The Compassionate Conservative Medicaid Push

Obamacare to end popular insurance plan used by 100,000 people in New Jersey:

The bare-bones health insurance policy that’s been the plan of choice for New Jerseyans who can’t afford something better is set to go away next year, thanks to the Affordable Care Act. And what those policy holders will be left with may be a choice among pricey, pricier and priciest.

About 106,000 people in the Garden State are insured under what are known as “basic and essential,” or B&E, health care plans, according to state data. Since 2003, all health insurers that operate in New Jersey’s individual health market have been required to sell these plans which, as their name implies, offer only a thin layer of coverage for things such as doctor’s office visits and procedures that don’t involve a hospital stay.

But while B&E plans were meant to help young families get coverage and stanch the drop of enrollment in the individual health market, their relatively low price – as little as a couple hundred dollars a month for some people – made them the most popular option for those who don’t get insurance through an employer or a government program such as Medicare or Medicaid. About 71 percent of those covered by the individual health market have a B&E plan.

Soon no longer.

In addition to requiring most everyone to carry health insurance, the Affordable Care Act – better known as Obamacare – starting next year will force health care plans to cover certain essential services while capping the out-of-pocket fees people pay in addition to their premiums. As a result, after Dec. 31, insurers won’t be able to sell or renew plans that don’t meet this litmus test. That includes B&E plans.

And these changes won’t come without a cost.

“In general, richer products translate into higher premiums,” said Larry Altman, vice president of the Office of Healthcare Reform at Horizon Blue Cross Blue Shield, New Jersey’s largest health insurer.

Yes, low-premium, high-deductible health plans are endangered by Obamacare.

Rod Coons and Florence Peace pay $403 a month for a family health plan that covers barely any medical care for either of them until he or she reaches $10,000 in claims in a given year. And that’s just the way they like it. “I’m only really interested in catastrophic coverage,” says Coons, 58, who retired last year after selling an electronics manufacturing business in Indianapolis. Beyond their premium, the couple typically spends no more than $500 annually on medical care, Coons says. “I’d prefer to stay with our current plan.”

That won’t be an option next year. In 2014, plans sold on the individual and small-group markets will have to meet new standards for coverage and cost-sharing, among other things. In addition to providing 10 so-called essential health benefits and covering many preventive-care services at no cost, plans must pay at least 60 percent of allowed medical expenses and cap annual out-of-pocket spending at $6,350 for individuals and $12,700 for families. (The only exception is for plans that have grandfathered status under the law.) Plans with $10,000 deductibles won’t make the cut, experts say, nor will many other plans that require high cost-sharing or provide limited benefits – by excluding prescription drugs or doctor visits from coverage, for example. …

Many policyholders don’t realize their current plans won’t meet the standards set by the Affordable Care Act next year. When the online health insurance agency eHealthinsurance began notifying people in nongrandfathered plans that they’d have to change policies in January, the company got so many calls that it shut down the planned weeklong email campaign after one day. Carrie McLean, the company’s director of customer care, says people who got the email “said, ‘What are you talking about? I thought I was already on an ACA plan.'”?

I’m sure most of these are the fault of Obamacare critics.

The CRS, Congress’ non-partisan in-house think tank, compiled 82 deadlines that the Affordable Care Act mandates upon the first three years of its own implementation. Remarkably, it turns out that the White House has missed half of the deadlines legally required by the ACA. And some of those deadlines remain unmet to this day. …

As of May 31, 2013, when the CRS analysis was completed, the White House had yet to meet 9 of 12 deadlines from the first year after the Affordable Care Act was enacted. It failed to meet 22 of 53 deadlines in the second year; another 8 became moot after Congress did not appropriate funds to complete the assigned tasks. In year three, the administration missed 10 out of 17 deadlines. That’s a total of 41 out of 82 deadlines missed. If you exclude the 9 deadlines that became moot because Congress never appropriated the funds to meet them, the Obama administration missed 41 out of 73 deadlines, or 56 percent. …

A requirement for the Secretary to “develop requirements for health plans to report on their efforts to improve health outcomes,” also due on March 23, 2012, has not been met to date. A number of rules that would safeguard the privacy of medical records have either yet to be developed, or have been meaningfully tardy in their arrival. And, of course, if you follow the Obamacare news, you are aware of the high-profile delays that are not included in the CRS report, such as the delay in Obamacare’s caps on out-of-pocket insurance costs. The administration has tried, almost comically, to make the case that the faulty implementation of Obamacare is Republicans’ fault. But blue states that have embraced the law are the ones having the most problems.

Many health insurers to limit choices of doctors, hospitals.

This fall, Indiana’s new online health-insurance marketplace will present some tough choices for consumers like John Nowak, who will be able to pick a plan from his current insurer – or go for one that includes his primary-care doctor.

That is because Mr. Nowak’s current insurer won’t include Indiana’s biggest health-care provider, 19-hospital Indiana University Health, in the plans it sells on the consumer exchange. If Mr. Nowak buys a new exchange plan from WellPoint Inc.’s WLP +0.03% Anthem Blue Cross and Blue Shield, he will generally have to pay the cost out of his own pocket if he sees the system’s doctors, because they aren’t in the network.

Mr. Nowak, a 48-year-old Indianapolis medical-spa owner, likes WellPoint. But he has been seeing an Indiana University-affiliated physician for five years, and “when you get a trust with a doctor, you want to stick with them,” he said.

Similar situations are likely to occur around the country, as details emerge about the coverage available through the new consumer marketplaces created by the federal health law. Many of the plans will include relatively few choices of doctors and hospitals. In some cases, plans will layer on other limits, such as requirements that patients get referrals to see specialists, or obtain insurer authorization before pricey procedures.

A McKinsey & Co. analysis of 955 consumer exchange-plan filings, from 13 states that were among the earliest to make them public, found that 47% were health-maintenance organizations or similarly designed plans. Such plans generally don’t pay for care provided outside their networks. A number of other plans, though classed as preferred-provider organizations, or PPOs, will also have limited choices of doctors and hospitals in their networks.

The big reason behind these limited plans: Cost.

Insurers are betting that consumers who buy plans on the exchanges will be willing to trade some choice and flexibility in order to get cheaper premiums. Smaller networks of providers generally translate to lower premiums, because insurers can negotiate discounts with health-care providers who will then have less competition for patients within the network.

WellPoint said it is using more-limited networks for most of the new marketplaces, and it aims to take at least 10% out of the premium costs.

“Individuals are making a lot of choices based on cost, particularly because it’s coming out of their pockets,” said Steve Hamman, a vice president at Blue Cross and Blue Shield of Illinois, a unit of Health Care Service Corp. He said his insurer’s exchange products with smaller provider networks will cost 20% to 30% less than some other plans with a bigger selection of hospitals and doctors that the insurer will also sell in the marketplace.

One upshot of these efforts is that some consumer exchange plans will sideline well-known institutions – some of which may be most likely to balk at discounted rates. In the Chicago area, Blue Cross and Blue Shield of Illinois said it would sell some plans that don’t have Rush University Medical Center or Northwestern Memorial Hospital in their networks.

In Los Angeles, most insurers won’t include UCLA Medical Center, which struck a deal only with WellPoint. BlueCross BlueShield of Tennessee will have some plans that don’t include Vanderbilt University Medical Center.

Massachusetts residents paying more, getting less from health insurance.

If Massachusetts residents have the feeling they’re getting less coverage from their health insurance even though it’s costing more, there’s now evidence that they’re right.

A state report says Bay State premiums rose 9.7 percent between 2009 and 2011, while the value of that coverage shrank 5.1 percent.

“What we’ve seen over the last couple of years is that premiums are growing faster than inflation and at the same time, the quality of the benefit is declining,” said Aron Boros, whose state agency, the Center for Health Information and Analysis, published the report. “So you’re not only paying more, you’re getting less.”

The gap between what consumers get and what they pay is widest for individuals who buy insurance on their own and for small businesses who have fewer people to buffer the impact of health care costs.

There are lots of reasons health care premiums continue to rise. But Boros says there’s one particularly thorny issue in Massachusetts: Residents get most of their care at the most expensive hospitals, instead of going to the nearest community hospital for the basic stuff like mammograms, check-ups and routine surgery.

“If you want to contain costs or reduce costs, you have to go after where the costs are,” Boros said. “The vast majority of costs are in high-priced hospitals and physician groups.”

Specifically in Partners HealthCare, which Boros says takes in 28 percent of all payments to hospitals and doctors in Massachusetts. But Partners is also the state’s largest private employer. It and many other high-priced hospitals spawn medical innovations and drive the state’s health care industry.

The report out Wednesday lays the foundation for health care cost hearings this fall run by the state’s Health Policy Commission. Its director, David Seltz, says there will be lots of tough questions for hospitals and physicians, including, “Why are these trends existing, what are they doing to mitigate them in the long term, and what are the places where the commonwealth can help and push this industry to achieve some of those efficiencies?”

Expect the pressure to continue on patients as well to make “smart” choices about where to get care.

“There is a strong push towards getting the patient more involved by providing better tools and better incentives through limited and tiered networks and high deductible plans,” Boros said. “But we’re at the infancy of those things.”

By October, health insurers in the state are supposed to have a website and phone number you can call to get the price of any treatment you need. When you’re choosing where to go, ask how the quality compares as well as the price.