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Filed under: Health Economics, Health Insurance, Health Law & Policy, Healthcare Finance | Tagged: ACA, Affordable Care Act., David Cutler, Health Economics, Health Insurance, Healthcare Finance, The ACA On Rising Healthcare Costs? |
The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants 
Conservatives see free market at work in dropping healthcare costs
Actually, the slowing rate of growth in healthcare costs is giving conservatives new ammunition to push for free-market solutions to the nation’s healthcare problems. Why?
Data from the Center for Medicare and Medicaid Services show that the annual rate of increase in national health expenditures has been dropping for a decade, from a high of more than 9 percent in 2002 to just 3.9 percent in 2010.
This author credits competition from low-cost generic drugs, new insurance options for consumers with higher deductibles and co-payments, and greater transparency from doctors and hospitals who found themselves competing for patients’ dollars.
http://online.wsj.com/article/SB10001424052970204792404577227050656680024.html?KEYWORDS=kleinke
Any thoughts?
Dr. Bill R. Bartow
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Bill,
You are correct. And, how the Supreme Court rules on the Affordable Care Act and Individual Mandate could have a dramatic impact on healthcare in America for years to come.
While the main issue, of course, is the “Individual Mandate provision” or “shared responsibility requirement,” the ACA includes a number of provisions dependent on, or related to health data and HIT, including electronic health information exchange and new methods to reimburse expenses.
So, all you health IT gurus out there, please opine.
Fraternally,
Dr. David Edward Marcinko MBA CMP®
http://www.CertifiedMedicalPlanner.org
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Most Individual Health Policies Don’t Meet Affordable Care Act Standards
More than 11 million Americans below the age of 65 are now covered by private individual health insurance plans.
But, a new study, released May 22nd by Health Affairs as a Web First, measures the actuarial value (the percentage of medical bills an insurance company pays) for a sample of 2010 health plans offering group and individual policies, and finds that the majority of individual plans fell below the minimum standards and benefits required by the Affordable Care Act of 2010.
http://content.healthaffairs.org/content/early/2012/05/22/hlthaff.2011.1082
Zigmund
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My take on ObamaCare thus Far
Here’s who doesn’t have to get health insurance under Obamacare [PP-ACA]:
* If you spend more than 8 percent of your income on premiums, you don’t pay
* If you are uninsured for 3 months or less, you don’t pay
* If you earn too little to pay taxes, you don’t pay
* If you are a member of a Native American tribe, you don’t pay
Now, if earn enough to pay taxes, you pay something but the government helps.
Here’s the rule:
* If you make more than $43,320 individually or $88,200 for a family of four you have to have insurance but, you can apply for a tax credit to help pay premiums, and subsidy to help pay out of pocket costs.
* These subsidies do not apply to Medicare or Medicaid.
Here is the paperwork you’ll do:
* Vitals: name, SS, proof of citizenship
* Tax return to prove what you earn
Here is the result:
* Department of Health and Human Services determines if you’re eligible
* DHHS informs the Treasury Department, and the HIE in your state
* Treasury Department pays your tax credit to the insurance company
* The insurance company lowers your premiums
What have I missed or misunderstood?
Dr. David Edward Marcinko MBA
[Editor-in-Chief]
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Health Costs Fall?
For the second time in the last three years, estimated medical expenses for new retirees have fallen, according to a new study by Fidelity Investments.
For example, a 65-year-old couple retiring this year would need $220,000 on average to cover medical expenses, an 8 percent decrease from last year’s estimate of $240,000.
The study assumed a life expectancy of 85 for women and 82 for men.
Baxter
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Are Employers to Blame for our High Medical Prices?
In a recent New York Times blog, Uwe Reinhardt PhD places much of the blame for high and rising medical prices on passive employers. He argues that employers should work just as hard to reduce healthcare benefit costs as they work to reduce other input costs.
http://economix.blogs.nytimes.com/2013/06/07/the-culprit-behind-high-u-s-health-care-prices/?_r=0
But, he then observes:
“One reason for the employers’ passivity in paying health care bills may be that they know, or should know, that the fringe benefits they purchase for their employees ultimately come out of the employees’ total pay package. In a sense, employers behave like pickpockets who take from their employees’ wallets and with the money lifted purchase goodies for their employees.”
Uwe is a colleague and economist from Princeton University. I’ve been a fan for years and reference him in many of our books, texts and white-papers.
So, what do you all think?
Dr. David Edward Marcinko MBA CMP™
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Data from The First Week of Enrollment in Washington State’s Health Insurance Marketplace, Washington Healthplanfinder
Web and Call Center Data
Unique Visitors – 165,332
Total Site Visits – 837,152
Page Views – 2,725,138
Unique Page Views – 2,023,610
Accounts Created – 39,115
Call Center Volume – 23,243
Average Call Center Wait Times – 10 min 25 sec
Enrollments Completed
* Qualified Health Plans – 916
* Medicaid Newly Eligible/Coverage Jan. 1 – 5,946
* Medicaid/Immediate coverage – 2,594
Total – 9,452
Source: Washington Health Benefit Exchange
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Medicare to Pay Flat Rate for Clinic Visits
Despite criticism from hospitals and doctors, the CMS intends to pay flat rates for Medicare visits to outpatient clinics instead of payments that vary with the severity of the patient’s condition.
However, the agency decided not to enact a similar policy for emergency-room visits—at least for the time being.
The 1,200-page outpatient prospective payment system rule for 2014, posted the Wednesday afternoon before Thanksgiving, says the agency is changing its longstanding approach to paying for clinic visits because of a widespread concern that the old system encourages upcoding.
Source: Joe Carlson and Beth Kutscher, Modern Healthcare [11/27/13]
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Growth in U.S. Health Spending Continues at Historically Slow Rate
New federal estimates show that U.S. health spending growth continued to grow at a historically low rate in 2012 even as the economy rebounded. The overall economy grew significantly faster than healthcare spending, which declined as a share of the nation’s gross domestic product to 17.2% from 17.3% the prior year.
In the fourth straight year of slow growth, national health spending in 2012 increased 3.7%, while the overall economy, continuing its rebound from the Great Recession, grew 4.6%, according to newly released estimates by economists and statisticians at the CMS. Health spending as a percentage of GDP declined by 0.8%, CMS’ data show.
The last time such a decline occurred was 1997, said Aaron Catlin, a deputy director of the CMS National Health Statistics Group, on a call with reporters Monday announcing the figures.
Source: Melanie Evans, Modern Healthcare [1/6/14]
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National Health Expenditures
[Average Annual Percent Change from Previous Year]
1.1970 – 10.6%
2.1980 – 13.1%
3.1990 – 11.0%
4.2000 – 6.6%
5.2001 – 8.4%
6.2002 – 9.7%
7.2003 – 8.6%
8.2004 – 7.2%
9.2005 – 6.8%
10.2006 – 6.5%
11.2007 – 6.3%
12.2008 – 4.7%
13.2009 – 3.8%
14.2010 – 3.8%
15.2011 – 3.6%
16.2012 – 3.7%
Source: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group
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Cost of the Affordable Care Act to Large Employers
The total cost of ACA to all large U.S. employers 2014 to 2023: $151 to $186 billion
Cost per employee, 2014 to 2023 $4,800 to $5,900
Cost per large employer, 2014 to 2023 $163 to $200 million
Percentage increase in employer-provided health care costs from: ACA 4.3% in 2016
5.1% in 2018
8.4% in 2023
Notes: Large U.S. employers have 10,000 or more employees
Source: American Health Policy Institute
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The Cost of the Affordable Care Act
Survey found the top three ACA provisions that increased costs in 2013 were the Patient-Centered Outcomes Research (PCORI) fee, general ACA administrative costs, and explaining ACA provisions to participants.
The survey also found the most common ways employers plan to deal with the increased costs due to the ACA are shifting costs to employees and increasing wellness and value-based health care initiatives.
Source: American Health Policy Institute
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CBO Shaves $100 Billion from ACA’s Ten-Year Cost Projection
Since the passage of the Patient Protection and Affordable Care Act (ACA), the Congressional Budget Office (CBO) and the Joint Committee on Tax (JCT) have attempted to estimate the cost of implementing the ACA’s provisions, as well as assess its overall budgetary effects.
Most recently, in April 2014, the CBO reduced its estimate for the cost of health insurance coverage expansion under the ACA, projecting that these provisions will cost $36 billion for 2014, $5 billion less than the CBO’s previous projection. The CBO also reduced its estimate for the cost of implementing the ACA’s coverage provisions over the next decade to $1.383 trillion, an estimate that is more than $100 billion less than previous forecasts.
Click to access ACA_CBO_Estimate.pdf
The CBO and JCT indicated that their downward adjustments were due primarily to the CBO’s decreased projection regarding federal spending on subsidies for insurance premiums, a critical feature of coverage expansions under the ACA.
Robert James Cimasi MHA ASA CVA CMP™
http://www.HealthCapital.com
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Employer and Employee Healthcare Costs
According to Towers Watson and the National Business Group on Health, employer-sponsored health benefits will increase in cost by 4.4% this year. In 2013 employer costs per employee were $9,157 and are expected to be $9,560 in 2014.
Employees’ share of premiums increased nearly 7% to $2,975 this year. The total employee cost share was 34.4% in 2011 and is 37% in 2014. Employees pay $100 more a month for healthcare compared to three years ago.
Publication Source: Employee Benefit News, April 15, 2014
Data Source: Towers Watson and the National Business Group on Health
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On Health Plan Costs
Managing administrative costs, while always central to operational excellence, is crucial in the post ACA environment. This is by design; the specific intent of the MLR limitations is to “create incentives for” health plans “to become more efficient” in the execution of their administrative activities. In addition, health plans continue to face a very tough provider contracting environment.
So, optimizing administrative costs provides a superior ROI on cost management initiatives. Moreover, given the limitations on medical cost management, and since each state limits membership growth to what can be supported by your accumulated retained earnings, optimizing administrative costs is the only way to internally finance the growth that may be available the number of insured people increases under ACA.
Douglas B. Sherlock CFA
[Senior Health Care Analyst]
sherlock@sherlockco.com
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ACA premiums up 12 percent in 2016?
Many Obamacare customers could be looking at surprisingly large price increases next year—if insurers get their wishes.
http://www.msn.com/en-us/money/insurance/obamacare-plan-prices-to-jump-an-average-of-12percent/ar-BBkVR7h?ocid=iehp
Health insurance premiums for individual plans in major U.S. cities would rise by an average of 12 percent in 2016 if the newly proposed prices are approved, a new analysis finds.
Leonard
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