Tagged Insurance

Cigna To Step Into War Against Opioid Epidemic

The health insurer plans to use predictive analytics to identify customers who are at the highest risk for an opioid overdose and develop partnerships in those areas to help combat the crisis. In other news: the government pulls funding for a pain relief training; a lobbying blitz has been launched on Capitol Hill as lawmakers vote on opioid measures; and more.

Atul Gawande Says U.S. Health System Is ‘Very Expensive Pile Of Junk.’ As Head Of Billionaires’ Initiative, Will He Be Able To Fix It?

The health world has been closely watching to see who Amazon, Berkshire Hathaway and JPMorgan Chase would choose to lead their health care initiative geared toward reining in astronomical costs. Atul Gawande, a highly respected doctor and writer on health care policy, is a “well-known luminary” in the field, but the pick was also a surprise to some because he lacks hands-on experience running a large organization.

‘Holy Cow’ Moment Changes How Montana’s State Health Plan Does Business

Marilyn Bartlett, the director administrator of Montana’s Health Care and Benefits Division, recalls thinking “holy cow” when she got an urgent directive from state legislators in late 2014: “You have to get these costs under control, or else.”

Increasing health care costs in the state workers’ health plan were helping hold down workers’ wages. The plan’s financial reserves were dwindling, heading for negative territory.

So began Barlett’s high-stakes game of chicken designed to change how the state did business with its 60 hospitals, which accounted for 43 percent of employee health care costs, turning the normal purchasing process on its head.

Instead of starting with the hospital’s list price and negotiating down for discounts, the state began telling these facilities how much it was willing to pay — a “reference price” — for each type of hospitalization. State officials used generally conservative Medicare rates as a baseline and starting point for the discussion.

Before the plan took effect, hospital charges for state employees for the same service had varied widely, with some hospitals charging three to six times the Medicare rate for some services.

To even out the disparities and save money, the state decided it would pay an average of 234 percent of Medicare rates — a level of payment that hospitals indicated they would accept and an amount the state calculated would allow an efficient hospital to deliver high-quality care and still profit.

While other states and some private employers have set prices they are willing to pay for some standardized procedures — such as a colonoscopies or hip replacements — Montana’s experiment is more sweeping, covering all hospital services, and it uses Medicare as a common yardstick.

Two years in, the state calls the effort a success, saving $15.6 million this year over the estimate of what it would have paid without the change. Meanwhile, its reserve fund has grown and is so healthy the state dipped into it for other needs.

Did The State Get The Payments Right?

“A centralized price-setting model has danger. It can overpay or underpay,” said Glenn Melnick, director of the Center for Health Policy and Management at the University of Southern California.

Lawmakers directed Marilyn Bartlett, the director administrator of Montana’s Health Care and Benefits Division, to get employee health costs under control, so she changed the way the state pays hospitals.(Courtesy of Marilyn Bartlett)

Like some other cost-control efforts, the Montana approach might lead to smaller numbers of hospitals that agree to participate in the state plan, he noted.

So far, there’s been no sign of that, said Bartlett: “No hospital has gone broke.”

But resistance is natural, said Damon Haycock, head of Nevada’s public employees’ benefits plan, because, ultimately, money saved for state workers is money hospitals don’t get.

There could be a ripple effect, as others in the community will want parity.

“If a state takes a hard line and says, we’re not paying more than X, then cities and counties and large employers would want the same deal,” he said. “And that becomes a massive political hurdle.”

To get buy-in, the state settled on the 234 percent, which many economists consider a relatively generous mark-up from standard Medicare payments.

Medicare doesn’t negotiate prices with hospitals or use hospital-set charges in its calculations. Instead, Medicare sets reimbursement through a complex formula that includes the cost of providing the service and the type of diagnoses. By its calculations, the government program pays hospitals enough to cover their services as well as a small profit.

Hospital officials, including many of those in Montana, disagree.

“When you look at total costs, Medicare probably pays 75 to 80 percent,” said Jay Doyle, president of St. James Healthcare in Butte. The facility, part of the SCL Health system, reported losing $9 million on its Medicare patients in 2016, the latest data available.

But economists say the prices are adequate if the hospitals spend the money wisely.

“Hospitals will say Medicare pays 90 cents on the dollar,” said Zack Cooper, an assistant professor of health policy and economics at Yale, which makes their argument sympathetic “for the first 15 seconds.”

In fact, for most hospitals, Medicare covers their costs, he added.

Reaching Out To The Holdouts

The Montana effort took aim at hospital-set prices, often called “chargemaster rates,” which to Bartlett were seemingly “going up and up.” She and the third-party administrator the state hired gathered data and dove into the new negotiations.

At some hospitals, Montana was shelling out more than three times what Medicare paid for inpatient care. Outpatient services showed an even wider range. Some hospitals were paid more than six times the Medicare rates.

When Bartlett’s team settled on paying an average of 234 percent of Medicare for inpatient and outpatient care, the decision involved a delicate balance: Set the bar too high and some hospitals would raise prices; too low, and some could cut back services or refuse to sign on.

As the July 1, 2016, deadline approached, five hospitals were holding out — and the state didn’t want huge gaps in its hospital network.

“I was absolutely freaking,” said Bartlett.

Four of the five remaining agreed before the deadline. The last major holdout was Benefis Health System in Great Falls, which argued that it was already one of the lower-cost hospitals in the state and that it should save its biggest discounts for its biggest customers.

Benefis declined requests for an interview.

At the time, state workers and their unions began a classic public relations arm-twisting campaign. Workers were told they might get hit with out-of-network bills from Benefis if it did not sign on. Such bills represent the balance between what the state pays and what hospitals charge.

Employee unions urged members and other interested groups to call or write Benefis, urging it to get on board.

The hospital is “kind of a monopoly, used to calling their own tune,” because it is the only major hospital within 90 miles, recalls Keith Leathers, an investigator with Montana’s Department of Public Health and Human Services. He was among those employees who picked up the phone, left messages and wrote notes.

By the end of July, Benefis finally signed on.

Will Others Follow Suit?

“A lot of states could learn from Montana,” said William Kramer, executive director for National Health Policy with the Pacific Business Group on Health, a coalition of employers. Within the state, companies and cities in the state are watching the experiment as well.

There are discussions underway about expanding Montana’s program beyond 35,000 state workers to cover city, county and university employees.

“If you want to get at pricing abuse by hospitals, why wouldn’t every single employer do that,” said Francois de Brantes, an independent benefits consultant and former director of the Center for Payment Innovation at Altarum, a Washington, D.C.-based nonprofit research and consulting firm.

That, of course, makes hospitals nervous since they have traditionally compensated for low reimbursement from some insurers by charging others more.

“If [that] happened, it would have huge economic impact,” including layoffs at his hospital, said Doyle of St. James Healthcare.

But Cooper, the Yale economist, suggested that hospitals paid based on multiples of Medicare will be fine if they deploy their earning wisely rather than on duplicative services, additional MRI machines or gleaming, marble-filled lobbies.

For many, he said, “it’s a function of investment decisions, not that Medicare doesn’t pay enough.”

‘Holy Cow’ Moment Changes How Montana’s State Health Plan Does Business

Marilyn Bartlett, the director administrator of Montana’s Health Care and Benefits Division, recalls thinking “holy cow” when she got an urgent directive from state legislators in late 2014: “You have to get these costs under control, or else.”

Increasing health care costs in the state workers’ health plan were helping hold down workers’ wages. The plan’s financial reserves were dwindling, heading for negative territory.

So began Barlett’s high-stakes game of chicken designed to change how the state did business with its 60 hospitals, which accounted for 43 percent of employee health care costs, turning the normal purchasing process on its head.

Instead of starting with the hospital’s list price and negotiating down for discounts, the state began telling these facilities how much it was willing to pay — a “reference price” — for each type of hospitalization. State officials used generally conservative Medicare rates as a baseline and starting point for the discussion.

Before the plan took effect, hospital charges for state employees for the same service had varied widely, with some hospitals charging three to six times the Medicare rate for some services.

To even out the disparities and save money, the state decided it would pay an average of 234 percent of Medicare rates — a level of payment that hospitals indicated they would accept and an amount the state calculated would allow an efficient hospital to deliver high-quality care and still profit.

While other states and some private employers have set prices they are willing to pay for some standardized procedures — such as a colonoscopies or hip replacements — Montana’s experiment is more sweeping, covering all hospital services, and it uses Medicare as a common yardstick.

Two years in, the state calls the effort a success, saving $15.6 million this year over the estimate of what it would have paid without the change. Meanwhile, its reserve fund has grown and is so healthy the state dipped into it for other needs.

Did The State Get The Payments Right?

“A centralized price-setting model has danger. It can overpay or underpay,” said Glenn Melnick, director of the Center for Health Policy and Management at the University of Southern California.

Lawmakers directed Marilyn Bartlett, the director administrator of Montana’s Health Care and Benefits Division, to get employee health costs under control, so she changed the way the state pays hospitals.(Courtesy of Marilyn Bartlett)

Like some other cost-control efforts, the Montana approach might lead to smaller numbers of hospitals that agree to participate in the state plan, he noted.

So far, there’s been no sign of that, said Bartlett: “No hospital has gone broke.”

But resistance is natural, said Damon Haycock, head of Nevada’s public employees’ benefits plan, because, ultimately, money saved for state workers is money hospitals don’t get.

There could be a ripple effect, as others in the community will want parity.

“If a state takes a hard line and says, we’re not paying more than X, then cities and counties and large employers would want the same deal,” he said. “And that becomes a massive political hurdle.”

To get buy-in, the state settled on the 234 percent, which many economists consider a relatively generous mark-up from standard Medicare payments.

Medicare doesn’t negotiate prices with hospitals or use hospital-set charges in its calculations. Instead, Medicare sets reimbursement through a complex formula that includes the cost of providing the service and the type of diagnoses. By its calculations, the government program pays hospitals enough to cover their services as well as a small profit.

Hospital officials, including many of those in Montana, disagree.

“When you look at total costs, Medicare probably pays 75 to 80 percent,” said Jay Doyle, president of St. James Healthcare in Butte. The facility, part of the SCL Health system, reported losing $9 million on its Medicare patients in 2016, the latest data available.

But economists say the prices are adequate if the hospitals spend the money wisely.

“Hospitals will say Medicare pays 90 cents on the dollar,” said Zack Cooper, an assistant professor of health policy and economics at Yale, which makes their argument sympathetic “for the first 15 seconds.”

In fact, for most hospitals, Medicare covers their costs, he added.

Reaching Out To The Holdouts

The Montana effort took aim at hospital-set prices, often called “chargemaster rates,” which to Bartlett were seemingly “going up and up.” She and the third-party administrator the state hired gathered data and dove into the new negotiations.

At some hospitals, Montana was shelling out more than three times what Medicare paid for inpatient care. Outpatient services showed an even wider range. Some hospitals were paid more than six times the Medicare rates.

When Bartlett’s team settled on paying an average of 234 percent of Medicare for inpatient and outpatient care, the decision involved a delicate balance: Set the bar too high and some hospitals would raise prices; too low, and some could cut back services or refuse to sign on.

As the July 1, 2016, deadline approached, five hospitals were holding out — and the state didn’t want huge gaps in its hospital network.

“I was absolutely freaking,” said Bartlett.

Four of the five remaining agreed before the deadline. The last major holdout was Benefis Health System in Great Falls, which argued that it was already one of the lower-cost hospitals in the state and that it should save its biggest discounts for its biggest customers.

Benefis declined requests for an interview.

At the time, state workers and their unions began a classic public relations arm-twisting campaign. Workers were told they might get hit with out-of-network bills from Benefis if it did not sign on. Such bills represent the balance between what the state pays and what hospitals charge.

Employee unions urged members and other interested groups to call or write Benefis, urging it to get on board.

The hospital is “kind of a monopoly, used to calling their own tune,” because it is the only major hospital within 90 miles, recalls Keith Leathers, an investigator with Montana’s Department of Public Health and Human Services. He was among those employees who picked up the phone, left messages and wrote notes.

By the end of July, Benefis finally signed on.

Will Others Follow Suit?

“A lot of states could learn from Montana,” said William Kramer, executive director for National Health Policy with the Pacific Business Group on Health, a coalition of employers. Within the state, companies and cities in the state are watching the experiment as well.

There are discussions underway about expanding Montana’s program beyond 35,000 state workers to cover city, county and university employees.

“If you want to get at pricing abuse by hospitals, why wouldn’t every single employer do that,” said Francois de Brantes, an independent benefits consultant and former director of the Center for Payment Innovation at Altarum, a Washington, D.C.-based nonprofit research and consulting firm.

That, of course, makes hospitals nervous since they have traditionally compensated for low reimbursement from some insurers by charging others more.

“If [that] happened, it would have huge economic impact,” including layoffs at his hospital, said Doyle of St. James Healthcare.

But Cooper, the Yale economist, suggested that hospitals paid based on multiples of Medicare will be fine if they deploy their earning wisely rather than on duplicative services, additional MRI machines or gleaming, marble-filled lobbies.

For many, he said, “it’s a function of investment decisions, not that Medicare doesn’t pay enough.”

Administration Eases Way For Small Businesses To Buy Insurance In Bulk

Small employers will more easily be able to band together to buy health insurance under rules issued Tuesday by the Trump administration, but the change could raise premiums for plans sold through the Affordable Care Act’s online marketplaces, analysts say.

The move loosens restrictions on so-called association health plans, allowing more businesses, including sole proprietors, to join forces to buy health coverage in bulk for their workers.

By effectively shifting small-business coverage into the large-group market, it exempts such plans from ACA requirements for 10 “essential” health benefits, such as mental health care and prescription drug coverage, prompting warnings of “junk insurance” from consumer advocates.

Supporters say the new Labor Department rules, which the government estimated could create health plans covering as many as 11 million people, will lead to more affordable choices for some employers.

When it comes to health insurance, “the regulatory burden on small businesses should certainly not be more than that on large companies,” Labor Secretary Alexander Acosta told reporters Tuesday.

Existing rules limit association plans to groups of employers in the same industry in the same region.

The new regulations eliminate the geographical restriction for similar employers, allowing, for example, family-owned auto-repair shops in multiple states to offer one big health plan, said Christopher Condeluci, a health benefits lawyer and former Senate Finance Committee aide.

The rules, to be implemented in stages into next year, also allow companies in different industries in the same region to form a group to offer coverage — even if the only reason is to provide health insurance.

Like other coverage under the ACA, association insurance plans will still be required to cover preexisting illnesses.

Analysts warn that because these changes will likely siphon away employers with relatively healthy consumers from ACA coverage into less-expensive trade-association plans, the result could be higher costs in the online marketplaces.

“If you have a group that is healthier than average, you might get a better rate from one of these plans, and your broker is going to come and say, ‘Hey, I can get you a better deal,’” said Dan Mendelson, president of Avalere Health, a consulting firm.

That would mean that, on balance, consumers insured through ACA small-group and individual plans could be older, sicker and more expensive, adding to years of erosion of the ACA marketplaces engineered by Republicans hostile to the law.

Loosening rules for association plans would lead to 3.2 million people leaving the ACA plans by 2022 and raising premiums for those remaining in individual markets by 3.5 percent, Avalere calculated this year.

America’s Health Insurance Plans, the largest medical insurance trade group, issued a statement saying the regulation “may lead to higher premiums” in ACA insurance and “could result in fewer insured Americans.”

Unlike ACA plans, association coverage does not have to include benefits across the broad “essential” categories, including hospitalization and emergency care.

The National Association of Insurance Commissioners previously warned that such plans “threaten the stability of the small group market” and “provide inadequate benefits and insufficient protection to consumers.”

The American Academy of Actuaries has expressed similar concerns.

Business groups praised the change, proposed in draft form earlier this year.

“We’ve been advocating for association health plans for almost 20 years, and we’re pleased to see the department moving aggressively forward,” said David French, senior vice president of government relations for the National Retail Federation.

Association plans have been around for decades, although enrollment has been more limited since the ACA’s passage. While some of the plans have worked well for their members, others have a checkered history.

In April, for example, Massachusetts regulators settled with Kansas-based Unified Life Insurance Company, which agreed to pay $2.8 million to resolve allegations that it engaged in deceptive practices, such as claiming it covered services that it did not.

The coverage “was sold across state lines and was issued through a third-party association,” according to a release from the Massachusetts attorney general’s office.

Administration Eases Way For Small Businesses To Buy Insurance In Bulk

Small employers will more easily be able to band together to buy health insurance under rules issued Tuesday by the Trump administration, but the change could raise premiums for plans sold through the Affordable Care Act’s online marketplaces, analysts say.

The move loosens restrictions on so-called association health plans, allowing more businesses, including sole proprietors, to join forces to buy health coverage in bulk for their workers.

By effectively shifting small-business coverage into the large-group market, it exempts such plans from ACA requirements for 10 “essential” health benefits, such as mental health care and prescription drug coverage, prompting warnings of “junk insurance” from consumer advocates.

Supporters say the new Labor Department rules, which the government estimated could create health plans covering as many as 11 million people, will lead to more affordable choices for some employers.

When it comes to health insurance, “the regulatory burden on small businesses should certainly not be more than that on large companies,” Labor Secretary Alexander Acosta told reporters Tuesday.

Existing rules limit association plans to groups of employers in the same industry in the same region.

The new regulations eliminate the geographical restriction for similar employers, allowing, for example, family-owned auto-repair shops in multiple states to offer one big health plan, said Christopher Condeluci, a health benefits lawyer and former Senate Finance Committee aide.

The rules, to be implemented in stages into next year, also allow companies in different industries in the same region to form a group to offer coverage — even if the only reason is to provide health insurance.

Like other coverage under the ACA, association insurance plans will still be required to cover preexisting illnesses.

Analysts warn that because these changes will likely siphon away employers with relatively healthy consumers from ACA coverage into less-expensive trade-association plans, the result could be higher costs in the online marketplaces.

“If you have a group that is healthier than average, you might get a better rate from one of these plans, and your broker is going to come and say, ‘Hey, I can get you a better deal,’” said Dan Mendelson, president of Avalere Health, a consulting firm.

That would mean that, on balance, consumers insured through ACA small-group and individual plans could be older, sicker and more expensive, adding to years of erosion of the ACA marketplaces engineered by Republicans hostile to the law.

Loosening rules for association plans would lead to 3.2 million people leaving the ACA plans by 2022 and raising premiums for those remaining in individual markets by 3.5 percent, Avalere calculated this year.

America’s Health Insurance Plans, the largest medical insurance trade group, issued a statement saying the regulation “may lead to higher premiums” in ACA insurance and “could result in fewer insured Americans.”

Unlike ACA plans, association coverage does not have to include benefits across the broad “essential” categories, including hospitalization and emergency care.

The National Association of Insurance Commissioners previously warned that such plans “threaten the stability of the small group market” and “provide inadequate benefits and insufficient protection to consumers.”

The American Academy of Actuaries has expressed similar concerns.

Business groups praised the change, proposed in draft form earlier this year.

“We’ve been advocating for association health plans for almost 20 years, and we’re pleased to see the department moving aggressively forward,” said David French, senior vice president of government relations for the National Retail Federation.

Association plans have been around for decades, although enrollment has been more limited since the ACA’s passage. While some of the plans have worked well for their members, others have a checkered history.

In April, for example, Massachusetts regulators settled with Kansas-based Unified Life Insurance Company, which agreed to pay $2.8 million to resolve allegations that it engaged in deceptive practices, such as claiming it covered services that it did not.

The coverage “was sold across state lines and was issued through a third-party association,” according to a release from the Massachusetts attorney general’s office.

Unwieldy Health Costs Often Stand Between Teachers And Fatter Paychecks

As teacher strikes flared this spring in more than half a dozen states, from West Virginia to Arizona, protesters bemoaned stagnant salaries, overcrowded classrooms and a lack of basic supplies like textbooks and computers.

But often missing from hand-scrawled placards and fiery speeches was an issue that has contributed greatly to the financial woes of America’s schools: skyrocketing health care costs.

Many teachers, like other public employees, have traditionally accepted a trade-off: In exchange for relatively low salaries, they could expect relatively generous benefits, including pensions and low- or no-cost health premiums.

But in an era of $100,000-a-year drugs and government budget cuts, school districts are struggling to find the money to keep up their end of the bargain, forced to take away from classroom funding and even modest, cost-of-living raises. Many cash-strapped school boards, cities and legislatures view health care benefits as an unpredictable budget-buster.

Meanwhile, teachers are being asked to fork over more of their paychecks to keep their health coverage, even as budget cuts have impelled them to use their own money for classroom supplies and to crowdsource money to buy computers.

In Jersey City, N.J., where health care expenses have gone up an average of 10 percent annually as district funding has remained flat, teachers staged a one-day strike in March to protest rising costs.

But with an underfunded school system and a $110 million health care bill that is expected to increase another 13 percent this year, teachers and officials accepted a mutually imperfect solution that included changes to their health care plan to end the strike and avoid cuts that would have gutted local schools.

“We’re talking about 300 teachers being laid off to be able to afford our health care bill,” said Sudhan Thomas, president of the Jersey City Public Schools’ board of education.

While the teacher strikes have ebbed with the school year, deals brokered to end walkouts mostly offered temporary fixes, with no long-term solution in sight.

Proposed cuts to health benefits in West Virginia were also behind the first strike this year, shuttering the state’s public schools for nine days and inspiring similar protests in several states. When officials initially extended teachers a 1 percent pay raise, small in comparison to an imminent hike in their health insurance contributions, teachers rejected the offer.

“You really know you have arrived when you become a verb,” said David Haney, executive director of the West Virginia Education Association, whose wife is a teacher. “Don’t make me go West Virginia on you.”

A Pay Equation That Doesn’t Add Up

Teacher pay was below the national average of $59,660 in the six states that saw significant demonstrations this year — West Virginia, Oklahoma, Arizona, Kentucky, Colorado and North Carolina. But teachers are losing ground nationally.

The average teacher salary in the United States has decreased by 4 percent since 2009, adjusted for inflation, according to a report released in April by the National Education Association, an advocacy group for public school teachers. During that time, public schools have seen their revenue shrink, with federal funding dropping 19.5 percent, particularly after Congress’ across-the-board spending cuts known as budget sequestration took effect in 2013.

As funding has declined, the cost of health insurance has gone up. State and local governments paid 14.5 percent more last year to cover a primary, secondary or special education teacher and her or his family than they did in 2008, adjusted for inflation.

According to that data from the Bureau of Labor Statistics (BLS), in March 2017, family coverage for one teacher cost state and local governments an average of $1,010.85 per month.

Put another way, a 2015 report from the George W. Bush Institute’s Education Reform Initiative estimated that it cost about $550 per pupil to cover American teachers’ insurance expenses.

Educators have also felt the sting of growing health insurance costs, especially as officials have shifted some of the burden to them. Primary, secondary and special education teachers paid 25.4 percent more last year to insure themselves and their families than they did in 2008, according to BLS data adjusted for inflation.

Teachers paid an average of $585.71 per month — more than $7,000 annually — in premiums for family health insurance coverage in March 2017.

For early-career teachers, that price is especially unmanageable. In Pueblo, Colo. — where teachers secured raises and an additional $50 a month toward health insurance premiums after walking out in May — a new teacher makes $35,277, according to Suzanne Ethredge, president of the Pueblo Education Association.

And even where school systems offer teachers generous plans, with low deductibles and minimal premium contributions, the educators frequently have to pick up the costs for family members.

Many States, Common Themes

The standoff in West Virginia typified the strains in states grappling with rising benefit costs on budgets strained by tax cuts and the recession.

Teachers, like other West Virginia public employees, pay for insurance based on what they earn. For a plan that allows some choice of doctors and hospitals, that means $59 per month for someone making less than $20,000, but $164 per month for someone making more than $125,000.

Last fall, the Public Employees Insurance Agency floated the ideas of slashing the number of salary tiers used to calculate contributions, adding spouses’ salaries in those calculations and charging per person for family coverage rather than a flat fee.

The agency further announced that state employees would soon be required to use a wellness app called Go365, incurring penalties for failing to meet their health goals or for declining to use the system altogether.

So when state lawmakers proposed a mere 1 percent raise to an average salary of just $45,555, teachers pushed back. They refused to return to work until officials agreed to a 5 percent raise, scuttled the Go365 plan and delayed the health care hikes so a task force could review them.

In Oklahoma, the strikers publicly focused their complaints on operational costs like textbooks and salaries. They secured roughly an extra half a billion dollars, said Alicia Priest, president of the Oklahoma Education Association. “We got everything that we could out of legislators this year,” she said.

But Priest said health care costs remain a serious issue for school personnel. While the state covers teachers’ individual premiums, covering a spouse and children can cost an additional $1,200 per month, she said — a significant portion of a teacher’s starting salary.

She said that some teacher aides work only for the health insurance for their families — in some cases writing a check to the district to cover the difference between meager salaries and their premiums.

While the advent of summer break has calmed the protests, future strikes look likely, said Paul Reville, a professor at the Harvard Graduate School of Education and former Massachusetts secretary of education. The fact that most teachers negotiated at least some concessions proved the tactic effective enough, especially as health care costs continue to rise.

“The shoe is pinching,” he said, “and people are reacting.”

Must-Reads Of The Week From Brianna Labuskes

President Donald Trump’s summit with North Korean leader Kim Jong Un may have stolen a bit of the spotlight from health care this week, but there’s still plenty of news to go around in our corner of the world. Here’s what you may have missed.

Republicans are cringing at the administration’s decision not to defend the health law’s preexisting condition provision. The move is likely to serve as a tailor-made soundbite for Democrats as lawmakers hit the campaign trail for the midterms. In fact, Dems are already going after the decision as “a sick joke,” while Senate Majority Leader Mitch McConnell (R-Ky.) is doing damage control. “Everybody I know in the Senate — everybody — is in favor of maintaining coverage for preexisting conditions,” McConnell told reporters in the Capitol. “There is no difference in opinion about that whatsoever.”

Politico: Trump’s Latest Health Care Move Squeezes Republicans

The New York Times: A ‘Sick Joke’: Democrats Attack Health Secretary On Pre-Existing Conditions

Politico: McConnell: ‘Everybody’ In Senate Likes Pre-Existing Condition Safeguards


Insurers are less than pleased with a court’s decision that they are not owed billions of dollars from the government under the health law’s risk corridors program. The program was designed to entice insurers into the marketplace with promises of covering their financial risk. But the panel said the government doesn’t have to pay insurers the money because Congress had taken action — after the health law’s passage — requiring the program to be budget neutral year after year. Insurers complain the rug was pulled out from under them.

The Wall Street Journal: Federal Government Doesn’t Have To Pay Billions To Health Insurers, Court Rules


The big dogs in the insurance industry are slowly inching toward a model where they could deny emergency room claims — and hospitals, doctors and lawmakers are all livid imagining a world where patients worry about whether their visits are going to be covered before seeking emergency care. The companies, though, argue that unnecessary ER visits are a huge factor in driving up medical costs. They’re not wrong, but the subject has always been taboo before.

Politico: Insurers Spark Blowback By Reducing Emergency Room Coverage


CRISPR is so hot right now it even spawned a (canceled) TV show. But a report that found genes edited by the technology could essentially be cancer “ticking time bombs” sent stocks spiraling this week.

Stat: CRISPR-Edited Cells Might Cause Cancer, Two Studies Find


Lawmakers are gearing up to consider a whopping 57 measures in an opioid package that is sure to win both Democrats and Republicans political points — conveniently just before the midterms. But advocates say the bills may still fall short of what’s needed to battle the country’s epidemic.

Stat: Can Major Opioids Legislation Make A Dent In A National Epidemic?


And in the miscellaneous file this week: A report confirms that sexual harassment is rampant in the academic sciences (“Most of that harassment is not the Harvey Weinstein harassment. It’s the everyday put-downs, and exclusions and belittlings,” said one woman); an ALS scientist who was diagnosed with the disease after he started researching it says he finds reason to live by helping others fight the condition that has ravaged his body; a nationwide survey reports that the kids are not all right, with sadness and hopelessness on the rise in teens (they’re also drinking less milk for what it’s worth); and how being black in America can deeply affect your health.

The Washington Post: Half Of Women In Science Experience Harassment, A Sweeping New Report Finds

The Washington Post: Devastated By ALS, Trying To Save Others

The New York Times: Sex And Drugs Decline Among Teens, But Depression And Suicidal Thoughts Grow

The Atlantic: Being Black In America Can Be Hazardous To Your Health


As you’re planning your weekend, you should probably know the oft-touted Mediterranean diet report has been retracted as flawed. But if you’re a fish, olive oil and nuts person, don’t worry, experts still think the diet is beneficial to heart health. Meanwhile, I’ll be over here worrying about my DNA’s digital footprint.

Podcast: KHN’s ‘What The Health?’ California Here We Come

 

Health care is a big political issue, but no place more than in California. In San Francisco last week, voters overwhelmingly approved a ballot measure upholding a ban on flavored tobacco products — over the vehement objections of the tobacco industry.

And the state’s activist attorney general, Xavier Becerra, is leading a group of Democratic officials from more than a dozen states defending the Affordable Care Act in a case filed in Texas. That is important given that the Trump administration’s Justice Department decided not to defend the law in full from charges that changes made by Congress in last year’s tax law invalidates the health law.

This week’s panelists for KHN’s “What the Health?” are: Julie Rovner of Kaiser Health News, Anna Maria Barry-Jester of FiveThirtyEight.com, Carrie Feibel of KQED San Francisco and Joanne Kenen of Politico.

Among the takeaways from this week’s podcast:

  • Republicans and Democrats had been gearing up for a midterm election debate on who is responsible for higher health insurance costs. But that shifted last week to an argument over whether consumers with preexisting conditions should be guaranteed coverage following the Justice Department’s brief saying changes to the ACA invalidated those protections.
  • In California, there is widespread support among Democrats for a single-payer health system. But the term is somewhat amorphous. For some officials, it is a catch-all phrase that seems to suggest strong efforts with current programs to get the uninsured rate down to zero, while still keeping much of the current insurance system in place.
  • Becerra has filed a suit against Sutter Health, a giant in the hospital industry in Northern California, alleging that consolidation has resulted in anti-competitive pricing practices.
  • San Francisco’s adoption of a referendum to ban flavored tobacco products could lead other local governments to follow suit. The measure included not only products with flavors allegedly geared to young people, but also menthol cigarettes, which make up about 30 percent of the market.

Plus, for “extra credit,” the panelists recommend their favorite health stories of the week they think you should read, too:

Julie Rovner: The New York Times, “Elizabeth Warren And A Scholarly Debate Over Bankruptcy That Won’t Go Away,” by Margot Sanger-Katz.

Anna Maria Barry-Jester: The Atlantic, “Being Black In America Can Be Hazardous To Your Health,” by Olga Khazan.

Carrie Feibel: KQED, “In The Land Of Legal Weed, Drug Education Moves From ‘Don’t’ To ‘Delay,’” by Carrie Feibel.

Joanne Kenen: The Miami Herald, “She Dreamed Of Getting Plastic Surgery In Miami. Three Days Later, She Was Dead,” by Sarah Blaskey, Sonia Osorio, and Daniel Chang.

To hear all our podcasts, click here.

And subscribe to What the Health? on iTunesStitcher or Google Play.

5 Things To Know About Medicaid Work Requirements

The Trump administration’s decision in January to give states the power to impose work requirements on Medicaid enrollees faces a federal court hearing Friday.

The lawsuit before the U.S. District Court in Washington, D.C., will determine whether tens of thousands of low-income adults in Kentucky will have to find jobs or volunteer in order to retain their health coverage.

But the ruling could have far-reaching implications affecting millions of enrollees nationwide and determining how far the Trump administration can go in changing Medicaid without congressional action.

Kentucky was the first of four states, so far, to win federal approval to advance a work requirement. Indiana, Arkansas and New Hampshire are the others. Each is now in the early stages of implementation.

Arkansas, for instance, in June began having Medicaid enrollees inform the state about their work status. In September, the state could begin disenrolling members who fail to report or meet the work rules.

Seven more states — Arizona, Kansas, Maine, Mississippi, Ohio, Utah and Wisconsin — have applications pending and several others are poised to join them.

Kentucky’s legal challenge encapsulates a debate about two competing views of the role of Medicaid, the nation’s largest health program that covers nearly 75 million low-income Americans.

The Trump administration and many conservatives see it as a welfare program that should provide only temporary help and should prepare enrollees to gain employment and negotiate private health insurance.

Democrats, advocates for the poor and most legal experts see Medicaid as a health program meant to help the nation’s poorest citizens access health coverage. They say the administration’s approach of requiring enrollees to work to get health coverage is backward because enrollees need health coverage so they are healthy enough to work.

“There is zero evidence to suggest that depriving people of Medicaid will lead to greater levels of employer insurance,” 40 health policy scholars wrote in an amicus brief supporting the lawsuit filed on behalf of several Kentucky Medicaid enrollees.

“The CMS work ‘demonstration’ destroys, not improves, Kentucky’s substantial health care achievements and defeats, rather than promotes, Medicaid’s purpose as a safety net insurer,” according to the brief.

The 2010 Affordable Care Act spurred 33 states to expand Medicaid to nondisabled adults without children. Before that, the program mainly served children, pregnant women and people with disabilities.

That expansion, which provided billions in new federal funding to states, triggered an unprecedented drop in uninsured rates nationwide and tempted some Republican governors to pursue the additional health care dollars. But some of these GOP-controlled states also sought to add the new work requirement, in part to show conservative voters they weren’t simply providing a government handout to poor adults.

States that didn’t expand Medicaid and have some of the strictest eligibility limits in the country —including Kansas and Mississippi — also applied for work requirement waivers.

Here are five things to know as this court case unfolds:

1. Why do the Trump administration and states want to add the new work requirement?

Top Trump officials say the work requirement is meant to help enrollees find jobs. They say people who work or do volunteer service are healthier. Seema Verma, administrator of the U.S. Centers for Medicare & Medicaid Services, said Medicaid should be a “hand up” not a handout.

According to CMS, while the work requirement is a change in policy, it still fits within the agency’s long-standing missions of promoting health and improving health outcomes.

2. How does the work requirement work?

Kentucky’s program would require nondisabled adults each month to participate in 80 hours of work, job training, education or other qualified “community engagement.”

Those who are exempt include children and former foster care kids; pregnant women; seniors; people who are the primary caretakers for a child or a disabled adult; those who are deemed medically frail or diagnosed with an acute medical condition that would prevent them from working; and full-time students.

Adults in northern Kentucky would have to begin registering their work hours this summer, and the rest of the state would follow by the end of 2018.

State officials acknowledge the new requirement could be complicated for many enrollees. “We need to be careful and thoughtful how we roll out the ‘community engagement,’ recognizing this is a huge change,” said Kristi Putnam, deputy secretary for Kentucky’s Cabinet for Health and Family Services.

States have set up different rules on how many hours a month Medicaid enrollees must work or volunteer and who is exempt.

In Arkansas, everyone enrolled in Medicaid has to document their work hours through an online portal created by the state — with no option to submit information in person, over the phone or by mail. Critics of the work requirement fear that will be a barrier, considering the state has the second-lowest rate of home internet access in the nation.

3. What are the main objections to the work requirement from a legal and practical standpoint?

Critics say the requirement would lead many low-income people to lose their health coverage and, therefore, hinder their ability to get medical care. They note Kentucky’s own projections show that 95,000 Medicaid enrollees would lose coverage within five years.

The work-requirement approvals were based on the Health and Human Services secretary’s authority to test new ways of providing Medicaid coverage. The critics also argue, though, that the Trump administration is overstepping its statutory boundaries because the requirement would reduce eligibility rather than expand it.

Lastly, work requirement opponents note most people on Medicaid already work — or go to school, have a disability or care for relatives.

A June 12 Kaiser Family Foundation study concluded that only 6 percent of able-bodied adults on Medicaid who are targeted by states’ work requirements are not already working and unlikely to qualify for an exemption. In addition, 6 in 10 nondisabled adults on Medicaid work at least part time, although they often aren’t offered health benefits through those jobs or can’t afford them. (Kaiser Health News is an editorially independent program of the foundation.)

Surveys show that many Medicaid enrollees who don’t work are in job training, go to school or are taking care of a child or an elderly relative, conditions that would make them exempt from the new mandate.

4. When is the court expected to rule, and could this issue go to the Supreme Court?

Both sides expect a quick decision, likely by late June. But an appeal is likely no matter who wins.

If the Trump administration wins, it’s uncertain if plaintiffs will be able to get a stay on the work requirement taking effect while an appeal is in process.

5. While the work requirement is getting most of the attention, what else is at stake in the court case Friday?

The lawsuit filed by advocates on behalf of Medicaid enrollees seeks to overturn the entire Kentucky Medicaid waiver approved by the Trump administration in January.

Kentucky’s waiver also sets precedent because it would become the first state to charge Medicaid premiums of up to 4 percent of an individual’s income. The current limit has been 2 percent. Moreover, Kentucky would become the first state to lock out Medicaid enrollees from coverage for up to six months for failure to timely renew their coverage or failure to alert the state if their income or family circumstances have changed.

California’s Attorney General Vows National Fight To Defend The ACA

California Attorney General Xavier Becerra pledged Friday to redouble his efforts as the Affordable Care Act’s leading defender, saying attacks by the Trump Administration threaten health care for millions of Americans.

Becerra’s pledge came in response to an announcement from the administration Thursday that it would not defend key parts of the Affordable Care Act in court. The administration instead called on federal courts to scuttle the health law’s protection for people with preexisting medical conditions and its requirement that people buy health coverage.

Becerra accused the administration of going “AWOL.” It “has decided to abandon the hundreds of millions of people who depend on” the law, he said in an interview with Kaiser Health News.

“It’s, simply put, an attack on the health care that millions of Americans have come to count on, and California, being the most successful state in implementing the Affordable Care Act, stands to lose perhaps more than anyone else.”

About 1.5 million Californians buy coverage through the state’s ACA exchange, Covered California, and nearly 4 million have joined Medicaid as a result of the program’s expansion under the law.

The state has been at the forefront in resisting many Trump Administration policies, including on health care and immigration.

“This is not a new experience for us under this new Trump era of having to defend Californians,” Becerra said. In the case of health care, “fortunately we have 16 other  [Democratic attorneys general] who are prepared to do it with us. ”

At issue is a lawsuit filed by 20 Republican state attorneys general on Feb. 26, which charged that Congress’ changes to the law in last year’s tax bill rendered the entire ACA unconstitutional. In the tax law, Congress repealed the penalty for people who fail to have health insurance starting in 2019.

Becerra is leading an effort by Democratic attorney generals from others states and the District of Columbia to defend the ACA against that lawsuit. In May, the court allowed them to “intervene” in the case.

The Trump administration filed a brief in the case on Thursday, arguing that without the tax to encourage healthy people to sign up, the parts of the law guaranteeing coverage to people with previous health conditions — without charging them higher rates — should be struck down as well.

In a letter to House Speaker Paul Ryan explaining the administration’s decision, U.S. Attorney General Jeff Sessions cited the Justice Department’s “longstanding tradition” of defending the constitutionality of federal laws “if reasonable arguments can be made in their defense.”

But in this case, he wrote, he could not find those arguments to defend the constitutionality of the provisions and “concluded that this is a rare case where the proper course is to forgo defense.”

The administration called on the court to declare the provisions that guarantee coverage to be invalid beginning on January 1, 2019, when the mandate penalty goes away.

Because the lawsuit could easily go all the way to the U.S. Supreme Court, a process that could take years, the protections for people with preexisting conditions are likely to stay in place during that period.

Lieutenant Governor Gavin Newsom, the Democratic front-runner in the race for California’s next governor, breathed the same fire as Becerra against the federal government on Friday.

“Trump and his cronies can’t unilaterally roll back preexisting protections for millions of Californians,” Newsom said. “California will fight like hell to protect our families and their healthcare.”

A spokesman for his opponent in the race, Republican gubernatorial candidate John Cox, declined to comment.

If the court ultimately declared the provisions targeted by the Trump Administration unconstitutional, California would be temporarily cushioned from the effects because there are laws already on the books should the ACA – or its provisions – go away.

For instance, existing rules would protect people with pre-existing conditions for twelve months if the ACA were struck down.

During that time, “policymakers in California would look really hard at being able to try to do something so we don’t lose those gains,” said Deborah Kelch, director of the Insure the Uninsured Project in Sacramento.

“It’s hard to look at California and imagine just folding it up and starting over.”

Some critics of the administration’s decision said California should go forward with enacting its own mandate for individual coverage, as a few other states have done. No one has pushed that issue forward in the Legislature.

Since he took office in January 2017, Becerra has emerged as a top opponent of the Trump administration, filing more than 30 lawsuits on health care and other issues.

In California’s primary election Tuesday, Becerra, a Democrat, dominated the race with 45 percent of the vote. He will face retired judge Steven Bailey, a Republican, in the November general election.

Bailey’s spokesman Corey Uhden said Friday that he wouldn’t comment on the constitutionality of the ACA provisions. However, he said, Bailey opposes the individual mandate and wants less government regulation of health insurance.

Alex Leeds Matthews contributed to this report.

 


This story was produced by Kaiser Health News, which publishes California Healthline, a service of the California Health Care Foundation.

Administration Challenges ACA’s Preexisting Conditions Protection In Court

The Trump administration is refusing to defend key parts of the Affordable Care Act, essentially arguing that federal courts should find the health law’s protection for people with preexisting conditions unconstitutional.

The federal lawsuit hinges on the ACA’s individual mandate, or the requirement to get health coverage or pay a penalty. The mandate has long been a sticking point for conservatives, who argue that the government should not be telling individuals what coverage they must have.

But that mandate was crucial to persuading insurers to offer plans under the ACA. It helped expand their risk pools while the law forced them to guarantee coverage to any customer. Insurers were not allowed to raise costs for people with preexisting conditions. The administration’s brief, filed Thursday in federal district court in Fort Worth, Texas, takes aim at those links.

Twenty Republican state attorneys general filed suit on Feb. 26, charging that Congress’ changes to the law in last year’s tax bill rendered the entire ACA unconstitutional. In the tax law, Congress repealed the penalty for people who fail to have health insurance starting in 2019.

The attorneys general argue that a Supreme Court decision in 2012 saved the ACA from being declared an unconstitutional overreach of congressional power by declaring the penalty a tax and pointing out that Congress has the power to levy taxes. Without the tax penalty, they argue, “the Court should hold that the ACA is unlawful and enjoin its operation.”

The Trump administration Thursday did not go that far. Rather, it argued that without the tax to encourage healthy people to sign up, the parts of the law guaranteeing coverage to people with health conditions and charging them the same rates should be struck down as well.

The administration called on the court to declare the provisions that guarantee coverage to be “invalid beginning on January 1, 2019,” when the mandate penalty goes away.

Here are five things to know about this latest in a long line of challenges to the health law:

If This Lawsuit Succeeds, Who Would Be Affected?

People who buy their own insurance because they are self-employed or don’t get coverage through their jobs or the government. There are about 21 million people who do so, buying either through brokers or from a state or federal Affordable Care Act marketplace.

But it’s not clear how many Americans have preexisting conditions and could be affected. Estimates vary widely because there is not a standard definition of what counts as a preexisting condition. Before the ACA passed, insurers commonly rejected people with cancer, heart failure, diabetes, arthritis and even less serious conditions.

Based on those pre-ACA examples, the Kaiser Family Foundation estimates that 27 percent of people under age 65 have a preexisting condition. Of course, not all of them buy coverage on their own. (Kaiser Health News is an editorially independent program of the foundation.)

America’s Health Insurance Plans, an industry trade group, Friday criticized the federal government’s filing.

“Zeroing out the individual mandate penalty should not result in striking important consumer protections” that help guarantee coverage to people with preexisting conditions, the statement said. “Removing those provisions will result in renewed uncertainty in the individual market, create a patchwork of requirements in the states, cause rates to go even higher for older Americans and sicker patients, and make it challenging to introduce products and rates for 2019.”

Is Anything Going To Change Right Away? What About Next Year?

Don’t look for big changes yet.

The lawsuit could easily go all the way to the Supreme Court before there is a resolution, which could take years. So, the preexisting conditions protection is likely to stay in place during that period.

More immediately, there might be some effect on premiums for next year. Health insurers are currently deciding whether to sell coverage in the individual market in 2019 — and what they’re going to charge.

“The more uncertainty there is, the more the actuaries are going to be plugging into their projections for premium rates,” said Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute.

But others say the legal brief may have minimal impact next year on premiums. That’s because insurers already expected the Trump administration would not defend the ACA — and they know that a resolution of the case will be years away, said industry consultant Robert Laszewski.

A bigger effect on premiums, according to both Corlette and Laszewski, are factors already in play that are expected to draw younger and healthier people out of the ACA marketplace. Those include Congress’ decision to repeal the individual mandate penalty and rules expected soon from the administration that will expand the market for lower cost and short-term policies that won’t have to follow all the ACA rules.

How Is This Lawsuit Different From Previous Challenges To The ACA?

The Supreme Court has twice upheld the constitutionality of the health law. Most famously, in 2012, a narrow majority led by Chief Justice John Roberts turned back a challenge that was also filed by Republican attorneys general, along with the National Federation of Independent Business. Roberts wrote in a 5-4 ruling that the requirement for most Americans to either have insurance or pay a fine constitutes a tax — even though Democrats had gone to great lengths to not call it a tax — and was therefore constitutional.

In 2015, the court ruled that Congress did not intend to provide financial aid exclusively for premiums to individuals in states that operated their own insurance exchanges.

This current lawsuit, led by Texas Attorney General Ken Paxton and Wisconsin Attorney General Brad Schimel, argues that since Congress has changed the law to remove the penalty forcing individuals to get insurance, it has inadvertently rendered the rest of it impermissible under the 2012 Supreme Court ruling.

“Texans have known all along that Obamacare is unlawful and a divided Supreme Court’s approval rested solely on the flimsy support of Congress’s authority to tax,” said Paxton when the suit was filed. “Congress has now kicked that flimsy support from beneath the law.”

Other legal observers point out that’s not how it works.

“Congress is always free to amend its statutes, even to omit what it previously thought was essential,” wrote Nick Bagley, a law professor at the University of Michigan, in a blog. “That’s what Congress did when it zeroed out the mandate. So we don’t have to speculate what Congress would’ve done if it had a choice between invalidating the ACA’s insurance reforms or just invalidating the mandate. Congress made that choice.”

If The Trump Administration Isn’t Going To Defend The Health Law In This Lawsuit, Who Will?

In May, the court allowed more than a dozen Democratic attorneys general to “intervene” in the case and defend the law.

“The goal of Texas’ lawsuit is to leave Americans without health insurance, forcing them to choose between their health and other needs,” said California Attorney General Xavier Becerra. Allowing the Democratic officials to join the suit “allows us to protect the health and well-being of these Americans by defending affordable access to healthcare.”

If Nothing Is Going To Happen Right Away, Why Is This Such A Big Deal?

The guarantees for coverage for people with preexisting conditions are among those most valued by the public. Even if the lawsuit stands little chance of success, putting those provisions back in play can create uncertainty for insurers and patients. It could also possibly provide Democrats another talking point for the coming midterm elections in November.

Legal experts also point out that the Trump administration’s failure to defend the law could have long-lasting implications for the rule of law in the nation.

“If the Justice Department can just throw in the towel whenever a law is challenged in court, it can effectively pick and choose which laws should remain on the books,” wrote Bagley. “That’s as flagrant a violation of the President’s constitutional duty to take care that the laws are faithfully executed as you can imagine.”