Analysis – Supreme Court Ruling

Obamacare Collapse Would Put Employers In Charge

by The Associated Press

WASHINGTON April 24, 2012, 01:12 pm ET

WASHINGTON (AP) — If the Supreme Court strikes down President Barack Obama’s health care overhaul, don’t look to government for what comes next.

Employers and insurance companies will take charge. They’ll borrow some ideas from Obamacare, ditch others, and push even harder to cut costs.

Here’s what experts say to expect:

— Workers will bear more of their own medical costs as job coverage shifts to plans with higher deductibles, the amount you pay out of pocket each year before insurance kicks in. Traditional insurance will lose ground to high-deductible plans with tax-free accounts for routine expenses, to which employers can contribute.

— Increasingly, smokers will face financial penalties if they don’t at least seriously try to quit. Employees with a weight problem and high cholesterol are next. They’ll get tagged as health risks and nudged into diet programs.

— Some companies will keep the health care law’s most popular benefit so far, coverage for adult children until they turn 26. Others will cut it to save money.

— Workers and family members will be steered to hospitals and doctors that can prove that they deliver quality care. These medical providers would earn part of their fees for keeping patients as healthy as possible, similar to the “accountable care organizations” in the health care law.

— Some workers will pick their health plans from a private insurance exchange, another similarity to Obama’s law. They’ll get fixed payments from their employers to choose from four levels of coverage: platinum, gold, silver and bronze. Those who pick rich benefits would pay more.

“Employers had been the major force driving health care change in this country up until the passage of health reform,” said Tom Billet, a senior benefits consultant with Towers Watson, which advises major companies. “If Obamacare disappears … we go back to square one. We still have a major problem in this country with very expensive health care.”

Business can’t and won’t take care of America’s 50 million uninsured.

Republican proposals for replacing the health care law aren’t likely to solve that problem either, because of the party’s opposition to raising taxes. The GOP alternative during House debate of Obama’s law would have covered 3 million uninsured people, compared with more than 30 million under the president’s plan.

After the collapse of then-President Bill Clinton’s health care plan in the 1990s, policymakers shied away from big health care legislation for years. Many expect a similar reluctance to set in if the Supreme Court invalidates Obama’s Affordable Care Act.

Starting in 2014, the law requires most Americans to obtain health insurance, either through an employer or a government program or by buying their own policies. In return, insurance companies would be prohibited from turning away the sick. Government would subsidize premiums for millions now uninsured.

The law’s opponents argue that Congress overstepped its constitutional authority by requiring citizens to obtain coverage. The administration says the mandate is permissible because it serves to regulate interstate commerce. A decision is expected in late June.

The federal insurance mandate is modeled on one that Massachusetts enacted in 2006 under then-Gov. Mitt Romney. That appears to have worked well, but it’s unlikely states would forge ahead if the federal law is invalidated because health care has become so politically polarized. Romney, the likely Republican presidential nominee, says he’d repeal Obamacare if elected.

That would leave it to employers, who provide coverage for about three out of five Americans under age 65.

“With or without health care reform, employers are committed to offering health care benefits and want to manage costs,” said Tracy Watts, a senior health care consultant with Mercer, which advises many large employers. “The health care reform law itself has driven employers, as well as the provider community, to advance some bolder strategies for cost containment.”

First, employers would push harder to control their own costs by shifting more financial responsibility to workers.

Data from Mercer’s employer survey suggests that a typical large employer can save nearly $1,800 per worker by replacing traditional preferred provider plans with a high-deductible policy combined with a health care account. “That is very compelling,” said Watts.

It won’t stop there. Many employers are convinced they have to go beyond haggling over money, and also pay attention to the health of their workers.

“As important as it is to manage the cost of medical services and products, and eliminate wasteful utilization, there has been a strong recognition that ultimately healthier populations cost less,” said Dr. Ian Chuang, medical director at the Lockton Companies, advisers to many medium-size employers. His firm touts programs that encourage employees to shed pounds, get active or quit smoking.

Employer health plans were already allowed to use economic incentives to promote wellness, and the overhaul law loosened some limits.

A Towers Watson survey found that 35 percent of large employers are currently using penalties or rewards to discourage smoking, for example, and another 17 percent plan to do so next year. The average penalty ranges from $10 to $80 a month, but one large retailer hits smokers who pick its most generous health plans with a surcharge of $178 a month, more than $2,100 a year.

Overall, one of the most intriguing employer experiments involves setting up private health insurance exchanges, markets such as the health care law envisions in each state. Major consulting firms such as Mercer and Aon Hewitt are developing exchanges for employers.

As under the health care law, the idea is that competition among insurers and cost-conscious decisions by employees will help keep spending in check. Aon Hewitt’s exchange would open next January, with as many as 19 companies participating, and some 600,000 employees and dependents.

“The concept of an exchange does not belong to Obamacare,” said Ken Sperling, managing the project for Aon Hewitt. “We’re borrowing a concept that was central to the health care law and bringing it into the private sector. Whether the law survives or not, the concept is still valid.”

Consumer Groups Ask Obama To Not Weaken Provisions For Insurance Labels

By Susan Jaffe

January 24th, 2012, 6:03 PM

Leaders from some of the nation’s top consumer and seniors advocacy groups today urged President Barack Obama not to weaken a key consumer provision of his signature health care overhaul law.

The provision requires health insurers and employers to use standardized, easy-to-understand information documents to describe health plan benefits and costs.   These forms would explain how much each plan pays on average for three common medical conditions and include a glossary of insurance terms.

“The summary of benefits and coverage [document] is a vital first step in making consumers better informed and able to make the proper decisions for themselves,” said Stephen Finan, senior director for policy for the American Cancer Society Cancer Action Network, one of the signers of the letter to the president.  In some states, information about providers and other policy details are not disclosed until after a consumer applies for coverage, he said.  Shoppers today, he explained, can get better information about buying a new washing machine than they can about a health insurance policy.

“You pay first and learn later,” he said.

The letter was signed by the chief executive officers of the American Cancer Society, American Heart Association, American Diabetes Association, Consumers Union and AARP, which has 37 million members age 55 and older.

According to the law, the forms are supposed to be distributed starting March 23, but the groups are worried about the administration’s long delay in setting final regulations that spell out how to use the forms. The draft regulations that include the proposed forms were issued in the summer and the administration has been reviewing comments on those. “As the Administration approaches its final decisions on the [summary of benefits and coverage] rule, we strongly encourage you to adhere to the letter of and intent of the Affordable Care Act,” the CEOs wrote.

Although they concede that there’s probably not enough time to meet the March deadline, they would like the forms available for the fall open enrollment season for group insurance plans.   They also urged that the forms be used in both group and individual insurance plan markets, , as the law and proposed rules require, and that they include premium price information as well as several coverage examples.

In comments on the proposed rules, insurance and business trade associations explained how some of these features would be difficult to implement now and asked for further delays.

The new forms were written by a working group of the National Association of Insurance Commissioners, which included industry and consumer representatives along with state insurance regulators and were later incorporated into the administration’s proposed rules.

Erin Shields, a spokeswoman for the U. S. Department Health and Human Services declined to say whether the final rules will favor the positions taken by industry or consumer groups.

“As always, we appreciate this and all feedback and value a constructive dialogue on this important, new consumer protection,” she said.

This entry was posted on Tuesday, January 24th, 2012 at 6:03 pm.

Source:

To view this article by Susan Jaffe for Kaiser Health News in its original context, please visit http://capsules.kaiserhealthnews.org/index.php/2012/01/consumer-groups-ask-obama-to-not-weaken-provisions-for-insurance-labels/

This Is The Year Obamacare Takes On Out-Of-Control Health Care Costs

1/19/2012 @ 12:32PM |

By: Rick Ungar

Write down the date. 2012 is the year that some of the more ‘behind the camera’ aspects of the Affordable Care Act will begin to take effect—measures that are designed to primarily impact on the high cost of medicine. Thus, while the measures may not score big headlines, 2012 could well prove to be the most important time frame in the effort to get control of the out-of-control costs that are destroying the American health care system.

Accountable Care Organizations – On January 1, the financial incentives designed to inspire health care providers to form Accountable Care Organizations (ACOs) took effect.

The idea behind an ACO is to bring a number of health care providers, providing different services and specialties, together to better coordinate the care a Medicare beneficiary receives for a variety of conditions. By doing this, the hope is that duplication can be avoided and the improved communication among these providers will increase quality of care and outcomes.

The result is expected to represent just under $1 billion in savings over the next three years.

The reward to providers who form ACOs—and can show improvements in outcomes and cost savings— is a share of the savings they deliver to Medicare. Note that this is not simply a matter of producing cost savings. If the improvements in outcomes are not there, an ACO is not going to profit. Thus, the success of the ACO program would produce a win-win for all involved. Patients will receive better care, providers will earn financial bonuses in success and Medicare will benefit from the savings.


Collection of Data Revealing Treatment Disparities
– It is no secret to anyone that the quality of care received in the United States can be directly tied to one’s race, income and ethnicity. In many cases, it can even be tied to gender.

The ACA intends to do something about this, beginning with the requirement—come March, 2012— that will require increased data collection to highlight this disparity in care and allowing the holes to be plugged in response to what is learned.

“It’s a huge issue,” says Anna Lambertson, executive director of the Kansas Health Consumer Coalition, a statewide advocacy group in Topeka, Kan. “Health disparities include women’s access to health insurance and being charged higher premiums because of gender. If we can find a way to help people navigate the health care system so they are not going to the ER to receive routine care, we can actually lower costs.”

Via Fox Business

As the old saying goes, “knowledge is power”. Having the data to back up the serious problem of disparities in care in America— based on factors that should never be factors— is the first step towards fixing the problem.


Payback:The Insurance Rebates
– With the exception of the Supreme Court decision that will determine whether or not key aspects of the ACA have a future, June will bring this year’s change that is most likely to make headlines – the obligation that health insurance companies who fail to meet the medical loss ratio (MLR) requirements of Obamacare issue rebates to customers. Insurance companies who have failed to spend 80 percent of premium dollars received from individual and small business policy holders (85 percent from large group policies), will be required to send rebate checks to their customers. It is estimated that had the insurance companies been obligated to make such rebates in 2010, the rebates would have totaled about $2 billion dollars.

This requirement will not only put some unexpected cash in the pockets of long-suffering premium payers, it will shine a light on which insurance companies are failing to spend the money you send them on your actual health care.

Value Based Purchasing – Beginning October 1, the Medicare Value-Based Purchasing Program (VBP) will link payments made by Medicare to health care providers to the quality of the outcome they achieve. The program also includes the ‘bundled payments’ you’ve heard so much about.

VBP is more important than you might initially realize. Currently, we have far too many people –about 30 percent of all patients– checking out of hospitals only to check back in a month later. Let that sink in for a moment. Almost one of every three patients who leave a hospital will be back in a month. And we wonder why we spend so much on health care!

And when that patient comes back to the hospital, the hospital once again begins to run up the tab.

Pursuant the rules taking effect in October, this will no longer be the case. If a Medicare participant checks into the hospital for triple-bypass heart surgery, the hospital is going to be paid a set fee for the procedure. If the patient is sent home with insufficient directions to properly care for themselves during the post-surgery period, and is thus required to return to the hospital when things go wrong, the hospital is not going to be paid again. Accordingly, the hospital now has every incentive to do the job right the first time and make sure that the patient has the information necessary to continue improving upon release—including making sure the patient is going to follow-up visits with his or her doctor. The result is a healthier patient and much less spent in recidivist returns to the hospital.


Electronic Health Records
– Also coming on-line in October are the requirements that will force medical providers to get serious about using electronic medical records that will ‘hook up’ physicians to better track the health care their patients have been receiving.

Anyone who has ever been subjected to multiple blood tests as a result of seeing two different physicians within a short time understands how often duplicate tests are performed for no good reason and at great expense.

Now, when a patient goes for an annual physical in May and then is required to see a cardiologist in June, the cardiologist, via an electronic health care records system, will have access to the recent blood test results taken just two months earlier,  allowing the doctor to avoid re-testing.

The potential for savings is huge.

What we see is that 2012 is the year where the ACA begins to seriously take on the high cost of medicine in America – an effort that even the most ardent critic of Obamacare should be supporting.

Whether or not these measures will achieve the desired results remains to be seen. However, the next time someone tries to convince you that health care reform does not tackle our costs problem, I hope you’ll refer them to this data and suggest that their own self-interest requires that they root for these measures to work.

Our health care system really does depend upon it.

SOURCE:
To view this article by Rick Ungar for Forbes, please visit http://www.forbes.com/sites/rickungar/2012/01/19/this-is-the-year-obamacare-takes-on-out-of-control-health-care-costs/