The snippy tone of the letter from my health insurance company really threw me for a minute. Very officious, very much this-is-totally-not-our-fault-the-bad-government-made-us-do-it, the letter informed me that because of the Affordable Care Act, my premium might change. Under the law, as of this year, insurance carriers would no longer be allowed to differentiate (or discriminate) on the basis of gender, and this, I was informed in a letter dripping with derision, might end up affecting how much I have to pay for my individual insurance each month.
Well, it did. My premiums are now 7 percent lower than they were.
Yes, that’s lower. Despite the fact that foes of Obamacare are screaming about how the law will bankrupt families and small businesses (the impact on buyers of individual policies never seems to come up), despite all the pols showing that Americans are terrified that their health care costs will grow, my premium went down. This will not be true for everyone—it was women who were routinely charged more for insurance for no other reason than their gender. That includes, incidentally, the handful of states in which it was perfectly legal for insurance companies to deem victims of domestic violence as having a “pre-existing condition.” But it’s reason to believe that the worry—verging on hysteria—over the law might be a bit much.
Health care costs are absurdly high in this country, and they must be reined in. And it’s not because we have the best health care in the world; we don’t. If you need a heart transplant, yes, this is where you want to be. But for most of the health care most of us will need in our lives, we are simply not getting the bang for our buck.
Health care premiums may indeed go up for many people, but they were going up before Obamacare was passed. That was the point of trying to do health care reform. That was the point during the Nixon administration, when both parties worried about the social and financial impact of the uninsured. It was the point in 1992, when Bill Clinton was running for president, and at nearly every campaign stop, someone told a sad story of a child with leukemia, and an insurance company refusing to pay for the treatments, or of someone who got laid off and couldn’t get a job because he had a “pre-existing condition” the new employer would find too expensive to cover through its insurance. The problem has merely gotten worse every single time Congress and the White House built the momentum to do something and came close but ultimately failed.
Is Obamacare the cure? The reality is, three years after the law was passed, is that we simply don’t know. House Democratic Leader Nancy Pelosi was criticized for saying we don’t know what the law will do until it’s in place, but she was right. That’s true of a lot of sweeping legislation (No Child Left Behind being the best recent example). The idea is to give it a shot, and then tweak it where necessary.
One thing is clear—doing nothing, yet again, was not an option.
By: Susan Milligan, U. S. News and World Report, March 22, 2013
Sometimes the best journalism explains what’s right under our noses. In Steven Brill’s exhaustive Time magazine cover article “Bitter Pill: Why Medical Bills Are Killing Us,” it’s the staggeringly expensive, grotesquely inefficient and inhumane way Americans pay for medical care.
“In the U.S.,” Brill reminds us, “people spend almost 20 percent of the gross domestic product on health care, compared with about half that in most developed countries. Yet in every measurable way, the results our health care system produces are no better and often worse than the outcomes in those countries.”
Obamacare or no Obamacare, ever-increasing prices show few signs of abating. For all the fear and uncertainty the president’s health insurance reform will eliminate from people’s lives, it’s almost incidental to the overall question of costs.
Moreover, had the law attempted to seriously restrain profiteering hospital chains, pharmaceutical companies and medical equipment manufacturers that Brill depicts as largely responsible for the current morass, there’s no way it could have passed.
Yes, it’s a fiscal issue. If Medicaid and Medicare paid the same amounts for health care as, say, Switzerland or France—the economist Dean Baker has repeatedly pointed out—the Federal budget deficit would virtually disappear. (Although the two federal programs are infinitely more frugal and efficient than the rest of the system.)
But it’s an economic and moral issue as well. Brill was inspired to research the article after noticing the gleaming spires of the Texas Medical Center in Houston, of which M.D. Anderson is the brand name. It’s a great hospital, dispensing world-class care (at world-class prices). But how exactly, Brill wondered, had hospitals become five of Houston’s 10 largest employers? It’s a pattern repeated nationwide, as hospital chains have come to dominate local economies.
Essentially, he found, by gaming what the article describes as “the ultimate seller’s market”—an economic realm where buyers (i.e. hospital patients) are normally ignorant, often frightened and sometimes literally helpless. And who often think they’ve got adequate insurance, until they examine the fine print.
Granted, nobody bargains over a cancer diagnosis or heart attack. Even so, Brill wondered “why should a trip to the emergency room for chest pains that turn out to be indigestion bring a bill that can exceed the cost of a semester of college? What makes a single dose of even the most wonderful wonder drug cost thousands of dollars? Why does simple lab work done during a few days in a hospital cost more than a car?”
Good questions, all. Brill answers them by taking readers on a guided tour of the Alice-in-Wonderland world of medical billing as experienced by ordinary patients for whom getting the bill became an ordeal equal to and sometimes surpassing the illness itself.
Such as “Steve H.,” who never asked the cost of outpatient treatment for his ailing back because his union-sponsored health insurance plan had $45,000 remaining on its annual $60,000 spending limit. “He figured, how much could a day at Mercy [hospital] cost?…Five thousand? Maybe 10?”
The bill came to $89,000—including $45,000 for an electronic stimulator Brill learns that Mercy Hospital bought from the manufacturer for $19,000, which spent roughly 25% of that amount making and shipping it. (An arbitrator persuaded the hospital to settle for $10,000 of the $44,000 it said Steve H. owed.)
Moreover, as medical markups go, Steve H. got off relatively easy. The “chargemaster” computerized system hospitals use to prepare bills routinely assesses patients 10 times and more what commonly used items like gauze pads and surgical gowns actually cost. If baseball teams treated their captive audiences like that, they’d be selling $40 beers.
At times, Brill’s mordant deconstruction of hospital bills can be grimly funny—even if Alice D., left facing a $900,000 bill for her dead husband’s futile cancer treatment, can be pardoned for not laughing. In the end “her losses from the fixed poker game that she was forced to play in the worst of times with the worst of cards,” persuaded Alice she could never afford to remarry.
Even chemotherapy patients who survive can be staggered to learn that a miracle drug cost Genentech roughly “$300 to make, test, package and ship to M.D. Anderson for $3,000 to $3,500, whereupon the hospital sold it to [patient Steve] Recchi for $13,702.33.”
Ultimately, many of these humongous bills are never collected; the industry average is around 35 percent, although prestigious hospitals like M.D. Anderson collect 50 percent of what they charge. Most are “non-profits” only in the sense of having no stockholders; instead, administrators are paid princely multi-million-dollar salaries. They occupy themselves with building empires.
In the end, Brill concludes that Americans pay an enormous price for refusing to admit that “because the health care market deals in a life-or-death product, it cannot be left to its own devices.”
He and Time have done a great public service.
By: Gene Lyons, The National Memo, March 13, 2013
An upcoming report by the Federal Trade Commission shows that brand-name pharmaceutical makers continue to cut questionable deals with generic manufacturers that delay the introduction of cheaper drugs onto the market.
Such pay-for-delay arrangements hurt consumers and increase costs for federal programs such as Medicare and Medicaid, according to the report, a copy of which was obtained by the editorial board. These deals are not illegal, but they should be.
Pharmaceutical companies rightly enjoy strong protections for products that often take years and billions of dollars to develop. These protections were so strong at one point that they discouraged would-be competitors from jumping in. The Hatch-Waxman Act of 1984 meant to address this problem by allowing generics to market “bio-equivalent” drugs as long as they did not infringe on the brand-name drug’s patent; the generic could also proceed if it proved the brand-name patent was invalid. The goal was to enhance competition and lower drug prices. That goal is thwarted when brand-name manufacturers engage in the popular practice of paying generic-drug makers to keep their products off the market.
In 2004, the FTC did not identify a single settlement in a patent litigation matter involving drug makers that raised pay-for-delay concerns. In its new report, the agency points to 28 cases that bear the telltale signs of pay-for-delay, including “compensation to the generic manufacturer and a restriction on the generic manufacturer’s ability to market its product.”
Sens. Charles E. Grassley (R-Iowa) and Herb Kohl (D-Wis.) have introduced the Preserve Access to Affordable Generics Act to close the pay-for-delay loophole. The bill would make such schemes presumptively illegal and empower the FTC to challenge suspicious arrangements in federal court. The most recent version gives companies a chance to preserve certain deals if “clear and convincing evidence” proves that their “pro-competitive benefits outweigh the anti-competitive harms.” The Obama administration estimates that eliminating pay-for-delay could save the government $8.8 billion over 10 years; the Congressional Budget Office offers a dramatically more conservative savings estimate of roughly $3 billion over the same period.
The legislation should appeal to the deficit-reduction “supercommittee,” which has been tasked with identifying ways to cut the federal deficit.
By: Editorial Board Opinion, The Washington Post, October 24, 2011
It’s Obama’s fault
Isn’t everything? I can’t believe what I am hearing and reading. Insurance companies are raising their premiums and, of course, that is President Obama’s fault. It’s that damn “Obamacare.” Ah, no, it isn’t.
Insurance companies have been raising their subscriber’s premiums for years before Mr. Obama was president; actually, even before he was ”Senator Obama.”
I have a family plan to cover my husband and our two children; but I also own two small businesses and cover my employees’ healthcare at both companies. The large private PPO provider who I won’t name, but has the color of the sky in their title (ahem), has increased my premiums for both group plans and my individual family plan at least once a year for the past five years. And when I phone them and ask why, they don’t have an answer. They certainly don’t say: It’s President Obama’s fault and the passage of the Affordable Care Act.
As a matter of fact, the president of Kaiser also stated that healthcare reform is not the reason for the increased premiums; at best, it might contribute to 1 percent; so what is the other 99 percent? What is the reason these insurance companies keep increasing our premiums?
How can healthcare reform increase our premiums? Due to the increased number of people being covered by the reform act (mostly children and students who may remain on their parent’s plan), there are more people purchasing plans, whether employers or employees, which actually brings more money to those insurance companies. So why the increase?
Every time my plan has been increased, I have phoned to ask what additional benefits I am receiving for that cost increase; and every time the answer is the same: none. When I ask why, no one knows. But I know, it’s greed.
All, not some, all of the heads of these insurance companies earn millions of dollars a year in their paychecks. The insurance companies are one of the few in America not being negatively affected by our economy. Don’t believe me? Check their stock prices, or the stock prices of most medical related companies for that matter.
Actually, the increase in premiums, whether a person has an HMO or a PPO, just helps to support the need not only for healthcare reform, but for further reform, specifically a public option.
These increases are proof that the public needs another option, an affordable option. And the mandate? That drives business to the insurance companies, so they should be reducing the premiums. Insurance companies will say that many people are requesting a higher deductible; of course we are, it’s a bad economy and most of us want to pay less per month, taking the risk that we won’t end up in the E.R. or need surgery, etc.
And according to my doctor-husband, that’s a big risk. He’s an orthopedic surgeon. Patients used to come see him when they were in pain—let’s say their knee hurt. Now they come when their bones are sticking out—when they’re chronic.
So the increased prices by the insurance companies should be blamed on the insurance companies. They are hurting our healthcare system, doctors’ ability to provide proper care, and the economy as well; especially when so many Americans head to the E.R. once they’re chronic, which further bankrupts the system.
Bottom line—don’t blame Obama. Blame the insurance companies. They’re the bad guys this time around.
By: Leslie Marshall, U. S. News and World Report, September 29, 2011
According to a study released today by the Kaiser Family Foundation, 2011 health insurance premiums for employer-sponsored family healthcare benefits rose 9 percent over last year’s prices, leaving employees to pay, on average, $4,129 and employer contributions at $10,944. The number represents a surprising rise given that increases experienced in 2010 were just 3 percent.
So, why the sudden increase?
We know that Americans are using fewer medical services since the economy took a dive as people are staying away from the doctor and putting off non-life saving surgeries, such as knee and hip replacements, until they have more confidence that they will have the money required to pay deductibles and co-pays. We also know that fewer medical services are being utilized as a result of the increased popularity of Health Safety Accounts which require deductibles in excess of $2,000 per family, and employer provided policies that have increasingly large deductibles and co-pays.
As a result, can it possibly make sense that medical costs are increasing by the 9 percent reflected in the hefty premium hikes? In a word, no.
That will not stop the anti-Obamacare forces, of course, from putting the blame squarely on healthcare reform. In a sense, I suppose the Affordable Care Act does bear some of the responsibility—if you can consider motivating the health insurers to falsely inflate their prices, by forcing them to do the right thing, to be a blamable offense.
Beginning next year, health insurers will be required to justify any increases in premium rates above 10 percent. They will further be obligated to refund money to customers if an insurer is found to have spent less than 85 percent of their premium income on medical expenses. Thus, it is hardly a stretch to conclude that the insurers are simply taking their last chance to raise premium rates before they find themselves having to be more accountable to the government, particularly when they are pretty much admitting to as much.