Showing posts with label AHIP. Show all posts
Showing posts with label AHIP. Show all posts

Tuesday, October 25, 2022

On adding an out-of-pocket cost cap to traditional Medicare

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Medicare's annual Open Enrollment Period is in progress, and enrollment in Medicare Advantage (MA) is poised to exceed enrollment in traditional, fee-for-service (FFS) Medicare for the first time in 2023. Stat's Bob Herman spotlights advocates' case for erasing MA's most consequential competitive advantage by adding an annual out-of-pocket cost cap (OOP cap) to traditional, fee-for-service Medicare:

At least 1 in 5 people* who choose Medicare Advantage — the alternative to traditional Medicare that is operated by health insurance companies — say they choose it because of the out-of-pocket limits that insurers offer, according to a new survey from the Commonwealth Fund.

According to a Kaiser Family Foundation estimate, as of 2018, about one in six FFS Medicare enrollees (counting only those enrolled in both Part A and Part B**) lacked an OOP cap and were thus exposed to potentially catastrophic out-of-pocket costs. That comes to about 5 million enrollees in 2022. The other 25 million FFS enrollees in Parts A  and B have access to OOP caps -- usually quite low --  via either Medigap, an employer-sponsored supplemental plan, or dual eligibility in Medicare and Medicaid.

In a study commissioned by America's Health Insurance Plans (AHIP), Wakely actuaries calculated that adding a $6,700 OOP cap to FFS Medicare Parts A and B would increase per-person spending by 3.5%. Wakely cast that estimate as conservative, as it does not include an estimate of "induced demand"-- i.e., enrollees using more care because it's more affordable. A June 2022 Urban Institute analysis bears that out. Urban estimated the cost of a $7,550 cap -- the highest currently allowable by MA plans for in-network care -- at $25 billion per year, a 5% increase. But that cap is inclusive of Part D, which according to Urban's estimate accounts for about 18% of cost increases. A $7,550 cap for Parts A and B alone would presumably increase FFS costs by about 4%. Urban estimates that induced demand triggered by a $7,550 cap will increase total spending by all payers by $8 billion, or 1.6% (perhaps 1.3% with Part D omitted).  That added cost (not accounted for by Wakely) does seem to bring the Urban and Wakely estimates more or less in line. 

Friday, May 26, 2017

AHIP puts Medicaid first in "do no harm" plea to Republicans

Early this week, in a letter to Senate Finance Committee Chair Orrin Hatch, the America's Health Insurance Plans (AHIP), the largest association of private health insurers, basically begged Republicans to stop threatening to uninsure tens of millions in the name of reform. 

AHIP voiced support for community rating, guaranteed issue, income- and age-based subsidies, and an enforcement measure sufficient to induce people to buy insurance. In other words, for preserving the ACA marketplace with a few regulatory teaks  -- and with the AHCA's $138 billion in federal funding for state reinsurance or other "stability" measures tossed in.

Striking on its face though the health insurance industry's renunciation of medical underwriting may be, the most remarkable part of the letter comes early, in its reframing of what healthcare "reform," Republican-style, is all about. AHCA opponents have been screaming for months that at the bill's core is a $900 billion tax cut* paid for by an $800+ billion Medicaid cut. It's been hard to break through the noise with that core equation, given the AHCA drafters' high-strung debates about various proposed malformations of the individual market. AHIP puts the pieces in perspective:

Monday, January 23, 2017

Losers and winners under medical underwriting

This post is a by-product of my prior post de-gaslighting Betsy McCaughey's ridiculous claim that only 500,000 people would be affected by repeal of the ACA's protections for people with pre-existing conditions seeking insurance in the individual market.   I believe I have a sharpened view of who's been helped and who's been hurt in the post-ACA individual market.

Spoiler alert: in the pre-ACA individual market, more than half of those who needed insurance were either denied coverage, discouraged from applying, offered insurance that excluded coverage for their pre-existing condition, or offered coverage at above-market rates.

McCaughey's argument was built on misrepresenting a 2010 report issued by Henry Waxman and Bart Stupak, then-chairs of the House Energy and Commerce Committee, that drew on data elicited from the four large health insurers in the 2009 individual market , The main takeaways in this study were that coverage denials on the basis of applicants' prior medical history rose rapidly from 2007 to 2009, and that the denial rate reached 15.3% in 2009. That latter figure is roughly at the midpoint between the result of a 2009 AHIP survey of member insurers, which found a denial rate of 12.7%, and the Kaiser Family Foundation's 2013 estimate that 18% of applicants were denied (perhaps the denial rate continued to rise after 2009).

The Waxman-Stupak report  also cited an internal document from one of the insurers articulating a common assumption: that in reality about one third of applicants were effectively shut out of the market, as many were discouraged from applying by brokers, or past experience. The report further noted that one of the four insurers provided 15% of its customers with polices that excluded coverage for their pre-existing condition. While it did not provide an overall estimate for such targeted exclusions, the AHIP survey reports that 6% of coverage offers included such exclusions (and some participating insurers did not report on this question).

Saturday, October 17, 2009

Obama (re) declares war on lobbyists

It's on now. When the Baucus bill passed out of committee, it became clear that some form of health care reform will likely pass. That was the opening gong for lobbyists to start their final pushes to knock key cost control measures off of the end product -- the excise tax on expensive health care plans, the pending Sustainable Growth Rate cut to doctors' Medicare payments, the cuts in subsidies to Medicare Advantage plans, the tax on medical device makers, strong price control leverage for any public option, etc. etc.

The bogus and swiftly discredited (counter-swiftboated?) AHIP-commissioned study purporting to show that the Baucus bill will raise premiums was in turn a red cape to Democrats, who have gone out with gusto to paint the health insurance industry as public enemy #1. It is unlikely that AHIP is trying to prevent a reform bill from passing; they are rather trying to get what they can added in and taken out -- stiffer individual mandates, increased subsidies, no public option, no excise tax, weaker mimimum coverage standards. Give them all that, and reform is still worth doing -- insurance at least marginally worth having will still be made at least marginally affordable to most of those who now lack it. But the U.S. health care system will remain dysfunctional -- twice as expensive as that of other rich countries, riddled with coverage holes, wired for overtreatment. The battle now is about how eviscerated the final bill will be.

That is why Obama has returned to a major campaign theme: we can't reform our policies until we reform our politics. Here's how he put it on Jan. 30, 2008 in Denver:
we need to do more than turn the page on the failed Bush-Cheney policies; we have to turn the page on the politics that helped make those policies possible.

Lobbyists setting an agenda in Washington that feeds the inequality, insecurity, and instability in our economy.

Division and distraction that keeps us from coming together to deal with challenges like health care, and clean energy, and crumbling schools year after year after year.

Cronyism that gave us Katrina instead of competent government. And secrecy that made torture permissible and illegal wiretaps possible.

It's a politics that uses 9/11 to scare up votes; and fear and falsehoods to lead us into a war in Iraq that should've never been authorized and should've never been waged.
Compare his weekly address today:

This [rampant health care inflation] is the unsustainable path we’re on, and it’s the path the insurers want to keep us on. In fact, the insurance industry is rolling out the big guns and breaking open their massive war chest – to marshal their forces for one last fight to save the status quo. They’re filling the airwaves with deceptive and dishonest ads. They’re flooding Capitol Hill with lobbyists and campaign contributions. And they’re funding studies designed to mislead the American people.

Of course, like clockwork, we’ve seen folks on cable television who know better, waving these industry-funded studies in the air. We’ve seen industry insiders – and their apologists – citing these studies as proof of claims that just aren’t true. They’ll claim that premiums will go up under reform; but they know that the non-partisan Congressional Budget Office found that reforms will lower premiums in a new insurance exchange while offering consumer protections that will limit out-of-pocket costs and prevent discrimination based on pre-existing conditions. They’ll claim that you’ll have to pay more out of pocket; but they know that this is based on a study that willfully ignores whole sections of the bill, including tax credits and cost savings that will greatly benefit middle class families. Even the authors of one of these studies have now admitted publicly that the insurance companies actually asked them to do an incomplete job.

It’s smoke and mirrors. It’s bogus. And it’s all too familiar. Every time we get close to passing reform, the insurance companies produce these phony studies as a prescription and say, "Take one of these, and call us in a decade." Well, not this time.
Beyond slamming the most obvious target, Obama at the close broadened the scope and raised the stakes, framing the health reform bill as a test case for the functioning of American democracy:

Last November, the American people went to the polls in historic numbers and demanded change. They wanted a change in our policies; but they also sought a change in our politics: a politics that too often has fallen prey to the lobbyists and the special interests; that has fostered division and sustained the status quo. Passing health insurance reform is a great test of this proposition. Yes, it will make a profound and positive difference in the lives of the American people. But it also now represents something more: whether or not we as a nation are capable of tackling our toughest challenges, if we can serve the national interest despite the unrelenting efforts of the special interests; if we can still do big things in America.

I believe we can. I believe we will. And I urge every member of Congress to stand against the power plays and political ploys – and to stand up on behalf the American people who sent us to Washington to do their business.

Obama here is not only turning the spotlight on lobbyists just as they kick into high gear -- there's also a veiled threat to expose selected targets in Congress (Democrats, since there's no Republican votes except maybe Snowe's) who try to hold the final bill hostage to various giveaways.

It's been said by many that Obama needs to land a punch in a major domestic policy fight. Let's see specifically what he chooses to fight for as health care reform approaches the endgame.