If you know someone who is uncertain how the Affordable Care Act works and whether they qualify for subsidies under the exchanges, a good place to start is here, at a site sponsored by Consumer Reports and the Robert Wood Johnson Foundation. Click on the FAQ tab.
As health writer Maggie Mahar notes in her postabout this site, “A great many young people don’t realize how little insurance would cost after applying the tax credit. Do them a favor, and find out for them.”
This sums up the bizarre economics of the hospital business in the United States as well as anything I’ve seen. Oversimplification? Sure. But what a clarifying example!
With blood oozing from deep lacerations, the two patients arrived at California Pacific Medical Center’s tidy emergency room. Deepika Singh, 26, had gashed her knee at a backyard barbecue. Orla Roche, a rambunctious toddler on vacation with her family, had tumbled from a couch, splitting open her forehead on a table.
On a quiet Saturday in May, nurses in blue scrubs quickly ushered the two patients into treatment rooms. The wounds were cleaned, numbed and mended in under an hour. “It was great they had good DVDs, the staff couldn’t have been nicer,” said Emer Duffy, Orla’s mother.
Then the bills arrived. Ms. Singh’s three stitches cost $2,229.11. Orla’s forehead was sealed with a dab of skin glue for $1,696. “When I first saw the charge, I said, ‘What could possibly have cost that much?’ ” recalled Ms. Singh. “They billed for everything, every pill.”
There is little science to how hospitals determine the prices they print on hospital bills.
“Charge master prices are basically arbitrary, not connected to underlying costs or market prices,” said Professor Melnick, the economist. Hospitals “can set them at any level they want. There are no market constraints.”
Prices for any item or service are set by each hospital and move up and down yearly, and show extraordinary variability, health economists say. The codeine that costs $20 and the bag of IV fluid that costs $137 at California Pacific are charged at $1 and $16 at the University of California San Francisco Medical Center, across town. But U.C.S.F. Medical Center charges $1,600 for an amniocentesis, which costs $687 at California Pacific.
In our states — Washington, Kentucky and Connecticut — the Affordable Care Act, or “Obamacare,” is working. Tens of thousands of our residents have enrolled in affordable health-care coverage. Many of them could not get insurance before the law was enacted.
People keep asking us why our states have been successful. Here’s a hint: It’s not about our Web sites.
Sure, having functioning Web sites for our health-care exchanges makes the job of meeting the enormous demand for affordable coverage much easier, but each of our state Web sites has had its share of technical glitches. As we have demonstrated on a near-daily basis, Web sites can continually be improved to meet consumers’ needs.
The Affordable Care Act has been successful in our states because our political and community leaders grasped the importance of expanding health-care coverage and have avoided the temptation to use health-care reform as a political football.
In response to my op-ed in the Kansas City Star this week, I received a wide range of comments. Most were quite supportive. Others were, shall we say, less than enthusiastic about various aspects of the health reform law.
My reply to those commenters:
Regarding the questions you shared with me about the Patient Protection and Affordable Care Act …
The United States is the one nation in the developed world that has not made a decision as a nation to consider health care a fundamental right. The health reform law (Patient Protection and Affordable Care Act of 2010) is the first major step in that direction since the passage of Medicare and Medicaid in the 1960s. It has many moving parts because it builds on the existing flawed system rather than switching to a single payer system, as was done in varying ways in other nations. Some of those other countries maintained private insurance companies but only as nonprofit entities; others went all in with government as the sole payer and/or administrator. The United States is the only developed nation that has private insurers that have to answer to shareholders. I would argue that this is a bug, not a feature.
In my view, all systems have their own unique strengths and weaknesses. The pre-PPACA U.S. system has the unique track record of having the highest (by far) overall per capita health care expenses in the world at the same time that it has many of the worst health outcomes in the developed world. So we begin with a system that is highly problematic, and to cap it off also leaves tens of millions (50M?) uninsured, something does not exist in any of these other nations. Before diving into any particular strengths and weaknesses of PPACA, I think it’s critical to acknowledge that the system on which it seeks to improve is drastically flawed. On at least that one point, I would imagine that both proponents and opponents may agree.
The Kansas City Star has just published my op-edbased on my experiences this year on the Missouri Citizens and Legislators Working Group on Medicaid.
At least a dozen physicians from safety net clinics shared stories of their uninsured, “working poor” patients (most of whom would be covered if Missouri accepts Medicaid expansion) who can’t afford the medicines or other treatments prescribed for their diabetes, heart disease, hypertension or chronic pain. As a result, they spiral downward, suffering greatly as their previously manageable ailments become unmanageable (such as treatable diabetes descending into kidney failure) , at which point their now-severe disabilities allow them to finally qualify for Medicaid, but too late to regain their health.
To put Obamacare victims’ strife in perspective, let’s take a trip down memory lane. You know, the golden years of American health care in … oh, let’s say 2007, back when you could be denied coverage for something as benign as acne or as mundane as pregnancy.
Back then, anecdotes about people who were denied coverage abounded. They included this 12-year-old boy who died in 2007 from an abscessed tooth after his family’s Medicaid lapsed. And this 17-year-old boy whose insurance was revoked after he tested positive for HIV. This woman who was denied coverage for breast cancer because she wasn’t diagnosed at the correct clinic. And this woman whose double mastectomy was denied after her insurance company learned she had visited a dermatologist for acne treatment the year before. Ah, yes, those were the days!
For those who put more stock in headlines, here are a few that help convey the state of the American health care system back in its heyday.
It’s not all anecdotes and headlines. She goes from there to a series of links to policy papers and the like.
We are currently in the early stages of what will likely be a decade-long transition to a new model. There will be bumps along the way. There are some now. But it’s important to remember why there was such a hue and cry for reform in the first place.
This intransigence will bring with it a great deal of unnecessary suffering, death and, not so incidentally, economic hardship in its wake. Will they change their minds eventually? Only if their own citizens force them to.
But in Rome, 27 percent of adults under 65 are uninsured, a rate that holds true across the state. Last year, the city’s two hospitals report spending more than $80 million delivering uncompensated care, often in the emergency room, where costs run high. Taxpayers and those with health insurance will end up paying for that care through government subsidies and higher premiums, industry experts say.
Rome’s dilemma is exactly the situation that the Patient Protection and Affordable Care Act, also known as “Obamacare,” was designed to fix — but that fix isn’t coming to Georgia.
The Patient Protection and Affordable Care Act provides for expansion of insurance coverage for low-income and middle-class adults, with the goal of reducing the $41 billion spent covering uninsured care each year.
A key provision, set to kick in on Jan. 1, 2014, offers states federal funding to expand Medicaid coverage to all adults making up to 133 percent of the poverty line, or $25,975 for a family of three. In Georgia, over half of that group is uninsured.
But in the Deep South and Florida, Republican governors and state legislatures have turned down the funding, citing cost concerns and philosophical opposition to the safety net insurance program, which was signed into law on July 30, 1965. In Louisiana, Mississippi, Alabama, Georgia, South Carolina and Florida, the move will exclude 2.7 million low-income residents from Medicaid eligibility, according to the Urban Institute.
“In Georgia, these people are the working poor,” said Dr. Leonard Reeves, a family physician in Rome who volunteers at the city’s privately-funded free clinic. “I had an uninsured patient in his late 30s who worked every day of his life, and one day he finally came in when he felt he couldn’t go on any more.”
Dr. Reeves diagnosed the man, who was married and worked part-time as a forklift operator, with diabetes, but it was too late for insulin. After years without basic treatment, his kidneys had failed, and he needed weekly dialysis treatments to stay alive.
“He’s now on disability,” said Dr. Reeves. “If he’d had that insurance, he’d still be paying into the tax rolls instead of taking from them. There’s an old saying — ‘An ounce of prevention is worth a pound of cure.’ And that’s exactly what we’re talking about here.”
The Congressional Budget Office predicted back in November 2009 that a medium-cost plan on the health exchange – known as a “silver plan” – would have an annual premium of $5,200. A separate report from actuarial firm Milliman projected that, in California, the average silver plan would have a $450 monthly premium.
Now we have California’s rates, and they appear to be significantly less expensive than what forecasters expected.
On average, the most affordable “silver plan” – which covers 70 percent of the average subscriber’s medical costs – comes with a $276 monthly premium. For the 2.6 million Californians who will receive federal subsidies, the price is a good deal less expensive, the amount noted in green below.
This is what is happening in the states whose governors and legislatures are not seeking to sabotage the implementation of the Affordable Care Act. California, Washington, and Oregon are showing similarly low rate offerings on the insurance exchanges, which at the beginning will apply mainly to individuals who were not previously insured.
In other words, the Affordable Care Act is providing affordable insurance to those previously unable to purchase it.
From Oregon, which in many ways is fast becoming a model for how to do health reform right (their recently released low back pain guidelines are also excellent):
In a striking illustration of the promise that the health law holds for consumers, two Oregon private insurers vying to sell coverage on the state’s Obamacare insurance marketplace this October are reevaluating their opening bids for the plans’ monthly premiums. The reason? A side-by-side regional comparison of all proposed 2014 premiums for Oregon marketplace plans became public on Oregon’s marketplace website Thursday, and showed that the two insurers’ planned monthly premiums were far higher than other proposals. That raised fears among the companies’ officials that their plans wouldn’t be competitive on the market later this year, leading them to proactively request a rate reduction — and as more of Obamacare is implemented, state insurance commissioners expect that trend to continue:
“Posting rate comparisons company-by-company is a taste of what is to come,” says Cheryl Martinis of the Oregon Insurance Division.
Judging by the reaction, there’s already an impact.
Providence Health Plan on Wednesday asked to lower its requested rates by 15 percent. Gary Walker, a Providence spokesman, says the “primary driver” was a realization that the plan’s cost projections were incorrect. But he conceded a desire to be competitive was part of it.
A Family Care Health Plans official on Thursday said the insurer will ask the state for even greater decrease in requested rates. CEO Jeff Heatherington says the company realized its analysts were too pessimistic after seeing online that its proposed premiums were the highest.
“That was my question when I saw the rates was, ‘Can we go in and refile these?’” he said. “We’re going to try to get these to a competitive range.”
Although some insurers have been using Obamacare as an excuse to hike premiums despite record profits, such rate hikes have been rarer — and less extreme — since the law’s passage.
As the reporters in this Washington Post article explain, the effort to get more effective health care while controlling costs is the goal of many of the health reform efforts now underway. This Oregon projectmay be the most of all. If it works, it can create a model for others to emulate.
So Kitzhaber did something that many before him have done in desperate times. The governor who favors cowboy boots over dress shoes made a bet that Oregon could not afford to lose.
The deal Kitzhaber struck was this: The Obama administration would give the state $1.9 billion over five years, enough to patch the budget hole. The catch: To secure that, Oregon’s Medicaid program must grow at a rate that is 2 percent slower than the rest of the country, ultimately generating $11 billion savings over the next decade. If it fails, those federal dollars disappear.
Oregon is pursuing the Holy Grail in health-care policy: slower cost growth. If it succeeds, it could set a course for the rest of the country at a pivotal moment for the Affordable Care Act. Under the law, many states will expand Medicaid programs to cover everyone below 133 percent of the federal poverty line, adding 7 million Americans to the program in 2014 and leaving states looking for the most cost-effective way to cover that influx of patients.
In Oregon alone, Medicaid is expected to enroll 400,000 new patients by 2022, nearly doubling its current numbers, according to an Urban Institute analysis.
As Oregon’s population grows, the state has come to realize that Medicaid is not a bottomless bucket of money. The state’s budget cannot sustain that. Instead, it strives to deliver what health policy experts call “the triple aim”: higher-quality care that leads to better outcomes, all delivered at a lower cost.