Saturday, September 28, 2019

The logic underpinning Medicare for all who want it

Blog as sketchpad: as employer-sponsored insurance continues to slowly, steadily bleed Americans white, I think the case for a strong public option that anyone can buy into on an affordable, income-adjusted basis boils down to a few simple propositions:

1. Employer insurance is deteriorating because employers (through insurance intermediaries) lack pricing power. Every year, premium and OOP increases exceed inflation and wage growth.
2. The competition needed to endow them with that power is a strong public option paying providers Medicare rates or some variant.
3. Once such a public option establishes all-payer rates, either de facto or by fiat**, we will have space to determine whether private insurance adds any value
4. Under those revamped market conditions, we can afford to be agnostic as to whether private insurance survives or dies.

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FN - This little credo started life as a postscript to a slightly longer version of the argument.

* The Medicare for America bill, which establishes a strong public option paying modified Medicare rates (110% Medicare, with adjustments for primary care, mental health and underserved areas), stipulates that providers who accept the public plan must accept the same payment rates from commercial insurers. Competition from a strong public option could more slowly have the same effect.

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Friday, September 27, 2019

Just how big a bite does healthcare cost growth take out of earnings?

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The Kaiser Family Foundation's Employer Health Benefits Survey for 2019, released this week, shows a continued upward march in premiums and out-of-pocket costs. While costs have risen more slowly in the past five years than in the previous five, and in the last ten years (2009-2019) than in the previous ten (1999-2009), they continue to outpace inflation and wage growth. 

To get a feel for how much wage growth is eaten by health costs, let's look at some broad averages: the average increase in premiums and deductibles set against the average increase in the mean wage. Jeffrey Young's overview of the survey results at HuffPost provides a useful starting point:
In the past 10 years, the average premium for job-based health insurance that covers a family has risen 54%, to $20,756. Moreover, the amount of that premium workers pay for family coverage has increased 71%, to $6,015.

Thursday, September 26, 2019

Employer-sponsored insurance as we know it is unsustainable. Now what?

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Kaiser's 2019 Employer Health Benefits Survey, released yesterday, highlights a basic I noted a month ago (based on a Kaiser precursor report): employer-sponsored health insurance is deteriorating. Average family plan premiums have topped $20,000; average deductibles have topped $1,600. Family premiums have increased 54% over ten years. That's actually down from the previous ten years, when rates more than doubled. But the climb in excess of inflation has been relentless.

The system most consistently fails low income workers -- many of whom would be better off if the employer offered no insurance, rendering them eligible for ACA marketplace subsidies. KFF president Drew Altman lays out the basics:
  • Roughly 36 million American workers earn $25,000 per year or less — retail workers, personal care attendants, warehouse workers and many more.
  • Just 33% of workers at lower-wage firms offering health benefits are covered by their employer’s health benefits, well below the 63% share at other firms offering coverage.
  • These low-wage workers pay an average of $7,000 per year just toward the premium for a family plan.
  • Workers in low-wage firms also face much higher deductibles: a $2,679 annual single deductible, while at other firms, the average is $1,610.
My takeaways:

Wednesday, September 25, 2019

Unsubsidized? Buy bronze (probably)

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In a post yesterday, David Anderson clarified something I understood only vaguely: once a health plan enrollee meets her deductible, her incurred costs will reach the plan's annual out-of-pocket (OOP) maximum much more slowly in a plan with a high actuarial value (say, a plan covering 80% of costs) than in a low-AV plan (covering 60% of costs).

The ACA requires plans to cap enrollees annual OOP costs at no more than $7,900. Most plans at all metal levels have OOP caps over $5,000, with the exception of silver plans enhanced by strong Cost Sharing Reduction CSR) subsidies available to low income enrollees.  By the standards of the U.S.'s peer countries, that's a grotesque amount of risk for an average person to assume, but that's the world we Americans have made ourselves.

Anderson plots the rate at which an enrollee's total incurred medical costs will hit the maximum allowable OOP max in  bronze, silver, and gold plans with these features:

Monday, September 23, 2019

Elizabeth Warren's healthcare toggle switch: A two-year review

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An hour ago I stumbled on a two year old post teasing out Elizabeth Warren's ambivalence about Bernie Sanders' Medicare for All bill, as expressed on the occasion of her co-sponsoring it. That's led me to reflect on the apparent cross-currents in Warren's mind drawing her alternately toward and away from fast-track hard-core single payer.

Here are some longstanding key points in Warren's healthcare stance, fleshed out in the links provided at bottom.

1. Warren's entire political outlook and diagnosis of the U.S.'s economic and political woes is founded on her understanding of the impact of medical debt and other costs of illness (e.g., lost wages) on ordinary Americans.

2. Warren's outrage against banks and other financial institutions that she views as helping Americans "drown in debt,"  taken up several notches in the wake of the 2008 financial crisis, transfers easily to outrage against health insurers -- which are, after all, financial institutions of a sort.

Friday, September 20, 2019

What's so great about Medicare?

Kaiser Family Foundation polling indicates that when a majority of Americans say they're in favor of Medicare for all, most are thinking of the program as it currently exists, not as Bernie Sanders re-imagines it.*

Which raises the question: Why is Medicare's brand so strong?  I've explored the question over at medicareresources.org, companion site to healthinsurance.org.

Personally I would rate Medicare somewhere along the lines of a review advertised by a Cleveland restaurant long ago: Not great, but more than adequate when you consider the alternatives. For all its gaps and flaws, Americans exhale when they hit age 65. Hope you'll click through for a bit more detail.
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* Most apparently are also thinking that everyone should be able to opt in, not that everyone should be auto-enrolled with no alternatives.

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Thursday, September 19, 2019

Buttigieg goes first! -- Decries predatory hospital pricing and proposes to do something about it

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I have been part of a chorus of healthcare writers complaining that when Democratic presidential candidates excoriate profiteering by health insurers and pharma, they always give providers a pass. Relatedly, my last post salutes three hard-hitting stories published this year -- two of them in the last week -- that spotlight predatory billing or collections by hospitals and private equity-owned physician staffing companies.

While no candidate participating in the September 12 CNN debate took Kaiser Health News editor-in-chief Elizabeth Rosenthal's pre-debate invitation...
one candidate caught the cue this week. Today, Pete Buttigieg is out with a "Medicare for all who want it" plan (rather like Biden's, FWIW). In a statement, as reported by HuffPost's Jonathan Cohn, Buttigieg rounded up the usual healthcare suspects -- plus one (my emphasis):
“For years, Washington politicians have allowed the pharmaceutical industry, giant insurance companies, and powerful hospital systems to profit off of people when they are at their sickest and most vulnerable,” Buttigieg said in a prepared statement. “My ‘Medicare for All Who Want It’ plan will create a health care system that puts power in the hands of each American.”

Tuesday, September 17, 2019

Healthcare regulation by exposé

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It's been said that shaming by journalists doth not a regulatory regime make. But in 2019, national healthcare reporters are giving it a go.

Back in January, Sarah Kliff, then at Vox (now at the NYT), reported that Zuckerberg San Francisco General Hospital, a go-to destination for trauma victims, did not accept any private insurance plans. Every private who enters the hospital gets balance billed (or did at the time of writing) -- often for tens of thousands of dollars. The stories were vivid and egregious.

The next shoe dropped in April:
Zuckerberg San Francisco General Hospital announced Tuesday it has overhauled its billing policies, a move that comes three months after a Vox story drew national attention to the hospital’s abnormal and aggressive billing tactics.

Thursday, September 12, 2019

Uninsurance goes upscale: The Census's Health Insurance Coverage Update for 2018

Yesterday the Census Bureau* released its health insurance estimates for 2018. The top line showed a rise in the uninsured population of 1.9 million, or 0.5% -- the first increase since the ACA's main programs launched.

Disturbingly, the number of uninsured children increased by 425,000, or 0.6%, raising children's uninsured rate to 5.5%. That spike would appear to be due mainly to a drop in Medicaid coverage, given that  Medicaid and CHIP coverage for children was down 1.2%; and the overall percentage of children with public health insurance dropped 0.8%, while the percentage of children with private health insurance ticked up 0.2%. There was also, however, a sharp spike in the uninsured rate among children in households with incomes over 400% of the Federal Poverty Level (FPL), from 1.9% in 2017 to 2.6% in 2018 -- accounting for almost half of the increase in uninsured children.

Folks at Georgetown University and the Center for Budget and Policy Priorities will probably dive  into the spike in uninsured children, as they have been doing for at least a year. Here I just want to throw some sidelights on the Census numbers generally.

1. Affluent uninsured population spikes. Notwithstanding a drop of 2 million  (0.7%) in Medicaid enrollment, the sharpest increases in the uninsured were at high incomes. At 300-399% FPL, the insured rate dropped a full percentage point, from 92.9% to 91.9%, and at over 400% FPL, the rate dropped 0.8%, from 97.3% to 96.6%. Together, these two income groups account for 55% of the population. Particularly striking, the number of uninsured at incomes over 300% FPL increased 23.8% (from 6.631 million in 2017 to 8.215 million in 2018).  The spike in uninsured children at high income levels seems congruent with this drop.

Tuesday, September 10, 2019

When silver loading discounts trump strong CSR (the nonexpansion state "advantage," take 5)

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This post picks up where the last one left off, further examining potential partial explanations for why ACA marketplace enrollment declines on HealthCare.gov in 2019 were much sharper in states that have expanded Medicaid than in states that have refused the expansion. I raised a question in that post, bolded in the excerpt below.

Enrollment changes by income, HealthCare.gov states
2019 enrollment as a percentage of 2018, as of the end of OE in each year

State group
Total enrollment
100-150% FPL
150-200% FPL
100-200%  FPL
200-400% FPL
Unsubsidized
Expansion*
93%
  93%
91%
  92%
  95%
88%
Nonexpansion
99%
100%
98%
100%
102%
82%
* Excluding Virginia and Maine   Source: CMS state-level public use files 

The enrollment performance gaps at 100-200% FPL and 200-400% FPL are comparable. I would be tempted to suggest that the gap at 100-150% FPL is due to the concentration of low income enrollees in the nonexpansion states (those at 100-138% FPL, who pay less for top-level CSR silver plans than do those at 138-150% FPL), and that the gap at 200-400% FPL is due to stronger silver loading in the non-expansion states. But the large performance gap at 150-200% FPL kind of belies that -- unless, perhaps, silver loading at that income level is pulling more prospective enrollees into free or ultra-cheap bronze plans in the nonexpansion states. In the silver loading era, silver plan selection at 150-200% FPL has dropped from 83% in 2017 (pre silver loading) to 76% in 2019 in HealthCare.gov states. The lure is bronze coverage that is often free at that income level, while benchmark (second cheapest) silver costs about $130/month at 200% FPL. I guess I need to test whether bronze selection in this income band has risen faster in nonexpansion states.

Friday, September 06, 2019

Why 2019 ACA enrollment drops were concentrated in Medicaid expansion states on HealthCare.gov, Take 4

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In December and January, I took several whacks at explaining why 2019 enrollment losses in the 39 HealthCare.gov states were concentrated in the states that had expanded Medicaid. In those 21 states, plan selections as of the end of Open Enrollment were down 7% from 2018, compared to a 1% drop in 16 states that have refused to expand Medicaid. (I excluded Virginia and Maine, which expanded Medicaid in 2019, affecting enrollment options and results.)

First hypothesis was that the heavy concentration of enrollees in non-expansion states with incomes that would have qualified them for Medicaid in expansion states is especially "sticky." People in this income group (100-138% of the Federal Poverty Level) pay just 2% of income for a benchmark silver plan that comes with the highest level of Cost Sharing Reduction (CSR), raising the actuarial value of a silver plan to 94%, which usually translates to a deductible in the $0-500 range.  About a third of enrollees in nonexpansion states are in this income category. While about 15% of enrollees in expansion states have incomes in the 138-150% FPL range, which qualifies them for the 94% AV silver, they pay 3-4% of income for the benchmark.

Second hypothesis was that silver loading effects are stronger in nonexpansion states, because all those low income enrollees raise the average actuarial value of silver plans (which varies with income). In Florida, the blended AV of all silver plan enrollees is 91.5% in 2019.  (If you're unfamiliar with silver loading, see the note at bottom.)

Recently a third possible factor occurred to me: expansion states have a higher percentage of enrollees with incomes too high to qualify for subsidies, and enrollment losses among the unsubsidized were much steeper in the market as a whole than among the subsidized. This factor did play a role, but it was partly offset by the fact that in this category losses were steeper in nonexpansion states. The higher concentration of unsubsidized enrollees in expansion states cancelled out that advantage, however, so that losses in unsubsidized enrollment took basically equal bites out of total enrollment in both groups.

Sunday, September 01, 2019

For further study

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I'm going to be a little Labor Day weekend lazy here and jot down a few questions I'd like to look into, rather than provide any actual information about them. If you have any answers, please comment!

1. Credential inflation.  My wife, a certified nurse-midwife, rolls her eyes at the increasing impossibility of getting credentialed in her field without a doctorate. She spoke recently to a young labor & delivery nurse who's planning to become a midwife and is facing four years of study and likely debt. Apparently you can't get certified as a midwife in NJ now without doing the doctorate (not a Ph.D.), and that's a nationwide trend. "We have to do it," was the word for a university program director, because all the other nursing specialty and other non-physician medical professions like OT are doing it.

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