JustCare

Tag: Affordability

  • Can you budget for your health care?

    Can you budget for your health care?

    If you have commercial health insurance, be it a Medicare Advantage plan, a state health exchange plan or an employer plan, and you are struggling to budget for your health care, you’re not alone. Your out-of-pocket costs tend to be hopelessly complex, confusing and never-ending. To keep monthly premiums down, health plans often charge a series of out-of-pocket costs each time you use services.

    What’s clear is that people who need more costly services tend to pay a lot more for their care. Unlike traditional Medicare, which spreads costs among everyone who has it, commercial health plans shift costs to people with complex conditions. In the process, they make it near impossible for you to budget for your health care. (Click here to read about why you can’t trust the health plan’s provider directory and what to do about it.) And, click here for a primer on the fundamental difference between traditional Medicare and commercial insurance.

    In many health plans, you will pay a deductible, a copay and possibly also coinsurance for at least some services you receive.  And, the amount of the coinsurance is not likely to be clear.  Calculating total costs can be a bear.  Here’s a mini-quiz: On a procedure that costs $1000, where you have a $250 deductible, a $50 copay and 20 percent coinsurance, what would you owe out-of-pocket?

    What did you come up with? The answer actually depends on whether the $1000 is the doctor’s charge or the health plan’s negotiated rate, which is often lower than the charge, and whether you have already paid any of the annual deductible. But, assuming the health plan’s rate is $1000 and you have not yet paid any of the deductible, you would owe $440 in out-of-pocket costs: $250 deductible, plus $50 copay, plus $140 (20 percent of the remaining cost of $700).

    The best way to budget for your care is to use in-network doctors and hospitals and choose a plan with a low out-of-pocket cap. To find a plan with a lower out-of-pocket limit, you need to understand how the plan calculates its cap. For example, if you see out-of-network providers will those costs go towards the cap? Is there a separate deductible for prescription drugs? Do your prescription drug costs apply to your out-of-pocket cap? How about your coinsurance? Each health plan is free to establish its own formula for calculating these costs.

    Unfortunately, we need to address the excessive costs people must pay when they need a lot of care. No matter which plan you choose, the out-of-pocket cap is going to be many thousands of dollars. Medicare allows people to budget for their care with supplemental coverage; so should commercial insurance.

    Here are four things to know if your income is low and you have Medicare. And, here are six tips for keeping your drug costs down if you have Medicare. And, here’s why you should plan ahead to keep your emergency care costs down.

  • To save money on drugs, avoid chain pharmacies

    To save money on drugs, avoid chain pharmacies

    A Consumer Reports investigative report reveals that to save money on drugs, you may want to avoid chain pharmacies. Pharmacies such as CVS, RiteAid and Walgreens sometimes charge as much as 10 times more than big box stores, such as Costco and Sam’s Club for the same drugs. Even if you have insurance that covers your drugs, the copays could be higher for the drugs you get at the chain drugstores than the full price you pay for the drugs at the big box stores.

    Based on calls to 220 pharmacies by its “secret shoppers,” Consumer Reports found substantial price variations within communities. Be it in Raleigh, North Carolina, Denver, Colorado, or Dallas, Texas, the chain drug stores or grocery stores often had prices for commonly use prescription drugs strikingly higher than some independent drug stores. In Raleigh, a month’s supply of generic Cymbalta cost $220 at Walgreens, $190 at Kroger, $118 at Walmart, $64 at an independent pharmacy, and $43 at Costco. In Dallas, a month’s supply of generic Plavix cost $150 at CVS in Dallas and $23 at an independent pharmacy a 20-minute drive away.

    To keep your costs down, you might want to take the time to price your drugs at a few different pharmacies. Be sure to ask the pharmacy whether you can get the drug at a better price or whether there’s a discount program. Consumer Reports found that shoppers who asked the pharmacy whether they could get the drug at a lower price were sometimes able to get steep price reductions. Also, chain pharmacies may have discount programs for cash-paying customers that significantly reduce prices on some drugs.

    Remember that you might spend less for your drugs buying them directly online or from a big box store than if you use your insurance.  The list price for several generics at www.healthwarehouse.com and Costco is likely less than your insurance copay for the drugs. And, if you can, get a three-month prescription, which tends to deliver better value.

    Here are six tips for keeping your drugs costs down if you have Medicare. And, here you can find free local resources for older adults.

  • To maximize profit, health insurers dropping small businesses

    To maximize profit, health insurers dropping small businesses

    Arguably, the people who have benefited most from the health care law—at least financially—are the top executives and shareholders of the country’s health insurance companies. And to maximize profit, health insurers are dumping small businesses or raising their rates substantially. Many small business owners who would like to keep offering their employees health coverage can no longer afford it.

    Insurer rates are rising steadily, and small business owners cannot afford to keep offering coverage as much as they would like to.  At the same time, the insurers’ share prices have doubled, and some have more than tripled, since the Affordable Care Act was signed.

    About two thirds of the country’s small businesses offered coverage to their workers in the 1990s. Now, it’s down to 50-55 percent. One reason is that insurers are “dumping” unprofitable accounts, especially small business customers.

    Insurers can lose money if a single employee of a small business gets sick or needs costly care. So, it’s in their interest to stop serving those businesses. Unfortunately, Obamacare does little to keep them from doing so.

    For more information on what’s happening in the health insurance market, visit the Center for Public Integrity, where I write about this in greater detail.

    For information about how health insurer mergers are driving up premiums, click here. To learn more about health insurance options and how fewer health insurers are offering out-of-network coverage, click here.

  • Health insurance premiums rising, but you might be able to control your costs

    Health insurance premiums rising, but you might be able to control your costs

    A recent analysis by the Kaiser Family Foundation reveals that premium increases for people in the health insurance exchanges will be modest, so long as they enroll in the lowest or second lowest cost silver plans. Unfortunately, for most of them, this means having to switch from the silver plan they are currently enrolled in to a different plan. And, it may mean switching doctors and hospitals as well in order to receive in-network care, undermining people’s continuity of care.

    The Kaiser analysis of proposed premium increases in 10 states plus Washington DC shows average premium increases of 4.4 percent, so long as people switch to the lowest and second lowest cost silver plans. Silver plans tend to be the most popular plans–68 percent of people choose them. That said, premium rates vary significantly in different parts of each state and in different cities in different states. In Seattle, Washington, overall rates appear to be dropping 10.1 percent, whereas in Portland, Oregon, rates are increasing 16.2 percent.

    The wildly varying silver plan premiums in the state health insurance marketplaces mean that enrollees need to be active purchasers, if they want to keep costs down, regardless of whether they are eligible for a tax credit based on their income. And if they are eligible for tax credits to help offset their premium costs, they need to keep in mind that these credits are tied to the second lowest silver plan premium.

    The Kaiser analysts found that typically the lowest and second lowest cost silver plans in 2015 will not be the lowest or second lowest cost silver plans in 2016.

    It’s not clear what size premium increases people enrolled in employer plans will see. Notwithstanding soaring 2014 profits, insurers are calling for 20-30 percent premium increases in the private health care marketplace.

  • What will big health insurer mergers mean for our health care choices and costs?

    What will big health insurer mergers mean for our health care choices and costs?

    On Friday, July 3, Aetna, the third largest health insurer, paid $34.1 billion for Humana, the fourth largest insurer, merging two of the biggest health insurers in America.  And, the mergers don’t stop there. There’s talk of UnitedHealth Group, the largest insurer, merging with Aetna. There’s also talk of Anthem, the second largest insurer, merging with Cigna, the fifth largest insurer.

    We should be extremely concerned about these mergers. They could very well mean less choice and higher costs for millions of Americans.

    While it’s hard to make a compelling case that there is much meaningful competition in the health insurance marketplace today (the kind of competition that brings down costs and improves quality, delivering value), millions of people with Medicare, in the health insurance exchanges, and with employer group coverage, do have some health plan choices. With insurer mergers, we could have less ability to find an affordable health plan or to choose a plan with in-network doctors whom we know and trust.

    To be sure, more power for insurers means that they arguably would have more leverage over hospital and doctor rates. But, they are enormous today and still have been unable or unwilling to use their leverage. And, some would argue that the insurers will have a financial incentive to pay providers more, because that’s one way for them to generate more revenue. They can charge higher premiums if they are spending more on health care. (The Affordable Care Act limits insurer administrative costs and profits to 15-20 percent of premium dollars.)

    More power for insurers also means more power for them to charge their members more without fear of losing business since members may not have a good lower-cost alternative. There are many examples of insurers merging and increasing rates significantly post merger.

    To make matters worse, according to David Lansky, head of the Pacific Business Group on Health, the bigger the insurers are, the less accountable they may be willing to be regarding prices, quality and outcomes.

    To the extent regulators in the states have power to shape these mergers, there is precious little evidence that all but a few of them will consider wielding that power on our behalf. (California and New York may be two exceptions.) Even when they’d like to, most lack the resources to do battle with health insurers. Remember that before the Affordable Care Act was passed, virtually every state allowed insurers to deny coverage to people with preexisting conditions, to sell policies with inadequate coverage, and to hike up rates excessively. Most also saw no need for transparency of prices or quality in the marketplace.

    The U.S. Justice Department could intervene to stop these mergers.  But, even if it does, that is likely to be a short-term solution at best if Congress and our next president want to support big business interests.

    At the end of the day, Medicare does a better job of controlling costs than the largest private health insurers and, as Robert Reich explains in this video, we should be giving everyone in America a Medicare option.

  • The rationale for an all-payer system for doctors and hospitals

    The rationale for an all-payer system for doctors and hospitals

    Unlike other developed countries, which negotiate or set uniform rates with doctors and hospitals regardless of who is paying the bill, an “all-payer system,” the United States takes a hands-off policy with regard to provider rates for private insurers and the uninsured. The result—except in the two states with an all-payer system for hospital services–is wildly varying rates that can be exorbitant, as Gerard Anderson and Ge Bai recently showed in their analysis of hospital prices. Health economist Uwe Reinhardt argues that if the U.S. had an all-payer payment system, we could more effectively control costs and help ensure that charges to patients were fair.

    Looking at steep hospital price increases in California and Oregon during the Great Recession, 2005-2009, Reinhardt shows that even in a weakened economy insurers were not able to control costs. He does not buy the argument that these increases were necessary to offset payments from Medicare and Medicaid. There is every reason to believe that hospitals and doctors negotiate for the largest rates they can get from insurers, regardless of their government payment rates.

    Put differently, private insurers are not forced to pay hospitals and doctors rates that are high to compensate for lower Medicare and Medicaid rates. That’s a myth. Hospitals and doctors are charging private insurers high rates because they can, because the health care market is broken.

    Moreover, if insurers lack the leverage to rein in costs for whatever reason, they should not be responsible for controlling costs. And, if provider rates are in any sense rational, how do you explain the huge differences in rates for the same services even within small geographic areas?

    According to Reinhardt, an all-payer system eliminates price discrimination in the health care marketplace. It prevents people from being charged wildly different amounts for the same service depending upon their insurer or their lack of insurance. It also simplifies the system for everyone and reduces administrative costs considerably.

    Our current system of giving insurers responsibility for negotiating provider rates adds no value to the system. They generally can’t control them effectively. Moreover, it incents providers to keep pushing prices higher.

    At a minimum, we should give everyone the option of enrolling in Medicare, as Robert Reich explains in this video.  It’s far more effective at controlling costs than private insurers.

     

  • Medicare is the solution to out of control health care costs, everyone should be able to buy into it

    Medicare is the solution to out of control health care costs, everyone should be able to buy into it

    In a new two-minute video for MoveOn, Robert Reich makes the case for why Medicare is part of the solution to fixing our economy. We should be expanding it and offering it to everyone in America through the Affordable Care Act’s state health insurance exchanges. Seven out of ten likely voters (71 percent) support giving all Americans the choice of buying into Medicare as a way to drive competition in the health insurance marketplace.

    Medicare is far more cost-effective than private health insurance. Because Medicare covers more than 50 million older adults and people with disabilities who need a lot of health care, the government is able to negotiate doctor and hospital rates that are lower than what the private insurers are able to negotiate. And, if Congress would lift the prohibition on Medicare negotiating drug prices with the drug companies, it would be able to bring those prices down as well.

    At the same time, traditional Medicare gives people the option of seeing virtually any doctor and using almost any hospital in the country, in most instances, with no out-of-pocket costs so long as they have supplemental insurance or Medicaid. That’s why the overwhelming majority of people newly eligible for Medicare enroll in traditional Medicare.

    Those in Congress proposing to cut Medicare and shift more people into private Medicare HMOs and other private health plans need to recognize that the private plans mean higher health care costs for all. They are unable to use their leverage to bring down costs.

  • 576,000 Americans with annual drug bills over $50,000 in 2014

    576,000 Americans with annual drug bills over $50,000 in 2014

    How much is too much to expect Americans to pay for prescription drugs? Unlike just about every other country, which negotiate drug prices, in the United States, Congress permits drug companies to set prices sky high. Not surprisingly, a new Kaiser Family Foundation poll shows that about three-quarters of Americans believe drug prices are not reasonable.

    Since insurers must cover medically reasonable and necessary drugs, regardless of the price, drug companies focus on profits and seem not to concern themselves with whether needed drugs are affordable. For example, two new FDA-approved drugs to treat heart disease by lowering LDL cholesterol levels and protect against heart attacks are expected to cost between $7,000 and $12,000 a year. And, Sovaldi, a new drug to treat hepatitis C costs $84,000 for a 12-week treatment. Of note, insurers do not generally cover the full cost of these drugs; patients usually spend thousands of their own dollars in copays and coinsurance for them.

    A recent report by Express Scripts details the problem of rising drug costs, reporting that “An estimated 576,000 Americans spent more than the median household income on prescription medications in 2014,” up 63 percent from 2013. And,140,000 people had drug costs of $100,000 or more, three times the number of people with these costs in 2013; slightly more than half of these people were baby boomers, between 51 and 70.

    About ten percent of Americans, millions of people, report that they have trouble affording their drugs, according to the Kaiser poll. And, many of them say they are not filling prescriptions or cutting their pills in half to reduce their costs at the expense of their health. No wonder that government drug price negotiation is the top national policy priority for Americans today.

    Here are six tips for keeping your drug costs down if you have Medicare.

     

  • Congress leaves insured Americans at the mercy of Pharma and out-of-control drug costs

    Congress leaves insured Americans at the mercy of Pharma and out-of-control drug costs

    Let’s face it, HMOs and PPOs are playing a game of bait and switch, keeping monthly premium increases down while raising their members’ out-of-pocket costs. Avalere reports that specialty drug costs are no exception with more than four out of ten state health exchange “silver” plans and more than half of the “bronze” plans requiring members to pay at least 30 percent of their cost in 2015. For many people with life-threatening illnesses who rely on these expensive drugs, this jeopardizes treatment. (And, costs for critical generic drugs also can be prohibitive.)

    The health plans are culpable mainly because they would rather shift costs to their members than admit they are powerless to contain prices. Consequently, they won’t join forces with their members and call upon Congress to ensure drug prices are reasonable. They won’t risk getting on the wrong side of lawmakers who are beholden to the drug industry. They do this knowing full well how important drugs can be for people with cancer, multiple sclerosis and myriad other complex conditions—and that high coinsurance could be a death sentence for those who can’t afford it.

    It is a gross injustice for Congress to allow health plans to leave people with serious and disabling conditions at the mercy of out-of-control drug costs rather than rein in prices, as every other industrialized nation does. People need to be able to budget for their care up-front. Their premiums should be seen as ample contribution to the cost. Insured people should not be forced to go without critical medications.

    Of course, when you follow the money and the lobbyists, as the Center for Responsive Politics and Pro Publica have done, you see very quickly why Congress supports what’s best for the pharmaceutical industry, not ordinary Americans.

  • US ranks at bottom of pack of wealthy nations on health of older adults and affordability of care

    US ranks at bottom of pack of wealthy nations on health of older adults and affordability of care

    A new Commonwealth Fund survey of older adults 65 and older in 11 countries reveals that, even with Medicare, affordability of care for older Americans is a serious issue.  Older adults in the United States struggle more paying for care and are in poorer health than older adults abroad.  Almost one in five older adults in the U.S. (19%) said that they had not visited the doctor or filled a prescription because of the cost.

    The typical person with Medicare spends $4000 each year on out-of-pocket health care costs that Medicare does not pay for.  Older adults in the U.S. also reported a harder time getting primary care and staying out of the emergency room than older adults in every other country except Canada and Sweden.  Of equal concern, older adults in the United States reported the highest levels of chronic conditions, with 87% saying that they had at least one chronic condition and 68% saying they had at least two.

    On a more positive note, older adults in the United States were more likely have spoken with a care provider about what they could do to improve their health.  They also were more likely to have a personalized chronic care plan and to have engaged in end-of-life planning.  End-of-life care planning by age 50 is especially important and relatively easy to do.  Since we can’t know what health care needs we will have, if we want our wishes followed, it is critical to have advance directives, such as a health care proxy and living will, as well as a power of attorney.

     

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