Costs – Page 3 – JustCare

States address prior authorization denials, while Congress fears to tread

People across the country are facing increasing numbers of treatment denials from insurers, even after their insurers have approved these treatments for extended periods. Shalina Chatlani reports for Medical Express on how some states are addressing these prior authorization denials that are undermining patients’ continuity of care and causing them serious hardship. Meanwhile, Congress has been unwilling to act in meaningful ways.

One patient suffering from chronic pain had been getting monthly infusions for pain relief. Then, Medicaid refused to cover these infusions. After many months, the corporate insurer administering Medicaid benefits decided to overrule the patient’s treating physician and deem the treatment medically unnecessary.

Prior authorization denials keep health care spending down. They also enrich the insurers that contract to deliver Medicare and Medicaid services as well as coverage for working people. They are generally paid a fix rate upfront. What they don’t spend, they are largely able to keep for themselves, so they have an incentive to deny care or delay care. It helps to maximize their profits.

Insurers leave patients without needed treatments, often to the detriment of their health and sometimes their lives. States have been stepping in to reduce the number of prior authorization delays and denials. Nine states have laws in place now to protect patients.

New Jersey addresses insurer delays of care by requiring insurers to make determinations as to whether care is covered within 72 hours of a request. In Texas, doctors whose requests to provide care are approved 90 percent of the time receive a “gold card” that eliminates their need to seek prior authorization. But, to date, only three percent of doctors in Texas have gold cards.

Washington has a law that ensures insurers make swift prior authorization determinations. Michigan ensures that insurers use only prior authorization processes that are peer-reviewed and approved. Arizona is considering a law that would require insurers to honor their own, or another insurer’s prior authorization determination if someone switched insurers, within 90 days of the determination. But, it would not apply to Medicaid patients.

What’s insane is that our federal government effectively trusts insurers to implement prior authorization rules that are evidence-based and appropriate, with little oversight to ensure that is the case, even though mountains of evidence indicate that it is not. Moreover, the Centers for Medicare and Medicaid Services (CMS), which oversees Medicare and Medicaid, has little ability to hold insurers accountable when they violate prior authorization regulations.

A new CMS rule is intended to speed up insurer prior authorization decisions for medical services. It goes into effect in 2026. But, it has no meaningful enforcement mechanism. As well, inexplicably, it does not apply to insurer determinations as to whether a drug is covered.

State laws, for the most part, only apply to private health insurance that is state-regulated. Consequently, people in ERISA plans, who work for companies that self-fund their health insurance, are not protected by state laws. These laws also generally do not protect people with Medicaid.

One recent study found that one in five people with cancer are denied care their treating physicians recommend. The American Medical Association found that patients often experience “serious adverse event(s)” as a result of prior authorization processes.

Even when states are able to detect violations by insurers and hold them accountable, the penalties generally are so small as not to be a deterrent for the large insurers. One expert suggested holding insurance company medical directors accountable for wrongful prior authorization determinations; medical directors could be sued for malpractice. Oklahoma is considering a law that would do that.

Here’s more from Just Care:

April 23, 2024

Medicare Part D drug coverage stunts are rampant

When it comes to Medicare Part D prescription drug coverage, one thing’s for sure: Medicare Part D coverage stunts will continue without an overhaul. Insurers have way too much room to drive up drug costs for enrollees in order to profit handsomely. Cheryl Clark reports for MedPage Today that Medicare Payment Advisory Commission (MedPac) Commissioners are surprised by the huge variation in generic drug prices and availability among different Part D drug plans. It’s no surprise, it’s the “free market” run amok.

Commissioners considered why one generic drug can cost someone with Part D coverage $1.06 at one pharmacy and $102 at a different pharmacy, sometimes even the same pharmacy chain. What goes into generic drug pricing? Lots of unknown factors in addition to the cost of manufacturing and dispensing the drug and the pharmacy’s costs. (But, you can be sure it’s all about insurer profits.)

About 20 percent of Medicare spending on prescription drugs is for generics, and generics represent about 90 percent of the drugs that Part D plans fill. Generics are costing more and more.

Some basic generic drugs, including cardiovascular drugs, are just plain “out of stock.” The big PBMs can’t even say when they will have these drugs in stock. Is it a supply chain issue? (Editor’s note: A David Dayen story in TAP reveals that 323 drugs are in short supply, many more than in the past, endangering people’s health and lives.)

MedPac Commissioners want to know more about Medicare Part D, as if we need to know more to fix a multi-headed drug cost problem. The biggest players have so much power that they can keep drugs off the market if that helps them financially. A while back, I reported on a story about CVS not selling certain generic drugs because they profited more from only making the brand-name alternatives available.

“Tying arrangements” are another cog in the pharmaceutical supply and price wheel. These agreements allow drug wholesalers and pharmacies to set the amount of a brand-name drug discount to the amount of generic drugs a pharmacy buys and the price it pays. Wholesalers can then charge more for generic drugs and give bigger discounts on brand-name drugs.

In addition, bigger pharmacy chains can bargain for lower costs than independent pharmacies. They can also pay less for the same drug from wholesalers. The manufacturers might be charging the same price for a drug, but the wholesalers do not.

And, the Part D the insurers don’t help matters, designing formularies that benefit their bottom lines and often cost their enrollees more. For more on the challenges of getting your drugs covered through Part D, check out this post from last week.

Bottom line: You cannot assume that you are getting your drugs at the lowest cost through your Part D drug plan. You need to shop around. Too often you can pay a lot less without using your insurance. One MedPac Commissioner explained that with “irrational drug prices … beneficiaries in the know have to strategize multiple means to access their meds. GoodRx over here and a mail order for Mark Cuban over there, a patient assistance program over there, and the many other methods that … bypass the local pharmacist.” Of course, those not in the know, often the most vulnerable, pay more than they should.

The Commissioner expounds on the problem: “It’s bad enough that the plans can dramatically change what medicines they cover and what costs for each year with different utilization management tools. But then to have multiple sources of the least expensive drug is just too much for older adults and adults with disabilities.” What’s worse, as I understand it, Part D plans can change the medicines they cover and their costs throughout the year.

Michael Chernew, MedPac Chair, appeared not to be aware of this longstanding issue with Medicare Part D drugs, both generic and brand-name. He suggested that it was challenging to determine a way to fix the problem, even though every other wealthy nation has done so through negotiated drug prices.

Here’s more from Just Care:

April 15, 2024

Medicare Part D plans can make it hard to get prescription drugs

As you might already know, Medicare Part D plans can make it hard to get the prescription drugs you need. That’s not to say you shouldn’t have Part D coverage because it could protect you from out-of-control prescription drug bills. But, you still might spend less paying for your drugs out of pocket with a discount coupon from GoodRx or through Costco mail order or from a verified pharmacy abroad.

First, the good news. Beginning next year, your out-of-pocket costs for drugs that Medicare Part D covers will be capped at $2,000 a year. The Inflation Reduction Act, one of President Biden’s big accomplishments is responsible for that limit as well as negotiated drug prices for some of the highest cost drugs in Medicare.

But, corporate health insurers offering Part D like to make money, so they are finding ways to shift more costs on to their enrollees.Part D insurers are making it hard for their enrollees to fill certain prescriptions. Either these insurers are not covering certain medicines altogether or they are forcing people to go through multiple hoops before they will pay for certain drugs, according to a recent Health Affairs study.

For the most part, if a Part D plan does not cover a drug, then that drug is not subject to the $2,000 out-of-pocket cap.

How do Medicare Part D insurers limit their prescription drug spending and/or boost their revenue?

They don’t include certain drugs on their formulary; they now don’t cover 30 percent of drugs, up from 21 percent 13 years ago. Apparently, they are now not covering come drugs that treat cancers and autoimmune disorders.
They promote brand-name drugs for which they get large rebates from pharmaceutical manufacturers and make copays for generic substitutes more expensive or simply don’t cover generics.
They restrict access to drugs through prior authorization requirements. In 2020, they restricted access to 44 percent of them.
They require the use of generics and won’t cover brand-name alternatives.

Why does the government permit these restrictions?

Here’s more from Just Care:

April 10, 2024

Poll: Health care concerns rank high, embedded in concerns about immigration, government and the economy

A new Gallup poll on top issues for likely voters could suggest that voters are far less focused on health care as a dominant concern than immigration, government leadership, the economy, the high cost of living and poverty. As Robert Pearl, MD reports for Forbes, health care now ranks 16th, down from being listed as a top concern. But, Pearl makes a compelling case that health care remains a big concern of Americans; it is embedded in their top concerns.

Health care ranked as an explicit top concern in 2018, 2020 and 2022, as Pearl points out. Here’s the share of Americans who ranked other issues ahead of health care in this recent poll: “Immigration (28%), the government (20%), the economy in general (12%), inflation (11%), poverty, hunger and homelessness (5%), unifying the country (4%), crime/violence (4%).”

But, as the Kaiser Family Foundation found last month, health care costs are a top economic priority for voters. And, voters today say that the economy is their third top concern.

Health care is now interwoven in other concerns. In addition to health care being part of voters’ concerns about the economy, health care is response for the high cost of living and poverty. Think about how Covid-19 has affected our country–our government, our economy, and our health. Covid has also affected government investment and inflation.

Health care costs are now tied to pressures on the economy, such as high housing, food and gasoline costs. Covid-19 affected our incomes and resources as well as our mental health. It bred social isolation, loneliness and more. It undid whatever social solidarity we felt as a nation and promoted greater fissures, including fear of immigrants.

Covid-19 fostered a lack of trust in government leadership. Mixed messages about how to protect yourself from Covid; the government’s inability to protect people; the high number of Covid deaths; ever-changing Covid policies; shortages of Covid test kits; lack of bi-partisan agreement on Covid policy reforms, all led voters to lose faith in government. Voters now feel a strong desire to unify our nation.

Pearl sees the Gallup poll results revealing “the extent to which the pandemic unraveled the social fabric and collective psyche of our nation.” Voters are not happy with our health care system. Nearly three in four of them (73 percent) say that it is not meeting their needs–mental, physical and economic.

Here’s more from Just Care:

April 3, 2024

People with Medicare spend twice as much on healthcare as other people

People with Medicare spend twice as much on healthcare as other people, according to a new Kaiser Family Foundation report. On average, people with Medicare spend $7,000 a year or 13.6 percent of their total household spending a year. People under 65 spend about 6.5 percent of their income or $4,900 a year.

Higher spending for Medicare population is not surprising. People with Medicare on average have lower incomes than younger working people. Annual average household income for working people is $74,100 as compared with $51,800 for people with Medicare. And, of course, people with Medicare use significantly more health care services than younger working people.

These healthcare expenses for people with Medicare represent a bigger portion of their income than health care expenses for younger working people. What’s noteworthy is that as a share of total household spending, people with Medicare’s health care expenses are about the same in 2022 as they were in 2013.

The Inflation Reduction Act could lower people with Medicare’s out-of-pocket healthcare costs somewhat. It caps prescription drug costs under Medicare Part D at $2,000 a year for covered drugs, beginning in 2025. And, it brings down the costs of some high-cost drugs beginning in 2026. It will also be easier for people to qualify for extra help paying their prescription drug costs as Congress has expanded access to these subsidies.

People with Medicare still need to buy supplemental coverage to fill gaps in traditional Medicare unless they have Medicaid or subsidized employer retiree coverage. If they are in a Medicare Advantage plan, they can pay as much as $8,700 a year in out-of-pocket costs for in-network care alone, though on average Medicare Advantage plans cap their costs at around $5,000 a year for in-network services (about twice the cost of Medicare supplemental coverage.)

Here’s more from Just Care:

March 19, 2024

Poll: Health care costs are a top economic priority for voters

As you’ve likely been reading, voters continue to have negative views about the US economy. High health care costs (and inflation, which is actually in check) feed into that view, with voters saying they are big concerns. The Kaiser Family Foundation’s latest poll finds that voters want to hear President Biden and former President Trump discuss these issues.

Americans believe that their cost of living, including housing, is rising; health care costs also represent a piece of that expense. They do not seem to consider that unemployment is low and the stock market has been climbing. Almost three in four Americans are concerned about paying unexpected medical bills; more than half are worried that they won’t be able to afford their prescription drugs and nearly half express concern about paying their health insurance premiums.

What’s particularly noteworthy is that even though former President Trump would likely cut some of the benefits voters enjoy and President Biden has worked hard to boost them, nine in ten Republicans say they would vote for former President Trump. Curiously, Republican voters believe that former President Trump did more to address high health care costs than President Biden, although not enough. Nearly six in ten Republicans (59 percent) say Trump did enough to address health care costs, whereas only one third (33 percent) of Democrats say Biden has done enough.

Voters who say they support Trump recognize that he does not have a vision for replacing the Affordable Care Act, only for ending it. But, they don’t appreciate that President Biden was the Vice President when the ACA was passed and played a significant role in its passage.

The ACA is not well understood, likely because only a fraction of the population benefits from it today. Most people don’t appreciate the protections it offers people who lose their employer coverage or who are self-employed, particularly those who have pre-existing conditions, and why it needs to be strengthened. Many Republicans suggest they would be happy to see it cut or repealed.

Here’s more from Just Care:

March 6, 2024

People in Medicare Advantage struggle to afford their care

Medicare offers very good coverage of inpatient and outpatient medical services, but it comes with significant out-of-pocket costs. A new report from The Commonwealth Fund lays out how these additional costs affect access to care for older adults and people with disabilities. In sum, people in Medicare Advantage are as likely to struggle to afford their care as people in Traditional Medicare.

Unless they qualify for Medicaid or a Medicare Savings Program, people with Medicare generally pay monthly Medicare Part B premiums, deductibles, coinsurance and copays. They also generally pay all or most of the cost of dental, hearing, vision and long-term care services.

Nearly 20 percent of people with Medicare face burdensome out-of-pocket costs–they are underinsured–based on their income. Whether they are in Traditional Medicare or Medicare Advantage, particularly people whose income is under twice the federal poverty level ($27, 180 for an individual and $36,620 for a couple in 2022) but who do not qualify for Medicaid, struggle to pay for their care. About 21 million people with Medicare have incomes under 200 percent of the federal poverty level.

The Commonwealth Fund survey found that 38 percent of people with Medicare reported one or more problems accessing care during the year. As a result, these Americans might have not filled a prescription or gone to the doctor or dentist. People in Traditional Medicare and Medicare Advantage experienced access to care problems at the same rate. People with annual incomes above $55,000 experienced fewer problems accessing care.

Medicare Part B premiums alone are substantial. And, 23 percent of people with Medicare reported that it is a challenge to pay these premiums. Nearly four in ten people with incomes under 200 percent of the federal poverty level reported a challenge paying these premiums.

If you’re in a Medicare Advantage plan, out-of-pocket medical and inpatient costs can be as high as $8,300 a year in 2023 for in-network services alone, depending upon the Medicare Advantage plan you’re enrolled in. If you’re in Traditional Medicare, these costs are very limited if you have Medicare supplemental coverage or Medigap, retiree coverage from a former employer or Medicaid. But, if you do not have this extra coverage, your costs are uncapped.

And, while people often join a Medicare Advantage plan believing they will get help with the cost of dental care, often that help appears better than it is. The data show that 30 percent of people in Medicare Advantage plans do not get dental care because of the cost as compared with 24 percent of people in Traditional Medicare. More people in Medicare Advantage plans have incomes under 200 percent of the federal poverty level than people in Traditional Medicare.

Medical debt is another challenge facing older adults. One in six people with Medicare said they struggled with a medical bill or medical debt. People enrolled in Medicare Advantage plans faced significantly more medical bill problems and medical debt problems than people in Traditional Medicare, particularly people with incomes between 200 and 4oo percent of the federal poverty level.

Twenty-eight percent of people facing medical debt and medical bills reported depleting their savings.

Here’s more from Just Care:

September 26, 2023

Blue Shield of California ends contract with CVS Caremark in attempt to lower drug prices

FierceHealthcare reports on Blue Shield of California’s decision to end its contract with CVS Caremark in an attempt to lower drug prices for its 4.8 million enrollees. CVS Caremark has been doing all price negotiation and formulary design for Blue Cross of California and pocketing a lot of the rebates and fees it collects from pharmaceutical corporations. Will Blue Shield of California’s enrollees actually see their drug costs drop?

Going forward, Caremark will only handle specialty drugs for Blue Shield of California enrollees. Amazon Pharmacy, Abarca, Mark Cuban Cost Plus Drugs and Prime Therapeutics will also be involved in different ways in ensuring enrollees have their prescription drug needs met.

Prime Therapeutics will take on drug price negotiation with the pharmaceutical companies. Abarca will pay pharmacists for people’s drugs. Cost Plus Drugs will develop a simple way of pricing drugs so that people are not surprised when they go to the pharmacy. Amazon will be in charge of drug deliveries and will let enrollees know upfront the cost of drugs.

Blue Shield of California says it would like to reduce drug costs by 10 to 15 percent. Given how much money the PBMs currently earn from negotiating drug prices and pocketing rebates and fees for themselves, that should be more than feasible in theory.

Blue Shield of California says it wants to eliminate drug rebates and fees. But, time will tell if it simply has developed a new prescription drug model that contributes more to its revenues. Blue Shield of California could simply be transferring some profits away from CVS Caremark to itself.

The US spent $600 billion a year on prescription drugs in 2021. That’s $1,500 for every individual. Spending continues to rise significantly. Congress has yet to do anything meaningful to lower drug prices other than to give Medicare some negotiating power over a very small number of drugs through the Inflation Reduction Act. So, at this point, any activity that could lower drug prices is a plus.

Here’s more from Just Care:

August 21, 2023

Even with Medicare, you’ll spend a lot on health care

If you have Medicare, you should expect to spend a larger portion of your income on health care than if you are still working or have Medicaid. According to the Kaiser Family Foundation, as much as Americans love Medicare, they typically face challenges paying for their health care. Whether you have Traditional Medicare or are enrolled in a Medicare Advantage plan, out-of-pocket costs take a toll.

By the Kaiser Family Foundation’s estimates, “Medicare households,” households with people who all have Medicare, spend about twice as much on health care proportionally (15 percent) as non-Medicare households (seven percent). And, in one third of Medicare households one fifth of spending went towards health care expenses. Given that Medicare does not pay for dental, vision and hearing benefits, the most vulnerable older adults have substantial health care expenses. (Medicare also does not pay for long-term care costs at home or in a nursing home, though those costs are not factored into the Kaiser Family Foundation’s analysis.)

People with Medicare spent about $6,557 for health care out of $44,686 in total spending on average. People without Medicare spent, on average, $4,598, out of $67,769 in total health care spending. They paid out of pocket for premiums, medical treatments, prescription drugs and medical supplies.

Americans spend most on their homes as a proportion of their total spending. Interestingly, Medicare households spend a greater share of their money on housing (37 percent) than non-Medicare households (33 percent) and a smaller share of their money on transportation 13 percent v. 17 percent.

About 15 percent of spending for both Medicare and non-Medicare households goes to food.

Note: This analysis is based on data during Covid, when fewer people were getting medical treatment, so the numbers would likely be higher now.

Congress should pass legislation that would put an out-of-pocket cap on traditional Medicare, in order to lower people’s out-of-pocket costs, as well as give people dental, vision and hearing benefits and coverage for their long-term care. The tens of billions in overpayments to Medicare Advantage plans today could cover a large portion of those costs.

For now, people with Medicare with lower incomes can sometimes get help paying for their care through Medicaid or a Medicare Savings Program.

Here’s more from Just Care:

August 2, 2023

Senator Sanders wants a commitment from President Biden to lower drug prices

Senator Bernie Sanders is refusing to join with President Joe Biden and fellow Democrats to support the president’s nominee to head the National Institutes of Health. The Washington Post reports that Sanders, who heads the Senate HELP committee, first wants a commitment from President Biden to lower drug prices.

We need “a very clear” government strategy on how to bring down prescription drug prices, says Sanders. Americans pay many times more than people in other countries for our drugs. And, not only is that insane, it is unconscionable. High drug prices are literally killing people, keeping them from taking heart and cancer medications they need to stay alive. High prices are also driving up federal health care spending.

As chair of the Senate HELP committee, Senator Sanders decides whether to confirm nominees for positions at the Department of Health and Human Services. He hopes to pressure the administration to establish a plan for lowering drug prices. He’s gotten media attention, but will he get Biden to act?

President Biden says he is concerned about the price of prescription drugs. He signed the Inflation Reduction Act, which allows Medicare to negotiate some drug prices. But, that’s only for people with Medicare and only covers a small number of drugs.

A recent report from the Department of Health and Human Services found that in the year between 2021 and 2022, the price of more than 1,200 medications rose more than 31 percent. The pharmaceutical industry blames Pharmacy Benefits Managers (PBMs) for high drug prices. They are to blame, and so are pharmaceutical companies. PBMs pocket most of the savings they secure from bulk purchasing of drugs rather than using the savings to reduce drug costs appreciably. Pharmaceutical companies charge high prices.

Senator Sanders’ team just issued a report finding that even when taxpayer dollars go to funding pharmaceutical company research that leads to the development of new drugs, Americans pay a lot more than people in other countries for those drugs. Americans pay for those drugs to be developed and are then expected to pay again in spades for them when they need them.

Senator Sanders wants all drugs created with taxpayer dollars through the NIH to come with a “reasonable pricing clause.” He doesn’t spell out what that means. It should mean a price equal to if not lower than what any other wealthy country pays for those drugs. That’s only reasonable since we’ve paid for their development.

The easiest way to bring down prescription drug prices quickly is to open our borders to drug importation from verified pharmacies and require insurers to cover their cost. But, no one is yet calling for that. Sanders’ goal is to change government policy with regard to the pharmaceutical industry and demand that prescription drug costs in the US drop considerably. Good luck!

Here’s more from Just Care:

July 13, 2023

Tag: Costs