(Reuters) - In a renewed attack against President Barack Obama's healthcare overhaul program, House Republicans voted on Tuesday to deny funding for a central element of the law that sets up marketplaces for people to shop for health insurance coverage.
The bill passed by the House of Representatives would rescind some $1.9 billion in grants that are being made available under the healthcare law to help states establish insurance exchanges where individuals and small businesses can shop for medical coverage plans.
The exchange idea is central to the law that has faced a number of challenges in Congress and the courts since it was enacted more than a year ago. Tuesday's bill, which passed on a largely party-line vote of 283-183, likely will be blocked by the Democratic-led Senate, just as an earlier effort by House Republicans to repeal the entire healthcare law was defeated.
Even though the bill targets insurance exchanges, the exchange idea is in fact a major element of a House Republican budget plan that would eventually end the traditional government-run Medicare health plan and instead provide subsidies to private insurers to provide medical coverage for the elderly.
The Republican budget plan, drafted by Wisconsin Representative Paul Ryan, would have the elderly shop for subsidized medical coverage on insurance exchanges.
"House Republicans rhetorically exalt the private health insurance marketplace," said Ron Pollack, head of Families USA, a healthcare advocacy group. "They ironically, however, plan to de-fund the creation of such state marketplaces that would enable consumers and small businesses to choose the private health plans they want."
The debate over the exchange bill covered familiar ground. Democrats argued the healthcare law already helps millions of people. Republicans argued that the law is costly and gives the federal government too big a role in setting coverage benefits.
"This is not a free-market system; it is essentially central planning," said Republican Representative Phil Roe.
Democratic Representative Frank Pallone said the effort to deny federal grants to the states would not kill the exchanges. Rather, it would make it harder for cash-strapped states to establish their own marketplaces and give more power to the federal government, Pallone said.
The healthcare law calls for the federal government to set up exchanges for states that fail to establish their own.
The nonpartisan Congressional Budget Office said the House bill would delay establishment of state exchanges and save $14.6 billion over the next 10 years mostly because fewer people would purchase government-subsidized insurance.
About 500,000 people would be without health coverage in 2015 because of the delay, CBO said in a recent analysis of the bill.
Wednesday, May 4, 2011
Wednesday, April 13, 2011
How Much Does Your Insurance Pay Your Doctor; Do You Care?
There are a few cost comparisons we are familiar with when comparing health insurance options, while choosing an insurance option from your employer's benefits package, for example. Generally you'll see the different plan options laid out, with column showing what's covered and at what percentage, out-of-pocket costs such as your portion of the premium costs, deductibles and co-pays.
As healthcare costs grow, there's been a commensurate growth in interest about increasing patient/ consumer cost awareness. In some cases by 'cost sharing'- shifting more costs to the consumer- and in other cases providing actual prices for medical services. The great moral hazard of health finance generally arises from the fact that neither the provider nor the patient (if insured) bears the brunt of costs, and in many cases neither of those parties is even aware of how much a service will cost.
Now imagine if two other columns where added to that table you were using to compare health plans. One of the new columns has quality information, either some measure of how in-plan providers rate compared to all doctors in the state, or some indication of what type of quality data might be available to help you choose a primary care provider, specialist or if you are lucky enough to have a choice, a hospital for non-emergency procedures. Those types of measures have long been hoped for, but are not the main focus of this discussion.
The next column provides information I've not heard widely discussed. This would be some ballpark measure of the average or median amount that the plan in question pays providers relative to other public and private payees and the cost of providing services. Why would you want to know this? A couple of possibilities come to mind:
--Are plans charging more in premiums, etc.. paying providers better?
--Maybe I feel that I'll get better care and more time with providers who are getting reimbursed more for the care they provide me.
One arena where this might come into play: State such as Vermont that are looking to provide some form of single -payer plan to cover all their citizens will be tempted to essentially expand Medicaid to cover everyone. The trouble is that Medicaid pays providers far less than it costs to provide care, rendering the program somewhat unsustainable. Private payers and uninsured persons not covered by Medicaid essentially subsidize the state program.
So what might happen if consumers able to opt into Medicaid were empowered with knowledge about how much their insurance was paying providers relative to the costs of providing services? If choosing between a free state plan and more costly private one, would patients avoid an expanded Medicaid-like insurer who reimburses at low rates, for fear it would impact the care their doctor provides? Do consumers covered by such a plan have a right to know how much their doctor is being paid to provide care for them?
All other things being equal, would knowledge of how much your doctor will be paid on your behalf influence your health insurance choice? Why?
And while we are on the path towards cost transparency, let's add a third new column that tells us what percentage of premiums are spent on administrative overhead. Perhaps I'd like to reward a more efficient company with my business.
What about you?
from Just Means
As healthcare costs grow, there's been a commensurate growth in interest about increasing patient/ consumer cost awareness. In some cases by 'cost sharing'- shifting more costs to the consumer- and in other cases providing actual prices for medical services. The great moral hazard of health finance generally arises from the fact that neither the provider nor the patient (if insured) bears the brunt of costs, and in many cases neither of those parties is even aware of how much a service will cost.
Now imagine if two other columns where added to that table you were using to compare health plans. One of the new columns has quality information, either some measure of how in-plan providers rate compared to all doctors in the state, or some indication of what type of quality data might be available to help you choose a primary care provider, specialist or if you are lucky enough to have a choice, a hospital for non-emergency procedures. Those types of measures have long been hoped for, but are not the main focus of this discussion.
The next column provides information I've not heard widely discussed. This would be some ballpark measure of the average or median amount that the plan in question pays providers relative to other public and private payees and the cost of providing services. Why would you want to know this? A couple of possibilities come to mind:
--Are plans charging more in premiums, etc.. paying providers better?
--Maybe I feel that I'll get better care and more time with providers who are getting reimbursed more for the care they provide me.
One arena where this might come into play: State such as Vermont that are looking to provide some form of single -payer plan to cover all their citizens will be tempted to essentially expand Medicaid to cover everyone. The trouble is that Medicaid pays providers far less than it costs to provide care, rendering the program somewhat unsustainable. Private payers and uninsured persons not covered by Medicaid essentially subsidize the state program.
So what might happen if consumers able to opt into Medicaid were empowered with knowledge about how much their insurance was paying providers relative to the costs of providing services? If choosing between a free state plan and more costly private one, would patients avoid an expanded Medicaid-like insurer who reimburses at low rates, for fear it would impact the care their doctor provides? Do consumers covered by such a plan have a right to know how much their doctor is being paid to provide care for them?
All other things being equal, would knowledge of how much your doctor will be paid on your behalf influence your health insurance choice? Why?
And while we are on the path towards cost transparency, let's add a third new column that tells us what percentage of premiums are spent on administrative overhead. Perhaps I'd like to reward a more efficient company with my business.
What about you?
from Just Means
Monday, November 22, 2010
Health plans must spend premiums on medical care
WASHINGTON (AP) — Health insurers must spend most of the premiums they collect for medical care, or issue rebates to consumers, the Obama administration said in regulations issued Monday.
The rule unveiled by the Health and Human Services department requires insurance companies to spend at least 80 cents of the premium dollar on medical care and quality. For employer plans covering more than 50 people, the requirement is 85 cents.
Part of the new health care law, the rule is meant to give consumers a better deal. Administration officials said it will prevent insurers from wasting valuable premiums on overhead, marketing and executive bonuses. "These new rules are an important step to hold insurance companies accountable and increase value for consumers," said Health and Human Services Secretary Kathleen Sebelius.
But the insurance industry says the approach is heavy handed, and doesn't take into account some of the costs of marketing to individuals and small employers. Indeed, some companies are threatening to pull out of the individual market, and four states have already asked the federal government for an exemption from the rule, fearing it could lead to loss of coverage.
Currently, there is no uniform requirement that health insurers spend a fixed proportion of premiums on medical care. Consumer groups say somewhere in the range of 80 to 85 cents on the dollar represents good value, and some plans are able to operate even more efficiently. However, officials said there are also many plans spending 50 to 65 cents for every dollar they collect in premiums.
The rule goes into effect Jan. 1, and applies to plans that currently insure about 75 million people. Starting in 2012, as many as 9 million customers could get rebates averaging $164, officials estimate. That could be a discount on premiums or a payment by check or credit card.
Consumers shopping for health insurance in the future will be able to compare what plans in their area spend on medical care. But they may have to learn some new jargon: the proportion insurers spend on care is termed the "medical loss ratio."
One major exception to the new rule involves large employer plans. Generally major companies pay their employees' health care expenses directly, hiring an insurance company to act as an outside administrator. To employees, it looks like they are covered by an insurer, but it's actually their company that's paying. Because most big firms pay up front, they already have a strong incentive to be as efficient as possible.
Administration officials say they don't anticipate the kinds of dire disruptions that some health insurance companies have warned about.
"These rules were carefully developed through a transparent and fair process with significant input from the public, the states, and other key stakeholders," said Jay Angoff, head of the HHS office of insurance oversight.
But just in case, the regulation provides for a series of adjustments to ease the impact of the requirements.
Very small insurers with fewer than 1,000 enrollees will not be required to provide rebates, and those with fewer than 75,000 enrollees will get an adjustment. Limited benefit plans popular in the food service industry will also be able to claim an adjustment. States can apply for a waiver if state regulators conclude that the requirement would destabilize local markets, for example if a large insurer pulled out.
The rule unveiled by the Health and Human Services department requires insurance companies to spend at least 80 cents of the premium dollar on medical care and quality. For employer plans covering more than 50 people, the requirement is 85 cents.
Part of the new health care law, the rule is meant to give consumers a better deal. Administration officials said it will prevent insurers from wasting valuable premiums on overhead, marketing and executive bonuses. "These new rules are an important step to hold insurance companies accountable and increase value for consumers," said Health and Human Services Secretary Kathleen Sebelius.
But the insurance industry says the approach is heavy handed, and doesn't take into account some of the costs of marketing to individuals and small employers. Indeed, some companies are threatening to pull out of the individual market, and four states have already asked the federal government for an exemption from the rule, fearing it could lead to loss of coverage.
Currently, there is no uniform requirement that health insurers spend a fixed proportion of premiums on medical care. Consumer groups say somewhere in the range of 80 to 85 cents on the dollar represents good value, and some plans are able to operate even more efficiently. However, officials said there are also many plans spending 50 to 65 cents for every dollar they collect in premiums.
The rule goes into effect Jan. 1, and applies to plans that currently insure about 75 million people. Starting in 2012, as many as 9 million customers could get rebates averaging $164, officials estimate. That could be a discount on premiums or a payment by check or credit card.
Consumers shopping for health insurance in the future will be able to compare what plans in their area spend on medical care. But they may have to learn some new jargon: the proportion insurers spend on care is termed the "medical loss ratio."
One major exception to the new rule involves large employer plans. Generally major companies pay their employees' health care expenses directly, hiring an insurance company to act as an outside administrator. To employees, it looks like they are covered by an insurer, but it's actually their company that's paying. Because most big firms pay up front, they already have a strong incentive to be as efficient as possible.
Administration officials say they don't anticipate the kinds of dire disruptions that some health insurance companies have warned about.
"These rules were carefully developed through a transparent and fair process with significant input from the public, the states, and other key stakeholders," said Jay Angoff, head of the HHS office of insurance oversight.
But just in case, the regulation provides for a series of adjustments to ease the impact of the requirements.
Very small insurers with fewer than 1,000 enrollees will not be required to provide rebates, and those with fewer than 75,000 enrollees will get an adjustment. Limited benefit plans popular in the food service industry will also be able to claim an adjustment. States can apply for a waiver if state regulators conclude that the requirement would destabilize local markets, for example if a large insurer pulled out.
Thursday, November 18, 2010
The best time to buy long-term care insurance
Toddi Gutner is a contributing writer for The Wall Street Journal and is a former associate editor for BusinessWeek. The views expressed here are her own.
Andy Schupack and his wife hadn’t given long-term care (LTC) insurance much thought until they realized what could happen without it. Some relatives had to do a reverse mortgage for financial resources and others had to move in with family members when they got older, but neither ended up getting the proper care as they aged. To avoid ending up in a similar situation, Schupack, 57, decided to explore long-term care insurance.
He isn’t alone. About eight million Americans have LTC insurance; some 325,000 are new policyholders who bought their coverage in 2009. That number is only expected to rise as the 77 million aging baby boomers begin to look out into the future and consider the care they will need during the last years of their lives. Even so, the industry is changing as insurers, including MetLife, are exiting the business — and experts are concerned that policies will disappear or become unaffordable to keep.
For consumers like Schupack who have decided they want long-term care coverage, questions remain about when is the best time to buy it, for how long should coverage exist, what your policy should include and even whether buying a policy is the right decision at all. Unfortunately, the answers aren’t easy, but there are guidelines that can help make the decision less challenging.
The typical time to buy is between 50 and 60 years old. “This is when you’re getting to the end of your working years and you can pay off the premiums by the time you are 65,” says Nick Erin, a long-term care specialist at Mass Mutual. “Most companies have a 10-year pay period.”
Many websites have cost/benefit calculators that can help you figure out the right time to buy. In some cases, however, “people don’t really need the product,” says Erin. LTC insurance is for income protection and sometimes “Medicaid is a more viable option for people who don’t have an estate,” he says.
As you would expect, your health will also determine your insurability and your cost. A 50-year-old who develops a chronic mid-life health problem like multiple sclerosis can be locked out of a policy. “I get one call a week from people who waited too long to get coverage,” says Rhonda Gimbel, an insurance agent for LTC Professional Insurance Group. The problem is people don’t look at the planning properly. An estimated 20 percent of applicants are turned down due to health reasons.
Indeed, the cost of long-term care insurance rises each year as you age. “The difference between years can be 2 percent to 9 percent and the older you are, the greater the increase in cost,” says Gimbel. For example, the average annualized premium for individual between 45-54 year-old is $1,900. That number jumps to $3,250 per year for someone 65 and older, according to the American Association for Long-Term Care Insurance.
If you buy a policy at a younger age, you can also qualify for preferred health discounts of up to 10 percent. An estimated 62 percent of applicants between the ages 40-49 and 46 percent of the applicants between the ages 50-59 qualified for good health discounts in 2009. That percentage fell to 38 percent for ages 60-69. There are also marital partner discounts.
Your policy benefit should be based upon the current cost of care, and include some inflation protection, because long-term care costs are increasing. “For example, in 2010 the national median rate for a private nursing home room is $75,190,” says Sam Fleet, president of AmWINS Group Benefits. “In 2011 that price is likely to be almost $79,000,” says Fleet.
In some cases, there may be some federal income tax advantages for people who buy LTC coverage. “These policies are called tax-qualified long-term care insurance contracts or simply qualified contracts,” says Fleet. “There may be other tax advantages depending on the state in which you live,” he says.
Once you’ve decided to purchase LTC insurance, consider what you want your policy to cover as there are more coverage options today than in the past. Typically, a policy will cover a nursing home, assisted living, home and adult day care. Additionally, a policy should offer caregiver training, medical alert systems, home modifications and durable medical equipment. It may cover hospice care, too.
You also need to decide coverage level and for how many years. The average daily benefit should be a minimum of $300-a day or $9,000 a month for at least three years—preferably five. Also be sure the policy has an inflation rider of at least 3 percent.
Schupack and his wife choose a flexible eight-year option—six years for him and two years for his wife—with a $400 daily benefit. He pays $2800 per year for the two of them. Given that the average stay in a nursing home is just under three years, Schupack figures he has bought himself peace of mind.
Andy Schupack and his wife hadn’t given long-term care (LTC) insurance much thought until they realized what could happen without it. Some relatives had to do a reverse mortgage for financial resources and others had to move in with family members when they got older, but neither ended up getting the proper care as they aged. To avoid ending up in a similar situation, Schupack, 57, decided to explore long-term care insurance.
He isn’t alone. About eight million Americans have LTC insurance; some 325,000 are new policyholders who bought their coverage in 2009. That number is only expected to rise as the 77 million aging baby boomers begin to look out into the future and consider the care they will need during the last years of their lives. Even so, the industry is changing as insurers, including MetLife, are exiting the business — and experts are concerned that policies will disappear or become unaffordable to keep.
For consumers like Schupack who have decided they want long-term care coverage, questions remain about when is the best time to buy it, for how long should coverage exist, what your policy should include and even whether buying a policy is the right decision at all. Unfortunately, the answers aren’t easy, but there are guidelines that can help make the decision less challenging.
The typical time to buy is between 50 and 60 years old. “This is when you’re getting to the end of your working years and you can pay off the premiums by the time you are 65,” says Nick Erin, a long-term care specialist at Mass Mutual. “Most companies have a 10-year pay period.”
Many websites have cost/benefit calculators that can help you figure out the right time to buy. In some cases, however, “people don’t really need the product,” says Erin. LTC insurance is for income protection and sometimes “Medicaid is a more viable option for people who don’t have an estate,” he says.
As you would expect, your health will also determine your insurability and your cost. A 50-year-old who develops a chronic mid-life health problem like multiple sclerosis can be locked out of a policy. “I get one call a week from people who waited too long to get coverage,” says Rhonda Gimbel, an insurance agent for LTC Professional Insurance Group. The problem is people don’t look at the planning properly. An estimated 20 percent of applicants are turned down due to health reasons.
Indeed, the cost of long-term care insurance rises each year as you age. “The difference between years can be 2 percent to 9 percent and the older you are, the greater the increase in cost,” says Gimbel. For example, the average annualized premium for individual between 45-54 year-old is $1,900. That number jumps to $3,250 per year for someone 65 and older, according to the American Association for Long-Term Care Insurance.
If you buy a policy at a younger age, you can also qualify for preferred health discounts of up to 10 percent. An estimated 62 percent of applicants between the ages 40-49 and 46 percent of the applicants between the ages 50-59 qualified for good health discounts in 2009. That percentage fell to 38 percent for ages 60-69. There are also marital partner discounts.
Your policy benefit should be based upon the current cost of care, and include some inflation protection, because long-term care costs are increasing. “For example, in 2010 the national median rate for a private nursing home room is $75,190,” says Sam Fleet, president of AmWINS Group Benefits. “In 2011 that price is likely to be almost $79,000,” says Fleet.
In some cases, there may be some federal income tax advantages for people who buy LTC coverage. “These policies are called tax-qualified long-term care insurance contracts or simply qualified contracts,” says Fleet. “There may be other tax advantages depending on the state in which you live,” he says.
Once you’ve decided to purchase LTC insurance, consider what you want your policy to cover as there are more coverage options today than in the past. Typically, a policy will cover a nursing home, assisted living, home and adult day care. Additionally, a policy should offer caregiver training, medical alert systems, home modifications and durable medical equipment. It may cover hospice care, too.
You also need to decide coverage level and for how many years. The average daily benefit should be a minimum of $300-a day or $9,000 a month for at least three years—preferably five. Also be sure the policy has an inflation rider of at least 3 percent.
Schupack and his wife choose a flexible eight-year option—six years for him and two years for his wife—with a $400 daily benefit. He pays $2800 per year for the two of them. Given that the average stay in a nursing home is just under three years, Schupack figures he has bought himself peace of mind.
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