JustCare

Tag: Costs

  • Bipartisan agreement on how to keep drug middlemen from ripping people off

    Bipartisan agreement on how to keep drug middlemen from ripping people off

    A new bill in Congress would end some of the most egregious practices of Pharmacy Benefit Managers (PBMs), reports Annika Kim Constantino for CNBC. PBMs are the drug middlemen who negotiate lower drug prices from manufacturers and then tend to pocket the savings for themselves or the health insurers who own them. The bill sounds appealing, but the only way to ensure fair drug prices for Americans is to remove the PBMs from the mix and have the government negotiate drug prices directly with the pharmaceutical manufacturers, as every other wealthy country does.

    Right now, the PBMs are driving up drug costs and forcing millions of Americans to forgo or delay filling their prescriptions. The PBMs are also driving community pharmacies out of business by underpaying them for their services or steering customers to pharmacies that promote the PBMs’ financial interests. The Congressional bill would make it easier for people to use community pharmacies, help ensure the PBMs pay these pharmacies appropriately, and lower people’s drug costs.

    This bill is not the only bill attempting to address high drug costs and abuses by the PBMs. And, though it’s bipartisan, it’s not at all clear that it will become law. Because the insurers and PBMs are so powerful, Congress is often hamstrung in its efforts to address their bad acts. Three PBMs–Optum Rx, Express Scripts and CVS Caremark–control about 85 percent of the prescription drug market and are owned by big insurers.

    Fortunately, the FTC is also working to address PBM abusive and unfair practices harming consumers. It plans to sue the three largest PBMs, which control about 80 percent of the market.

    If passed, the bill in Congress would create a new model for paying pharmacies. For reasons I can’t explain, today, PBMs can reimburse pharmacies less than what the pharmacies pay for drugs. The bill also would require PBMs to pass along to patients 80 percent of the savings they negotiate. And, it would forbid PBMs from steering patients to brand-name drugs when lower-cost generics are available.

    Here’s more from Just Care:

  • Nearly half of Americans can’t afford their health care

    Nearly half of Americans can’t afford their health care

    Time passes and health care costs rise, as do the number of Americans who can’t afford their health care, according to a new Gallup and West Health poll, reports Aimee Picchi for CBS News. Not surprisingly, people of color are struggling most to pay for their care, as are people in their 50’s and early 60’s, who are not yet eligible for Medicare. But, eight percent fewer people over 65 are able to afford their care now than just two years ago.

    Only about 55 percent of Americans between the ages of 50 and 64 are “cost secure.” They can afford care and prescription drugs. But, that percentage is dwindling quickly. Two years ago, 61 percent reported being “cost secure.

    Even with Medicare, just 71 percent of people are cost secure, down from 79 percent in 2022. Younger adults are the least cost secure. Fewer than half of them (47 percent) can afford their health care, down five percent from two years ago.

    The new poll found that 45 percent of respondents reported skipping care or not filling their prescriptions because of the cost or an inability to get them.  Eight percent of those people said that if they needed care now, they would not be able to get it at an affordable cost. Gallup termed these people “cost desperate.”

    Around one in three U.S. adults, more than 72 million people, said that they had not got care they needed in the past three months because of the cost. Of those 72 million, more than eight million are 65 or older.

    Black and Hispanic Americans are increasingly cost desperate. About one in seven Hispanic adults and one in nine Black adults are cost desperate. Seven percent of White adults are cost desperate.

    What’s causing this increase in the number of Americans who can’t afford their care? Inflation has driven up health care costs. And, doctors and hospitals can charge pretty much what they please, with little accountability. Moreover, insurers keep increasing their deductibles, the amount people must pay out of pocket before their insurance coverage kicks in.

    In 2022, the typical insurance deductible for a family was $3,800. That deductible reflects more than a 50 percent increase ($1,300) from 2013.

    Overwhelmingly, Americans believe that health care costs too much and they are not getting bang for their buck. But, they are not advocating for Medicare for all or even a government-regulated system that sets prices for health care services, which would bring their costs down.

    People are eating less to pay for their prescription drugs. We don’t know how many are dying prematurely because they can’t afford their heart and other medicines, but it’s a good bet thousands are each year.

    Today, the average annual cost of health care in the US per person is $12,555. In Germany, Italy and France, the average annual cost is around $6,651, almost half of what we spend.

    Insurers are keeping people from getting the health care they need. They deny and delay care inappropriately. They refuse to pay for medically necessary services.

    Here’s more from Just Care:

  • Why can’t people know their health care costs before receiving care?

    Why can’t people know their health care costs before receiving care?

    Health care should not be a commodity; it should be a right. But, so long as our country treats health care like a commodity, people should be able to know what they’ll be charged before receiving health care. Instead, it feels as if hospitals and physicians can make up their charges and insurers can make up what they cover; patients have little choice but to pay what they are billed or end up in medical debt.

    At a recent Senate hearing, policy experts explained why the current health care system isn’t working. Hospitals are supposed to post their prices, but many still don’t and, honestly, it probably would be of no help to patients if they did. The issue is not simply the costs of different services, but which services are delivered, over both of which patients have little control.

    The only solution for protecting people against high health care costs is an all-payer rate-setting system with regulated prices and public health insurance that covers them. Medicare for all. Once corporate insurers are in the mix and hospitals and physicians can charge what they please, as we know, your health care costs can be through the roof.

    The Senate Special Committee on Aging heard from witnesses about how impossible it is for patients to shop for health care effectively. Senator Mike Braun called provider behavior monopolistic. But, his solution, explained in a report, is simply for more price transparency, which will never address the problem of high prices.

    Hospitals also now get away with charging “facility fees,” which can be super high and are always unpredictable. Moreover, consolidation in the health care space is driving up prices, without any evidence of improved quality of care. But, Congress remains unwilling to address health care costs in a meaningful way.

    Congress did cap prescription drug costs for people with Medicare Part D at $2,000 a year beginning in 2025. But, that legislation continues to allow pharmaceutical companies to charge what they will for their prescription drugs. That’s not a meaningful solution. It will drive up Part D premiums further.

    For their part, hospitals argue that they need to increase prices because insurers too often refuse to pay them for the services they deliver. In addition, many patients can’t afford to pay their hospital bills, so hospitals are forced to absorb the cost of the services they deliver.

    Here’s more from Just Care:

  • Older adults are extremely worried about affording health care

    Older adults are extremely worried about affording health care

    Older adults are extremely worried about affording their health care, concerned they will not be able to pay for the care they need, reports Judith Graham for KFF Health News. Health care affordability is top of mind for older adults as they see prices rising for all their basic needs.

    The National Poll on Healthy Aging found that people over 50 had three major health care concerns: costs, costs and more costs. The cost of medical care, the cost of long-term care and the cost of prescription drugs. People were “very concerned” about these costs.

    People surveyed had other concerns, also related to costs, including the cost of health insurance and Medicare and the cost of dental care. They were also concerned about financial scams.

    People were less concerned about loneliness, being overweight and age discrimination.

    It’s not surprising that older adults are so concerned about health care costs. Twenty-five percent of older adults depend entirely on Social Security for their income, which averages $1,913 a month for an individual. Ten percent of older adults have annual income below the federal poverty level.

    Older adults cannot rely on Medicare, be they in Traditional Medicare or a Medicare Advantage plan, to cover their dental, vision or hearing care or their long-term care. Medicare only covers limited care in a skilled nursing facility or at home if you meet certain criteria. And though Medicare Advantage plans like to tout the dental, vision or hearing care they cover, they tend to offer very limited benefits that are of little help to covering the costs of the services people need.

    People often go without dental care and eyeglasses since Medicare does not cover them. On average, people with Medicare spend about $7,000 a year on medical care. Younger people spend about $4,900 on average.

    People also struggle to pay for long-term care. Nursing home care costs $104,000 on average in 2023. Care in an assisted living facility costs $64,200 on average in 2023. Services at home from home-health aides cost $75,500 a year on average.

    A large proportion of older adults–17 million–live on less than $30,120 a year ($40, 880 for a couple,) twice the federal poverty level. After you pay for Medicare Part B and D premiums and a Medicare supplemental policy, millions of people with Medicare have spent more than 4o percent of their monthly Social Security check, about $468 out of $1,121.

    Medicare Savings Programs can help cover Medicare premiums and out-of-pocket costs. You can apply through your Medicaid office. You qualify based on your income and assets, but many people are unaware of the programs. Six million people qualify who are not enrolled, according to Graham.

    You can check out additional programs that lower your health care costs here.

    Here’s more from Just Care:

  • What’s more dangerous than dozens of insurers offering Medicare Advantage? UnitedHealth for All

    What’s more dangerous than dozens of insurers offering Medicare Advantage? UnitedHealth for All

    Hayden Rooke-Ley et al. write in the The New England Journal of Medicine about the dangers of a corporate health insurer takeover of Medicare. Medicare Advantage, which is administered by corporate health insurers, is growing like wildflowers. Unless the government ends overpayments to Medicare Advantage plans, a future of UnitedHealth for everyone with Medicare is not unlikely–undermining competition, driving up costs, and putting patient health at risk.

    UnitedHealth is the largest health insurer in the US. In part thanks to the billions of dollars of fixed upfront (capitated) payments it receives from the government to offer Medicare Advantage plans, UnitedHealth is acquiring physician practices and clinics. Indeed, UnitedHealth is the largest employer of physicians in the nation. It also owns the third largest Pharmacy Benefit Manager, OptumRx. And it even owns an enormous provider payment system.

    The government’s payment system for Medicare Advantage, through upfront capitated payments to insurers who bear the full risk of providing Medicare benefits, creates powerful financial disincentives for corporate insurers to withhold patient care and reimbursements to providers every way they can. In sharp contrast, Traditional Medicare, which is administered directly by the government, has a fee-for-service payment system that incentivizes providers to deliver health care.

    Recently, UnitedHealth’s payment system, Change Healthcare, was hacked. As a result, UnitedHealth held up reimbursements to hospitals, physicians and pharmacies. In turn, many of these providers were unable to meet payroll and to deliver care as needed.

    Corporate control of health care is a threat to our health care system. Change Healthcare processes payments in Traditional Medicare as well as in Medicare Advantage. After the Change hack, while UnitedHealth left providers in Medicare Advantage with long waits for reimbursements, the Centers for Medicare and Medicaid Services stepped in on behalf of providers in Traditional Medicare to ensure they were paid. Unlike UnitedHealth, the federal government was most concerned about ensuring providers were paid.

    Humana and CVS are not as large as UnitedHealth, but they too are building enormous positions in senior care, post-acute care, and in-home services. Cigna, Centene and Elevance are also buying up health care businesses.

    This vertical integration in the corporate health insurance sector comes with serious risks. It undermines competition and drives up costs. It can also bankrupt physicians and hospitals and endanger patient care.

    Some argue that corporate control and consolidation in the health care sector delivers efficiencies that can save money and improve care. For example, insurers have an incentive to keep people from going to the ER because they are paid a fixed amount and can pocket what they don’t spend on care. They also have an incentive to keep members healthy so they spend less on their care.

    But, insurers have a financial incentive to keep people from going to the ER and getting other costly care when they need it. The Office of the Inspector General has found that they engage in widespread inappropriate delays and denials of care. So, whatever the benefits of consolidation, the risks are costly and dangerous.

    Insurers also game the Medicare payment system to reap billions of dollars in additional revenue. Last year, they received $83 billion in overpayments, according to the Medicare Payment Advisory Commission.

    The notion that insurers’ employment of physicians eases physicians’ administrative burden is misplaced. Insurers control staffing and scheduling, burdening physicians with a large caseload. In fact, insurers can keep physicians from putting the health of their patients first. Insurers can call the shots regarding the number of patients each clinician sees. And, insurers can incentivize providers to withhold care.

    Insurers like UnitedHealth and CVS have so much money and power at this point that the Department of Justice and Federal Trade Commission have not been successful at blocking monopolistic acquisitions such as United’s purchase of Change Healthcare. UnitedHealth prevailed in court.

    Theoretically, Congress could put an end to vertical consolidation by passing legislation that would prevent insurers from employing physicians and controlling our care-delivery system. Those reforms appear to be a pipe dream, given the gridlock in Congress.

    For sure, Congress should eliminate insurer overpayments. That would cripple the insurers quickly. But, that’s equally unlikely, given the politics.

    At the very least, Congress and the Administration should warn people with Medicare of the dangers they face in Medicare Advantage, instead of misleading them to think they will get the same benefits as in Traditional Medicare. While that might be the case in theory, Medicare Advantage enrollees do not get the same benefits as people in Traditional Medicare in practice. Medicare Advantage plans limit enrollees’ access to doctors and hospitals, impose administrative obstacles to care, and second-guess treating physicians, often inappropriately denying critical care.

    Here’s more from Just Care:

  • Do you qualify for hospital charity care?

    Do you qualify for hospital charity care?

    Back in October 2021, I wrote a post for Just Care on how to lower your hospital costs if your income is low. Many people who qualify for charity care are unaware that they might qualify for a free or low-cost hospital care under a hospital’s policy. If you are able, before going to the hospital, find out whether it offers charity care, and, if so, who qualifies and whether any physicians are excluded from their charity care policy.

    The Affordable Care Act requires non-profit hospitals to offer charity care to people with low incomes. They might reduce their charges or, in some cases, cancel them altogether if your income is below a certain level. But, most people don’t know about this requirement, and hospitals don’t often tell you about it.

    Since it became law, many nonprofit hospitals have made it a lot more difficult for people struggling to pay for their hospital care to get charity care. Moreover, some physicians who provide you care at the hospital might not be covered under the hospital’s charity care policy, reports Filipa Carvalho for the Lown Institute. However, hospitals must disclose their financial assistance policy (FAP), including which physicians are covered and which are not.

    If your income is low, it’s wise to ask your hospital about its policy for providing charity care and for an application before you are admitted to the hospital. You might want to see about using a different hospital if it appears that it will be challenging to get charity care.

    When using a hospital offering charity care (a non-profit hospital), even if your income is higher than the hospital’s income limit, you should still apply, if paying the bill will put you in medical debt. You have 240 days from receiving a hospital bill to apply, and it could save you thousands of dollars.

    If the hospital sends a collection agency after you, call the hospital and let the staff know you are applying for charity care and you’d like them to stop the collection agency from trying to get you to pay.

    Here’s more from Just Care:

  • How to avoid overpaying for your prescription drugs

    How to avoid overpaying for your prescription drugs

    In a piece for the New York Times, Rebecca Robbins and Reed Abelson advise readers on how to avoid overpaying for prescription drugs. Most importantly, you should not assume that your insurer is saving you money on your drugs. Too often you will pay more for your drugs with insurance than you would if you paid for your drugs in full, without insurance.

    How is it possible you would pay more for your drugs with employer coverage or Medicare Part D coverage than without it? Three words: Pharmacy benefit managers or “PBMs.” These entities—prescription drug middlemen who work for health insurers and are often owned by them—are responsible for negotiating with pharmaceutical companies for lower-priced drugs. But, they can and do pocket a lot of the savings. They then determine which drugs your insurer will cover and your copay for each drug, your “formulary.”

    Three big corporations own the three biggest PBMs. UnitedHealth owns Optum Rx, CVS owns Caremark and Cigna owns ExpressScripts. These insurance corporations put their shareholders’ interests ahead of their customers’. What’s worse is that our government allows them to upcharge their customers.

    Robbins and Abelson suggest that you might want to know which PBM controls your formulary, but I’m not sure why. Caremark, ExpressScripts and Optum control 80 percent of the prescriptions filled in the US. And, there’s no evidence that any of them offer better prescription drug coverage than any other.

    How do PBMs game the system? In addition to being able to pocket and not pass along to you the discounts they secure from drug manufacturers, they can force you to take a brand-name drug when a lower-cost generic is available. They take money from the brand-name manufacturer to steer you to its drug and away from the generic; they might not include the generic on their formulary.

    Sometimes, PBMs include generic drugs on their formularies, but they charge copays for these drugs that are higher than the full cost of the drugs without insurance.

    What can you do? Always check to see whether you can get your prescription drugs at a lower price from Costco or GoodRx or Mark Cuban’s Cost Plus Drugs or from abroad. You often can. A colleague of mine was told the Medicare Part D copay for his drug was over $300.  When he asked the cost with GoodRx, he was told it was $30!

    Here’s more from Just Care:

  • Medicare Advantage offers less care at greater cost

    Medicare Advantage offers less care at greater cost

    In a paper for JAMA Network, Adam Gaffney et al. suggest the time is ripe for cutting our losses in Medicare Advantage and strengthening traditional Medicare for two reasons. People in Medicare Advantage face obstacles to care and coverage that they need, endangering their health, that patients in traditional Medicare do not face. And insurers offering Medicare Advantage are charging the government tens of billions of dollars more than we spend in traditional Medicare, driving up Medicare costs.

    No question mountains of data support Gaffney’s position. Just as people with commercial health insurance, people in Medicare Advantage face lots of challenges getting needed care. They must overcome myriad prior authorization requirements, especially when they need costly care, unlike people in traditional Medicare. And, they often struggle to see physicians and access hospitals they want to use.

    Gaffney further suggests that incremental reforms to the MA payment and coverage systems will not fix these big problems. They are always too small. And, insurers find ways around them. Between 2007 and 2023, the government paid insurers $612 billion extra for covering their enrollees than it would have paid had these enrollees been in traditional Medicare. Of the money, $592 billion — 97 percent — went to insurer overhead and profits.

    Today, people in Medicare Advantage plans receive nine percent fewer Medicare-covered services than people in traditional Medicare. For sure, these are the people who most need care. These are the people that Medicare Advantage plans try to avoid enrolling and, if they enroll, encourage to disenroll.

    Moreover, Medicare Advantage plans do not have to set up shop in areas where they see few profits, and there’s no way to make them do so. The model is flawed at its core.

    There’s no denying that people, overall, are happy in their Medicare Advantage plans. That’s because they have an out-of-pocket maximum rather than a need to buy supplemental coverage, as people in traditional Medicare do. And, it’s because they often get free gym memberships or some dental care or eyeglasses.

    If people are healthy, they might be better off in Medicare Advantage. But, Medicare is paying an average of $13,000 on them, even though they don’t need care; they cost little or nothing. If they become ill, it can be a struggle for them. That’s not a workable health insurance model, particularly for older, frailer and more vulnerable Americans.

    Here’s more from Just Care:

  • CVS plans to raise Medicare Rx premiums a lot in 2025

    CVS plans to raise Medicare Rx premiums a lot in 2025

    In an op-ed for MarketWatch, Brett Arens’s Roi warns about rising Medicare Part D premiums.

    The CFO at CVS is alerting people that Medicare Part D premiums will increase significantly in 2025. How much of that increase amounts to more profits for CVS? It’s already profiting from pocketing pharmaceutical company rebates instead of passing them on to its Part D enrollees in the form of lower out-of-pocket costs.

    A series of articles over the last few years highlight tactics CVS uses to maximize profits. For example, it sometimes makes its Part D enrollees buy brand-name drugs, for which CVS earns more. So, it’s no surprise that CVS is planning another premium hike. Premiums will be “much, much higher” says Thomas Cowhey, the CFO.

    CVS knocked up Part D premiums 20 percent this past year. This time round, the higher premiums will allow CVS to protect its profits from rising costs resulting from the $2,000 out-of-pocket cap for Part D coverage that goes into effect in 2025.

    CVS believes that more people will be filling their prescriptions once Part D has a $2,000 out-of-pocket cap. Costs will no longer be a barrier for some, after they spend $2,000 out of pocket. The question then becomes how many people have $2,000 to spend to reach that out-of-pocket cap when they need to?

    As of now, about one in seven people with Medicare say they are not filling their prescriptions because of the cost.

    Some analysts believe that the new $2,000 out-of-pocket cap in Part D will steer more people into Medicare Advantage plans. Medicare Advantage plans almost always include prescription drug coverage in their premiums. Medicare Advantage plans are likely to look less expensive than Traditional Medicare, where people would have to buy a stand-alone Part D prescription drug plan.

    Here’s more from Just Care:

  • People with Medicare increasingly going without private supplemental coverage

    People with Medicare increasingly going without private supplemental coverage

    A new report from the US Census Bureau reveals that an increasing number of people with Medicare are going without private supplemental coverage. While the report does not look into why this is the case, more people with Medicare are opting for Medicare Advantage plans, which don’t allow people to have supplemental coverage. In addition, more people in Traditional Medicare are not buying supplemental coverage, either because it is not available to them or it is unaffordable.

    While the Census Bureau does not explore the risks of people with Medicare not having supplemental coverage, the risks are significant. Without supplemental coverage, out-of-pocket costs in the form of deductibles and copays are often unaffordable. People of color, people with low incomes and people in poor health are particularly at risk.

    People enrolling in Medicare Advantage plans often mistakenly believe they are saving money over enrolling in traditional Medicare, when in fact they can easily spend a lot more on their care in Medicare Advantage than in traditional Medicare with supplemental coverage. Comprehensive Medicare supplemental coverage costs around $2,500 a year, while out of pocket costs in Medicare Advantage for people who need a lot of care can easily be $5,000 a year for in-network care alone. Unfortunately, we can’t predict when we will be diagnosed with a costly condition or be hit by a car and need costly care.

    People in traditional Medicare without supplemental coverage pay about 16 percent of the cost of their care; they have no out-of-pocket cap. That can be prohibitively expensive for most people, leading them to opt not to get care. Traditional Medicare should have an out-of-pocket cap.

    The maximum out-of-pocket cap in Medicare Advantage can be as high as $8,850 this year for in-network services. Beyond this out-of-pocket limit, because Medicare Advantage plans too often inappropriately delay or deny care or have restricted networks that will not allow you to see the doctors you need to see, you can be liable for the full cost of care you need. So, whether you are in traditional Medicare or a Medicare Advantage plan, out-of-pocket costs can be thousands of dollars without supplemental coverage. Most people with Medicare delay or forgo care when their costs are unaffordable.

    The Census Bureau report shows that in the five years between 2017 and 2022, the rate of people with Medicare with supplemental coverage fell more than 8 percent from 47.9 percent to 39.6 percent.

    Medicare should have far lower out-of-pocket costs, both to promote health equity and to ensure every older adult and person with a disability has access to the care they need, regardless of their ability to pay for it.

    Here’s more from Just Care: