Consumer Power Report #408
Over the past few weeks, we’ve witnessed the rise of a new creature in media: the Obamacare denialists. Convinced there is nothing wrong with Obamacare, these individuals argue that any objections to the law have to be creations of the partisan right. Jonathan Bernstein writes here: “Is it possible that the reason all the Republican horror stories about the Affordable Care Act haven’t panned out is because there aren’t any (real) horror stories?”
I realize the stories I’ve shared here might not suit Mr. Bernstein’s partisan framework of the issue, but perhaps he could comment on this, shared by a subscriber whose spouse has MS.
A consultation with the private drug coverage website told me I was covered for the cost of the drug minus my co-pay. I contacted my drug insurance companies eight hundred number to verify and I was told that my coverage had changed because of Obamacare. My private insurance, a benefit gained as compensation during my working years, would now only cover this drug so minimally as to be useless. In order to be treated, I must come up with approximately 50 grand a year, cash, out of pocket.
And then there is Stephen Blackwood, writing about his mother’s battle with cancer:
[I]n November, along with millions of other Americans, she lost her health insurance. She’d had a Blue Cross/Blue Shield plan for nearly 20 years. It was expensive, but given that it covered her very expensive treatment, it was a terrific plan. It gave her access to any specialist or surgeon, and to the Sandostatin and other medications that were keeping her alive.
And then, because our lawmakers and president thought they could do better, she had nothing. Her old plan, now considered illegal under the new health law, had been canceled.
Because the exchange website in her state (Virginia) was not working, she went directly to insurers’ websites and telephoned them, one by one, over dozens of hours. As a medical-office manager, she had decades of experience navigating the enormous problems of even our pre-ObamaCare system. But nothing could have prepared her for the bureaucratic morass she now had to traverse.
The repeated and prolonged phone waits were Sisyphean, the competence and customer service abysmal. When finally she found a plan that looked like it would cover her Sandostatin and other cancer treatments, she called the insurer, Humana, HUM -2.32% to confirm that it would do so. The enrollment agent said that after she met her deductible, all treatments and medications – including those for her cancer – would be covered at 100%. Because, however, the enrollment agents did not – unbelievable though this may seem – have access to the “coverage formularies” for the plans they were selling, they said the only way to find out in detail what was in the plan was to buy the plan. (Does that remind you of anyone?)
With no other options, she bought the plan and was approved on Nov. 22. Because by January the plan was still not showing up on her online Humana account, however, she repeatedly called to confirm that it was active. The agents told her not to worry, she was definitely covered.
Then on Feb. 12, just before going into (yet another) surgery, she was informed by Humana that it would not, in fact, cover her Sandostatin, or other cancer-related medications. The cost of the Sandostatin alone, since Jan. 1, was $14,000, and the company was refusing to pay.
The news was dumbfounding. This is a woman who had an affordable health plan that covered her condition. Our lawmakers weren’t happy with that because … they wanted plans that were affordable and covered her condition. So they gave her a new one. It doesn’t cover her condition and it’s completely unaffordable.
Alec Torres has more on the phenomenon:
For example, if Paul Krugman read the paper he writes for, he would have heard about Mike Horrigan, a lifelong Democrat and a former Obamacare supporter. As the New York Times wrote in December, Horrigan’s “coverage by a state high-risk insurance program was eliminated, then replaced by a more expensive plan. His wife’s individual plan was canceled for being substandard, then suddenly renewed – also at a higher price.”
The Times of New York also brought out the story of Barbara Meinwald, whose temporary plan with fewer doctors would cost her $5,000 more a year. “Meinwald also looked on the state’s health insurance exchange,” Anemonia Hartocollis writes, “but she said she found that those plans did not have a good choice of doctors, and that it was hard to even find out who the doctors were, and which hospitals were covered.”
Camille Sweeney, written about in the same article, was “dismayed” that neither her pediatrician nor general practitioner were on the plans offered on her state’s exchange …
The reports from left-leaning media alone go on and on. If liberals really believe nobody has been hurt by Obamacare, they’re denying the settled consensus of the most prominent media in the country.
Mr. Bernstein is not alone in his Obamacare denialism, but he should be smart enough to understand that a failure to admit there are winners and losers from this policy is a good way to politically embolden the losers … or maybe, like this fellow, you have no problem coming across as a ghoulish partisan.
— Benjamin Domenech
IN THIS ISSUE
ARKANSAS HOUSE MOVES TOWARD FIFTH VOTE ON MEDICAID
Arkansas lawmakers are returning for the third week of this year’s legislative session, but it’s unclear when the House will try again to break an impasse over the future of the state’s compromise Medicaid expansion.
The House and Senate convene Tuesday, and legislative leaders had initially planned a fifth vote on reauthorizing the “private option” that was approved last year as an alternative to expanding Medicaid. The Senate has approved the private option legislation, but the funding measure has stalled before the House.
House Speaker Davy Carter said it’ll be a “game-time decision” whether to hold the fifth vote Tuesday on the measure. Carter had initially vowed daily votes until it passed.
SOURCE: Arkansas Online
OBAMACARE TO INCREASE COSTS OF EMPLOYER-SPONSORED INSURANCE
Yesterday, the Obama Administration’s Centers for Medicare and Medicaid Services released a six-page report predicting that Obamacare could cause premiums to increase for nearly two-thirds of small- to medium-sized businesses. “This results in roughly 11 million individuals whose premiums are estimated to be higher as a result of the ACA and about 6 million individuals who are estimated to have lower premiums,” CMS writes. But CMS’ projections almost certainly understate the problem, one that will begin to affect millions of workers in the second half of 2014.
The CMS premium report was a requirement imposed by Congress on the administration under the Department of Defense and Full-Year Continuing Appropriations Act of 2011. That law mandated that CMS “provide an estimate of the number individuals and families who will experience a premium increase and the number who will see a decrease” as a result of the Affordable Care Act.
But CMS only looked at one cost-increasing Obamacare provision: community rating. And they only looked at it for individuals employed by businesses with less than 100 employees: what’s called the “small group market.”
Here’s the background. Under Obamacare, all regulated insurance plans are required to charge people the same premium, regardless of health status. Insurers can charge different rates based on age (but only within a narrow range); tobacco use (smokers can be charged 50 percent more than non-smokers); geographic area (insurers can charge people different rates based on regional demographic variation); and whether the plan is for a single individual or a family.
Before these provisions went on-line on January 1, 2014, “firms with employees who had better than average health risks would typically pay lower premiums, and therefore, they were more likely to be the firms that offer health insurance. As a result, most of people with coverage in the small group market have premium rates that are below average.” CMS polled “several actuarial experts” who believe that 60 to 67 of small-group firms enjoyed below-average premiums in the pre-Obamacare market.
Because the remaining firms have above-average premiums, CMS simplistically assumed that 65 percent of these small-group firms will experience increased premiums, and 35 percent will experience decreased premiums. That amounts to 11 million and 6 million people, respectively.
But there are other costly requirements that CMS didn’t directly address. For example, Obamacare includes a silly excise tax on health insurance premiums that will get passed onto consumers in the form of higher prices. Same for its taxes on pharmaceuticals and medical devices. The law also requires that all plans cover a broad range of “essential” benefits, some of which they may not already. The law requires that employers cover “adult children” under the age of 26, which is a good deal for those with adult children, but an added cost for everyone else.
HIGHER DRUG COSTS IN OBAMACARE PLANS
Consumers who use specialty medications may face higher costs on ObamaCare’s marketplace plans, many of which include co-insurance rather than copayments for the drugs, a new analysis warned.
Researchers with consulting firm Avalere Health found that 59 percent of silver-level plans on the new exchanges charge policyholders a percentage of the cost of specialty drugs rather than a fixed copay.
Twenty-three percent of these plans have co-insurance rates of 30 percent or more of the cost of the drugs on the highest formulary tier, the analysis found. This rate increased to 60 percent among the lower-premium bronze plans, researchers said.
The findings indicate that some patients will face higher or unexpected out-of-pocket costs on the exchanges when it comes to paying for specialty drugs.
In some cases, these charges will be counterbalanced with savings derived from other provisions of ObamaCare, such as the law’s free preventive care and ban on lifetime and annual dollar limits on essential health benefits.
Still, Avalere officials warned that the plans’ structure could be unpredictable for sick patients when it comes to paying for prescriptions.
SOURCE: The Hill
MAJOR SPENDING CUTS TO MEDICARE ADVANTAGE
The Obama administration is proposing a major cut in 2015 payments to Medicare Advantage, in a move that is sure to set off a ferocious campaign by the insurance industry to reverse the decision and likely will further complicate the health care politics of the midterm elections.
An annual notice released Friday after the markets closed would reduce Medicare Advantage spending by 3.55 percent. The figure is based on trends in health care spending, which has grown at a historically low pace in recent years. The annual rate adjustment – which is only one of the payment changes – is calculated through a complicated set of formulas, and analysts were still sorting out the 148-page proposal that CMS released late in the afternoon to assess the total impact on the increasingly popular program for seniors.
Lambert van der Walde, a former CMS official under President George W. Bush who now advises investment firms, said the cut is bigger than the industry expected, given estimates the government provided in December.
“It looks worse,” van der Walde said, while adding that it’s too soon to determine what the final level will be.
Republican and Democratic strategists say any cuts to Medicare Advantage, which now covers a third of all Medicare beneficiaries, will give the GOP ammunition to attack Democrats. Some Democrats have already asked the administration to leave the program alone.
Forty senators, including vulnerable Democrats Kay Hagan of North Carolina, Mary Landrieu of Louisiana, Mark Pryor of Arkansas and Mark Udall of Colorado, as well as Sen. Chuck Schumer (D-N.Y.) and a host of Republicans, sent a letter Tuesday asking the administration to “prioritize beneficiaries’ experience and minimize disruption to payment levels for 2015.”
OREGON HEALTH EXCHANGE EMAILS RELEASED
Carolyn Lawson, the state information-technology official who was asked to resign over problems with the health insurance exchange in December, has declined to comment publicly ever since.
Privately, though, she has plenty to say, judging by an e-mail obtained under Oregon Public Records Law.
On Jan. 19 Lawson complained to state managers that she has been unfairly criticized by Oregon Health Authority leadership even though she kept her boss, Bruce Goldberg, fully informed. Lawson did as she was told, she said – such as publicly parroting inaccurate OHA talking points, and writing a scripted letter of resignation that portrayed her departure as voluntary.
“I have done everything that I have been asked to do,” she wrote. “Please stop feeding personally damaging misinformation to the media.”
An Oregon Health Authority spokesperson said the agency disagrees with Lawson’s “characterization of the facts.”
Lawson, former Chief Information Officer for the Oregon Health Authority and the Department of Human Services, was hired in July 2011 and given the health exchange as her number one priority, according to the man who hired her, then-OHA director Goldberg. The agency had committed to build a bug-free consumer-oriented exchange website and information-sharing system for Cover Oregon by February 2013.
Since then, Goldberg – now the acting director of Cover Oregon – has questioned the decision Lawson made to manage the exchange IT project in-house, rather than hiring an outside contractor to oversee the IT vendor Oracle. Oracle, meanwhile, has been accused of shoddy work, and the exchange enrollment function remains closed to the public while programmers try to work out bugs.
Goldberg also said in January that Lawson “misled” him by leading him to believe the exchange would be ready to work last Oct. 1.
On Dec. 19, Lawson submitted her e-mail resignation, saying she did so voluntarily, and that a death in her family “caused me to reevaluate many things in my life” including her weekend commute from her home near Sacramento. OHA’s acting director Tina Edlund alerted staff to the decision, praising and thanking Lawson for her leadership.
In reality, Lawson was “asked to resign over all of the HIX mess,” Lawson wrote in a private message to Secretary of State Chief Information Officer Julie Pearson-Ruthven that week, according to another e-mail obtained under the records law.
SOURCE: The Oregonian
Technological advances have created new opportunities for enormous advances in health care delivery. However, this progress is stymied by an outdated statutory regime that restricts the use of telemedicine under Medicare. The unfortunate reality is that state Medicaid programs make better use of telemedicine than does Medicare, the nation’s largest health care payer. But the leadership shown by states on this issue has created a pathway to expand telemedicine on the national level.
After seeing telemedicine succeed in our home states and others, we engaged in a monthslong conversation with patients, providers and other industry stakeholders to determine whether Congress could strengthen Medicare and enhance Medicaid using this technology. The response was overwhelmingly clear: Until we can attract more physicians to underserved communities and tighten the access gap, the best and most cost-efficient alternative is to improve telehealth networks.
As Congress evaluates the use of alternative payment models and service delivery methods for Medicare, the time is ripe to grant providers flexibility to improve telemedicine. This is the time to explore how to use telehealth and other technologies to improve patient access and health outcomes. This is the time to find ways to efficiently meet the growing demands of our aging population. This is the time to find creative and innovative ways to bend the health care cost curve and save Medicare and Medicaid money. The Telehealth Enhancement Act does just that.
Our bill would expand telemedicine services into rural and underserved households for use in home dialysis, hospice and among homebound patients. It would also expand coverage of telehealth services offered in some metropolitan areas, such as for critical access and sole community hospitals. To improve the economic and clinical outcomes, our bill allows remote patient monitoring for some acute, chronic and other medical conditions – like a stroke – for all Medicare beneficiaries.
SOURCE: Roll Call
The FDA could argue that the EMA and the FDA have significantly different approval standards. Or that the populations tested in E.U. trials are significantly different than those required for U.S. trials. In some cases, this may be true. But many commonly used drugs – like those routinely used for hypertension, painkillers, and gastric discomfort – are widely available here and in the E.U. There’s also a net loss for society by requiring manufacturers to essentially jump through the same hoops over and over, expending scarce R&D dollars and human resources (i.e., patients) running multiple trials of the same medicines for different regulatory jurisdictions.
If the FDA, EMA, and other advanced regulators have (largely) the same safety standards, there should at least be reciprocal approval for vaccines (and likely many drug classes as well) where the biological understanding of the underlying mechanisms of action are well understood, and where robust postmarket surveillance tools are already in place. The FDA already works, to some extent, with international regulators to harmonize regulations, so this wouldn’t be a heavy lift for the agency.
But while the FDA and EMA engage in high level discussion and collaboration, true reciprocity of approvals has never really been on the table. Why? Regulators may fear losing clout, and application review fees – about $672 million in 2012 – that come with submitting new drug approvals to the FDA. After all, if access to the large and lucrative U.S. market could be obtained by going to the EMA rather than the FDA, there might be a mass exodus of drug applications to the E.U.
SOURCE: Health Affairs