eridani
eridani's JournalKaiser Family Foundation Report on Income and Assets of Medicare Beneficiaries
The Kaiser Family Foundation recently released an issue brief that describes the income and assets of Medicare beneficiaries in 2014. It is essential to place proposals making changes to the Medicare program within the context of this data in order to understand the impact on beneficiaries. This is particularly true for proposals that shift costs onto beneficiaries. The brief also provides projected numbers for beneficiaries in 2030.
Some important findings from the report (all numbers are for 2014):
Half of all Medicare beneficiaries had incomes below $24,150
One-quarter of beneficiaries had incomes below $14,350
Five percent had incomes exceeding $93,000 (Includes one percent who had incomes exceeding $163,600)
Median per capita income:
White beneficiaries: $27,450
Black beneficiaries: $16,150
Hispanic beneficiaries: $12,800
More than half of all beneficiaries ages 85 and older lived on an income of less than $18,850
Median per capita savings:
White beneficiaries: $91,950
Black beneficiaries: $12,350
Hispanic beneficiaries: $9,800
More than half of all beneficiaries ages 85 and older have less than $30,700
The full Kaiser Family Foundation Issue Brief is available at:
http://files.kff.org/attachment/issue-brief-income-and-assets-of-medicare-beneficiaries-2014-2030
Solution to Medicare Part B Cost Increases? Look at "Outpatient" Observation Status
If Congress and the Administration truly seek ways to limit Medicare premiums and deductibles, they ought to look at CMS’s hospital Observation Status policy.
A major cause of the Part B increase is likely the parallel increase in so-called "outpatient" Observation Status, the use of which has more than doubled since 1999. The result of this misguided policy, under which inpatient-level hospital services are billed as outpatient “Observation,” is that unprecedented amounts of hospital care are being billed to Medicare Part B, rather than Part A. This was never intended by the law.
Part A is called “Hospital Insurance” in the Medicare Act. Yet, thousands of patients stay in hospitals for many days only to learn they were not admitted as inpatients. Instead, they are classified as outpatients on Observation Status. One of the myriad consequences of this policy is that Part B expenses are skyrocketing – increasing Part B premiums and deductibles and cost shifting to Medicare beneficiaries. These costs should not be included in calculating the share of Part B costs that beneficiaries must pay.
Congressman Joe Courtney (CT-2) wrote the Secretary of Health and Human services asking her to review the link between Observation Status and Part B costs. We hope this will help lead to real reform of the so-called outpatient Observation policy and Part B cost-sharing.
http://www.medicareadvocacy.org/wp-content/uploads/2015/10/Final-Letter-to-HHS-Secretary-re-Medicare-Part-B-and-MedPAC-report-10-16-2015.pdf
Hedge Funds Attack American Health Care
It ain't just Martin Shitstain.
It’s not just one highly unethical man: dozens of high-flying financial speculators at hedge funds and private equity firms are driving up the price of pharmaceuticals across the country.
Out of the twenty-five drugs with the fastest-rising prices over the past two years, twenty are owned or have been acquired by firms with significant activity from hedge fund, private equity, or venture capital firms.
Yes, you read that right: 80% of the drugs with the fastest-rising prices were involved in hedge fund, private equity or similar speculative attacks in the past two years.
The exact circumstances of each deal varies, but the outcome is always the same: branded pharmaceuticals — drugs for which no lower-cost generic alternative drug exists — see their prices increase many times over to satisfy the greed of speculative investors.
One company that stands out in all this is Valeant, a drug manufacturer that partnered in 2014 with a hedge fund called Pershing Square Capital Management to attempt the takeover of Allergan, another pharmaceutical company.
Comment by Don McCanne of PNHP: The full Hedge Clippers article, available at the link above, provides many examples of outrageous drug price manipulation by hedge fund, private equity, or venture capital firms. These confiscatory price increases have not been for financing new drug research, rather they have been for the sole purpose of redistributing money from patients in need of these drugs to the the money managers at the very top of the income and wealth scales, further compounding our crisis of inequality.
Government intervention is imperative. It would be automatic if we enacted a single payer national health program.
U.S. Health Care Could Be More Like Denmark’s
The United States isn’t Denmark, but it can, like Scandinavia, implement changes to its health care system that save money, cover everyone and help us live longer. In the 1950s, U.S. health statistics were world class: infant mortality rate among the lowest, life expectancy among the highest, and health costs about average. One by one, other nations — not just Denmark and Sweden, but Australia, Britain, Canada and Taiwan, to name a few — adopted national health programs. By the end of the 20th century, the U.S. was the lone hold out for private, for-profit health insurance, and its health statistics lagged behind dozens of countries. Meanwhile, costs soared to twice the average in other wealthy nations.
In contrast, insurance overhead in single-payer programs (and fee-for-service Medicare) takes only 1 percent to 2 percent. In these programs, hospitals don't need to bill each patient; they're paid a lump sum budget, the way we fund fire departments, sharply cutting hospital administrative costs. Moving to a single-payer system would save about $400 billion annually on paperwork and administration — enough to ensure every American top coverage.
Messages like "We are not Denmark" insist we put blinders on and refuse to learn from others. That reasoning would have us ignore innovations like vaccination or CT scanners (British inventions), echocardiograms (a Swedish one) or cardiac stents (first used in France). A single-payer reform — like the one advocated by the 20,000 members of Physicians for a National Health Program — could save thousands of American lives each year. That's as American as apple pie.
Comment by Don McCanne of PNHP: We need to be sure that the fundamentals do not get lost in political rhetoric. The fact is that health system performance in the United States has lagged behind many other nations while our costs have soared to twice the average of wealthier nations. Bernie Sanders says that we can learn from Denmark (meaningful rhetoric). Hillary Clinton says that we are not Denmark, but we are the United States of America (dismissive rhetoric). Steffie Woolhandler says that saving lives through single-payer reform would be as American as apple pie (Yankee Doodle Dandy rhetoric).
So how about a little Yankee Doodle Dandy? James Cagney or Mickey Rooney - you choose:
Where else but in America could we choose which Yankee Doodle Dandy we prefer? And we can even choose health care for all if we were willing to give up our uniquely American health care system, as dysfunctional as it is. But that would mean adopting policies of health care justice already in use in other nations. Apple pie anyone?
A Trojan Horse In Clinton’s Pledge To “Enhance” Social Security?
https://ourfuture.org/20151015/a-trojan-horse-in-clintons-pledge-to-enhance-social-securityLynn Stuart Parramore wrote in 2012 that she understood why “well-intentioned liberals” end up embracing Social Security policies that would treat the “vulnerable” differently from everyone else. But she warned that these schemes are “a sneak attack on vital programs meant to weaken and eventually destroy them” and “a highly effective political strategy for getting liberals and progressives to act against their own values and interests.”
Chief among her arguments are the point that Social Security benefits are not “handouts to the needy.” They are “benefits that people pay for as they work. They are also smart social insurance programs that spread risk across society in order to protect everyone at rates no private insurance scheme, with its much smaller risk pool, could touch.”
Like your insurance policy, when you file a claim the size of the check you receive is not based on your income or net worth; it’s based on the amount of coverage you purchased. Car insurance companies that paid less in claims to Mercedes owners, presumably because they are wealthier than owners of a working-class Chevy Cruze, would lose high-end customers – and eventually would collapse.
There are real threats to Social Security that Clinton could have called out in Tuesday’s debate.
There are reports this week that Senate Majority Leader Mitch McConnell wants cuts in Social Security and entitlement programs in exchange for support for increasing the debt ceiling next month. The fact that there will not be a cost-of-living increase for Social Security recipients underscores a fundamental flaw in how benefits are calculated: the particular spending patterns for seniors, particularly in health care, aren’t captured in the index used for adjusting Social Security payments. Finally, as this petition from Social Security Works warns, if Congress does not act soon, the Medicare Part B premium and deductible are expected to increase significantly for older adults and people with disabilities in 2016, and Social Security recipients won’t have the extra dollars to cover those costs.
Rethinking high deductible health insurance--patients cut care as well as costs
We found that almost all spending reductions during the year occurred while consumers were still under the deductible, despite the fact that the majority of incremental spending occurs for consumers that have already passed the deductible. Moreover, about 30% of all spending reductions come from consumers in months when they (i) began that month under the deductible but (ii) were predictably sick, in the sense that they had very low shadow prices for health care.
Economists Zarek Brot-Goldberg, Amitabh Chandra, Benjamin Handel, and Jonathan Kolstad studied a firm that, in 2013, shifted tens of thousands of workers into high-deductible insurance plans. This was a perfect moment to look at how their patterns of care changed — whether they did, in fact, use the new shopping tools their employer gave them to compare prices.
Turns out they didn't. The new paper shows that when faced with a higher deductible, patients did not price shop for a better deal. Instead, both healthy and sick patients simply used way less health care.
This raises a scary possibility: Perhaps higher deductibles don't lead to smarter shoppers but rather, in the long run, sicker patients.
Comment by Don McCanne of PNHP: This is an important study. It shows that sick patients will not shop prices but rather they will forgo beneficial health care services while they are still under the deductible for their plan.
This confirms that deductibles are an inappropriate tool for reducing health care spending, since health policies should be designed to improve care rather than impair it. This puts the entire concept of consumer-directed health care under question as a means of slowing health care spending. In contrast, single payer policies control spending while benefiting patients.
This study may seem familiar to regular readers. That is because it was covered in our June 15, 2015 Quote of the Day. It was based on an article in “The Conversation” by Ben Handel, one of the co-authors of this study.
What is new is that NBER has now released the full study, and reports of it are appearing in the media. It is a concept well worth repeating. Excerpts of the Vox article by Sarah Kliff are included above in that her description is quite clear, avoiding the technical language of economists and policy wonks.
Quote of the Day, June 15, 2015:
http://www.pnhp.org/news/2015/june/deductibles-do-not-foster-price-shopping
Financial health shaky at many Obamacare insurance co-ops
The first plan to collapse served people in Iowa and Nebraska; it folded in February after being taken over by state insurance regulators. In July, Louisiana’s co-op revealed it was shutting down. Then late last month in New York state, the nation’s largest co-op toppled, startling insurance industry and health policy analysts who thought it was too big for the government to let fail.
The latest announcement came Friday, when the Kentucky Health Cooperative, serving about 51,000 customers, said that it, too, will close Dec. 31 because of poor finances.
The co-op disappearances are disrupting coverage for nearly 400,000 customers across five states, according to the most recent publicly available enrollment figures.
The program has been under siege from the start, including from the insurance industry. Before the law’s passage, government grants to help them get going were switched to loans. None of that money could go for advertising — a wounding rule for new insurers that needed to attract customers. Moreover, the amount available was cut from $10 billion to $6 billion and then later, as part of the administration’s budget deals with congressional Republicans, to $2.4 billion. Federal health officials abandoned plans for a co-op in every state.
At the time, some health policy experts warned that the constraints would make it difficult for some co-ops to thrive.
In August, federal officials delayed another type of assistance intended to help cushion the risk of covering the previously uninsured. This temporary “risk corridor” money was cut last week to a small fraction of what many co-ops had been banking on. The Kentucky co-op blamed its demise on its cut — from an expected $77 million to less than $10 million.
Comment by Don McCanne of PNHP: During the crafting of the Affordable Care Act (ACA), there was strong support for including the option of selecting a government-run insurance program in the insurance exchanges. This “public option” was first emasculated so that it would not be an effective competitor to the private insurance firms, and then it was totally eliminated from ACA by political chicanery. That led to support for including “Consumer Operated and Oriented Plans” (co-ops) - nonprofit insurers controlled by directors elected by the enrollees - as a substitute for the public option.
The private insurers were not through. Obviously they did not want competition from a nonprofit consumer-operated system that should have significantly lower expenses than do the private insurers. Insurers require capital - both for start-up expenses and for establishing reserves from which to pay claims. Although the original intent was to provide government grants to the co-ops, these were changed to government loans which the co-ops would have to pay back (not to mention that borrowing to fund reserves is a shell game - the net reserves are zero). Adding the burden of debt service onto the backs of these co-ops basically destroyed their competitive advantage, especially at a time that they were facing high start-up costs. Further, as an extra measure, the insurers had included in ACA a rule that prohibited the co-ops from advertising. Thus the insurers saw to it that the co-ops were placed at a competitive disadvantage.
And what help did the co-ops receive from the government? First the government cut way back on the funds that were made available as loans to satisfy capital requirements. When co-ops were successful in their enrollment efforts, the government did not make further loans available to satisfy increased reserve requirements (larger member rolls require greater reserves). Then the feds reneged on their requirement to pay the co-ops losses above the risk corridor (a form of reinsurance for excessive losses by the co-ops). Finally, the feds have become hard-nosed and have begun shutting down the co-ops because of failure to maintain adequate reserves. Surprise! How were they supposed to build reserves in a year with high start-up costs, high debt service, and increased reserve requirements because of greater than expected enrollment?
It is clear that HHS, from the beginning, has been in bed with the private insurers. This experience with the co-ops is not the only example of their effort to relieve the insurers of competition from government programs. They have been supporting the private Medicare Advantage (MA) plans through administrative manipulations that offset the required reductions in overpayments to these plans. Also, they are now greatly increasing Part B premiums for about one-third of Medicare beneficiaries, especially for those with high incomes - a measure bound to diminish support for the traditional Medicare program, chasing irked beneficiaries into the private MA plans.
This unfortunate outcome for the co-ops was not exactly unanticipated. It was inevitable based on the design features dictated by the private insurers (see our Quote of the Day of July 18, 2011). What is particularly sad is that our own government has not been a reliable partner with our citizens and their organizations. They have gotten into bed with the private insurers instead.
Single payer would fix this, but we would need new public administrators.
High-Cost Patients Had Substantial Rates Of Leaving Medicare Advantage And Joining--
--Traditional Medicare
We examined the relationship between use of hospital, nursing home, and home health care in 2010 and beneficiaries’ switching between Medicare Advantage and traditional Medicare by January 2011. Among traditional Medicare beneficiaries, we observed lower rates of switching into Medicare Advantage among people who used nursing home, home health, or acute inpatient care, compared with beneficiaries who did not use these services. In contrast, among Medicare Advantage beneficiaries, we found increased rates of switching into traditional Medicare among people who used nursing home and home health care, compared with beneficiaries who did not use these services.
Our results are consistent with other studies reporting that beneficiaries who report poorer health, use more health services, and have higher health care spending are more likely than their counterpart Medicare Advantage beneficiaries to leave Medicare Advantage plans, despite the recent reforms to the Medicare Advantage payment formula.
Comment by Don McCanne of PNHP: In 1997, The New England Journal of Medicine published a landmark article that showed that Medicare patients who enrolled in private Medicare HMOs exited them when they developed a need for a greater amount of health care: “The Medicare-HMO Revolving Door — The Healthy Go in and the Sick Go Out”
After nearly two decades of refinement of payment methods for the private Medicare Advantage plans, this new study from Health Affairs shows that “a high proportion of beneficiaries with nursing home or home health care use choose to exit the Medicare Advantage program.” Specifically, “Our results are consistent with other studies reporting that beneficiaries who report poorer health, use more health services, and have higher health care spending are more likely than their counterpart Medicare Advantage beneficiaries to leave Medicare Advantage plans, despite the recent reforms to the Medicare Advantage payment formula.”
The healthy go in and the sick go out. With Medicare Advantage plans, the patients and the taxpayers end up as losers.
New Social Security Works Music Video Dont Wanna Work 'Til We Die
http://ssworkswa.org/https://www.facebook.com/ssworkswa
70 National Organizations Urge Congress to Act on 2016 Part B Premium and Deductible Hikes
This week, led by Medicare Rights Center, 70 prominent organizations representing people with Medicare, health insurers, workers, federal employees, and more sent a letter to key Congressional committees urging swift action to shield older adults, people with disabilities, and state Medicaid programs from anticipated increases in Medicare Part B premiums and the Part B deductible in 2016.
Part B costs are expected to increase next year for 30 percent of people with Medicare. Without a fix, Part B premiums will increase to $159 per month for select beneficiaries, and the Part B deductible will rise to $223 for all people with Medicare. Older adults and people with disabilities affected by the projected premium increase include new Medicare enrollees, individuals not collecting Social Security benefits, beneficiaries already paying higher premiums, and people with both Medicare and Medicaid (state Medicaid programs will bear this cost). The anticipated hike in the Part B deductible will impact all beneficiaries, most significantly affecting those who lack adequate supplemental coverage.
Joe Baker, President of Medicare Rights, said in a written statement, "Older adults and people with disabilities cannot shoulder these unprecedented increases, especially those living on low- and fixed incomes. Half of all people with Medicare are living on annual incomes of $24,150 or less. We urge members of Congress to heed this call to action from leading voices across the health care sector.”
Read the letter.
http://medicarerights.org/pdf/093015-joint-ltr-partb-premiums.pdf
Read Medicare Rights' statement.
http://www.medicarerights.org/newsroom/press-releases/93015-2
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