ObamaCare’s impact on health costs.
“Two-plus weeks have passed since the D.C. Circuit’s panel decision in Halbig v. Burwell and the Fourth Circuit’s opposite decision in King v. Burwell, a substantially identical case. The King plaintiffs have filed their cert petition; and the government has asked for rehearing en banc in the D.C. Circuit; and the initial agitation has subsided. It’s a fine time to highlight a few lessons that, in my estimation, we have already learned. I offer three sets of observations: today, I’ll focus on the interplay between constitutional and administrative law and on the advocacy network that produced Halbig and its companion cases; tomorrow, I’ll analyze the institutional pathologies and ideological derangements that account for the contretemps.
Constitutional and Other Law. To rehearse the wholly obvious, Halbig is the second frontal legal assault on Obamacare. The first (NFIB v. Sebelius) was directed at its “individual mandate,” and its provision that states refusing to participate in the Act’s Medicaid expansion would forfeit all Medicaid funding. These were high-toned constitutional attacks—the former, on the authority of Congress under the commerce and tax powers; the latter, on its spending authority. I don’t mean to dispute the urgency or righteousness of those lawsuits. They had to be brought, and quickly—even if the only point had been to proclaim that they can’t do this to us, at least not without a fight. Beyond that, NFIB served to demonstrate that constitutional arguments over enumerated powers still cut some ice.
The prevailing response to the Court’s narrow upholding of the mandate as a permissible exercise of the taxing power has been disappointment (or worse). At variance with many of my friends and colleagues, I believe that the Supreme Court’s decision actually produced a positive result on the enumerated powers front. Either way, though, even a full-scale win on the mandate question would have done little beyond turning Obamacare into the no-mandate care system that had been advocated by then-candidate Obama—and which the President has since implemented by waiving and postponing the oh-so-essential mandates for individuals and employers. In operational terms, and even for significant constitutional questions, the individual mandate itself has always been a side show.”
“One of the common arguments against mandating or providing upfront prices for medical tests and procedures is that American patients are not very skilled consumers of health care and will assume high prices mean high quality.
A study released Monday in the journal Health Affairs suggests we are smarter than that.
The insurer WellPoint provided members who had scheduled an appointment for an elective magnetic resonance imaging test with a list of other scanners in their area that could do the test at a lower price. The alternative providers had been vetted for quality, and patients were asked if they wanted help rescheduling the test somewhere that delivered “better value.”
Fifteen percent of patients agreed to change their test to a cheaper center. “We shined a light on costs,” said Dr. Sam Nussbaum, WellPoint’s chief medical officer. “We acted as a concierge and engaged consumers giving them information about cost and quality.”
The program resulted in a $220 cost reduction (18.7 percent) per test over the course of two years, said Andrea DeVries, the director of payer and provider research at HealthCore, a subsidiary of WellPoint, which conducted the study. It compared the costs of scanning people in the WellPoint program with those of people in plans that did not offer such services.”
“Republicans were quick to pounce Monday on Florida’s announcement that residents buying health insurance on the individual market for next year will face a 13.2 percent average increase in monthly premiums — one of the steepest rate hikes announced for any state. “Obamacare is a bad law that just seems to be getting worse,” said Florida Gov. Rick Scott, a Republican who is running for re-election.
But consumer advocates and Sen. Bill Nelson, D-Fla., the state’s former insurance commissioner, blame the increases on Florida lawmakers’ decision last year to suspend the state’s authority to negotiate and approve premiums on policies sold to people who buy insurance themselves instead of getting it through an employer.
The Republican-controlled Florida legislature voted to cancel that authority until 2016 because it did not want to have any involvement with insurance plans sold through the Affordable Care Act, saying that job should be done by the Obama administration. The federal government has authority to review but not change insurance rates.”
“Some states that expanded Medicaid under the Affordable Care Act and set up all or part of their own insurance exchanges have seen a marked drop in the number of uninsured adults.
The uninsured rates in states that opted to expand Medicaid, a health program primarily for low-income residents, and set up their own exchanges declined more in the first half of 2014 than in the states that didn’t take that approach, according to a study released Tuesday by Gallup. The survey was based on a random sample of adults through June 30.
Arkansas saw the percentage of uninsured drop from 22.5% in 2013 to 12.4% through midyear 2014, according to the survey. Kentucky followed, with its percentage of uninsured dropping from 20.4% to 11.9% during the same time span.
The other states with the largest drop in the percentage of uninsured were Delaware, Washington, Colorado, West Virginia, Oregon, California, New Mexico and Connecticut.”
“CHATTANOOGA, Tenn. — The dominion of Tennessee’s largest health insurer is reflected in its headquarters’ lofty perch above the city, atop a hill that during the Civil War was lined with Union cannons to repel Confederate troops.
BlueCross BlueShield of Tennessee has used its position to establish a similarly firm foothold in the first year of the marketplaces created by the health law. The company sold 88 percent of the plans for Tennessee individuals and families. Only one other insurer, Cigna, bothered to offer policies in Chattanooga, and the premiums were substantially higher than those offered by BlueCross.
Though insurers have been regularly vilified in debates over health care prices, BlueCross’ near monopoly here has been unusually good financially for consumers. Its cut-rate exclusive deal with one of three area health systems turned Chattanooga into one of the 10 least expensive insurance markets in the country, as judged by the lowest price mid-level, or silver, plan. The premium for a 40-year-old for that plan is $181 a month, 30 percent less than for the median cheapest silver plan nationally.”
“Last week, the House of Representatives voted to authorize Speaker John Boehner to file a lawsuit challenging President Obama’s failure to fully implement Obamacare. Specifically, the lawsuit will challenge the administration’s delay of the employer mandate—requiring many employers to provide health insurance or pay a fine—that was supposed to go into effect Jan. 1. It’s clear President Obama repeatedly has abused executive power to circumvent Congress and essentially rewrite the law, but this lawsuit still raises a host of questions.”
“Obamacare plans have shrunk payments to physicians so much that some doctors say they won’t be able to afford to accept Obamacare coverage, NPR reports.
Many of the eight million sign-ups in Obamacare exchanges nationwide already face more limited choices for physicians and hospitals than those in the private insurance market. But with low physician reimbursement rates, the problem could get even worse.
For a typical quick patient visit, Dr. Doug Gerard, a Connecticut internist, told NPR a private insurer would pay $100 while Medicare would pay around $80. But Obamacare plans are more likely to pay closer to $80, which Gerard says is unsustainable for his practice.
“I cannot accept a plan [in which] potentially commercial-type reimbursement rates were now going to be reimbursed at Medicare rates,” Dr. Gerard told NPR. ”You have to maintain a certain mix in private practice between the low reimbursers and the high reimbursers to be able to keep the lights on.”
Narrow networks have become a hallmark of many Obamacare exchange plans, as one of few options left to insurance companies that allows them to save money by lowering reimbursement rates and covering fewer providers. In the health-care law’s first year, 70 percent of all Obamacare plan networks were either narrow or ultra-narrow, according to an analysis from consulting firm McKinsey.”
“Giving health-care providers a lump sum payment for certain treatments – touted as a way to save money and improve coordination of care — yielded disappointing results for some major California hospitals and insurers, a study found.
The RAND Corp. study, funded by a $2.9-million federal grant, looked at “bundled payments” for care of insured orthopedic patients under 65 at a handful of large hospitals and insurers in California.
Six of the state’s biggest insurers and eight hospitals started out in a pilot program in 2010, but only three insurers and two hospitals actually decided to enter contracts to adopt bundled payments. The others dropped out because they didn’t think bundled care, such procedures as total knee replacement surgery, would change the delivery of care significantly or lower costs, according to the study, published in the journal Health Affairs Monday.
The pilot project resulted in such a small number of hospital cases that it was hard to draw conclusions about how bundled payments affect health care quality or costs, which were the initial goals of the study, the researchers reported. Two ambulatory surgery centers managed to partner with an insurance company and had a higher volume of cases, but generally health plans have been slow to contract with them, the study found.
“That was unexpected,” said Susan Ridgely, the lead author of the study and a senior policy analyst at RAND, a Santa Monica, Calif.-based think tank. “They were a bit more flexible and also wanted the business, but hospitals began to see that it required too much time and effort or maybe that it was not in their best interest.””
“Francisco Velazco couldn’t wait any longer. For several years, the 35-year-old Seattle handyman had searched for an orthopedic surgeon who would reconstruct the torn ligament in his knee for a price he could afford.
Out of work because of the pain and unable to scrape together $15,000 – the cheapest option he could find in Seattle – Velazco turned to an unconventional and controversial option: an online medical auction site called Medibid, which largely operates outside the confines of traditional health insurance. The four-year-old online service links patients seeking non-emergency care with doctors and facilities that offer it, much the way Priceline unites travelers and hotels. Vetting doctors is left to prospective patients: Medibid does not verify credentials but requires doctors to submit their medical license number for patients to check.
Velazco paid $25 to post his request for knee surgery. A few days later, he had bids for the outpatient procedure from surgeons in New York, California and Virginia, including details about their expertise. After accepting the lowest bid — $7,500, a fee that covered anesthesia and related costs — he learned that his surgeon would be William T. Grant, a Charlottesville orthopedist.”
“If being uninsured were no big deal, presumably Obamacare never would have been enacted. The whole premise of the law is that being uninsured is a bad thing, so it’s well worth wielding a few carrots and sticks to get people into coverage. Unfortunately, Obamacare has had to break more than a few eggs along the way. One of the presumably unintended consequences of this misguided law is the fashion in which it encourages some young adults to become uninsured. These are the very young people that the Exchanges need to sign up for coverage if they are to avoid a death spiral.
It may seem puzzling that a law that both hands out subsidies to encourage coverage and imposes penalties on those who do not could possibly increase the incentive to become or remain uninsured.”