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Surprises For Physicians Coming With In Health Insurance Exchanges

May 8, 2013
inHealthcare Insurance Industry, Medicine: Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP, MACE

 Two
important components of Obamacare are Accountable Care Organizations (ACOs) and
Health Insurance Exchanges (HIEs).


The
adoption of both by medical communities and the states has been slow for good
reason.

I have
discussed the difficulties of setting up and the executing effective Accountable
Care Organizations.

Some hospital systems are trying to set up ACO’s. These hospital systems
are buying up physicians’ practices and trying to develop integrated care
organizations.

The hospital systems are buying the physicians’ intellectual property and
surgical skills sets. It will not work once physicians realize what happened.

The relationship between community hospital systems and practicing
physicians had always been tense. Physicians do not trust hospitals and hospitals
do not trust physicians.

Some physician groups are trying to develop their own ACOs. They are trying
to convert hospital systems from being providers of patient care to vendors for
their physician ACO.

If there are two hospitals in a community or town the hospital systems
might become competitive.

The huge problem for physicians is the assuming of risk. If healthcare
insurance companies cannot manage risk, why would physicians think they can
manage risk?

 A variable that cannot be controlled
in managing risk are patients. With all the obesity and the increase in
diabetes mellitus it seems patients do not have the incentives to manage their
own risks.

 Patients and physicians must be provided with appropriate financial
incentives if there is the slightest chance of managing risk and decreasing the
cost of healthcare.

 The adoption of ACOs has been slower than the Obama administration has anticipated.
  

 Adoption
of the Health Insurance Exchanges has been slow by states. Some states
recognize the financial risk the Obama administration is trying to force on
them.

This
risk is ever present even if the federal government is going to pay the entire
bill for the first three years.

As soon as physicians realize
the risk the Health Insurance Exchanges are going to impose on them, they will
not be willing participate.

These risks become more
apparent will each succeeding release of regulation.

Kathleen Sebelius said it two
weeks ago when she said there would be plenty of surprises ahead for physicians.

“Health
and Human Services Secretary Kathleen Sebelius, who told a gathering a few
weeks ago at the Harvard School of Public Health that she has been
"surprised" by the political wrangling caused so far by Obamacare,
there are likely to be plenty of surprises ahead.”

Physicians could face dramatic
financial challenges for treating patients who receive health coverage through
the Affordable Care Act's (ACA) Health Insurance Exchanges starting next year.

“ Insurance companies will not
process claims on patients who haven't paid their premiums in 3 months, leaving
doctors on the hook to recoup payment directly from the patients.”

Obamacare provides a 3-month grace
period to individuals who haven't paid their premiums for insurance purchased
through the Health Insurance Exchanges.

This provision will prove to be a
problem for physicians.

In Obamacare patients who fail to
pay their premium are free to sign up for another plan provided by the Health Insurance
Exchange.  

They can also start seeing another
physician without the insurance company or new physicians being aware of the
patient’s delinquent premium record.

"Why would a doctor sign up to treat these patients] if
they're going to be completely at risk and have to collect from the patient
directly for their care?"  "This
is a really bad provision in the bill, and we've got to get it fixed."


Under traditional insurance provided
by employers, the plan is still liable for paying doctors even if the patient
or employer hasn't paid their premiums,

Under the health insurance exchange
the individual is responsible for their monthly premium. If the patients
discontinue payment of their premium the healthcare insurer is not obligated to
pay the physician for the care provided.

Most of the time patients have stopped
paying premiums because they cannot afford them. Patients buying healthcare
insurance from the Health Insurance Exchanges are lower income producing
patients. 

 The
expected annual, out-of-pocket cost for an individual is estimated to be around
$6,400 and $12,800 for a family. This is not an insignificant expense for low
wage earners.

Recent premium estimates indicate
that the premium will be higher. This could be one of the surprises Kathleen
Sibelius is referring to.

Another potential shortcoming of the
Health Insurance Exchange is the reimbursement rates provided to physicians.
The Obama administration believes Medicaid rates are sufficient.

I wonder if any of President Obama’s
healthcare policy wonks ever questioned why so many physicians do not accept
Medicaid.

The answer is simple. The
reimbursement rate is less than the physicians fixed overhead to see the patient.

Medicaid physicians are driven to
see many patients a day to try to make a living.

It would be difficult maintaining a
physician patient relationship and a high quality of care seeing over 100
patients a day.

When their overproduction is
discovered these physicians are investigated for fraudulent practices.

 The rates the healthcare insurance industry
will pay physicians will not be set until late summer.

The big provider groups are negotiating with plans on their
payments. Small groups will only get a "take it or leave it" contract
from the health plans.

It seems obvious that fewer
physicians will sign up to accept patients receiving coverage through the
Health Insurance Exchanges once physicians understand what Obamacare is doing.

 This will result in a further physician
shortage.

 The simple question is what is Obamacare
trying to do to the healthcare system?

 Is Obamacare trying to destroy the
healthcare system?

 The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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The Destruction of Private Healthcare Insurance

January 9, 2013
inHealthcare Insurance Industry, Medicine: Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D., FACP, MACE

One of these days Americans
are going to pay attention to how President Obama is destroying private
healthcare in America.

Many people will fine this
hard to believe because he is such a nice guy and many people like him.

He is making the healthcare
insurance industry destroy itself by forcing them to increase healthcare
insurance rates.

The destruction is so well
designed that the public cannot take notice. The healthcare system will not be
more affordable or accessible to anyone in the nation.

The changes will provide
President Obama with another tool to redistribute wealth and increase the individual’s
dependence on the federal government. This defines President Obama’s goal in affecting
all areas of our life.

Americans are on the Road To
Serfdom.

I remember Barney Frank and
John Kerry saying that healthcare reform would not work without a “Public Option.”
I also remember President Obama saying we can make it work without a “Public Option.”

President
Obama’s original plan was to eliminate private insurance. Americans would have
no choice but a “Public Option.”  (National Health Plan)

 

 Kathleen
Sebelius, the secretary of health and human services
said, she “retains authority to make the
final decision” on insurance rates if she finds that a state acted in an
arbitrary or capricious way in denying a rate increase sought by a nationwide
health plan.

 

This is the first time I
have seen President Obama’s administration use the words “National Health
Plan.”

It was obvious President
Obama was not truthful when he said “if
you like your physician you can keep him” and “if you like your healthcare insurance you can keep it.”

Congress made a gigantic while
passing Obamacare and transferring all healthcare policy decision making power
to the executive branch of government.

President Obama’s goal is to
have complete control over the healthcare system. He wants to force the private
healthcare insurance industry out of business. He wants to socialize the entire
medical care industry into a single party payer system.  The government will be the single party payer.

Healthcare will then be a
ubiquitous entitlement program that the government cannot afford unless it increases
taxes entire population according to the taxpayers means.

This is the pattern behind many
of the articles written in isolation by the traditional media.

The unintended consequences
resulting from each policy change will be overwhelming.

I have been fascinated by President
Obama’s negotiating strategy.  

Americans are going to wake
up to the fact that President Obama has increased taxes for the funding of
Obamacare by $1 trillion dollars over the next ten years aside from the tax
hikes effective January 1st.

Americans are going to wake
up and feel deceived by President Obama when they realize they are getting
little for their increased taxes except government control over their freedoms.

I predict President Obama’s
plans will blow up in his face.

Consumers will protest when
they recognize the impact these multiple new taxes will have on their
discretionary income. President Obama will not get the funding he needs from
congress.  

His physician workforce will
not cooperate. Hospitals are starting to wake up and are seeing they were
deceived. They thought they would do better because they have bought physician
practices.

Recently they automatically
received cuts in reimbursement while the doctor fix was extended for another
year. Physician reimbursement will be cut and the physician workforce will
dwindle.

On Friday afternoon November
30th 2012 the Obama administration pulled a stunt on the healthcare
insurance industry.

“The Obama administration
said Friday that it would charge insurance companies for the privilege of
selling health insurance to millions of Americans in new online
markets run by the federal government.”

The cost of these “user
fees” can be passed on to consumers. The proposed fees could add 3.5 percent to
premiums for private health plans sold in insurance exchanges operated by the
federal government.

The "user fees" are another tax to consumers.

The government is
disregarding the fact that healthcare insurance premiums are too high for
employers to provide healthcare insurance for employees now.

Employers are opting to drop
healthcare insurance coverage and pay the government penalty. Some are dropping
healthcare insurance and avoiding the penalty by decreasing the number of
employees to under 50 employees or decreasing employees work hours to under 30
hours per week.

This will increase, not
decrease the tax burden on the consumer.

The exact effect of the
health insurance exchange on the healthcare industry is muddled.

It looks as if President
Obama is rapidly moving toward a “Public Option.”

Consumer advocates, insurers,
and some state officials had expressed concern about delays in publication of
the rules for this new proposal.

President Obama has used
this is the same tactic before. Consumers and agencies must accept the changes
before the rules are published.

Consumers and state
governments do not trust President Obama. They are afraid to say yes when they
do not know what they are saying yes to. In the end it  looks like the state governments and the
consumers will get stuck with the bill and the federal government will have
complete control over the healthcare system.

CMS said. “These plans will
be offered by private insurance companies under contract with the United States Office of Personnel Management. The agency already provides insurance to eight
million federal employees, retirees and dependents.”

The scary part is the administration said,
“It (the government) retains
authority to make the final decision” on rates if it finds that a state acted
in an arbitrary or capricious way in denying a rate increase sought by a
nationwide health plan.”

The term “Nationwide Health Plan” and “final authority” sounds as if the
government is taking over.

The federal government will
also have control over physicians and hospital fees.  It will also control access to care and the
rationing of care.

It is almost too late for
consumers to wake up.

No one can say President
Obama didn’t tell us.

It can only be said the plan
was so obfuscated, final rules so delayed and unsubstantiated promises made and
not publicized on a Friday afternoon the week after Thanksgiving that the
public did not understand what was going on and could not express an opinion.

The games President Obama
and his administration play are dizzying. The irresponsibility of our elected
congressional officials who are supposed to be our surrogates is
unconscionable.

   The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.



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Problems With State Health Insurance Exchanges

December 17, 2012
inMedicine: Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

December 15th was the deadline
for states to sign up to implement state health insurance exchanges.

President
Obama was hoping all 50 states would agree to set up and implement health
insurance exchanges.

Health
insurance exchanges might be able to dis-intermediate the healthcare insurance
industry. They might also cause the insurance industry to leave the healthcare
business.  

If that happens President
Obama would not have anyone to provide administrative services for Medicare and
Medicaid.

Why
would President Obama be interested in expanding a failed entitlement program
such as Medicaid? Medicaid is bankrupting the healthcare system.  States would 
go deeper in debt if they try to implement health insurance exchanges.
In order to survive states would have to increase state taxes.

Businesses
and people are leaving California in droves because of the real effective tax
rate will be over 60% of gross income on January 1, 2013.  

Governors
realize their state can have a competitive advantage over others in  attracting corporations to move to their state
if they balance their budget. They are trying to avoid this federal government
disaster. 

Over
60% of the population is opposed to Obamacare.  

States
refusing to set up state health insurance exchanges are reflecting public
opinion.

President
Obama’s goal should be to improve entitlement programs such as Medicare and
Medicaid so that the programs would save money and improve the healthcare
system.

 “Even
President Obama has recognized Medicaid is broken," says Mike Schrimpf,
spokesman for the Republican Governors Association. "For many states,
placing more individuals into a broken system would be like adding more
passengers to the Titanic. And regardless of whether it's federal dollars or
state dollars, taxpayers are still on the hook."

A total of 30 states are leaning toward rejection
of the health insurance exchange concept. Only 17 states plus DC have agreed to
run a health insurance exchange.

The federal government will have to set up 30
health insurance exchanges. The latest reports are the administration is not
prepared to set up run the exchanges.

“As
of November 19, 2012, seventeen states, NY, MA, RI, NH, DC, KY, DE, W VA, MS.
NM, CO, CA. OR, NV, MN, WA, and HI have declared their intention to establish a
State-based Exchange (SBE).”

After my recent articles about health insurance
exchanges several readers asked why the health insurance exchanges were a bad
idea from a state’s point of view.

There are many reasons:

 1. States are under
no obligation to create a health insurance exchange that could create a large
financial burden to the state and its citizens. A Supreme Court ruling has given
states that option.

2.  14 states have
enacted either statutes or constitutional amendments (or both) forbidding state
employees to participate in an essential exchange function. It made operating
Obamacare illegal in the following states; Alabama, Arizona, Georgia, Idaho,
Indiana, Kansas, Louisiana, Missouri, Montana, Ohio, Oklahoma, Tennessee, Utah,
and Virginia

States passing these amendments was by a state was part of
the strategy to reject Obamacare.

 3. State governors
estimated that health insurance exchanges would cost the state $10 to $100
million dollars a year. State constitutions prohibit budget  deficits. Health insurance exchanges would
necessitate increased taxes.

Increasing taxes has a negative effect when states are trying
to lure businesses. i

4. Deadlines have continually been delayed. Concrete rules
and regulations have not been published. Uncertainty prevails as if a trap is
going to be sprung on the states.

 President Obama has
not yet provided the crucial information for
states to make an intelligent decision about setting up a health insurance
exchange. President Obama wants the states to trust him, sign up, and then
accept federal regulations.

5. States have been given the option to create health
insurance exchanges at a later date. Some state politicians fear the loss of
federal funds. Others see the federal funds as a carrot that will cost their
state more in the long run.

6. In the preliminary rules the “state-created exchanges”
are not controlled by a state-controlled exchange.
The exchanges are to be controlled by rules created by the Obama
administration.

7.  President Obama has authorized payment to the states
for start up costs and expenses for Medicaid Expansion until 2017.

Congress has not authorized these
funds. President Obama might not be able to get the funds from congress to fund
the states’ health insurance exchanges.

The states’ would be stuck with
the bill.

8. State officials responsible for setting up the exchanges
believe Obamacare will fail. Many feel it will increase private insurance
premiums and deny assess to care.

These state officials do not want to take the blame for this
disastrous mess that they have no control over.  

9. President Obama’s ultimate goal is to create a “Public Option”
and then have the federal government control all the stakeholders in the
healthcare system.  His ultimate goal is
to have a single party payer system.

State governors understand that public outcry will stop it.
States want to control their own destiny.

10. If the federal government must set up health insurance
exchanges because the state refuses, the Obamacare law as written exempts a
state’s employers from the employer mandate of $2,000 per employee per year.

The Supreme Court called the mandate a tax but everyone
knows it’s a mandate.

11.  If the states
avoided the mandate and save $2,000 per state employee it would put the state
at a competitive advantage to improve the prospect for job creation. It would
protect individual and states rights. It would protect some tenants of
religious freedom that Obamacare ignores.

 There is no evidence that Medicaid is
cost effective, that medical outcomes are improved or that access to medical care
for the poor would improve.

“There is scant reliable evidence that Medicaid improves health
outcomes, and no evidence that it is a
cost-effective way of doing so.” 

In the short term it has been predicted that healthcare insurance premiums for the
middle class will increase by 50% and access to medical care will decline.

State health insurance exchanges
will result in higher state taxes, fewer jobs, and less protection of religious
freedom. States are better off defaulting to a federal exchange.

Neither the states nor the federal government has the money
to expand Medicaid.

Theoretically,
health insurance exchanges are a good idea. Practically, they are not.

If all states refuse to set up health insurance exchanges
and avoid falling into President Obama’s trap Obamacare will be doomed.

 The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

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Permalink:

What Is The Insurance Value Of Medicare?

November 19, 2012
inHealthcare Insurance Industry, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests
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Stanley Feld M.D.,FACP,MACE

 

Healthcare insurance is
great if you do not need it.

The wonderful thing
about Medicare is private insurance is not available to seniors.  

Healthcare insurance companies
are not interested in covering consumers with health risks or preexisting
illnesses.

In fact private
individual healthcare insurance policies are not available to an unemployed 55
year old person with mild obesity and hypertension.

If you are employed and
over 65 years old with mild obesity and hypertension the healthcare insurance
industry is required to insure you under your employer healthcare plan.

The employed person
receives healthcare coverage with pre-tax dollars.

 A person who might be
eligible to purchase individual healthcare insurance must pay with after-tax
dollars.

This is unfair but
easily corrected.

The pre-tax/post tax
issue could be solved if the state insurance boards required the healthcare
insurance companies, wanting to sell private insurance in that state, cover
everyone applying for insurance. The insurance company should be required to
set the premiums based on community rating.

Everyone should pay
premiums with pre-tax dollars.

Medicare, through
government inefficiency, has become very expensive. If it were efficient
insurance it would be less expensive to both consumers and the government.

Most working people have
no idea of Medicare’s cost to them during their working years.

Medicare’s yearly tax
withholding is 1.45% of salary. A worker earning
$100,000 a year pays $1450 yearly to the Medicare Trust Fund. In 40 years that
person would pay $58,000 into the Trust Fund.

When they became eligible
for;

 Medicare Part B the yearly premium in 2012 was
means tested.

 

If your yearly income in 2010 was

You pay (in 2012)

File individual tax return

File joint tax return

$85,000
or less

$170,000
or less

$99.90

above
$85,000 up to $107,000

above
$170,000 up to $214,000

$139.90

above
$107,000 up to $160,000

above
$214,000 up to $320,000

$199.80

above
$160,000 up to $214,000

above
$320,000 up to $428,000

$259.70

 

 

 

In
2013 the Medicare Part B premiums are going to increase.

 

 

 

 

 

 

 

 

 

 

 

 

 
   

 

 

 

 

 

If your yearly income in 2011 was

You pay (in 2013)

File individual tax return

File joint tax return

$85,000
or less

$170,000
or less

$104.90

above
$85,000 up to $107,000

above
$170,000 up to $214,000

$146.90

above
$107,000 up to $160,000

above
$214,000 up to $320,000

$209.80

above
$160,000 up to $214,000

above
$320,000 up to $428,000

$272.70

above
$214,000

above
$428,000

$335.70

 

Income is defined as
income from all sources such as capital gains, interest, pension annuities,
social security and all earned income.

Further premium increases have been announced for 2014 but
have not been published.

Medicare premiums are
taken out of each Social Security check.

The Medicare Part B
insurance has deductible and co-pay rules. Medicare Part B deductibles apply
for each hospital stay, ER visits and physician office visits.

For each benefit period
you pay:

  • A total of $1,156 for each hospital admission of
    1-60 days.
  • $289 per day for days 61-90 of a hospital stay.
  • $578 per day for days 91-150 of a hospital stay
    (Lifetime Reserve Days).
  • All costs for each day beyond 150 days.
  •  

Skilled Nursing Facility
Coinsurance

  • $144.50 per day for days 21 through 100 each
    benefit period. Days 1-20 are free.
  •  

Part B: (covers Medicare eligible physician services, outpatient
hospital services, certain home health services, durable medical equipment)

  • $140.00 per year. (Note: You pay 20% of the
    Medicare-approved amount for services after you meet the $140.00 deductible.)

 

The deductible for the
first $140 dollars worth of services plus 20% of any physicians and hospital
bill can add up as one gets older. It becomes unaffordable for many seniors.

 

Medicare Part B’s deductibles
and copays’ costs makes Medicare gap coverage   essential.

Premiums For Medicare Part
F   

Policy Summary

Monthly Premium:
$84 – $302  depending on age and benefits

Estimated Annual
Cost: $6,050.00

Benefits

  • Basic Benefits Medigap
    Basic Benefits definition[?] – Opens in a
    new window
  • Skilled Nursing Facilities Skilled
    Nursing Facility definition[?] – Opens in a
    new window
  • Part A Deductible Part
    A (Hospital Insurance) definition[?] – Opens
    in a new window
  • Part B Deductible Part
    B (Medical Insurance) definition[?] – Opens
    in a new window
  • Part B Excess Charges (100%)
  • Foreign Travel Emergency
  • Preventive Services

 Medicare
Part D is the drug benefit plan. Medicare Part D helps reduce the cost of
medications.

Medicare
Part D is also means tested. There are multiple plans to pick. Some include
complete payment for brand named drugs and some cover the donut. The price can
range from $40 to $120 per month per senior depending on the coverage a senior
picks. The additional means tested fees are below.

The
brand named drugs are expensive. Most drug chains have followed Wal-Mart’s lead
and charge $4.00 for generic drugs. This forces seniors to purchase generic
drugs

Medicare
Part D is expensive and unfair for seniors needing brand named drugs.

The Means Testing Formula For Medicare
Part D 2012

 If your yearly income in 2010 was

You pay

File individual tax return

File joint tax return

$85,000
or less

$170,000
or less

Your
plan premium

above
$85,000 up to $107,000

above
$170,000 up to $214,000

$11.60
+ your plan premium

above
$107,000 up to $160,000

above
$214,000 up to $320,000

$29.90
+ your plan premium

above
$160,000 up to $214,000

above
$320,000 up to $428,000

$48.10+
your plan premium

above
$214,000

above
$428,000

$66.40
+ your plan premium

 http://www.medicare.gov/your-medicare-costs/costs-at-a-glance/costs-at-glance.html

 Medigap
fees and Medicare Part D fees are paid with post tax dollars.

These
costs are in addition to seniors having contributed $58,000 to the Medicare
Trust Fund during their working years.

“The reason we have
health insurance at all is not that health care is expensive, but rather that
there is great uncertainty about who will need very expensive and potentially
lifesaving care and when they will need it. Medicare should give beneficiaries
not just access to medical care, but also protection from the risk of
catastrophic spending.” 

Medicare
coverage is not cheap. President Obama’s Obamacare is going to make it more
expensive with less access to care.

 Why
is Medicare Part B,F,D  so expensive when
the average person on Medicare spends only $6,600 dollar per year?

This
is the major question. The government should focus on the answer. It should not
be spending time and money on a system that is punitive to patients and
physicians and has little chance of being successful.

The
money creating the Medicare deficit is going somewhere. Where?

The cost to Medicare beneficiaries is high.
The protection against economic ruin is limited. The basic benefit lacks a cap
on out-of-pocket spending, so beneficiaries are exposed to the risk of
open-ended cost sharing that can generate substantial financial strain (or
deplete assets for surviving spouses).1 

Moreover,
the odds of facing a catastrophic expense mount over time. Almost 50% of
beneficiaries are hospitalized at least once over a 4-year period.2 

If
we are going protect our seniors from financial strain or ruin Medicare must
reassess it premises and reduce its administrative waste. It must be completely
transparent. If the government did it correctly it would provide an affordable
healthcare insurance plan for seniors.

“Everyone knows the dice is loaded.”
Leonard Cohen.

  

http://youtu.be/GUfS8LyeUyM

 

At
the moment seniors do not have another choice. It is the only game in town.

 The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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Permalink:

Healthcare Insurance Industry’s’ New Business Model Is Wrong.

February 29, 2012
inConsumer Driven Health Care, Healthcare Insurance Industry, Medicine: Healthcare System, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
• Leave a comment

Stanley Feld M.D.,FACP,MACE

One percent of the people spend 25% of the healthcare dollars. Twenty percent of the people spend 80% of the healthcare dollars.

It would be important to know why this is true. Then figure out what could be done about it Stakeholders need to agree on a course of action.

It would be a good idea to understand what physicians think should be done. 

“One percent of patients account for more than 25 percent of health care spending among the privately insured, according to a new study. Their medical bills average nearly $100,000 a year for multiple hospital stays, doctors’ visits, trips to emergency rooms and prescription drugs.”

The 1% and the 20% are suffering from complications of a chronic disease.

The incidence of chronic diseases is on the rise in the United States. A major precipitating factor for this is obesity.

The incidence of Type 2 Diabetes Mellitus is increasing in both adults and young children, as the incidence of obesity is increasing.

The incidence of complications of Diabetes Mellitus will increase in the future. The result will be an increase in the cost of medical care.

President Obama’s healthcare reform act will expand healthcare coverage to 32 million uninsured in 2014. Obamacare is forcing the healthcare insurance industry to change its business model in order in order to remain profitable.

Premiums are out of the reach of most businesses and individuals. Premium increases are not an option.

High-risk individuals are denied healthcare insurance coverage. High-risk patients automatically get coverage in corporate healthcare plans. The healthcare insurance industry simply raises premiums on corporate groups in order to maintain its profits.

Something must be done to decrease the increase in chronic disease and its complications. 

The government cannot afford to insure its present patient obligations much less the 32 million uninsured.

“As the new federal health care law aims to expand care and control costs, the people in the medical 1 percent are getting more attention from the nation’s health insurers.”

Twenty percent of the population not 1% should be getting the attention of the healthcare insurance industry.

“Studies have already shown that Medicare spending is concentrated on a small group of individuals who are seriously ill.

An analysis by the IMS Institute for Healthcare Informatics, the research arm of IMS Health, a health information company in Danbury, Conn., provides a rare glimpse into the medical problems of people with private health insurance that are under 65.

About three-quarters of them suffer from at least one chronic condition that could spiral out of control without proper care.”

Most of these people were obese.

The healthcare insurance industry cannot avoid these patients after 2014.

“Insurance companies will be required to enroll millions of new customers without the ability to turn them away or charge them higher premiums if they are sick. They will prosper only if they are able to coordinate care and prevent patients from reaching that top 1 percent.”

The healthcare insurance industry realizes it must fundamentally change its business model.

The healthcare insurance industry has a problem developing a new business model that would work. The industry does not want to lose control over patients, their physicians and the monies paid into the healthcare system.

The healthcare industry does not have a clue about how to actually repair the healthcare system. It is focused on its own bottom line rather than looking at business models that will be beneficial to everyone and align all the stakeholders’ incentives.

The healthcare insurance industry is planning on instituting programs that will tinker with the edges. It will not fix the problems.

The new business models will increase the percentage of money the insurance industry receives for direct patient care maintaining a Medical-Loss ratio of 15%. There is no interest in providing patients with financial incentives and a choice.

The net result will be higher costs and system failure. The weird thing is most of the healthcare insurance industry executives know it.

“The reality is if we don’t figure out how to get to the patients, we’re not going to get where they need to be,” said Dr. Lonny Reisman, the chief medical officer for Aetna.

The reality is that the system must be consumer driven with consumers in charge of their healthcare and their healthcare dollars.

At the moment patients have no incentive to decrease the cost of care. Hundreds of patients have told me that they go to the doctor to fix their illness. Medicare or their insurance pays. The patients have no idea of the costs they incur nor do they care. They have no interest in controlling their disease.

My ideal medical saving accounts would give the patients incentive to learn about their disease. They would be interested in self-managing their disease with the physician and his medical care team being the coach.

“The next challenge, say insurers, is to figure out how best to work with a person’s doctor. Because many of these patients seem to be seeing many doctors and taking many medications, there may be no one who is accountable for the patients’ overall health.” 

Physicians have figured out what services get paid by the healthcare insurance industry. They do not get paid for educating patients about their disease.

The healthcare insurance industry and the government have developed a punitive bureaucracy.   

An attempt is being made to penalize or reward physicians for medical outcomes. Pay for Performance (P4P) is a punitive payment system. It will fail. 

Patients are responsible in large part for the onset of their medical problems and in controlling their medical outcomes. Physicians cannot be responsible for patients’ outcomes. It is the responsibility of the patient.

“Insurers are also still grappling with their understanding of human nature — why some people simply don’t take care of themselves or take their medicine or go to the doctor, even when it is clear that they should.”

Patient outcomes have nothing to do with human nature. It has everything to do with financial incentive and effective education.

Spokes 5 and 6 of my future state business model has everything to do with patients’ responsibility for caring for their disease and the physicians’ responsibility to the patients. It has nothing to do with physicians’ and patients’ responsibility to the healthcare insurance industry or government.

The opinions expressed in the blog “Repairing The Healthcare System” is, mine and mine alone

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I Left My Job: What Do I Do Now For Healthcare Insurance Coverage?

February 19, 2012
inHealthcare Insurance Industry, Medicine: Healthcare System, Patients Problems
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Stanley Feld M.D.,FACP,MACE

“Dear Dr. Feld

My wife and I are 43 years old. We have a 7 year old daughter. All three of us are in excellent health. We have minimal medical bills and yearly checkups. 

I just left an executive position in a company that had excellent healthcare insurance.

 I am in the process of hunting for a new executive position. I am currently uninsured. I have the option to buy COBRA insurance for the next 18 months or until I get a job with good healthcare benefits.

The COBRA premium quoted to me to be $1600 per month or $19,200 per year. My former employer told me he was paying $15,000 for the same insurance.

I cannot afford $19,200 per year. Neither can I afford not to have healthcare insurance coverage for my family in case of catastrophic illness. I searched the Internet for the best option.

There were at least 97 healthcare insurance policies offered for individual coverage. After I got through understanding the fifth policy I was exhausted. None seemed to be a good deal.

I have been a reader of your blog and always say to myself thank God I do not have to deal with the dysfunction you describe. I could not believe I would be in this situation.

You seem to understand the problems in the healthcare system. What do I do next?

Thank you in advance for any help you can offer.

Sincerely

H”

I have received other letters of disbelief from young people. They did not appreciate how unfair, non transparent and truly dysfunctional the healthcare system was until they encountered the problems.

The future belongs to the 20 -50 year old age group not seniors. They are all consumers and potential patients. They are are going to need a viable healthcare system at some point in their life.

This age group must take an interest in developing an understanding of and take responsibility for getting involved in fixing the dysfunctional healthcare system now.

In general 20-50 year olds are not sick. Only 20% of the population is involved in dealing with the healthcare industry at one time.  Eighty percent of the population does not interact with the healthcare system. When they do they realize how dysfunctional it is.

100% of the consumers must demand, simultaneously, the healthcare system become transparent and equitable.

The structure of Present Obama’s healthcare reform plan has not yet delivered nor does it have a chance to deliver is promises. In fact, it has made the healthcare system more dysfunctional and unfair.   

Change in the system has to be consumer driven in order to force the government to reform the system so it is affordable and accessible to all. This means honestly eliminating waste at all levels.

President Obama’s waivers to favored groups and concession to vested interests political pressures will not improve the system.  

I totally understand that when dysfunction affects the other guy, young busy unaffected consumers have no interest in being involved in actively changing the system. However, they are going to be the other guy at some point.

In answer to the reader’s question “What do I do?”

He could sign up for COBRA. The COBRA system is a flawed system. It is a dishonest promise.  COBRA was accepted by congress and consumers without understanding its underlying consequences.  

“The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. “

Nothing in the Department of Labor’s document covers how the premiums are determined by the healthcare insurance industry.

A consumer electing to take COBRA is charged the calculated premium for an individual healthcare plan. The premium is very high.  

Actuarial calculation is designed to the benefit of the healthcare insurance industry. The calculation is not transparent. I suspect the government does not oversee the calculation.

COBRA is about the only option good for a 50 year old obese male with hypertension and hyperlipidemia who has a wife and a 7 year old child. He would be rejected for all private insurance plans.

The individual state’s “high risk pools’” premiums are even higher than COBRA’s premium. The high risk insurance coverage is less inclusive because it excludes any possible risk from underlying conditions.  

I felt compelled to help this reader.

He needed coverage in case of a catastrophic illness in his family until he obtained a new position. At his age and health history he should not have any trouble getting accepted for a high deductible policy.

I told him to check which insurance company his family’s physicians accept. It was UnitedHealth.

The 8th plan down the list of UnitedHealth options for high deductible was a $10,000 called Plan 100. The premium would be $318.82 a month. The deductible was $10,000. The plan provides full first dollar coverage after the $10,000 deductible is met up to 1 million dollars.

UnitedHealth Plan 100 underwritten by Golden Rule also had a $7,500 deductible for $417.

I thought this was the plan for this family. Their routine healthcare costs were less than $1000 year. The premium for the $7,500 deductible is $5004 per year. Total savings vs. COBRA is $19,200-$6004= $13,196.

If there was a catastrophic illness in his family and it cost more than $7,500 his total cost would be $7500 plus $5004 for his premium for a total cost of $12,504. He would still save $6,696 (19,200 for COBRA vs. $12,504= $6,696).

The big disadvantage is his premium costs are not tax deductible as it would be for an employer. At a 30% tax rate this consumer would have to earn $27,429 in order to pay $19,200. 

The adjudication of claims is simple. The physicians send the bill to UnitedHealth. UnitedHealth allows physicians their negotiated fee. The consumer is then sent an explanation of benefits for allowable fees.

Since the consumer has not reached the deductible, he is required to pay the physician’s allowable fee. This fee is credited toward his $7,500 deductible.

When the deductible is reached the full allowable amount for services is paid. This is the best deal under the present healthcare insurance options for this family of three.

He bought the high deductible Plus 100 insurance. He also complained about the confusing array of options and prices, the lack of transparency about these options, and difficulty in easily understanding the options.

He said he is a pretty smart fellow. He had difficulty in figuring out what to do and was ready to pay for COBRA coverage.

He asked, “How could people of average intelligence figure it out?

It would be easy if there were a questionnaire that would automatically determine consumers’ healthcare policy needs and direct them toward healthcare insurance policies that would fix their needs.

I told him the game is rigged. The insurance industry does not want you to figure out what policy is best for you. It wants you to buy the most expensive policy that might not address your needs.

The opinions expressed in the blog “Repairing The Healthcare System” is, mine and mine alone

Please send the blog to a friend

 

 

 

 

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Medicare Premiums Are On The Rise

July 24, 2011
inMedicine: Healthcare System, Stakeholder Mistrust
• Leave a comment


Stanley Feld M.D, FACP,MACE

President Obama’s campaign’s many promises have turned out to be false. His pledge to not raise taxes for people earning less than $250,000 has turned out to be a lie.

“I can make a firm pledge.  Under my plan, no family making less than $250,000 a year will see any form of tax increase.  Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes,” 
President Obama, September 12, 2008

Many seniors live on a fixed income. Many live on interest and capital gains from their retirement plans in addition to social security benefits.

In 2003 congress passed the “The Medicare Modernization Act. (MMA)” The act is known for establishing Medicare Part D, a prescription drug benefit managed by private insurance.

Medicare Part D has turned out to be a cash cow for the healthcare insurance industry. It has not been a tremendous benefit to seniors. Medicare Part D’s premiums have been increasing each year. Medicare Part D’s premiums are paid for with after tax dollars.

The MMA also made significant changes to Medicare Part B.  Most seniors were not aware of the changes to Medicare or implications for Medicare Part B coverage at the time of passage of the bill to law.

Millions of seniors depend on the universal, “affordable” healthcare insurance coverage Medicare provides.  

Medicare Part B premiums are based on means testing or  the modified adjusted income (MAGI.)

Under the previous law, all Medicare beneficiaries were required to pay a premium equal to about 25 percent of Medicare Part B program's total costs. The remaining 75 percent of the programs costs were financed through general revenues.

The MMA through MAGI, however, radically altered this formula by linking premiums to seniors’ income. Included in income is salary, earned interest, pension distributions, annuities, bond distributions, capital gains and social security income.

The more seniors earn from any source the more they pay in Medicare premiums.  

As a result, wealthier seniors pay a disproportionately higher premium than other seniors.

Means testing is done automatically. CMS connects to the Internal Revenue tax returns of seniors and calculates the MAGI for the following year.  

This is “redistribution of wealth” plain and simple. This means testing results in the higher income seniors paying premiums ranging from 35 to 80 percent of the Medicare program's total costs per person aside from the senior already paying into the system during his working days.

In 2011 single taxpayers with MAGI up to $80,000 pay no surcharges for their Medicare Part B. Joint filing taxpayers with MAGI up to $160,000 MAGI will not pay a surcharge.

An individual who makes over $80,000 per year had a rate increase from $98.20 to $109.80. A senior couple making over $160,000 per year experienced a rate increase from  $111.16 for each individual to $153.72 per month for a total of 317.44 per month or $3809.28 per year.

The $3809.28 is deducted from their social security distribution. The premiums are paid with pre tax dollars. Medicare Part D and Part F premiums are paid with post tax dollars.

The basic Medicare rates have increased yearly since 2007 and are scheduled to continue to increase through 2015.

President Obama raised the rates above the schedule Medicare premium for 2012 from $153.72 per person to $161.50. This represents a “hidden” tax increase by the Obama administration for people under earning under $250,000.  

It gets worse. People earning $200,000 to $300,000 experience an increase from $130.60 to $219.60 per month per individual as a result of means testing. 

Seniors in the top bracket will have their Medicare premium increased of from $169.49 to $369.36. President Obama has increased this premium $18.00 per month per individual above the scheduled increase.

The increase in Medicare premiums represent an increase in taxes for seniors that worked hard all their life in order to have extra money to enjoy retirement.

President Obama is increasing the tax on seniors with income from any source between $80,000-250,000 per year. This is contrary to his campaign pledge.  

President Obama’s fib is not surprising when we look at his attitude toward people who were productive and earned extra wealth.

 “I don’t want a deal in which I am able to keep hundreds of thousands of dollars that I don’t need, while a parent struggling to send her kid to college finds they have a couple thousand dollars less in grants and student loans.”

 President Obama believes in “redistribution of wealth” with government control of the redistribution. He does not believe in economic incentives for individuals to earn money and save it for retirement.  

President Obama’s beliefs are not compatible with the American Dream. His beliefs will lead to the destruction of American’s innovative entrepreneurial spirit.

 

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

 

 

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Pharmaceutical Companies Shafting Healthcare Insurance Companies

February 20, 2011
inMedicine: Healthcare System, Politicians,Healthcare and Vested Interests, Quality medical care measures, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
• Leave a comment

Stanley Feld M.D.,FACP,MACE

 

The pharmaceutical companies are marketing kings. The large increase in generic sales has affected their bottom line. When they are up against the wall marketing gets innovative.

“EXECUTIVES of a small insurance company in Albany were mystified when, almost overnight, its payments for a certain class of antibiotics nearly doubled, threatening to add about a half-million dollars annually in costs.”

The drug benefits costs for this healthcare insurance company increased as it did for others because the drug company was innovative. It started giving out coupons to cover the patients’ co-pay. It did not cost the patient to pay for this new expensive medication. It cost the insurance company dearly because patients stopped using the generics since their co-pay was covered by the drug company. The effectiveness difference between the generic and the new antibiotic was questionable.

This is not the first time drug companies have given patients co-payment coupons. The coupons paid the branded drugs’ co-pay. This is another example of consumer driven power. Consumers will seek the best price and highest quality.

The use of such co-payment cards and coupons and other types of discounts has more than tripled since mid-2006, according to IMS Health, an information company that tracks the pharmaceutical industry.

Consumers are smart. They know when they are getting a good deal. Pfizer, the maker of Lipitor, introduced a new coupon card that reduces the co-pay for Lipitor to $4 a month. The co-pay for Lipitor is about $50 for a month’s supply. The coupon card saves consumers as much as $50 a month. The coupon gives Pfizer a chance to have Lipitor compete with generic Zocor at Wal-Mart and other chains.

The healthcare insurance industry pays much more for Lipitor than it does for generic Zocor. The clinical evidence for a difference in the medications is small. The marketing of the clinical evidence is a gimmick. The both work the same. Lipitor is twice as potent therefore, you need half the dose to achieve the same effect.

“Drug companies say the coupon plans help some patients afford medicines that they otherwise could not. “

The health insurance companies say the coupons are a marketing gimmick. In reality they are. The healthcare insurance industry is just going to pass the cost to its bottom line to consumers by raising the price of insurance premiums.

“The member is somewhat insulated from the cost of the prescription,” said Kevin Slavik, senior director of pharmacy at the Health Care Service Corporation, which runs Blue Cross and Blue Shield plans in Illinois and three other states. “In essence, it drives up the total cost of providing the prescription benefit.”

President Obama, where are you when the public needs you? The Food and Drug Administration has been ineffective.

“The Food and Drug Administration, meanwhile, is studying the effect of the discounts on consumer perceptions, concerned that the coupons will make consumers believe that a drug is safer or better than it really is.”

The differences in costs are astounding.

  1. Once a day Minocycline is $700 per month. The price of a twice a day generic Minocycline $40 per month
  2. In New York City in a union representing public employees, 59 percent of claims were brand-name statins whose co-pay was coupon supported. The claims cost the union $17.3 million. The other 41 percent of claims were for generic statins. It cost the union only $179,000. The union has eliminated the co-pay on generic statins to encourage their use.
  3. Jazz Pharmaceuticals has quadrupled the price of its narcolepsy drug Xyrem, to about $30,000 a year, over the last five years. In order to cushion patients’ out of pocket cost, the company recently increased its co-pay assistance to as much as $1,200 a month.

“It seems the best strategy for a pharmaceutical company is to price their drug as high as they possibly can and offer that co-pay assistance broadly” to insulate consumers, said Joshua Schimmer,

Co-payment coupons are distributed by drug company sales representatives to physicians. Physicians are made to believe they are helping their patients. The coupons are also available directly to patients over the Internet. Patients present them at the drugstore when paying for their prescriptions and receive the discount.

Medicis, the company that sells Solodyn(Minocycline extended tablet), have told investors that the co-payment card is used by an “overwhelming majority” of patients, and is largely responsible for doubling use of the drug, to 26,000 prescriptions a week.

The use of once a day Minocycline vs. twice a day generic Minocycline results in a difference in cost of $2.6 billion dollars a year for this one drug.

There is something wrong. Physicians are not aware of the drug companies’ gimmicks. They think they are helping their patients. The pharmaceutical industry is indeed the king of marketing.

Pharmaceutical Companies Shafting Healthcare Insurance Companies. Healthcare Insurance Companies in turn will shaft patients by increasing their premiums.

President Obama’s healthcare reform act should be doing something about this if it wants to keep the cost of healthcare down. It is not doing anything about this problem.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

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State Medicaid Coverage -A Cash Cow For The Healthcare Insurance Industry

January 9, 2011
inMedicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
• Leave a comment

Stanley Feld M.D., FACP,MACE

 

The healthcare insurance industry is preparing to capitalize on a $40 billion opportunity to run Medicaid plans for states when President Obama’s healthcare reform act adds 16 million people to the Medicaid roles in 2014.

Do the math. $40,000,000,000 divided by 16,000,000 people is a net profit of $2,500 per patient after expenses.

“Medicaid, the state and federal program for the poor, has become a growth area for big insurers.”

Citigroup research group estimates that presently the overall healthcare insurance industry’s net profit is about $56.5 billion per year. The addition of 16 million enrollees will add $40 billion dollars in net profit to the healthcare insurance industry’s bottom line.

The positioning of both major healthcare insurance companies and smaller companies has been proceeding quietly, as they want to stay below the radar of public detection.

California will have 2 million new enrollees. Texas will have 1.9 million enrollees.

The healthcare insurance industry is preparing bids to provide administrative services for each state’s Medicaid program. Most states are experiencing budget crises and find it is cheaper to outsource the administrative services of their Medicaid programs.

“The healthcare insurance industry manage coverage of 70% of Medicaid enrollees, or 33.4 million people, up from 56% in 1999, according to Sanford C. Bernstein.”

States let contracts lasting five years. The states want to contract with vendors now so they do not experience disruptions in 2014 when the Medicaid expansion occurs.

The healthcare insurance companies are trying to customize their plans to win their bids.

“Medicaid is one of health insurers’ few bright spots, as their margins are pressed by regulatory crackdowns on premiums in their traditional policies. Gail Boudreaux, UnitedHealth’s executive vice president, told investors last month that: "The Medicaid space is a significant long-term growth opportunity for us. It’s a big market that’s getting even bigger." UnitedHealth pegs the value of new bids or expansions over the next three years at $40 billion.”

Many healthcare insurance companies are jumping in to capture the Medicaid business. UnitedHealth and WellPoint(Blue Cross/Blue Shield) are at the head of the class. Smaller companies such as Amerigroup, Centene and Molina claim their specialized focus gives them an advantage over the larger companies.

"Understanding the state as a customer is quite different than understanding what GE or IBM want as a purchaser," said John Littel, Amerigroup’s executive vice president of external relations.”

President Obama did not think out his plans for Medicaid very well. His healthcare reform act has done nothing to repair the problems in the Medicaid insurance system. In fact, the funding demanded of the states has resulted in a decrease in funding of vital safety net city and county hospitals.

What remains is an expansion of a system that has failed to provide adequate care over the last 40 years. The defective design of the Medicaid system is responsible for its failure. It makes no sense that by expanding the program by 16 million uninsured people it will produce a successful program. Expanding a failed system will not solve our universal healthcare goals. It will only expand our federal and state deficits and provide more profit for the healthcare insurance industry.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.