Commercial Insurance Premiums Up Again

By George W. Chapman

More than 150 million people are on commercial insurance through their employer.  Despite the elimination of some ACA taxes, premiums are still on the rise well ahead of inflation. Family premiums  went up an average of 5 percent to about $19,600 and individual premiums went up an average 3 percent to almost $7,000, according to the Kaiser Family Foundation. Worker wage increases and inflation are both at 2.5 percent this year. In the last 10 years, premiums have increased twice as fast as worker earnings and three time as fast as inflation. To exacerbate things for consumers, out-of-pocket deductibles have increased eight times faster than their earnings. Employers seemingly “take back” wage increases via increases in employee copays and deductibles. Some of the recent increase in premiums is due to younger people going without insurance (making risk pool older) once the mandate to have insurance was terminated.

Hospital Inspectors

The Centers for Medicare and Medicaid Services (CMS) relies on independent inspectors or accrediting organizations (AOs) to ensure public and private hospital quality and safety. A Wall Street Journal investigation found that some hospitals, despite a history of ongoing problems, still kept their “accredited” status, which allows them to receive payments from CMS. Consequently, CMS is improving its oversight of these AOs. CMS has redesigned the inspection process AOs must follow and will begin posting the AO performance data and findings to Congress. CMS will also select hospitals at random to and compare the CMS audit to that of the AO. The plan is to release more detail like complaints and out of compliance data versus just the overall accreditation status of a hospital. It is still illegal for CMS to disclose actual hospital surveys performed by the AOs.

Upstate VA Hospital Ratings

The VA performs its own audits and ranks its hospitals on a five star scale. This year, two thirds of the VA hospitals (96 of 146) showed improvement. The current rankings are: Albany 3+, Bath 5+, Buffalo 4+, Canandaigua 4+ and Syracuse 3. The + indicates noticeable improvement since the last audit.

Accessing Your Records

You are entitled to a complete copy of your medical record, digital if you want,  per the Health Information Portability and Accountability Act (HIPAA) of 1996. Providers are allowed to charge a “reasonable fee,” typically a fixed rate or per page rate. Usually, it is not a problem requesting and receiving a copy of your record from your physician. You have a relationship with your physician(s) and the cost to copy the record is not prohibitive because it might be just several pages in length. According to a study conducted by the Yale University School of Medicine, obtaining your record from a hospital is more of a challenge. Researchers, posing as patients, called the top 83 hospitals in the US and asked about procuring a copy of their record. One hospital actually told the “patient” that it would be a HIPAA violation to release a copy in any event. Several hospitals said that sending the record via email was “insecure” and therefore a violation. That is not true. You are entitled to receive a copy of your record in any format as long as it is readily producible in that format. Many of the hospitals in the study didn’t even have a process for delivering the record in digital format, although required to do so by law.  Many hospitals said they could only send paper copies and would charge per page. In most cases, the expense would be prohibitive as a 200-page hospital record is not atypical. However, in their defense, there are still storage units filled with boxes of paper records and accessing and copying your record is time and labor intensive. The study concluded that while patients should know they are entitled to digital copy by law, they have to understand hospitals are still transitioning to the digital age.

Medicare Premiums Level

There are about 60 million people covered by Medicare. Ten thousand baby boomers (65+) are signing up for Medicare every day. It is projected there will be almost 80 million seniors on Medicare by 2030.  Medicare premiums went up an average of just 1 percent a year under Obama and continue to creep up today well below commercial premium increases. How is that possible? Skeptics have attributed this low increase phenomenon as a fluke or result of the last recession. The thought was seniors couldn’t afford the 20 percent copay so didn’t seek as much care. That has never been proven. Vanderbilt University economist Melinda Buntin has studied Medicare for years and has raised some eyebrows as she reveals her findings. The Affordable Care Act, not the recession, had way more to do with leveling/steading Medicare premiums over the last 10 years. There was a “perfect storm” of provider incentives to control costs and how care was delivered. She found that Medicare and Medicaid got much better at managing dual eligibles (over 65 and poor). Value-based payments and payment bundling were effective at controlling costs without decreasing the quality of care. The dismantling of the ACA will have a negative impact and the expectation is Medicare premiums will soon increase by more than 1 percent annually.

Drug Pricing Under Control?  

In what could be a sign of the times, drug manufacturer Gilead is dropping the list price of its generic Hep C drug “Harvoni.”  As reported in the Wall Street Journal recently, the list price for the eight-week treatment plan was dropped from a staggering $63,000 to a staggering $24,000.  This is “progress.” Traditionally, drug manufacturers have marked up prices in anticipation of giving discounts to pharmacy benefit managers (PBMs). The  good news for consumers is that many plans require you to pay your share based on the absurd list price versus the discounted price obtained by PBMs.

Trump Signs Spending Bill 

The 2019 federal fiscal year began Oct. 1. Related to healthcare, the budget increased funding for: the DHHS and NIH, the opioid epidemic, increased access to addiction treatment, slowing the flow of illegal drugs into the US, and for states to monitor prescriptions.

George W. Chapman is a healthcare business consultant who works exclusively with physicians, hospitals and healthcare organizations. He operates GW Chapman Consulting based in Syracuse. Email him at gwc@gwchapmanconsulting.com.

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