Health Insurance News

In what can be only be described as a great day for America, President Barack Obama woke up to a great idea.  I guess it occurred over several days, but because his health care reform legislation has stalled like a Mexican car in the summertime, Barack’s amaing idea is to give the federal government the authority to block health insurance companies from increasing premiums.

This is ridiculous of course, as health insurance companies, though indeed scum of the earth, are not to blame for this health care crises.  They are not the ones increasing medical costs, they are reacting to it.  They are not the ones that have been suffering from the financial woes caused by Wall Street excesses and firing or laying off entire cities.  They are in fact, a symptom of this financial distress.

After Blue Cross Blue Shield of California has been trying to get through a 40% increase (though as we said, they would still be the most affordable plan in California despite this massive increase) Obama used them as a scapegoat for this crises.

Though if he wants to point fingers, perhaps he can start by looking at the massive waste of Medicare and Medicaid or perhaps the lawyer vultures that have caused malpractice rates to become untenable.

The president plans to include a program to have the criminal Federal Reserve regulate insurance rates, which sounds like a great idea, considering their success in regulating Wall Street and our fiscal situation.

The president will unveil the ridiculous plan today in advance of what is sure to become the silliest summit ever on Thursday part of the supposed bipartisan health care summit.

This is another case of assigning blame incorrectly.  The insurance company financial statements include the same profit percentages which are fixed and not allowed to exceed a certain percent.  When an insurance company earns a profit it is because their claims percent was lower then their premiums.  This number is not allowed by law to be above a reasonable number.

The plan is to have this new proposal be encompassed in a bridged version of the Senate and House bills that were passed late last year.  This premium control is likely to be opposed by Republicans who are right about this but for the wrong reason, they believe or are at least using the excuse that it would give too much power to the federal government.  But in fact it is because the insurance companies are some of their largest donors.

The Democratic health bills already envision some role for the government to control premium costs, through new exchanges where individuals and small businesses could buy insurance. One version would prevent any insurer that raised rates beyond a level that the government deemed unfair from selling policies in the exchange.

Private insurance companies are now regulated by the states, which review proposed rate increases. Under the Obama proposal, the federal Department of Health and Human Services would gain the power to review and block premium increases.

A new seven-member Health Insurance Rate Authority, made up of industry experts, consumer representatives, a physician and others, would issue an annual report laying out what it viewed as reasonable rate increases. Those considered unjustified could be blocked by a federal board. Customers might even qualify for rebates.

Senator Mitch McConnel continues to request that these bills be scraped due to a lack of support from America.

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Guess whats getting more swollen than Octomom during Springtime?  If you guessed Medicaid enrollments, then please come to my office now so I can take you out to lunch and then when the checks comes I will slap you for you stating the obvious and run out the back door.

In the middle of the greatest recession ever, more Americans are jumping on Medicaid on then on fad diets.  The total amount of new enrollments is a staggering 3 million for fiscal year June 2008 through 2009.  Which means there are now 46.8 million people enjoying the fruits of Medicaid, though I am not sure Medicaid offers any fruit.

The analysis by the Kaiser Family Foundation, a health policy and research organization, found that in three-fifths of the jurisdictions, including Maryland and the District, people rushed into the safety net for health coverage at more than twice the rate as the year before.

Medicaid directors said in interviews that despite early clues elsewhere that the economy may be starting to improve, the demand for government health coverage has not tapered off since last summer. “Nope. It hasn’t slowed down yet,” said John Folkemer, deputy secretary for health-care financing for Maryland, where the caseload rose by 20 percent from June 2008 to June 2009, the steepest increase in the country.

Like the rising demand for food stamps and welfare benefits, the increase in people turning to Medicaid reflects the millions of Americans who have lost jobs and economic self-reliance and are asking the government for basic help, in many instances for the first time.

Because the program is large and expensive, the spurt in Medicaid caseloads has produced far more damaging effects on state budgets than the other two programs. In the past year or two, many states have responded by reducing the medical services available to Medicaid patients or payments to doctors, hospitals and other providers of health care.

Now, 29 states are considering further reductions or have made them since their current fiscal year began, Thursday’s report said. Such strains exist even though the federal government has been giving states extra money for Medicaid as part of the economic stimulus efforts Congress set in motion a year ago. The extra subsidies are due to expire at the end of this year, and states are lobbying hard to continue them for at least six months.

The worsening financial burden imposed by Medicaid also has heightened some governors’ wariness about the approach to redesigning the nation’s health-care system that is favored by the White House and congressional Democrats. In the health-care bills passed by the House and the Senate, an expansion of health coverage to the uninsured would rely substantially on Medicaid. If the legislation were enacted, the federal government would pick up the cost for the first few years, but, after that, states would contribute a small portion.

“Reform is needed, but, gosh, the hard nut to crack is, how do you fund it?” said Charles Duarte, the administrator who oversees Medicaid in Nevada, where the caseload rose 13 percent in the year that ended in June.

Medicaid, created as part of the Great Society policies of the mid-1960s, is a shared responsibility of the federal government and states. The federal government pays part of the cost, depending on each state’s wealth, and requires a certain level of coverage, but states are free to set many of their program’s rules, including whether to furnish additional benefits.

In the Washington area, which has many low-income residents who have long relied on government help, the Medicaid rolls rose by 4 percent, compared with a 1 percent increase a year earlier. Virginia’s caseload increased by 8 percent, compared with slightly more than 4 percent the previous year.

In most states, however, the growth of Medicaid is a result of economic bad times. By the end of 2009, Nevada’s Medicaid rolls had shot up 20,000 above the 220,000 the state had forecast, Duarte said. Next week, he said, the state’s legislature, faced with revenue far lower than expected from gambling and sales, will hold special sessions to cut the budget.

Last summer, Duarte said, he was able to restore several reductions in benefits the legislature had cut not long before, including vision coverage and some dental care for adult Medicaid patients. Now, he said, as legislators look for new cuts, that list of services “is back on the table, with more added to it.”

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It should come as no surprise to most Americans that Generation Y (those youthful bastards under 30) are figuartively and literally dying for health reform as they are the most uninsured group in the country.  (Other than minorities I would guess.)

The great researchers at Pew have come out with a new study that shows 33% of this group are not covered by any type of health insurance.  19% are not covered in my Generation (X), and baby boomers are at 12%.  Those lucky seniors who are in the Silent Generation might be the last group to enjoy Social Security and Medicare as both programs are insolvent, and are 97% insured.

Of course these Millennials are allergic to news and due to their uninformed opinion making,  they have not shown much support for health reform, on the other hand they do support Xbox and skateboarding.  The group does favor the public option, but most are realistic and don’t expect health reform to fix their situation.  If you ask a Millenial their opinion about health reform, make sure to first take out their ipod headphones so they can hear you, and then don’t be surprised when they have no idea what health reform is!

Fewer than half of the Millenials support the health reform proposal, and 36% oppose it, and the rest were busy being whippersnappers!

The rest of the study showed a lack of support for health reform from the Baby Boomers and the Medicare group, why?  Because they expect free health coverage (yes they technically paid for it) when they hit 65.  Someone needs to slap around all the demographic groups and explain the seriousness of this situation.

What is also sad, is that all the people surveryed in this study seem unwilling to change their uninformed opinion despite the changes in this fluid situation. 

I wonder if they know what is happening in California right now and that the same thing will be happening across the country quite soon.

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In the past, what has come to be common knowledge is that racial inequalities in medical care not only exist, but are substantial.  Why do people of color tend to have less postive incomes then their white counterparts?  Is it due to financial differences or is it something else.  Well the studies show that it is not unfortuantely attributed to differences in income or education, but instead something completely different.

To put a reason for this disparity a group of researchers from Yale and the Urban Institute did a study of 133,000 patients who were treated for 10 specific surgeries in New York City and the surrounding burroughs from 2001 to 2004.

The results of the study which were just published on Monday found that across the board counting all 10 procedures, white patients were treated by better hospitals and surgeons (meaning that they came from higher volume facilities) then blacks, Asians, and Hispanic patients.

The final study showed that after averaging all procedures together white patients enjoyed better conditions in better facilites and by better staff in 37.6% of cases, while blacks only had this advantage in 20.6% of cases, 24% for Asians, and 26% for Hispanics.

These results show a consistent and identifable pattern of racism that is consistent for every group except for whites.  Again, the study was able to prove that economic status does not play a part in the resulting less preferential treatment of minorities, which leaves the question of what is causing the difference.

An example that the study showed was that Asians were likely to be either without health insurance or on Medicaid, even though they came from better socioeconomic neighborhoods than the black patients.

So again why the disparity?  The researchers have a couple of theories of course, but they are just that theories. 

One theory was that white patients have better information from friends and families about hospitals and doctors.  New York has tried to address this situation by publishing report cards on medical staff and hospitals.  Since the inception of the program, black patients have seen an increase in the quality of surgeons for coronary artery disease but still less than whites.

The final theory, is that even though New York City is a melting pot, it also anchors one of the five most segregated metropolitan areas in the country, according to U.S. census data. On top of that, only 9.5% of surgeons and 22% of hospitals in the study were classified as “high-volume,” and those hospitals may be clustered in neighborhoods populated by whites, they wrote. (To test this theory, it would be useful to see whether white and minority patients treated in a given hospital were equally likely to be treated by a high-volume surgeon.)

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Amid all the criticism from Washington and Kathleen Sebelius, Blue Cross of California has opted to hold off on their monster rate increase.  The 40% rate increase which Blue Cross has been defending for several days now with some pretty valid points has turned into a PR nightmare for the California’s largest for profit health insurance company.

The state insurance commissioner requested the delay on Monday after the states 700,000 individual health insurance policy holders began receiving these shocking increase notices for increases to start on March 1st.

California’s insurance commissioner is only armed with one method of denying the increase which is based on the state regulation that requires all insurers to spend a minimum of 70% of the health insurance premiums on health claims instead of using the profits for private jets and so forth.

Short of that, however the state is pretty much without any teeth.  In other words unless this can be proven the state must allow the increase.  If however they are violating this rue, they could lose their license to sell health insurance policies in California until they reduced their premiums.

As I showed in another article on the Blue Cross of California rate hike, Blue Cross is actually right now the most affordable health insurance company in California and because of their position they should enjoy an economy of scale in California which should allow them to dominate other companies in terms of premiums.

This issue has garnered national attention of the worst kind and the Obama administration has been like a rabid dog biting on Blue Cross legs.

“While a two-month delay offers some temporary relief,” said Kathleen Sebelius, the secretary of health and human services, “what California families need is long-term health insurance security. This rate increase underscores the urgency of passing real health insurance reform.”

The insurance commissioner of California, Mr. Steven Poizner might be a little familiar to California residents as he is currently running for governor of California, and will certainly be using this issue to make a name for himself by beating on “the defenseless company.”

“There are reasons to be suspicious that this rate increase might not be in compliance, I have a healthy skepticism about how you get to 39 percent.”    His skepticism is grounded in the fact that the increases are 3 times the rate of medical cost inflation, which is simply astounding considering how high and fast medical costs are inflating.

Anthem which is owned by Wellpoint one of the larger insurance companies in the country is pretty convinced the rates are justified but are taking a huge chance on the fact that their numbers are correct.  They are in a untenable position and though they are putting on a brave face with statements like these, “we welcome the regulatory review and are confident that our rates reflect anticipated medical costs,” I am pretty sure that their are not in a financial position that justifies such a ridiculous increase.

Basically, we have a quite volatile situation here, when you consider the publicity hungry insurance commissioner going after the rich health insurance company, and it should make for some good reading in the coming days.

The company has said the rates are justified because of escalating medical and pharmaceutical costs and because the recession is prompting healthy consumers to drop their coverage, leaving insurers with a smaller, sicker risk pool. Mr. Sassi said this week that Anthem lost money on the individual market in California last year. Mr. Poizner said he could not confirm that.

Mr. Sassi said the average rate increase would be 25 percent, and that fewer than one in four customers would see increases of 35 percent to 39 percent.

Mr. Poizner said he also was seeing “pretty significant” price increases on individual policies sold by other carriers, but he could not compare them to Anthem’s.

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Walgreens has been changing medical practices in this country without even knowing what it was doing at first.  What am I talking about?  How about the fact that many of the 50 million or so uninsured Americans go to Walgreens Urgent Care clinics for much of their care.  This has ravaged many of the private urgent care clinics and even the primary care centers.

In an interview with Reuters (http://www.reuters.com/article/idUSTRE6185LY20100209)  Greg Wasson the CEO of Walgreens says he believes that health reform has begun in spite of the government dropping the ball.

“Regardless of what comes out, the horse is out of the barn. Reform is occurring in this country today, I’ve supported the president’s goal of health reform. I do think we need health reform in this country, but what is exciting me is what is taking place already and the opportunity we have to play a role in that,” Wasson said.

After the great swine flu pandemic so to speak of last year, Walgreens has transformed itself into a primary community health center accross the country.

Regardless of what happens with the health reform bills, Washington is going to become the primary payer for health care in this country, and more so everyday.

But if you have been to a primary care doctor or urgent care clinic, you will notice that it seems like the traffic in these offices might be cut in half.  This is a good thing, as imagine a Costco of health care taking over, a sort of medical mall at discount prices.  This is the one trick that has yet to be tried.  Further, imagine this medical mall offers a health insurance policy with access to any of the providers in the mall.

Wasson readily admits to his plans in this interview, “the states across the country are challenged. One of the things I think we can do is work with states to help reduce their cost of Medicaid. We could offer convenient, low-cost healthcare through our clinics,” he said.

They are now even offering free diabetes testing as a way of further branding these clinics.

Still while he might claim that reform is already taking place, what he is missing is that tonight, more people will go to sleep without access to basic health care then ever before, and that no matter how many free diabetes tests Walgreens gives away this ain’t changing.

Wasson has already started shaping Walgreens to begin its bid to turn its 7,160 locations into a health provider.

How that looks may vary according to the needs of the community.

For example, in some urban stores in places like Chicago that have so-called food deserts — in which fresh foods are scarce and overpriced — the company is expanding its fresh foods offerings to include fruits and vegetables even as it brings back beer and wine and continues to stock tobacco.

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Anthem Blue Cross in California is a go getter.  You have to wake up pretty early in the morning to get one over on them.  From rescinding policies to now throwing 39% rate increases at its clients, Blue Cross has cornered the market on antagonizing its clients.

What made the meanies at Blue Cross throw a 39% rate increase at their clients?  Well in light of the fact that they made close to a $3 billion dollar profit last year, it is certainly not due to cash flow issues. 

One of the largest insurers in California covering nearly 800,000 Californians, Blue Cross’s rationale here can only be speculated as trying to get one final dig at their customers before health reform passes.

Then came the news that health reform wasn’t coming, and guess what?  They still plowed forward with this.  I personally am not licensed with them, and even if I were I would not hesitate to spout angry gesticulations in their general direction.  Our health insurance brokerage is licensed however, and after reading about this increase I thought it might be good to actually price their plans to see how they compare to other California health insurance companies.

Well guess what?  They were the cheapest company in California before this rate increase, and they will stilll be among the top after it.  However, if they are profitable by such a high percentage why go after this increase? 

They might have a point with their argument about health care costs rising, and an even better point about due to the economy many of their healthy client base has cancelled coverage as they can no longer afford it, leaving Blue Cross with a pretty unhealthy client base.  Of course all carriers would also have this same condition and they did not do this.

The response from state and federal regulators was swift and heartening. California Insurance Commissioner Steve Poizner, who can’t regulate rates directly but can limit insurers’ profit margins, announced that he was hiring an independent actuary to scrutinize the planned increase. The House Energy and Commerce Committee and Health and Human Services Secretary Kathleen Sebelius also launched inquiries. To truly protect consumers, though, Congress should pass a healthcare reform bill that makes it easier for people to switch insurers without sacrificing coverage.

The company has called on Congress to start over on healthcare reform, rather than trying to improve on the bills passed by the House and Senate. In particular, Chief Executive Angela Braly of WellPoint Inc., Anthem’s parent company, recently told the Wall Street Journal that lawmakers should find more effective ways to prod healthy people to buy insurance, promote competition among healthcare providers and put the brakes on rising costs. Those are all worthy aims, and the pending healthcare bills could be improved on all three fronts.

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Cigarette Tax to Pay for State Budget Deficits – Again!

As the states become more and more like homeless vagabonds and drug addicts looking for new ways to infuse cash into their depleted coffers they are targeting another group of addicts the tobacco addicts.

They want to increase the cigarette tax another $1 which would raise $9 billion to help close budget shortfalls, and hopefully convince more people to quit smoking.  Of course if too many people quit smoking then they would lose more tax revenues.  On the other, other hand another positive thing would be that there would be less smoking medical costs if more people quit, which would then save money as well for the states which spend millions on the medical effects of smoking for those without health insurance.

Only 33 percent of voters (or smokers) think that the tax is bollucks, as in some states they are already paying nearly $10 for a pack of cigarettes.

The report details the revenue and health benefits to each state of increasing its cigarette tax by $1 per pack. If every state and Washington, D.C., did so, they would:

• Raise $9.1 billion in new annual revenue;
• Prevent more than 2.3 million kids from becoming smokers;
• Prompt more than 1.2 million adult smokers to quit;
• Prevent more than 1 million premature, smoking-caused deaths; and
• Save $52.8 billion in health care costs.

The report, Tobacco Taxes: A Win-Win-Win for Cash-Strapped States, which is linked to above, was undertaken by a few anti smoking groups including the the Cancer Soceity and the Heart Association.

“This report shows that raising tobacco taxes is truly a win-win-win for the states. It is a budget win that will help protect vital programs like health care and education, a health win that will prevent kids from smoking and save lives, and a political win with the voters,” said Matthew L. Myers, president of the Campaign for Tobacco-Free Kids.

According to the national poll released with the report:

• By a 67 percent to 31 percent margin, voters favor a $1 per pack increase in the state tobacco tax, with 53 percent saying they “strongly” support the tobacco tax increase. This support crosses political lines, with a majority of Democrats (70 percent), Republicans (68 percent) and Independents (64 percent) favoring the increase.
• Voters far prefer raising the state tobacco tax to other options for addressing state budget deficits. While 60 percent supported increasing the tobacco tax for this purpose, more than 70 percent opposed every other option presented, including higher state income, gasoline and sales taxes and cuts to education, health care, transportation and law enforcement programs.
• By a margin of 59 percent to 35 percent, voters prefer a candidate for state office who supports the tobacco tax over one who opposes it. This preference is expressed by majorities of Democrats, Republicans and Independents.

“We have irrefutable evidence that raising the tobacco tax lowers smoking rates among adults and deters millions of children from picking up their first cigarette,” said John R. Seffrin, Ph.D., CEO, American Cancer Society Cancer Action Network. “An increase in tobacco tax rates is not only sound public health policy but a smart and predictable way to help boost the economy and generate long-term health savings for states facing deepening budget deficits.”

“When it comes to saving lives and injecting new revenue in depleted state coffers, we should not hesitate to support measures that will accomplish both,” said Nancy Brown, CEO of the American Heart Association. “Raising tobacco taxes will protect children and adults from tobacco use, reduce health care costs and revitalize critical health and education programs that too often fall victim to state budget cuts.”

“During these tough economic times, cigarette tax increases are both popular among voters and can significantly reduce long-term smoking-related health care costs,” said Charles D. Connor, American Lung Association president and CEO. “Spending some of the revenue on maintaining or increasing funding for tobacco prevention and cessation programs makes cigarette tax increases even more effective.”

The scientific evidence is clear that increasing cigarette prices is one of the most effective ways to reduce smoking, especially among youth. The report’s projections are based on research findings that every 10 percent increase in cigarette prices reduces youth smoking rates by about 6.5 percent, adult smoking rates by two percent, and total cigarette consumption by four percent.

According to the report, states can achieve even greater financial and health benefits if they also increase tax rates on other tobacco products, such as smokeless tobacco and cigars, and dedicate some of their tobacco tax revenues to fund programs to prevent kids from smoking and help smokers quit.

The current average state cigarette tax is $1.34 per pack, with rates ranging from a low of seven cents in South Carolina to a high of $3.46 in Rhode Island.

Tobacco use is the leading preventable cause of death in the United States, killing more than 400,000 people and costing $96 billion a year in health care costs. Every day, another 1,000 kids become regular smokers—one-third of them will die prematurely as a result.

The national survey of 847 registered voters was conducted from January 20-24, 2010, by International Communications Research and has a margin of error of plus or minus 3.4 percentage points. More information, including the full report, state-specific information and detailed poll results, can be found at www.tobaccofreekids.org/winwinwin.

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Copays seemingly go up every year, and hopefully insurers will take notice of this study as well, and do something about rocketing copayments.

The study had participation by nearly 900,000 seniors in 36 Medicare Advantage plans during 2001 to 2006.  Half of the plans raised their copays for office visits, and researchers were able to build statistical models which showed patterns of procrastination among the group in the higher copays.  Prescription drug coverage was not tested in the study, but if they were to study it, I can tell them the results.  Generics, Canada, and going without.

In the study, it seems that copays doubled from around $7 for the primary and $13 for the specialist to about $14 and $22 respectively, remember this is 2001 to 2006, and for the control group their copays stayed low at $8.33 at the primary and $11.38 at the specialist.

The results?  For every 100 people that enrolled in the plans that had increasing copays there were on average 20 fewer office visits but 2 additional hospital admissions and 13 more hospital days per year for this group then the control group.

The study also showed that the increases in copayments had the most profound effect on the poor and minorities in low income neighborhoods.

If you think about it the copayment system runs counter-intuitive to the entire idea of managed care, which is supposed to encourage preventative medicine.  Insurance Companies, I hope you are reading this.

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