ObamaCare’s impact on health costs.

“Insurance expansion under healthcare reform is starting to yield patient volume for hospitals, but the costs of staffing up for more patients are eclipsing the additional revenue.
Earnings reports for not-for-profit systems in the first half of the year show that many providers are seeing rising salary and benefit expenses cut into revenue gains, leading to smaller operating surpluses.
“As the pieces of the Affordable Care Act are coming together, it’s changing the demand for care,” said Jeff Jones, managing director at Huron Consulting Group. “It’s shifting the way that providers are thinking about their labor pools.”
A report from Standard & Poor’s similarly found that in 2013, expenses increased 7%, outpacing revenue growth of 5%. The rating agency attributed the rising costs to preparations that systems were making to prepare for healthcare reform, including staffing needs.”

“Obamacare puts employers in a bind, two New York Federal Reserve surveys show. Employers’ health care costs continue to rise, and the health care law is driving them to hire more part-time labor, CNBC reports:
The median respondent to the N.Y. Fed surveys expects health coverage costs to jump by 10 percent next year, after seeing a similar percentage increase last year.
Not all firms surveyed said the Affordable Care Act (ACA) is to blame for those cost increases to date. But a majority did, and the percentage of businesses that predicted the ACA will hike such costs next year is even higher than those that said it did this year.
Obamacare’s higher costs will cascade down to consumers. The surveys found that “36 percent of manufacturers and 25 percent of service firms said they were hiking prices in response” to Obamacare’s effects.
The Empire State Manufacturing Survey polls New York State manufacturers, and the Business Leaders Survey polls service firms in the New York Federal Reserve District.
A June Gallup poll found that four in ten Americans are spending more on health care in 2014 than in 2013.”

“A new poll shows 69% of California voters back Proposition 45, a November ballot measure giving the insurance commissioner the power to stop excessive health-insurance rate increases..
The Field Poll released Wednesday indicates broad support statewide for Proposition 45 ahead of what’s expected to be a costly and contentious battle between consumer groups and health insurers.
Overall, 69% of registered voters said they favored the health-rate regulation measure while 16% opposed it and 15% were undecided heading into the Nov. 4 election.
The poll found that a majority of registered Democrats and Republicans in the state supported Proposition 45.
Among Democrats, 75% of those surveyed offered support while 58% of Republicans also favored it.”

“Despite the president’s assurance that “if you like your health plan, you can keep your health plan,” Obamacare caused significant disruption to people’s coverage as the health insurance exchanges prepared for their first open enrollment. Beginning October 1, 2013, insurers knew they would struggle to price policies in the exchanges accurately.
The Affordable Care Act (ACA) included three mechanisms to backstop insurers’ risks: risk adjustment, reinsurance and risk corridors. The first, risk adjustment, consists of perpetual transfers of money from unexpectedly profitable insurers to unexpectedly loss-making insurers and is — at least conceptually — necessary to mitigate risk in a market where insurers are forbidden to charge beneficiaries actuarially accurate premiums.
The other two mechanisms, reinsurance and risk corridors, were designed to protect insurers from unforeseen losses in Obamacare’s first three years, when insurers would not have enough experience to know how much risk they faced. These financial protections are critical to insurers’ ability to survive in the exchanges through the end of 2016. Both schemes persist only through the first three years of Obamacare, by the end of which its architects believed actuarial risks in the exchanges will have stabilized.”

“It was late in the afternoon on a warm Friday in early fall and Doug Sumrell was mowing the lawn outside his suburban home in Evans, Georgia. As he pushed the mower across the yard, Sumrell began to feel faint — his chest tightened and the back of his neck started throbbing — so he went inside to take a break and drink a glass of water. But each time he went outside to finish the job, the feeling came back. He drove himself to the hospital as the sun was setting. On the way there, he left a message for his primary care doctor, Dr. Paul Fischer.
At the hospital, a cardiac enzyme test showed Sumrell’s levels were extremely high, a strong indication that Sumrell had experienced a heart attack. The emergency room doctors said that they wanted to admit him, but it was already after midnight and Sumrell’s symptoms had subsided. His wife was out of town and their dog Buddy needed to be let out. Sumrell checked himself out of the hospital.
He was jolted awake at 7:30 a.m. by the telephone. Dr. Fischer was on the line demanding that Sumrell return to the hospital immediately to meet Dr. Faiz Rehman, a cardiologist and friend of Fischer’s, to examine his heart. Within 15 minutes of arriving, Sumrell was in the hospital’s “cath lab,” where Dr. Rehman inserted a catheter through Sumrell’s groin and into his heart, allowing him to see blockages in Sumrell’s arteries. The news was bad: his left anterior descending artery — also known as the “widow maker” — was up to 98 percent blocked. “Lord, I would’ve stayed home and not told anybody if Dr. Fischer hadn’t interceded and gotten me down there and arranged everything,” Sumrell told me.”

“For all the endless talk about reforming the health care system these past five years, it’s remarkable how little we’ve done to solve its actual problems. Spending hundreds of billions of taxpayer dollars to subsidize insurance coverage for several million people? That’s the easy part. The hard part is addressing the fact that American health care is so expensive.
The high price of U.S. health care is the fundamental reason tens of millions of Americans are uninsured. It’s the principal suppressor of middle-class wage growth. It’s a constant threat to businesses’ operating margins, and it’s the primary driver of the federal debt.
In May the American Health Policy Institute surveyed the chief human resource officers of 360 large employers, representing 10 million workers. When asked what troubled them the most about the Affordable Care Act, 85% said “increasing access to the health care system without making significant improvements in the efficiency and affordability of that system.” Only 6% believed that “the ACA will help my company more effectively control health care costs”; 82% disagreed.
According to the Congressional Budget Office’s 2014 Long-Term Budget Outlook, the United States remains on an “unsustainable” trajectory, driven entirely by growth in the big federal health care entitlements: Medicare, Medicaid and Obamacare.”

“Carondelet Health Network, a Tucson, Ariz.-based division of Ascension Health, has agreed to pay $35 million to settle allegations that two of its hospitals inappropriately billed Medicare and other federal health programs for inpatient rehabilitation care.
The settlement is the highest amount paid in Arizona under the False Claims Act, according to the U.S. attorney’s office in Phoenix. From 2004 to 2011, the Justice Department alleged, the Carondelet hospitals billed the government for inpatient rehab services for patients who didn’t meet coverage criteria.
The Roman Catholic hospital system “expressly denies” the allegations in the settlement agreement.”

“Instead of shutting down Obamacare’s insurance exchanges, the government should expand them so that they also include patients who now are covered by Medicaid, Medicare, and veterans health programs.
That’s the gist of a big new health care policy proposal that’s getting a lot of attention.
It’s newsworthy in part because it’s so counter-intuitive. It comes from a think tank, the Manhattan Institute, that’s generally known for conservative, free-market, center-right policy ideas. You’d expect them to be in favor of repealing Obamacare entirely, not expanding it.
The proposal is attracting respectful praise from other conservative voices. Steve Forbes, the former Republican presidential candidate, tweeted a link about the proposal with the words “what true patient-centered, consumer-driven healthcare reform would look like.” (The plan’s author, Avik Roy, is the opinion editor of Forbes in addition to being a senior fellow at the Manhattan Institute.)
At the conservative web site Townhall.com, Conn Carroll wrote, “Some conservatives will oppose Roy’s plan since it does not begin by repealing Obamacare.” But he insists, “fetishizing full repeal at the expense of smaller, more popular reforms would be a huge mistake… Progressives did not create the modern welfare state in one fell swoop. They did it by incrementally building it up over time. Conservatives should steal a page from their playbook and begin to cut the size and scope of the federal government whenever they can. If we wait to do at all at once, we may be waiting forever.””

“Arkansas, the first state to establish the conservative private-plan model for expanding Medicaid under the Patient Protection and Affordable Care Act, now is looking to join several other conservative-leaning states in requiring low-income beneficiaries to make monthly contributions to their health coverage in the form of a health savings account.
The state has proposed to the CMS that, beginning in 2015, its Medicaid beneficiaries would have to contribute to Health Independence Accounts (PDF). Beneficiaries with annual incomes between 50% and 99% of the federal poverty level would contribute $5 a month to their accounts, while those earning between 100% and 138% of poverty would pay between $10 and $25. The state would provide a matching contribution of $15 into their accounts. Money would be drawn from the accounts for copayments on medical services. Any unused funds in the accounts would be rolled over annually with a cap of $200, which the beneficiary could use for paying private insurance costs.”

“Last Monday, Jed Graham of Investor’s Business Daily reported that insurers say Affordable Care Act enrollment is shrinking, and it is expected to shrink further. Some of those who signed up for insurance on the exchanges never paid; others paid, then stopped paying. Insurers are undoubtedly picking up some new customers who lost jobs or had another “qualifying life event” since open enrollment closed. But on net, they expect enrollment to shrink from their March numbers by a substantial amount — as much as 30 percent at Aetna Inc., for example.
How much does this matter? As Charles Gaba notes, this was not unexpected: Back in January, industry expert Bob Laszewski predicted an attrition rate of 10 to 20 percent, which seems roughly in line with what IBD is reporting. However, Gaba seems to imply that this makes the IBD report old news, barely worth talking about, and I think that’s wrong, for multiple reasons.”