes to insurers and pharmaceutical companies feuding over health costs, she said, “there’s probably a lot of right and a lot of wrong on both sides.” (Pauline Bartolone/KHN)
Eric Wang, visiting from Los Angeles for a meeting with legislators, said opposing groups need to “work together to figure out a way to make our health care system affordable.”
But it’s unlikely the feud between drugmakers and health insurers will dissipate anytime soon. The federal government is only taking small steps to control drug prices, which means the debate over drug prices will continue to flare in state houses around the country.
Lila Cervantes, who was at the Capitol advocating for higher education funding, posed for a picture with the heart, but she admitted later that she didn’t know much about the war between health insurers and drugmakers.
“There’s probably a lot of right and a lot of wrong on both sides,” Cervantes said. “We gotta’ sometimes take the politics out of it and … do what’s best for the people.”
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