Interim Meeting of The American Medical Association-Atlanta, Georgia
I’m sure some of you may have noticed my lack of postings over the last several days. I want to assure you that I am still alive and well. As a physician, one of the most important functions for me is advocating on behalf of “Patients” and our Profession of Medicine. We generally meet on a national level at least twice per year at various sites across the country. There are over 530 delegates representing every state and virtually every speciality and sub-speciality that you can imagine. Additionally, each delegate has an alternate. Today, we have multiple ongoing Reference Committees, during which anyone can make his/her case for a particular issue. We are the official body of The House of Delegates to the American Medical Association. I am presently in one reference committee discussing such topics as merging of Health Insurance Companies, Veterans Health, Pain Manangemet, Opioid Abuse, Access To Care,Women’s Health and their decision to determine their health care desires for themselves. This is in no way all encompassing, only a snapshot of this one committee. The General Meeting started with a “Big Bang”….A movement by a few obstructionists (we have them here too) for the AMA to support the defunding of Planned Parenthood was resoundingly smacked down, not once but twice. It’s not over till it’s over, so I am waiting to see what parliamentary methods will be conjured up to somehow come back to this issue.
So, this is my focus right now and through mid-week. I’ll be back to my regular routine as soon as possible, but for now, I’m in this fight to the end. I’ll rejoin you as soon as I can!
RAEMD95, November 15, 2015
“Who Knew?”: Obamacare Is Such A Disaster That Even More Insurers Want To Be Part Of It
There are still plenty of days when Obamacare looks bad. Tuesday wasn’t one of them.
The Department of Health and Human Services announced that more insurers were joining the Affordable Care Act’s new marketplaces—you know, the places where people can buy coverage on their own and, depending on their incomes, qualify for subsidies. How many more insurers are participating? Quite a few, it turns out. According to HHS, the net increase is more than 25 percent. That should translate to more options for people buying coverage. The increased competition should also help keep premiums relatively low.
The data is preliminary, based on 44 states for which HHS had information. And of course the sheer number of insurers offering coverage is just one sign of how the law is doing. If you’re actually buying insurance, you don’t simply want choices. You want good choices. You want to know that the insurance will give you access to doctors and hospitals when you need them. You want to know that the coverage pays your bills adequately. And so on.
Still, Obamacare critics hadn’t predicted the markets would evolve this way. On the contrary, they expected that young and healthy people would stay far away from the new marketplaces, because the new coverage would be pricier than what they were paying before. Without enough business, the argument went, insurers would get skittish and withdraw. At best, the marketplaces would all become oligopolies and monopolies, with just a handful of insurers continuing to sell policies. At worst, the whole scheme would fall apart. That quite obviously isn’t happening.
Trouble could still arise. By design, Obamacare includes a series of provisions designed to insulate insurers from major losses in the first three years. I usually describe them as “shock absorbers.” Many other policy wonks refer to them as the three Rs, for reinsurance, risk corridors, and risk adjustment. Two of the three, risk corridors and reinsurance, are temporary measures set to expire in 2016. More knowledgeable critics of the law, like Bob Laszewski and Megan McArdle, have warned that more insurers could abandon the market or at least jack up their premiums once those measures expire.
I can’t tell you with certainty whether they are right or wrong. Always in motion is the future, as a famous prophet once said. But keep in mind that gloomy, even dire, predictions about Obamacare’s marketplaces are nothing new. One of my favorites was an op-ed that ran in the Wall Street Journal at the end of last year. The author was John Cochrane, a professor of finance at the University of Chicago. The headline was “What to Do When Obamacare Unravels”—not “if,” mind you, but “when.”
At the time, with unexpected plan cancellations and the website problems very much on people’s minds, betting against the program working probably seemed like a good idea. Who wants to make that kind of bet now?
By: Jonathan Cohn, The New Republic, September 24, 2014
“Extending The Hardship Exemption”: You Can Still Have Weak Health Insurance Under Obamacare, For Now
If you liked your old skimpy health plan, you may not be able to keep it. But now you can get a new, somewhat skimpy health plan instead, at least for a little while.
That’s a rough translation of an Obamacare policy change that the Administration announced on Thursday. The change, first reported by Louise Radnofsky of the Wall Street Journal, represents yet another effort to help people about to lose their existing insurance policies, usually because those policies do not comply with the Affordable Care Act’s standards for benefits and pricing. Those old policies left out major benefits, were sold only to people without pre-existing conditions, and so on.
As you know, plan cancellations have been a source of tremendous controversy—and, for the president, immense political grief. Some estimates have suggested several million people received these cancellation notices. The vast majority of those people have already found new coverage, either directly through insurers or through one of the Obamacare exchange websites, according to the Administration. While some are paying more money, others have discovered that the new policies are cheaper—or, at least, are grateful for the extra protection. Lucia Graves of National Journal wrote about some of their stories the other day.
But some people still haven’t found insurance. Administration officials think, based on conversations with state regulators and insurers, that about half a million people fall into this category. That’s half a million people who could, because of the individual mandate, face tax penalties because they have declined to get affordable coverage.
Now, however, people with cancelled policies have a new option. The individual mandate has always contained a hardship exemption: If you qualify for it, you don’t have to pay the penalty and you have access to the cheaper, slightly less comprehensive catastrophic insurance plans otherwise available only to people under 30. The only question with the hardship exemption has been who gets it. The law gives the administration flexibility over that question and, on Thursday, Health and Human Services Secretary Kathleen Sebelius announced that it would apply to people who just lost their policies and are unable to find replacements that cost the same or less money.
HHS made the announcement by posting a guidance and sending a letter to a half-dozen more conservative members of the Senate Democratic caucus. And neither document answers all of the relevant questions, like how strictly the government will apply the new criteria or for how long this exemption will last. (Administration officials say it will be temporary.)
Conceptually, making the change is not so different from allowing more people to have grandfather protection for their existing coverage—after all, it’s basically telling people who have bare-bones coverage now that they can take out bare-bones policies next year. And imposition of the individual mandate was always supposed to be a gradual process. The financial penalty starts out relatively low, but will increase in 2015 and 2016. The administrative flexibility over the hardship exemption was designed to give the administration some leeway over enforcing the mandate, particularly early on, in order to ease the transition to a new and reformed insurance market. (The Massachusetts reforms, which were a model for the Affordable Care Act, also included a hardship exemption and called for increasing penalties over time.)
Administration officials don’t seem to think many people will take up this new option. They are probably right about that. Catastrophic policies aren’t dramatically different in coverage from the “bronze” policies, which cover 60 percent of the typical person’s medical expenses and comply with all Obamacare requirements. But if you buy a catastrophic policy, you’re not eligible for federal tax credits. If you buy a bronze policy, you are. As a result, most lower- and middle-income people would probably still find the bronze policies a better deal.
Still, some people—primarily, the ones who don’t qualify for subsidies—will opt for the catastrophic policies because they will be moderately cheaper. And some people will opt not to get insurance at all. That will mean fewer people in good health paying premiums for the exchange policies. That’s a potential problem for insurers, who count upon those premiums to offset the medical bills of people in poor health. (For health policy wonks: The catastrophic policies are an independent risk pool, separate from other policies in the exchanges. So for every person who selects one of those policies, that’s one fewer person putting premiums into the larger pot of money for the exchange policies.) There’s also a danger that, as Ezra Klein points out, the administration will come under more pressure to pull back on the mandate for other people. “This latest rule change could cause significant instability in the marketplace and lead to further confusion and disruption for consumers,” said Karen Ignani, president of America’s Health Insurance Plans.
Yes, insurers say those sorts of things all the time. And this singular change probably won’t cause serious, irreparable harm, any more than any of the previous ones did. The number of people whose behavior changes is likely to be small and the new system is more resilient than most people realize. But even minor changes can become major if there are enough of them.
Note: This item has been updated. As a friend reminds me, even the catastrophic plans under Obamacare aren’t that skimpy. They still cover all essential benefits, for example, and the actuarial value really isn’t much different from bronze plans.
By: Jonathan Cohn, The New Republic, December 21, 2013
“Unless You’re One Of The Unlucky Ones”: Americans Suddenly Discovering How Insurance Works
It’s been said to the point of becoming cliche that once Democrats passed significant health-care reform, they’d “own” everything about the American health-care system for good or ill. For some time to come, people will blame Barack Obama for health-care problems he had absolutely nothing to do with. But there’s a corollary to that truism we’re seeing play out now, which is that what used to be just “a sucky thing that happened to me” or “something about the way insurance works that I don’t particularly like”—things that have existed forever—are now changing into issues, matters that become worthy of media attention and are attributed to policy choices, accurately or not. Before now, millions of Americans had health insurance horror stories. But they didn’t have an organizing narrative around them, particularly one the news media would use as a reason to tell them.
The latest has to do with the provider networks that insurance companies put together. This is something insurance companies have done for a long time, because it enables them to limit costs. If an insurer has a lot of customers in an area, it can say to doctors, “We’ll put you in our provider network, giving you access to all our customers. But we only pay $50 for an office visit. Take it or leave it.” An individual doctor might think that it’s less than she’d like to be paid, but she needs those patients, so she’ll say yes. Or she might decide that she has enough loyal patients to keep her business running, and she wants to charge $100 for an office visit, so she’ll say no.
So every year, doctors move in and out of those private-provider networks, and the insurers adjust what they pay for various visits and procedures, and inevitably some people find that their old doctor is no longer in their network. Or they change jobs and find the same thing when they get new insurance. And that can be a hassle.
But now they have someone new to blame: not the insurance company that established the network, and not the doctor that chose not to be a part of it, but Barack Obama. It’s not just my hassle, it’s a national issue. As Politico reported, “Speaker John Boehner (R-Ohio) said to reporters on Tuesday that the ‘fundamentally flawed’ health care law is ‘causing people to lose the doctor of their choice.’ Chief GOP investigator Darrell Issa has launched a House probe into the doctor claim. And House Republicans have highlighted the physician predicament in their weekly GOP addresses.” So to reiterate: Your insurance company set terms for its network that your doctor didn’t like. Your doctor decided not to be in that network. And that, of course, is Barack Obama’s fault.
Before we move on, there’s something we should note. You know who never loses their doctor? People who have single-payer insurance, that’s who. If you live in pretty much any other industrialized country in the world, you don’t have to worry whether your doctor accepts the national health plan that insures you and everyone else, because every doctor accepts it. Even here in America, there are people who almost never have to worry about losing their doctor: the elderly people who benefit from America’s single-payer plan, Medicare. Despite their constant gripes about payment levels, 90 percent of doctors accept Medicare, because there are just too many Medicare patients and doctors don’t want to be shut out of that business.
“Obamacare will make you lose your doctor!” may be the attack of this week, but conservatives are even trying to blame Barack Obama for the basic way insurance itself works. There’s a lot of talk about what a raw deal Obamacare is, a message that’s being aimed at young people in particular to try to convince them to stay uninsured. As Jonathan Cohn says, “The simplest way to describe Obamacare is as a transfer from the lucky to the unlucky.” That’s not just true of Obamacare, it’s true of insurance generally. All insurance.
The way insurance works is that unless you’re one of the unlucky ones, in purely financial terms, your insurance costs more than you gain from it. Have you ever sat down with all the bills you’ve paid for car insurance and homeowner’s insurance and totalled up all your premiums and all the payouts you’ve received over your lifetime? If you did, it would probably look like you paid a lot but didn’t get much in return. Some people who have had major catastrophes—an accident that totalled their car, a tree falling on their house—come out ahead, but people who haven’t had those things happen to them come out behind. If it wasn’t that way, every insurance company would lose money. But they don’t. They work very hard to set premiums to exceed the amount they spend in payouts (not to mention working hard not to pay out for things they ought to). But as Jonathan Chait says, “Insurance isn’t a kind of gamble where you bet you can beat the house by consuming more in medical care than you pay in premiums and deductibles. It’s protection from risk. People like that protection. They will pay to acquire it.” That applies not just to health insurance but to every kind of insurance. That’s why it’s called “insurance.” (The only exception is life insurance, which works more like an investment.)
The only people who come out ahead in dollars and cents on insurance are those people who have had terrible things happen to them. What the rest of us are buying, as any insurance salesman will tell you, is peace of mind.
To get back to the place we started, it can seem now that people are saying for the first time, “Wait a minute! Insurance is a raw deal! I mean, Obamacare is a raw deal!” And the media are doing their part by running stories that characterize the side effects of the private insurance market, like limited networks of doctors or the fact that less expensive plans have higher deductibles, as something new that’s occurring only because of the Affordable Care Act. But they aren’t. If you want to have a system of private health insurers, that’s how it has worked in the past, and that’s how it will continue to work. If you really want to be free of those problems, you’ll have to wait until you’re 65 and can join the big-government, socialist plan called Medicare.
By: Paul Waldman, Contributing Editor, The American Prospect, December 10, 2013
“A Reminder Of The Essential Truth”: You Might Lose Your Doctor, But Don’t Blame Obamacare
Obamacare critics on the right think they have a new issue. They are calling it “provider shock.” Thanks to the new health care law, these conservatives say, insurance companies are limiting beneficiaries to small groups of doctors and hospitals. As a result, people who depend on these professionals and institutions will have to seek treatment elsewhere—and, inevitably, get substandard care.
When conservatives make these arguments, I imagine they have in mind stories like this one, from the Los Angeles Times:
In a major shift in health-care benefits likely to be followed by others, PacifiCare Health Systems Inc. today will unveil an HMO that will limit members’ choices to a relatively small network of doctors and hospitals. … members who enroll in the plan, called Value Network, will have available to them about one-third of the hospitals and one-half of the doctors of a standard HMO. Altogether, there are 300 hospitals and 250 medical groups in California. Value Network members who use providers outside the slimmed-down network generally will have to foot the bills.
If you’re a fellow health policy geek, then you may have guessed the punch line. This article isn’t from 2013. It’s from 2002. And it’s a reminder of the essential truth here. Insurance companies have been using limited provider networks for a long time. It’s how they conducted business before Obamacare came along and, for better or worse, it’s how they’ll conduct business now that Obamacare is law.
Maybe a little history would put this issue in its proper context. Once upon a time, most insurance carriers would pay for care provided by pretty much any person or facility with a license. But that got expensive and, by the 1980s, insurers responded by reducing what they would pay for services—and then limiting beneficiaries to networks of doctors and hospitals willing to accept these lower fees.
The change was not particularly popular. At the time, Americans were not accustomed to such restrictions on where they got their medical care. In response to the consumer and political backlash—a backlash that providers happily supported—insurers started offering plans with looser restrictions. Mostly these were preferred provider organizations (PPOs), which allowed beneficiaries to seek care out of network as long as they were willing to pay more for each visit and service. But provider restrictions never went away entirely and frequently negotiations over the terms led to very public disputes, as Paul Fronstin, from the Employment Benefit Research Institute, pointed out via e-mail:
There have been numerous stories over the last decade of usually health plans dropping a large provider group because the provider group wouldn’t accept the rates, or less-usually a provider group walking away from a health plan because it didn’t like the terms. Often the two would come to terms after some period of continued negotiation once the contract expired and the news hit the fan, so to speak.
More recently insurers have shown renewed interest in tighter networks, sometimes through what’s known as “tiered network” plans that operate as a sort of hybrid between HMOs and PPOs. (These plans allow people to get care out of network, but only at much higher out-of-pocket costs than more traditional PPOs would require.) And it appears the Obamacare exchanges have lots of these plans.
While I haven’t seen definitive nationwide data, a report from the Center for Healthcare Transformation and Research found that, on Michigan’s new exchange, the majority of options are “limited or network plans.” In California, where narrow networks have gotten a great deal of media attention, the plans Blue Shield is offering will allow access to just 36 percent of the physicians available in Blue Cross employer plans, according to the L.A. Times. And when McKinsey and Company surveyed 16 state exchanges earlier in the year, it found that about half the plans had narrow networks, according to an article in Modern Healthcare magazine.
But Obamacare’s relationship to this trend is more complicated than it might seem. On the one hand, the law has introduced volatility into the insurance market, potentially emboldening insurers who were contemplating tightening networks already. As Karen Pollitz, a senior fellow at the Kaiser Family Foundation, explained via e-mail:
Without question, some insurers took this opportunity—when things are changing and so the old ways of doing business could be shaken up—to offer new, tighter, cheaper network designs. And probably without a clear idea as to what impact it might have on patients. Also without question, some hospitals and doctor groups took this opportunity to take a tougher bargaining stance and demand higher payments from insurers to join their networks, betting the insurers couldn’t live without them, and the insurers called their bluff. It’s not obvious providers knew clearly what the patient impact would be, either.
With Obamacare, and its requirement of selling policies to anybody willing to buy them, insurers also worry about adverse selection. Previously, they were willing to offer plans without provider restrictions, but only to people unlikely to use either outpatient or inpatient services much. Now insurers have to sell plans to anybody, regardless of pre-existing conditions or risk of illness. In other words, they can’t restrict wide-open access to the people least likely to use it. Faced with this reality, some insurers are bound to raise premiums for those plans—or to stop offering them altogether. That’s why some people who buy these plans now would have to pay more for them next year. (Basically, this is just another form of rate shock, about which you’ve read so much already.)
Still, according to nearly every source inside and outside the industry I’ve consulted, the primary reason carriers are offering so many small-network plans in the exchanges is that they believe consumers want them. Their marketing research suggests that, when forced to choose between paying higher premiums for wider networks or lower premiums for narrower networks, the majority of people will go for the cheaper insurance. The one survey I’ve seen on this question, by Morning Consult, suggests the carriers may be right: In that survey, nearly 60 percent of respondents said they’d opt for plans with fewer provider choices if it meant saving on premiums.
Larry Levitt, senior vice president of the Kaiser Family Foundation, summarizes the situation this way:
The main way insurers control costs is by negotiating and selectively contracting with doctors and hospitals. That’s been the case for decades. The only real connection to the Affordable Care Act is that the health reform law is making insurers compete for customers more aggressively.
As it happens, the narrower networks might be a good fit for many consumers, both financially and medically. Totally lost in this debate is the fact that many experts believe our health care system pays the providers of medical care way too much money. That’s particularly true of hospitals, whose obtuse and frequently unjustified prices were the subject of Steve Brill’s celebrated Time magazine article earlier this year. Sometimes high prices correlate with high quality, but sometimes they don’t. And particularly when it comes to more routine care, a community hospital is not just adequate but maybe even preferable to a teaching hospital that specializes in the hardest-to-treat cases.
Of course, the converse is also true. A few people have those hardest-to-treat cases. They are the ones who are better off at a place like Cedars-Sinai or the Mayo Clinic—or who need to maintain long-term relationships with professionals, rather than switching every time plans alter their networks. They are also the people whom, ideally, health insurance should do the most to assist.
But it’s not as if most people in this situation have unfettered access to such doctors and hospitals today. And Obamacare has provisions designed to help them. Most of the exchanges seem to include more traditional PPOs. They are expensive, but they are available to anybody—including people who, because of pre-existing conditions, previously had absolutely no way to buy them. (There are also subsidies that some people can use to offset the cost.) In addition, the Affordable Care Act has a “network adequacy” requirement that, in theory, requires all plans to include hospitals that provide specialty services like pediatric cancer treatment. The law even creates an external appeals process, through which people with private insurance can seek medically appropriate care they believe their carriers cannot (or will not) provide.
There’s a good case for strengthening these two provisions, which are relatively weak, or for taking other steps to help people who depend upon the most advanced hospitals and/or a set of familiar providers. The federal government could, for example, offer more financial incentives for the creation of Accountable Care Organizations, which are closed-network groups of providers designed to deliver the same kind of high-quality, low-cost care you find today at places like Kaiser Permanente, Geisinger Health System, and Group Health of Puget Sound. More states could set hospital rates, as Maryland already does, effectively taking price negotiation out of the market and subjecting it instead to regulation. Or there’s the most radical solution of all: Simply junking private insurance and creating a single-payer system, which would operate more or less like Medicare and would, in practice, mean access to most physicians and virtually every hospital.
None of these things are likely to happen anytime soon. They involve greater government regulation of health insurance, which would be fine with most Obamacare supporters but anathema to the law’s critics. That’s one irony of this latest controversy, as Jonathan Chait pointed out on Monday. Market forces, not government, and the main reason insurers are introducing tighter networks. Yet the people objecting to the result are the same ones who say they love markets.
By: Jonathan Cohn, The New Republic, November 26, 2013
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