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Health Insurance

36,000 retired teachers have left Texas health insurance program

By | Health Insurance
By Julie Chang – American-Statesman Staff

Updated: 10:25 a.m. Thursday, September 06, 2018 |  Posted: 6:37 p.m. Wednesday, September 05, 2018


State Rep. Donna Howard, D-Austin, listens to Brian Guthrie, executive director of the Teacher Retirement System of Texas, answer a question during a hearing of a House Approprations Subcommittee on Wednesday. In 2018, about 36,000 retired Texas teachers and their dependents opted out of the state health insurance program run by the system after increases to premiums and deductibles. RALPH BARRERA / AMERICAN-STATESMAN

State Rep. Donna Howard, D-Austin, listens to Brian Guthrie, executive director of the Teacher Retirement System of Texas, answer a question during a hearing of a House Appropriations Subcommittee on Wednesday. In 2018, about 36,000 retired Texas teachers and their dependents opted out of the state health insurance program run by the system after increases to premiums and deductibles. RALPH BARRERA / AMERICAN-STATESMAN

Highlights

  • Texas retired teachers saw more expensive health insurance plans through the state this year.
  • The state is considering further premium hikes, which Lt. Gov. Dan Patrick has spoken against.
  • The health insurance program for retired teachers faces a $410 million shortfall next budget cycle.

About 36,000 retired teachers and their dependents abandoned their state-created health insurance system this year after Texas officials enacted higher deductibles and premiums.

Most of the retirees who left were 65 or older and opted to choose cheaper Medicare plans elsewhere, putting the Teacher Retirement System of Texas’ health insurance system, called TRS-Care, and its remaining 230,000 members at risk of a bigger shortfall in the future.

In previous years, the number of retirees who dropped out of the system has been about 1,500 or less per year.

The system expects a $410 million shortfall in the 2020-21 budget cycle, system officials told a Texas House Appropriations subcommittee Wednesday.

“We need to find some sustainable revenue streams and not continually be looking at how do we alter our eligibility and our benefits packages to what I think is ultimately at the detriment of our retired teachers,” state Rep. Donna Howard, D-Austin, said during the hearing.

To stave off a $1 billion shortfall, the Legislature in 2017 injected $484 million into the system over the next two years, but lawmakers also increased premiums and deductibles for some retired teachers by paring down the number of health care plans, including eliminating a $0 premium plan.

After retirees complained to lawmakers about the higher costs later that summer, the Legislature during a special session added an additional $212 million to the system to lower premiums and deductibles, but it wasn’t enough to keep some retirees and their dependents in the system.

“The average per-retiree contribution rates to care increased by nearly 50 percent in 2018. That was a shock to the system for many of them and proved to be very expensive,” Brian Guthrie, executive director of the Teacher Retirement System, told lawmakers.

Why did costs grow?

The Teacher Retirement System board will consider at the end of the month increasing premiums by $600 per year starting in 2019 for retirees who are under age 65 and not eligible for Medicare. Guthrie said Wednesday that it’s unlikely the board will approve the increase.

This comes after Lt. Gov. Dan Patrick last month sent a letter to the board saying the Legislature would try to help fill the funding hole if the board forgoes the premium increases to those under age 65. The premium hikes would have dropped the expected 2020-21 shortfall from $410 million to $246 million.

Last session, system officials estimated the shortfall for the 2020-21 biennium to be closer to $700 million, but Guthrie said the figure was cut nearly in half partly as a result of lower than expected claim costs and renegotiated contracts with pharmacy benefits management companies.

Even so, teacher groups told lawmakers Wednesday the state needs more sustainable funding options.

Currently, TRS-Care is funded largely by contributions from the state, current and retired teachers and school districts based on total salaries paid to active teachers. Growth in teacher salaries hasn’t kept up with the cost of health care for retirees — 3 percent versus 7.5 percent, according to Guthrie — contributing to the system’s budget shortfall.

A third of the system was funded by the state during the current budget cycle and 40 percent by current and retired teachers.

Why are retired teachers leaving?

Tim Lee, head of the Texas Retired Teachers Association, told lawmakers that retirees over the age of 65 are having problems finding doctors who accept the state’s health insurance and have had trouble contacting TRS-Care representatives for help.

Agents with other insurance companies see the disenchantment and offer more desirable plans, he said.

“They are being bombarded by information as to staying in TRS-Care or leaving or buying an individual plan,” Lee said. “These are very confusing times for members.”

Currently, once retirees over age 65 opt out, they can’t buy health insurance from the system again. Monty Exter with the Association of Texas Professional Educators said the retirement system needs to eliminate that policy.

“To not let folks back into the system … is frankly against every free-market principle that a large majority of the legislators who make up this body have run on in the past,” Exter said.

Exter also suggested that the retirement system expand its list of free or low-cost prescription drugs for retirees.

Teacher groups have feared that if too many retirees, especially those who are healthy, opt out of TRS-Care, its unfunded liability will continue to balloon, which could translate into even higher costs for those retirees remaining in the system.

State Rep. Helen Giddings, D-DeSoto, said she didn’t want retirees sacrificing quality of care for cost savings.

“It seems to me that if you can’t afford it, that does indirectly affect the quality of the care that you get,” Giddings said.

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Trump Throws A Life Belt To People Who Buy Their Own Health Insurance

By | Health Insurance, Health Reform

new Treasury ruling will allow people to buy health insurance that has lower premiums, lower deductibles and broader networks of providers.1st-HHS-Graohic

John C. Goodman Aug 6, 2018, 06:00 am

For the first time since the enactment of Obamacare, people will be able to buy insurance that meets individual and family needs rather than the needs of politicians and bureaucrats. They will also be able to pay actuarially fair premiums.

These new plans are predicted to be popular, with the expected number of enrollees ranging from 1.9 million (Medicare’s chief actuary) to 2.1 million (Urban Institute). The Congressional Budget Office and the Joint Committee on Taxation put the number at 2.0 million.

So, who could be against this welcome opportunity? Answer: Almost everyone, except the people who plan to buy the insurance, that is.

The opponents include Blue CrossAHIP (the insurance industry’s trade group) and virtually every other stakeholder. Before finalizing the rule, the government received about 12,000 comments. According to an analysis by the Los Angeles Times, 98% of them were negative. “Not a single group representing patients, physicians, nurses or hospitals voiced support,” the newspaper noted.

Think about that. Roughly 2 million people are about to get the opportunity to buy insurance that meets their needs for a fair price and virtually every special interest in the entire health care system wants to stop them.

Why is that? Explanation below. But remember, there was a reason why the Berlin Wall was manned by armed guards for so many years, keeping people from crossing to freedom.

The ruling pertains to “short-term, limited duration” health plans. These plans are exempt from Obamacare regulations, including mandated benefits and a prohibition on pricing based on expected health expenses. Although they typically last up to 12 months, the Obama administration restricted them to 3 months and outlawed renewal guarantees that protect people who develop a costly health condition from facing a big premium hike on their next purchase.

The Trump administration has now reversed those decisions, allowing short-term plans to last up to 12 months and allowing guaranteed renewals up to three years. The ruling also allows the sale of a separate plan, call “health status insurance,” that protects people from premium increases due to a change in health condition should they want to buy short-term insurance for another 3 years.

By stringing together these two types of insurance, people will likely be able to remain insured indefinitely. The new plans will probably include most doctors and hospitals in their networks. And they are likely to look like the kind of insurance that was popular before we had Obamacare.

In explaining the motivation for the ruling, the Treasury Department document points to an “alarming” 20% decline last year in the number of people who are enrolled in the individual market and not getting subsidies (e.g., an individual earning more than $48,160). In some states, the decline was even worse, with enrollment dropping by more than 40% in six states, including a 73% decline in Arizona.

These are the classic symptoms of a death spiral. Over the past four years, many people have seen their insurance premiums double and in some cases triple, while the networks have shrunk so much that they omit the best doctors and the best hospitals.

The Treasury document says that in half the counties in the country, there is only one monopoly insurer. In most cases the insurer is a Medicaid contractor. The plans they are selling look like Medicaid, or something even worse.

So why are so many organizations opposed to giving people a way out?

Because most people in health care believe in private sector socialism, at least when they are not advocating public sector socialism. They don’t want you to be able to buy health insurance for a fair premium, the way you buy life insurance, homeowner’s insurance, or any other kind of insurance.

In short, they want the healthy to over-pay so that the sick can underpay. And the only way that can happen is if the healthy are trapped with no means of escape.

Put differently, the Obama administration and Democrats in Congress wanted to give a gift to a small number of high-cost patients who migrated from group plans to the individual market and faced exclusions, riders or outright denial of coverage. The goal was commendable, but they didn’t want to pay for it with taxpayer dollars. Instead, for the last four years, they have been trying to pay for this benefit by pushing the cost off on other insurance buyers.

The individual market is a small part of the market for private health insurance – only 5% to 6% of the total. Yet the states have been allowed to end their risk pools and dump those enrollees into this market. Similarly, cities and counties and large employers have been able to end their post-retirement health plans and send their high-cost retirees to the individual market. Chronic patients in employer plans also now have an opportunity to go to the individual market for subsidized insurance.

These developments have caused premiums to skyrocket, deductibles to soar, and created a race to the bottom on quality and access to care.

Take the case of an Iowa teenager with a rare case of hemophilia. This one patient cost Wellmark Blue Cross & Blue Shield $1 million a month and was responsible for 10 percentage points of Wellmark’s 43% premium increase last year in Iowa’s tiny individual market. It helped spur the insurer’s complete withdrawal from the market this year.

This is an example of a social problem that society as a whole should resolve. There is no reason to make the small number of people who buy their own insurance shoulder the entire cost, and to build the health equivalent of a Berlin Wall in an effort to keep them from paying actuarially fair prices for insurance that meets their needs.

I am one of the nation’s leading thinkers on health policy. I am a Senior Fellow at the Independent Institute and author of the widely acclaimed book, Priceless: Curing the Healthcare Crisis. The Wall Street Journal calls me “the father of Health Savings Accounts.”

Changes in Enrollment in the Individual Health Insurance Market

By | Health Insurance, Health Reform

The Affordable Care Act (ACA) expanded health insurance coverage in part by prohibiting discrimination against people with pre-existing conditions and offering subsidies to low-income people purchasing through newly-created exchanges on the individual insurance market. In this analysis, we use publicly-available federal enrollment data and administrative data insurers report to the National Association of Insurance Commissioners (as compiled by Mark Farrah Associates) to measure changes in enrollment in the individual market before and after the ACA’s coverage expansions and market rules went into effect in 2014 through the first quarter of 2018.

The individual market comprises coverage purchased by individuals and families through the ACA’s exchanges (Marketplaces) as well as coverage purchased off-exchange, which includes both plans complying with the ACA’s rules and non-compliant coverage (e.g., grandfathered policies purchased before the ACA went into effect and short-term plans). It is a relatively small market as a share of the U.S. population, with about 10.6 million people enrolled in 2013 before the ACA went fully into effect1.

Our analysis finds that, after increasing substantially (by 64% to 17.4 million people in 2015) following implementation of the ACA, enrollment in the individual market remained relatively unchanged in 2016 (at 17.0 million) then declined by 12% to 15.2 million in 2017. Enrollment has continued to fall in early 2018: first quarter enrollment has declined by 12% in 2018 compared to the first quarter of 20172. Much of this decline in overall individual market enrollment was concentrated in the off-exchange market, where enrollees are not eligible for federal premium subsidies and therefore were not cushioned from the significant premium increases in 2017 and 2018. Despite the recent decline in overall individual market enrollment, there are still 14.4 million people enrolled as of the first quarter of 2018, compared to 10.6 million people in 2013.

Changes in Enrollment through 2018

As the ACA market rules and premium subsidies were implemented in 2014, there was significant growth in enrollment on the individual market. For the first time in nearly all states, people with pre-existing conditions could purchase coverage on an open marketplace and low-income people were eligible for tax credits to help pay their premiums and reductions in their cost sharing. In addition, many people who went without insurance coverage had to pay a tax penalty. As of 2014, health plans had to follow new rules that standardized benefits and guaranteed coverage for those with pre-existing conditions when selling coverage to new customers (known as “ACA-compliant” plans). Following these changes, individual market enrollment increased substantially, expanding from 10.6 million members on average per month in 2013 to 17.4 million members in 2015 (Figure 1)3. This included an estimated 3.5 million people in non-ACA compliant plans — including short term plans, grandfathered plans, and plans purchased before October 2013 that were allowed to continue under a federal transition policy at the discretion of states and insurers.

In 2016, total individual market enrollment was relatively unchanged from the previous year (at 17.0 million), though there was an apparent shift from non-compliant to ACA-compliant plans. In 2016, enrollment in non-compliant plans decreased by 1.3 million (38%), while ACA compliant enrollment (including both on and off-exchange plans) increased by 1 million people.

Enrollment in the total individual market began to decline in 2017. Both compliant and non-compliant enrollment declined, suggesting that people ending transitional, non-compliant policies were not necessarily moving to the ACA-compliant market. In 2017, the individual market covered 15.2 million people on an average monthly basis, including 13.3 million people in compliant plans on and off the exchanges and 1.8 million people in non-compliant plans.

First quarter enrollment data from 2018 shows that total individual enrollment continues to decline, even as enrollment on the ACA exchanges has remained relatively stable (see Figure 3). 14.4 million people are enrolled in the individual market as of the first quarter 2018, 12% lower than the first quarter of 2017 – a drop of about 2 million.

Figure 1: Individual Market Enrollment, 2011 – 2017

Changes in On vs. Off-Exchange Enrollment

After peaking at 11.1 million people in 2016, exchange enrollment has declined somewhat but has largely remained stable. In the first quarter of 2018, 10.6 million people were covered on the ACA exchanges, including 9.2 million people receiving federal premium subsidies (Figure 2)4.

Figure 2: Q1 Exchange Enrollment, 2015 – 2018

Declining off-exchange enrollment accounts for much of the drop in individual market enrollment since 2016. Total individual market enrollment began to decline in 2017 and has continued to fall in the first quarter of 2018 (Figure 3). Total individual market enrollment declined by 2 million people (12%) from the first quarter of 2017 to the first quarter of 2018. All of this decline was in the off-exchange market, which fell by 2.3 million people (38%). Exchange enrollment increased slightly by 313 thousand people (3%), reflecting an increase in enrollment among subsidized enrollees and a decrease among those not eligible for subsidies5. The “silver loading” of premiums in response to termination of cost-sharing subsidy payments to insurers in late 2017 inflated premium subsidies in 2018 and made zero-premium bronze plans possible for many more people. This may have boosted enrollment among subsidized consumers in 2018.

Figure 3: Change in Q1 Enrollment, 2017 – 2018

Off-exchange enrollment includes ACA-compliant plans that are sold outside of the exchange but are part of the same risk pool. The primary distinction between on and off exchange ACA-compliant plans is that subsidies are only available through the exchange. To the extent that fewer people in good health buy off-exchange ACA-compliant plans, premiums in on-exchange plans are affected as well. Non-compliant plans – including grandfathered and short-term plans – that are not part of the ACA risk pool -are also included in off-exchange enrollment. In 2017, 3.6 million people were covered by off-exchange ACA compliant plans, and 1.8 million people had non-compliant plans6.

The decline in individual market enrollment coincides with significant premium increases in 2017 and 2018. In the early years of the ACA exchanges, insurers underestimated how sick the new risk pool would be and set premiums too low to cover their claims. A number of insurers then exited the market and the remaining insurers raised premiums substantially on average to match their costs (Figure 4). Our analysis of insurer financials showed the market was stabilizing by 2017 and insurers were starting to become profitable in the individual market for the first time under the ACA. Signs pointed toward the 2017 premium increases being a one-time market correction. However, premiums increased again in 2018, in large part compensating for uncertainty around enforcement of the individual mandate and the termination of cost sharing payments.

Figure 4: Average First Quarter Individual Market Monthly Premiums and Claims Per Person, 2011 – 2018

While the vast majority of exchange consumers receive subsidies that protect them from premium increases, off-exchange consumers bear the full cost of premium increases each year. In 2017, states that had larger premium increases saw larger declines in unsubsidized ACA-compliant enrollment (Figure 5), suggesting a relationship between premium hikes and enrollment drops.

No data are available to determine what is happening to people who have dropped off-exchange coverage. Some may now qualify for subsidies as premiums have risen, some may have obtained coverage elsewhere (e.g., through employer plans, or health care sharing ministries, which are not considered insurance and do not file any enrollment or financial information to regulators), and some may be uninsured.

Figure 5: State Changes in Average Benchmark Premium vs Unsubsidized Enrollment, 2016 – 2017

As off-exchange, unsubsidized enrollment has fallen, the total individual market has increasingly become dominated by subsidized enrollees. In the first quarter of 2018, nearly two-thirds of enrollees in the total individual market are subsidized (Figure 6).

Figure 6: Subsidized vs. Unsubsidized Share of Q1 Individual Market Enrollment

Discussion

Looking ahead to 2019, the repeal of the individual mandate penalty has raised concerns of further enrollment declines in the individual market, particularly among people who are healthier than average. The expected expansion of loosely-regulated short-term health plans will also likely siphon away healthy people, pushing premiums up further for ACA-compliant plans on and off the exchange.

While the majority of people on the exchanges receive subsidies and will be protected from premium increases, middle-class people who do not qualify for subsidies will feel the brunt of future premium increases. This is especially true of people with pre-existing conditions who likely would not qualify for short-term plans that base eligibility and premiums on people’s health.

The availability of premium subsidies – which rise along with premiums – is likely sufficient to keep the individual insurance market financially sustainable in the face of policy changes and enrollment declines. However, based on the current trajectory, the market is likely to be increasingly dominated by lower-income people and those with pre-existing conditions.

Methods

We analyzed publicly-available federal enrollment data from the Centers for Medicare and Medicaid Services (CMS), and insurer-reported enrollment and financial data from Health Coverage Portal TM, a market database maintained by Mark Farrah Associates, which includes information from the National Association of Insurance Commissioners (NAIC) and the California Department of Managed HealthCare. All total enrollment figures in this data note are for the individual health insurance market as a whole, which includes major medical insurance plans sold both on and off exchange.

Exchange and compliant enrollment are from the Centers for Medicare and Medicaid Services (CMS). Total individual market enrollment is from administrative data insurers report to the National Association of Insurance Commissioners, and compiled by Mark Farrah Associates: annual enrollment is from the Supplemental Health Exhibit and first quarter enrollment is from the Exhibit of Premiums, Enrollment, and Utilization for health companies and rolled over from the prior year Supplemental Health Exhibit for life companies. Off-exchange enrollment is estimated by subtracting exchange enrollment from total enrollment in the individual market. Non-compliant enrollment is estimated by subtracting compliant enrollment from total enrollment in the individual market. CMS does not collect enrollment data for off-exchange ACA compliant plans in Massachusetts or Vermont; in these states non-compliant enrollment was estimated by applying the national average share of non-compliant off-exchange members to statewide off-exchange enrollment.

Annual enrollment figures from 2011 – 2017 are for average monthly enrollment. Quarterly enrollment figures in 2018 are for effectuated enrollment (i.e., people who paid their first month’s premiums). Annual filings provide a more complete picture of the individual market and allow for estimates of compliant vs non-compliant enrollment. Quarterly filings provide a sense of how enrollment is changing on a more current basis. First quarter enrollment tends to be higher than average annual enrollment because the number of people who drop coverage throughout the year exceeds the number who purchase coverage through special enrollment periods outside of annual open enrollment.

Air Ambulances Are Flying More Patients Than Ever, and Leaving Massive Bills Behind

By | Health Insurance

Rising prices, billing disputes, and a quirk in federal law are creating a new health-care headache.

When three-year-old West Cox’s fever hit 107 degrees, doctors called a helicopter.

Hours earlier, the toddler, who’d been prescribed an antibiotic for a suspected ear infection, was at home in Princeton, West Virginia, watching cartoons and eating chips and salsa. Then, during a nap, he started to have convulsions, and his mother, Tabitha Cox, a physician assistant, drove him to the emergency room, stripped to his shorts to cool.

Tabitha remembers the triage nurse’s eyes widening when she took West’s temperature at Princeton Community Hospital, the only medical center in the small town on the southern edge of the state. Nurses covered him in ice packs to try to keep his temperature down.

Patients running a fever that high can suffer permanent brain damage. Within an hour of his arrival at the emergency room, an air ambulance was on the way to take West to the CAMC Women and Children’s Hospital in Charleston. Flying would cut a 90-minute drive in half.

During four nights in the pediatric intensive-care unit, West recovered from apparent encephalitis. Three years later, his parents are still reckoning with the aftermath of his 76-mile flight: a bill for $45,930 from for-profit helicopter operator Air Methods.

At the heart of the dispute is a gap between what insurance will pay for the flight and what Air Methods says it must charge to keep flying. Michael Cox, West’s father and a track coach at Concord University, had health coverage through a plan for public employees. It paid $6,704—the amount, it says, Medicare would have paid for the trip.LiftOff2 (1)

Air Methods billed the family for the rest.

The U.S. air-ambulance fleet has doubled in size in the past 15 years to nearly 900 helicopters making 300,000 flights annually, according to data compiled by Ira Blumen, a professor of emergency medicine and director of University of Chicago Aeromedical Network.

That rapid growth has made stories such as the Cox family’s more common. The air-ambulance industry says reimbursements from U.S. government health programs, including Medicare and Medicaid, don’t cover their expenses. Operators say they thus must ask others to pay more—and when health plans balk, patients get stuck with the tab.

“I was angry and I felt like we were being taken advantage of,” said Tabitha Cox. The family sued Air Methods in August 2017, seeking certification for a class-action lawsuit against the company on behalf of other patients in West Virginia who received similar bills.

Air Methods has defended its billing and disputed other allegations in the complaint in court filings. The case is pending.

“The fundamental problem is that the current reimbursement rates by Medicare, Medicaid, and some of the private insurance companies fall well short of what it actually costs to provide this lifesaving service,” Air Methods Executive Vice President JaeLynn Williams said in an interview. She declined to comment on specific patients’ cases.

Favorable treatment under federal law means air-ambulance companies, unlike their counterparts on the ground, have few restrictions on what they can charge for their services. Through a quirk of the 1978 Airline Deregulation Act, air-ambulance operators are considered air carriers—similar to Delta Air Lines or American Airlines—and states have no power to put in place their own curbs.

Prices for emergency medical flights have increased dramatically, as air-ambulance operators expanded their networks and responded to a wider set of emergencies, including traumas, strokes and heart attacks.

The median charge to Medicare for a medical helicopter flight more than doubled to almost $30,000 in 2014, from $14,000 in 2010, according to a report last year by the U.S. Government Accountability Office. Air Methods’ average charge ballooned, from $13,000 in 2007 to $49,800 in 2016, the GAO said. Medicare, the federal health program for people 65 and older, pays only a fraction of billed charges; Medicaid, the state-federal program for the poor, pays even less.

Air-ambulance operators’ special legal status has helped them thwart efforts to control their rates. West Virginia’s legislature passed a law in 2016 capping what its employee-health plan—which covered West Cox—and its worker-compensation program would pay for air ambulances. Another company, Air Evac EMS, successfully challenged the caps in federal court. A judge ruled that the caps were pre-empted by the federal deregulation law and blocked the state from enforcing them. West Virginia has appealed the ruling.

The industry has used similar arguments to fight regulation in other states, winning cases in North CarolinaNorth DakotaTexas and Wyoming. A lawsuit recently filed in New Mexico challenges the state’s prohibition on balance billing on the same grounds.

Wealthy investors lured by the industry’s rapid growth have acquired many of the biggest air-ambulance operators, leaving control of the business in the hands of private-equity groups. American Securities LLC bought Air Methods for $2.5 billion in March 2017. Rival Air Medical Group Holdings, which includes Air Evac and several other brands, has been owned by New York private-equity firm KKR & Co. LP since 2015. Two-thirds of medical helicopters operating in 2015 belonged to three for-profit providers, the GAO said in its report.

Amy Harsch, a managing director at American Securities, declined to comment. Kristi Huller, a spokeswoman for KKR, declined to comment.

Seth Myers, president of Air Evac, said that his company loses money on patients covered by Medicaid and Medicare, as well as those with no insurance. That’s about 75 percent of the people it flies.

“I fly people based on need, when a physician calls or when an ambulance calls,” he said. “We don’t know for days whether a person has the ability to pay.”Air Ambulance Payments

According to a 2017 report commissioned by the Association of Air Medical Services, an industry trade group, the typical cost per flight was $10,199 in 2015, and Medicare paid only 59 percent that. Air-medical operators back U.S. legislation proposed by Senator Dean Heller of Nevada and Representative Jackie Walorski of Indiana, both Republicans, that would boost reimbursements by as much as 20 percent over three years. The bill would also have Medicare collect cost data from air-ambulance companies and use it to update rates to reflect “the actual costs of providing air ambulance services.” Both versions have co-sponsors from both parties.

For people with private insurance, short flights in an air ambulance are often followed by long battles over the bill.

In 2015, Erin Roth’s father, Michael, was flown 18 miles by helicopter from Good Samaritan Hospital in Suffern, New York, to Westchester Medical Center in White Plains, after he collapsed on a work site and hit his head.

Roth, who was 55, died from his injury. After workers-compensation insurance refused to cover the flight, his Aetna Inc. medical plan paid $4,370, and Air Methods’ subsidiary, Rocky Mountain Holdings LLC, sent the family a bill for $34,495. The air-ambulance company put a lien on Roth’s estate, preventing Erin from selling her father’s house. The dispute dragged on for two years, until a TV reporter Roth contacted looked into it, and Aetna paid the rest of the claim.LiftOff3

“It was just kind of like a black cloud that was over my head the whole time,” she said.

Air Methods and Aetna declined to comment on Roth’s situation.

Williams, Air Methods’ executive vice president, said the company has hired “nearly 25” patient advocates since 2016 to “help them navigate the very complex process with their insurers, and we help them get the payments for these lifesaving critical emergency services that they’re entitled to.”

The industry says insurers put patients in the middle. “We need to hold the insurers’ feet to the fire to say we need a reasonable rate,” said Myers, the Air Evac executive. He said health plans often won’t agree to network contracts that could lower costs. He declined to say how large in-network discounts are, citing nondisclosure agreements.

Consumer groups and insurers counter that air-ambulance companies strategically stay out of health-plan networks to maximize revenue.

In response to a complaint filed with the state insurance commissioner by a West Virginia consumer last year, insurer Highmark Blue Cross Blue Shield wrote that it tried to negotiate a contract with Air Methods, but the company “refuses to discount its services by more than 3% of its total charge.” The consumer was appealing a $51,209 bill for his daughter’s medical flight, of which Highmark paid $10,571.

Williams, the Air Methods executive, declined to comment on what discounts the company offers insurers, but she said it is in “active negotiation” with about a dozen insurers nationally.

“Air Methods is 100 percent committed to going in-network,” she said.

Air-ambulance providers are “using consumers as leverage with the insurance companies,” said Betsy Imholz, director of special projects at Consumers Union, who helped write a report critical of the industry. Patients are “terrified” when they receive a five-figure bill for an air ambulance and press insurers to pay more, she said.

“I think there is, frankly, in many cases, price gouging going on,” Imholz said.

When air travel was deregulated, the air-ambulance business was in its infancy. A few dozen medical helicopters, mostly operated by hospitals, were in use in the early 1980s, according to data compiled by Blumen, the University of Chicago emergency-medicine professor.

Then, in 2002, a new Medicare payment formula “effectively raised the payment amounts for air ambulance service,” according to the GAO. At the same time, new treatments for strokes and heart attacks expanded the number of patients who could survive such episodes if medics got to them sooner. As rural hospitals closed, air ambulances became lifelines for remote communities.

The number of aircraft grew faster than the number of patients flown. In the 1990s, each helicopter flew about 600 patients a year, on average, according to Blumen’s data. That’s fallen to about 350 in the current decade, spreading the expense of keeping each helicopter at the ready among a smaller pool of patients.

While adding helicopters has expanded the reach of emergency care, “there are fewer and fewer patients that are having to pay higher and higher charges in order to facilitate this increase in access,” Aaron D. Todd, chief executive officer of Air Methods, said on an earnings call in May of 2015, before the company was taken private. “If you ask me personally, do we need 900 air medical helicopters to serve this country, I’d say probably not,” he said.

Despite the apparent glut, air-ambulance operators are profitable. Air Methods had an average annual profit margin of 9.1 percent from 2012 to 2016. Over the same period, companies in the S&P 500 Health Care Providers & Services index had margins of 7.9 percent, on average. PHI, a helicopter company that operates both medical flights and transports for oil and gas drillers, reported average operating margins of 15.7 percent from 2014 to 2017 in its medical segment, compared to 10.4 percent for the benchmark index in the same period.

Air Methods declined to comment on its current profitability or to share financial details as a private company.

If there are too many helicopters for the number of patients who need them, market forces should force less-efficient operators out of business, said Hank Perritt, a professor at the Chicago-Kent College of Law who has studied the industry.

Montana Senator Jon Tester, a Democrat, has introduced legislation that would roll back the special status of air-ambulance companies. A Federal Aviation Administration reauthorization bill passed by the House in April would make medical services provided by air ambulances subject to state regulation.

In West Virginia, the Cox family went through two appeals with their health plan. After they retained a lawyer, Air Methods offered to reduce their balance to $10,000 on reviewing their tax returns, bank statements, pay stubs, and a list of assets. The family decided to sue instead.

“I felt like they were screening us to see just how much money they could get out of us,” Tabitha Cox said. “I think about people that really struggle—single moms, people that don’t have the financial blessings that we have. Bottom line, it’s just not fair.”

Trump administration won’t defend ACA in case brought by GOP states

By | Health Insurance, Health Reform
June 7

The Trump administration said Thursday night that it will not defend the Affordable Care Act against the latest legal challenge to its constitutionality — a dramatic break from the executiveACA Not Bening Defended branch’s tradition of arguing to uphold existing statutes and a land mine for health insurance changes the ACA brought about.

In a brief filed in a Texas federal court and an accompanying letter to the House and Senate leaders of both parties, the Justice Department agrees in large part with the 20 Republican-led states that brought the suit. They contend that the ACA provision requiring most Americans to carry health insurance soon will no longer be constitutional and that, as a result, consumer insurance protections under the law will not be valid, either.

The three-page letter from Attorney General Jeff Sessions begins by saying that Justice adopted its position “with the approval of the President of the United States.” The letter acknowledges that the decision not to defend an existing law deviates from history but contends that it is not unprecedented.

The bold swipe at the ACA, a Republican whipping post since its 2010 passage, does not immediately affect any of its provisions. But it puts the law on far more wobbly legal footing in the case, which is being heard by a GOP-appointed judge who has in other recent cases ruled against more minor aspects.

The administration does not go as far as the Texas attorney general and his counterparts. In their suit, lodged in February in the U.S. District Court for the Northern District of Texas, they argue that the entire law is now invalid.

By contrast, the Justice brief and letter say many other aspects of the law can survive because they can be considered legally distinct from the insurance mandate and such consumer protections as a ban on charging more or refusing coverage to people with preexisting medical conditions.

A group of 17 Democratic-led states that have won standing in the case also filed a brief on Thursday night arguing for the ACA’s preservation.

While the case has to play out from here, the administration’s striking position raises the possibility that major parts of the law could be struck down — a year after the Republican Congress failed at attempts to repeal core provisions.

In an unusual filing just before 6 p.m. Thursday, when the brief was due, the three career Justice attorneys involved in the case — Joel McElvain, Eric Beckenhauer and Rebecca Kopplin — withdrew.

The department’s argument, if adopted by U.S. District Judge Reed O’Connor, “would be breathtaking in its effect,’ said Timothy Jost, a retired Washington and Lee law professor who follows such litigation closely. “Of all of the actions the Trump administration has taken to undermine individual insurance markets, this may be the most destabilizing. . . . [If] I’m an insurer, I don’t know what I am supposed to do or not.”

Jost, an ACA supporter, noted that the administration’s decision not to defend the law comes during the season when participating insurers must file their rates for next year with state regulators. It raises new questions about whether insurers still will be required to charge the same prices to all customers, healthy or sick.

And Topher Spiro, vice president of health policy at the liberal Center for American Progress, said the administration’s legal argument contradicts promises by Trump that he would not tamper with the ACA’s protections for people with preexisting medical conditions.

University of Michigan law professor Nicholas Bagley, another ACA defender, went even further in a blog post. “If the Justice Department can just throw in the towel whenever a law is challenged in court, it can effectively pick and choose which laws should remain on the books,” he wrote. “That’s not a rule of law I recognize. That’s a rule by whim. And it scares me.”

Crusading against the ACA has been a priority of Trump’s since his campaign for the White House. On his first night in office, Trump issued an executive order, directing federal agencies to lighten the regulatory burden placed by the law. Last October, the president unilaterally ended a significant part of the law that cushions insurers financially from an obligation to give discounts to decrease out-of-pocket costs to lower-income customers with ACA coverage.

More recently, the White House and Department of Health and Human Services have been working to make it easier for consumers to buy relatively inexpensive health plans that exclude some of the benefits the ACA requires.

The new challenge comes six years after the Supreme Court’s divided ruling that the ACA is constitutional. That ruling hinged on the reasoning that, while the government “does not have the power to order people to buy health insurance,” as Chief Justice John G. Roberts Jr. wrote for the majority, it “does have the power to impose a tax on those without health insurance.”

The case in Texas, which has attracted relatively little notice until now,emerges from the massive tax bill Congress passed late last year. In that, lawmakers decided to eliminate the tax penalty the ACA requires people to pay if they flout the insurance mandate. The enforcement of that requirement will end in January.

As a result, the Texas lawsuit contends, “the country is left with an individual mandate to buy health insurance that lacks any constitutional basis. . . . Once the heart of the ACA — the individual mandate — is declared unconstitutional, the remainder of the ACA must also fall.”

Texas and the accompanying states have asked for a preliminary injunction that could suspend the entire law while the case plays out in court.

But the administration disagrees with that position. Instead, Justice officials argue in their brief that the ACA’s insurance requirement will not become unconstitutional until January, so that “the injury imposed by the individual mandate is not sufficiently imminent” and that the judge could issue a final ruling in the case before then.

O’Connor, who is hearing the suit, was appointed by President George W. Bush and has ruled against the ACA in other cases the past few years.

Until Thursday’s filing, the Trump administration had not indicated its position on either this latest lawsuit or the Republican states’ effort to block the law while the case moved along.

Commentary: Canada’s Health Care Is Abysmal. Why Would We Copy It?

By | Health Insurance

By SALLY C. PIPES

April 26, 2018

Americans have come down with single-payer fever. A whole 59% now back a national health plan, according to a March 2018 Kaiser Health Tracking Poll—way up from the 33% reported by the Pew Research Center in summer 2017.

But the American people don’t really understand what supporting a single-payer plan means. For instance, in October 2017, 47% believed they’d be able to keep their current health coverage if a single-payer plan were put into place, according to Kaiser.

They’re sorely mistaken. Bills that would launch a government takeover of the country’s health care sector are meandering through Congress and numerous statehouses across the country. Those measures would outlaw private insurance within a matter of years. If any of them pass, Americans will find themselves paying sky-high taxes for access—not to care but to a waiting list.

Take Sen. Bernie Sanders’s Medicare for All proposal. Over the course of four years, it would systematically pryBernie Sanders people away from their current coverage arrangements—employer-sponsored insurance, individual-market coverage, Medicare, and Medicaid—and dump them all in a government-run plan. Companion legislation spearheaded by Rep. Keith Ellison in the House would do the same.

The Center for American Progress’s recently released Medicare Extra for All plan would nudge people into single-payer more gradually. Medicaid beneficiaries, the uninsured, and people with coverage through Obamacare’s exchanges would be first. Newborns and seniors turning 65 would soon follow suit.

The proposal also claims to allow Americans to keep their employer-sponsored coverage. But it offers employers incentives to move their workers into Medicare Extra. The end result, after a decade or so, would be single-payer.

Earlier this month, Democratic senators introduced the Choose Medicare Act, a bill that would allow individuals and employers to buy into Medicare rather than purchasing coverage from a private insurer.

As long as there’s a Republican in the White House, these proposals have little chance of becoming law; consequently, many state legislators are taking matters into their own hands. The California Senate approved a single-payer bill last June. It has since stalled in the Assembly, thanks in large part to the absence of a plan to pay for it. But progressive activists, led by the California Nurses Association, have continued to pressure the Assembly speaker to act on the bill. The New York Assembly green-lit a single-payer plan last year, but it never made it out of the State Senate.

Rhode Island, Washington state, New Hampshire, and Massachusetts are all in various states of exploring how they might implement single-payer within their borders.

They’ll quickly find that it’s financially impossible. California’s Senate Appropriations Committee estimates that single-payer would cost $400 billion per year—roughly twice the state’s entire budget. New York’s plan would increase state health spending by more than $87 billion in 2019 and require nearly $226 billion in tax increases, according to the Foundation for Research on Equal Opportunity.

Sanders’s Medicare for All plan makes these state initiatives look cheap by comparison. According to the Urban Institute, his reform package would cost $3.2 trillion a year. Proposed financing options include new payroll and individual income taxes of 7.5% and 4%, respectively—all on top of existing taxes.

Single-payer wouldn’t merely harm Americans’ financial well-being—it would jeopardize their physical health.

When patients face no out-of-pocket costs at the doctor’s office or hospitals, they have no incentive to moderate their consumption of care or seek lower-cost providers. The only way for governments to control spending is to ration the supply of care.

Consider how things work north of the border. Canada effectively outlaws private insurance for medically necessary services—just as the Sanders plan would. Patients must wait months for routine procedures—a median of more than 21 weeks for treatment from a specialist after referral from a general practitioner.

These long waits aren’t due to a lack of funding. The cost of health insurance for the average Canadian family jumped 174% over the past two decades—nearly twice as fast as incomes and four times the rate of inflation.

Canadians are fed up with their “free” health care. Three in four believe they should have the right to pay for care privately if the wait they’re facing is longer than clinically recommended.

Sanders and his progressive allies are working toward a revolution in the opposite direction. But it’s odd that they’re looking to mimic Canada’s single-payer model just as a strong majority of Canadians want to end their government’s ban on private insurance and permit more private options for care.

Americans’ burgeoning support for Medicare for All will quickly fade when patients learn that the government will confiscate their current health plans and force them to wait in line for care—and then charge them exorbitantly high taxes for the pleasure.

Sally C. Pipes is the president, CEO, and Thomas W. Smith fellow in health care policy at the Pacific Research Institute. Her latest book is The False Promise of Single-payer Health Care. Follow her on Twitter.

Bring back short-term health insurance plans — it’s only fair

By | Health Insurance

THE VIEWS EXPRESSED BY CONTRIBUTORS ARE THEIR OWN AND NOT THE VIEW OF THE HILL

 

The Million-Dollar Cancer Treatment: Who Will Pay?

By | Health Insurance

So far, few patients have received the new drugs, as commercial health plans and Medicare wrestle with how to cover the treatment.

By
Jonathan D. Rockoff
April 26, 2018 7:00 a.m. ET
495 COMMENTS

The emergence of genetics-based medicines is pushing the cost of treating certain diseases to new levels, forcing hospitals and health insurers to reckon with how to cover total costs per patient approaching a million dollars.

The therapies deliver new genes or genetically altered cells to tackle some of the hardest-to-treat diseases, including in children. They come at a high price: Novartis AG listed its newly approved cell therapy for cancer at $475,000, while Gilead Sciences Inc. priced its rival drug at $373,000.

But the price of the drugs is just the beginning, hospitals and insurers say. Administering these therapies can add hundreds of thousands of dollars to the tab, including lengthy hospital stays and use of other services and medicines.

It isn’t clear how much hospitals will get paid for these new treatments. Current payment systems generally cover infusions of drugs, or episodes of hospital care, but aren’t set up to deal with treatments that combine both. What is clear is that the total cost will be far more than the list price of the drugs themselves.

“It is about systems that don’t work well and aren’t set up for cutting-edge new technologies” says Gary Goldstein, a business manager at Stanford University’s health system, which is offering the new treatments. “And if we don’t get this one right, what about the next one?”

Million-Dollar Treatment

A new wave of gene-based therapies for cancer and other diseases threatens to bring the cost of treatment to a million dollars, because both the drug and related care are expensive. Treatment Costs

So far, few patients have received the new drugs, as commercial health plans and Medicare cover treatment on a case-by-case basis until they can settle on an official payment plan.

Finding a path is important, as the next generation of cell- and gene-based therapies expands. Among drugs in late-stage development, Bluebird Bio ’s gene therapy for sickle-cell disease could involve a hospital stay of as long as six weeks.

One of the first genetics-based treatments was Gilead’s lymphoma drug Yescarta, approved last October for use in patients who have failed other drugs. Yescarta is a form of cell therapy known as CAR-T, for chimeric antigen receptor T-cells. It uses a patient’s own immune cells, which are extracted, modified in a lab and then put back into the patient where they hunt down and attack cancer.

Martin Fries’s recent treatment with Yescarta included a 13-day hospital stay, use of several other drugs and a variety of procedures that he anticipates will cost between $750,000 and $1 million.

The 62-year-old pharmacist from Kissimmee, Fla., first spent a half-day at Moffitt Cancer Center in Tampa hooked up to a so-called apheresis machine. It harvested his immune cells, which were shipped to Gilead to be turned into the drug.

Mr. Fries then received two chemotherapies over three days to prepare his body for the altered cells.

He was admitted to the hospital in December, where the engineered cells were infused and he was monitored for side effects. Monitoring usually costs a few thousand dollars a day, hospitals say. Mr. Fries says he was treated for fever of 104.8 degrees and received a blood-plasma drug and a steroid to combat neurological side effects.

Treatment Costs2

In December Mr. Fries received the CAR-T therapy, which involves harvesting his immune cells, sending them to the drugmaker to be processed, and then infusing him with the therapy. PHOTO: EVE EDELHEIT FOR THE WALL STREET JOURNAL

In January, he got a drug called Neupogen to boost his white blood cells. And he has regular follow-ups to make sure he doesn’t have lasting neurological effects.

“Already hit my total out-of-pocket of $5,000 for this year,” Mr. Fries said in March. He returned to work after scans picked up no signs of cancer.

United Healthcare, Mr. Fries’s insurer, reached a deal with Moffitt for the insurer’s share of treatment, according to hospital officials, who wouldn’t reveal terms. United Healthcare says it doesn’t disclose its payments.

So far, Moffitt has treated more than 15 insured patients. “The financial realities of this have not been what we expected,” says Yvette Tremonti, Moffitt’s chief financial officer. “We’re not losing money, but we are certainly not making money.”

The problem, hospitals and insurers say, is the new treatments don’t fit neatly into the existing framework in which insurers pay hospitals for care.

Traditionally, hospitals get a lump sum for care they give in the hospital, including drugs, or a payment for outpatient infusing of a drug that covers extra costs. But hospitals say

“What is the incentive then for hospitals to provide these therapies, which are complicated and require a large investment of time and resources, if there is not a way to at least recoup costs?” says Aaron Chrisman, director of Stem Cell Transplant and Cellular Therapy Administration at the University of Chicago Medicine.

Insurers don’t question the benefits of the treatments but say they are affordable only if the cost is spread over time. There is currently no payment mechanism to do so.

“We either need to accept we are going to see a bump-up in premiums—which I don’t think we want, honestly–or we have to figure out how to pay for them over time,” says Michael Sherman, chief medical officer of Harvard Pilgrim Health Care Inc.

The federal government’s Centers for Medicare and Medicaid Services hasn’t said whether it will cover the drugs, according to hospitals. The decision is left to contractors around the country that process Medicare claims, only some of which have said Medicare will pay. Hospitals have been lobbying for a reimbursement pathway.

CMS has taken steps toward developing payments to cover CAR-T and is working on more, a spokesman says. On Tuesday, the agency proposed changes for fiscal year 2019 that hospitals say would help cover more of their costs associated with providing the new therapies.

Kathryn VanGilder, a retired teacher from Fairmont, W.Va., who is on Medicare, says she struggled to find a hospital to provide treatment, partly because of uncertain reimbursements.

The James Cancer Center at Ohio State University eventually gave her Yescarta in January, Ms. VanGilder says, after she got U.S. Sen. Joseph Manchin’s help in getting a letter from a Medicare contractor stating it would review payment after treatment. The hospital said it treated Ms. VanGilder even though Medicare won’t cover all of its costs.

“In the six weeks I waited,” says Ms. VanGilder, 66, a small tumor in one lymph node “had spread all through my abdomen and throat.” She says her latest tests showed the cancer was eliminated.

Gilead reported $7 million in sales from Yescarta during the final three months of 2017, while Novartis said Kymriah had $12 million in sales during the first quarter of 2018. Spokesmen for both companies said they are working with government and private insurers to make sure appropriate patients get the new drugs.

Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com

Appeared in the April 27, 2018, print edition as ‘Gene Drugs Inflict Sticker Shock.’

 

How to Protect Your Retirement by Making Health Insurance Part of Your Retirement Planning

By | Health Insurance

Health insurance is as important to your retirement security as home and auto insurance. That’s because costs of major health issues, like the cost of a catastrophic accident or losing your homeHealthLifeDental Insurance Retirement Planning to a fire, if not insured, could wipe you our financially.

But unlike home and autos – which can be paid off and considered assets, your health is never paid in full – and estimates forecast that the average 65-year-old couple can expect health care costs of more than $275,000 in their retirement years. Unless your retirement package includes ongoing coverage and guaranteed eligibility for supplemental insurance, many people risk spending the bulk of their retirement savings on the aftermath of a major medical event.

With some careful planning, it’s possible to avoid that dreary future and focus on enjoying retirement rather than the effect of potential claims on a fragile nest egg.

Why Health Insurance Matters In Retirement

Wondering why health insurance should be a part of your retirement planning? Let me explain:

The future of healthcare is uncertain. With the proposed changes to mandated health insurance coverage and programs pulling back from the Affordable Care Act, Americans about to retire find themselves in a gray area for health insurance. Many don’t have coverage and are worried about choosing a provider amid such uncertainty.

Few companies provide health insurance in retirement packages. According to the Kaiser Family Foundation, employer-provided coverage won’t be as much help to retirees as it used to be. Its research indicates that only 25% of large employers even offer retiree health coverage, compared with the 40% of employers who offered it in 1999.

Additionally, the current administration’s intent to amend the ACA is clear, but the details of its plan to change federal insurance laws are not. For anyone nearing retirement, the potential impacts to insurance coverage and costs should be of special concern. For instance, the reintroduction of high-risk pools for pre-existing conditions could lead to declining coverage and higher premiums for many.

Potential tax consequences exist for not having health insurance. While the Republican Party’s most recent attempt to overhaul the American healthcare system failed, the issue still tops the party’s to-do list for 2018. One of the proposed changes the GOP has loudly touted in past health bills is the elimination of the penalty for not having insurance.

While the fine no longer exists, two recent versions of the bill suggested people without insurance for more than 63 days would have to pay a 30% premium penalty or forgo coverage for six months.

Here’s the point: no matter how well-thought-out a retirement plan is, failure to account for insurance needs puts a financially secure retirement at risk.

Preparing For a Healthy Retirement

The clear path to a healthy and full retirement requires considering what you might need in the years to come – and approaching health care insurance knowing that our Healthcare System is, to say the least, full of uncertainty. Use these three strategies to create a thorough plan:

  1. Do your research.

Learn the pros and cons of today’s insurance options. You might qualify for Medicare Part A, but Medicare Part B could cost you an out-of-pocket premium. Keep in mind that out-of-pocket costs for premiums increase without employer supplementation. What was once a $250-per-month premium can quickly skyrocket into a $1,000-plus payment for the same coverage.

When you get serious about planning for retirement, we can work with you to help you predict what your out-of-pocket premiums might be. Based on that we can help you allocate funds between savings and a Living Benefits Health Insurance Policy to insure that you can comfortably meet those predictions.

  1. Know your risks — and make sure they’re covered.

Know your specific health risks, and know which currently available insurance options cover them. This will serve as an excellent guide to planning for healthcare needs in retirement. If you’re in excellent health and have no risk factors or history of life-threatening illnesses, it might seem like a good idea to focus solely on coverage for major medical events. That strategy could cut down expenses, but it also leaves a significant gap in coverage.  As professionals with a long-standing track record for successfully protecting our clients, we can help you with this.

The goal is to cover as many bases as possible. Even something as simple as appendicitis could cost more than $55,000 — Without the right insurance policy, the experience could be catastrophic, both financially and emotionally.

  1. Prepare for the worst.

If you buy life insurance for the worst-case scenario, then why not plan for the aftermath of such a scenario? Medical bills can stack up after a major medical event, and in the worst-case scenarios, those bills are often left to family members. Some people might view the discussion about insurance as taboo. But, practically speaking, it’s worse to avoid the discussion and fail to plan.

Making sure the whole family is prepared for the worst can be difficult, but it’s absolutely necessary, and part of how we help our clients protect their loved ones.

When I speak with professionals who haven’t added their health care needs to their retirement planning, they’re often as surprised as I am that they haven’t considered it. The point of retirement planning is to enjoy your golden years, and you can do that more effectively if you aren’t worrying about how to cover medical expenses.

Call us now at 1-800-257-1723 or click here for an appointment.

 

Based on Daniel Wesley’s recent article in Forbes

Learn How Your Health Plan Saves You Money While Never Being Out of Network – How to File Claims for Healthcare Providers that Are Behind the Learning Curve

By | Health Insurance

Your Pivot Health – Companion Life Plan is an Any Provider Reference Based Pricing Plan (RBP) and NOT a PPO.  Learn about the difference between a PPO and RBP plan: image

Reference-Based Pricing (RBP) programs are gaining in popularity due to their significant cost savings to both the employer and their employee/members. These savings often exceed 30 percent compared to the PPOs.

PPO plans are at the heart of the overpayment problem.

The Accountable Care Act turned a spotlight on the employer pays health care system, and a variety of companies started to publish data outing the PPO industry and the ridiculous “discount” reimbursement model. In reality, hospitals readily accept 130% to 150% of what Medicare would pay (sometimes less) for those willing to make cash-based payments. Intelligent employers started asking about ways to close the gap between the 300% of Medicare most are paying via the PPO models and what hospitals except from cash-based payers.

PPO plans cost more because there is typically no transparency in fees for services charged by providers.  As a result patients simply seek health care with no regard for cost whatsoever. The provider industry (hospitals and doctors) is aware of this flaw in the purchasing system and takes full advantage through what many would suggest are egregious overcharges for services.

Reference-Based Pricing (RBP) – What’s fair?

RBP offers remedies to this inflated, unfair system by using a defined-contribution model of health care benefit financing. First, an employer or sponsor of a group health plan determines a fair and just reimbursement for a medical service and defines such in its agreement with its membership.

Pivot Health – How It Works

Pivot Health – Companion Life uses 150% of Medicare for Facilities and 125% of Medicare for Physicians.  This is offered as payment first on an ANY PROVIDER basis.

If the provider does not want to accept that as payment in full, Allied (Pivot Plans are exclusively administered by an independent third party administrator- in this case Allied National) has a “balance billing” that uses a negotiations model requiring that all claims be negotiated to mutual satisfaction.

How to file your own claim- Pivot Health- Companion Life

In the event your medical provider will not willingly process your claim, access the Pivot concierge service through the numbers on the back or your ID card.

image2

If you need additional assistance follow these instructions:image3

IF you paid the claim yourself make sure to put PLEASE PAY PATIENT on your ITEMIZED BILL so reimbursement is made payable to YOU.

WHY USE THIS TYPE OF REIMBURSEMENT?

You get a much lower rate.  That is why! Since RBP plans are exclusively administered by independent third-party administrators (TPAs), there are typically additional savings in administrative fees and the elimination of PPO access costs as well. Typically these savings often exceed 30 percent compared to the PPOs.

This adds up to saving potentially thousands of dollars a year of premium put back in YOUR pocket.

Secondly but important – Many other Short Term Medical Plans have gone from a true PPO to a NETWORK ONLY OPTION.  This is very risky. If your provider is deemed out of network, then ZERO payment is payable.  Here’s an excerpt from ONE plan that uses this type of limited network arrangement:

Please Note: There are no non-network benefits. You must use a network doctor or hospital. These plans pay no benefits for out-of-network expenses except for emergencies. Emergency treatment from a non-network provider will be treated as a network eligible service. 

This could make you responsible for the entire out of network claim. With RBP from Companion this can NEVER Happen!

Yes, sometimes it can be a bit inconvenient, but you have an agent for support and to direct you to the concierge service included with your plan at no extra charge.

Here is how it works in detail:

Usual and Customary Billing Process. The Pivot Health short term medical claims reimbursement system is set up to guarantee that no member will be responsible for a balance bill due to the discount taken for charges above the Medicare Reference Pricing amount, subject to the terms outlined in the certificate of insurance. This insurance plan reimburses medical providers based on a percentage above Medicare allowable amounts, paying: • 150% of Medicare allowable amount for medical facilities • 125% of Medicare allowable amount for physician claims.

When bills are received, they are repriced according to these percentages of the Medicare allowed amounts, based on the Medicare fee schedule. Payment is made to the provider based on this amount and the reduction shown as a discount by the provider. If a provider wishes to review and discuss the allowed amount or initially objects to the reimbursement amount, the provider is connected with the repricing vendor. The repricing vendor is authorized to negotiate a settlement. In addition, providers are contacted proactively, to confirm that they are accepting the reimbursements and not shifting costs to members. If the provider bills the member for any portion of the discount, the member may refer that bill to Allied who will initiate the negotiation process. • The member needs to send a copy of the bill to Allied to validate the provider is billing for the discount. • The member is responsible for their out of pocket amounts (deductible and coinsurance). However, some members may not be clear on exactly what is being billed by the provider.

Allied National will research and advise the insured if the discount has been applied or initiate contact with the provider by the repricing vendor. When insured members have questions or concerns, they should submit the bill to Allied by email to balancebilling@alliednational.com.

The bottom line:  It’s your money – why pay twice the price if you don’t have too!

For more information call us – 1-800-257-1723 – or click here to set an appointment