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January 31, 2013 | 2:28 PM | By

Economist Rekindles Debate over Geographic Differences in Health Spending

By Jordan Rau, Kaiser Health News

An economist at the Federal Reserve has restoked the debate over the causes of regional differences in Medicare spending, and her analysis disputes some of the thinking behind a number of policy changes in the 2010 health overhaul.

The Obama administration and many prominent economists believe that as much as a third of the $2.7 trillion spent on health care may be due to wasteful practices of physicians and hospitals that could be eliminated without hurting patients. This is based on decades of research, principally by the Dartmouth Institute for Health Policy & Clinical Practice in New Hampshire, showing that Medicare spending in some regions of the country is significantly higher than others.

This geographic variation in spending, which the government has also examined, was a motivating force behind a number of government initiatives including changes in Medicare payment to reward hospitals and doctors who provide good care efficiently. Continue reading →

FILED UNDER: KQED blogs, Money, Policy, Geographic Variation, Health Care Spending, Regional Variation
January 30, 2013 | 10:20 AM | By

UC Student Health Plan Slips Through Loophole in Affordable Care Act

A UC Berkeley student discovered the limits of his UC student health coverage after a cancer diagnosis.(Studio H (Chris)/Flickr)

A UC Berkeley student discovered the limits of his UC student health coverage after a cancer diagnosis.(Studio H (Chris)/Flickr)

If you are a student at any of the UC campuses — or a family member of one — you might want to pay close attention to the case of Kenya Wheeler at UC Berkeley. A year ago he was “healthy as a horse,” the San Francisco Chronicle reports and biked to school every day.

But everything changed when he was diagnosed with cancer. He had health insurance through the UC Student Health Plan. But as medical bills mounted, he closed in on the $400,000 lifetime cap of the policy — caps that were made illegal under the Affordable Care Act.

Illegal, that is, except for self-funded college health insurance plans, such as the one UC has. In its self-funded plan, UC bears the financial risk of medical coverage. From the Chronicle:

Universities have long offered student health coverage to make sure their students have access to health care. Most college health plans purchase a group policy from a health insurance company and must adhere to the new federal requirements. Continue reading →

FILED UNDER: Money, Reform, Affordable Care Act, Lifetime Caps, Obamacare
January 15, 2013 | 12:08 PM | By

Advocacy Group Says Anthem Blue Cross Pharmacy Program is Discriminatory

(Paul Wilson/Flickr)

(Paul Wilson/Flickr)

The advocacy group Consumer Watchdog has filed a statewide class action lawsuit against Anthem Blue Cross saying the health insurer is discriminating against HIV/AIDS patients.

Anthem is changing its pharmacy program and will require anyone using drugs from a list of “specialty” medications to use a mail-order pharmacy, approved by Anthem. But patients seeking to fill other prescriptions may still use their local bricks-and-mortar pharmacy. “That’s exactly the kind of targeting and discrimination barred under the Civil Rights Act in California,” Consumer Watchdog attorney Jerry Flanagan says.

In a statement, Anthem denies the change is discriminatory, because the list of specialty medications includes not only HIV/AIDS drugs, but also medicines for other conditions, such as cancer and multiple sclerosis. Anthem says that the practice is already established. From Anthem’s statement:

“For many years, health plans in California and other states have sought, subject to certain exceptions, that specialty drugs be filled by Specialty Pharmacies and received via confidential home or other private delivery location that benefits the member. … This is being done with the knowledge of our regulator and applies to several hundred different drugs for many medical ailments.  Anthem’s policies do not discriminate on the basis of disease states, and they are reasonable and compliant with applicable laws.”

Marta Green at the Department of Managed Health Care confirmed that there are three similar programs already in place in California from Health Net, Sharp and United Health Care of California. Green declined to comment on Consumer Watchdog’s lawsuit, saying the Department had just received it.

Continue reading →

FILED UNDER: Money, health insurance, Prescription Drugs
January 11, 2013 | 1:30 PM | By

State vs. County Showdown Over Funding the Medi-Cal Expansion?

(Justin Sullivan/Getty Images)

Gov. Brown is proposing California's counties relinquish some of their state health funding once the Affordable Care Act is in place. (Justin Sullivan/Getty Images)

We’re now 354 days from the rollout of the Affordable Care Act next Jan. 1. While the governor declared the state’s participation in the Medicaid expansion at his budget unveiling yesterday, he also proposed two ways to handle that expansion.

Under one scenario, the state will continue to administer the program. Under the other, each of California’s 58 counties will oversee running Medi-Cal, California’s version of Medicaid, for its own residents.

The Affordable Care Act dictates that the federal government will pay 100 percent of the cost for those people newly eligible for Medicaid, and in both proposals, the state’s position is that California counties will get some fiscal relief once those federal dollars start flowing.

But don’t get too excited, counties.

California Secretary of Health and Human Services Diana Dooley yesterday referred to a “conversation” around “appropriate sharing” that needs to happen between the state and its counties around financial responsibilities.

“There’s an assumption we’ve been fully funded. That is simply not accurate.”

“Conversation” might prove to be a euphemism for what could become a vocal debate between the state and the counties. And maybe between counties themselves.

Alex Briscoe, Director of Alameda County’s Health Care Services Agency, told me this morning that “sharing” presumes that current state funding is sufficient to meet the needs of the indigent poor, an idea he called “simply preposterous.” Continue reading →

FILED UNDER: Money, Reform, Affordable Care Act, California Budget, Medi-Cal, Medicaid Expansion
January 10, 2013 | 11:15 AM | By

Governor’s Proposals for Medicaid Expansion

(Military Health/Flickr)

(Military Health/Flickr)

Gov. Jerry Brown has released his new state budget, including plans for implementing the Affordable Care Act in California. In a press conference this morning, the governor said he plans to handle that implementation “cautiously.”

“We are committed to expanding Medi-Cal, we’re committed to bringing more people into the healthcare system, but we recognize there are big costs out there,” the governor told reporters. “There are big unknowns so we’re going to move carefully, but we’re going to move with commitment, because I believe people do need decent healthcare, and I believe what Pres. Obama did was historic. It was heroic, and I’m going to do everything I can to be a good partner to make sure his plan works.”

The ACA calls for an expansion of the Medicaid program, known as Medi-Cal in California. The federal government will pay 100 percent of the costs of the new enrollees through 2016. After that, the federal contribution will decline to 90 percent by 2020.

The governor is proposing two ways to handle the expansion. Continue reading →

FILED UNDER: Money, Policy, Affordable Care Act, California Budget
January 9, 2013 | 10:27 AM | By

Insurance Commissioner Criticizes Anthem Blue Cross Rate Hike

By Mina Kim

State Insurance Commissioner Dave Jones says Anthem Blue Cross’s rate hike on small business plans is “unreasonable” … but he’s powerless to stop it. .

Jones says his department actuaries calculated Anthem’s average 11 percent rate hike on small employers would grow to nearly twenty percent in two years. On a call with reporters Tuesday, Jones blasted the insurer for overstating health care costs and for charging policy holders fees that won’t be collected until 2014 under the Affordable Care Act.

“If you look at, on a return-on-equity basis,” Jones said, “the profits that Anthem Blue Cross of California has made, they have been extraordinary.”

Anthem Blue Cross spokesman Darrel Ng disputes Jones’s figures saying the average rate increase is about half what Jones projects and that Anthem’s profits last year, were about one percent. Continue reading →

FILED UNDER: KQED blogs, Money, health insurance, Rate Hikes
December 27, 2012 | 4:10 PM | By

‘ClearHealthCosts’ Sorts Out Bewildering Health Prices

(Image: ClearHealthCost)

If you’re uninsured or have a high deductible health plan, you’ve likely experienced the frustration of trying to figure out how much a specific medical procedure might cost you.

Start up ClearHealthCosts is trying to help. Former New York Times journalist Jeanne Pinder hatched the idea on the simple premise that “somehow you could bring transparency to the health care marketplace,” as she told me today in an interview.

The site launched with price comparisons across 30 common procedures in New York and then (lucky for those in the Bay Area) added San Francisco. Let’s pick a simple lower back MRI without dye. I searched within 25 miles of San Francisco, and the range was $500 on the low end to $1945 on the high end. If you’re paying out of pocket, that’s a whopping $1,445 savings to you.

In this case, the main driver of the big cost difference appeared to be whether the MRI would be done in a hospital (more overhead) or a clinic. Continue reading →

FILED UNDER: Money, Cost Variation
December 14, 2012 | 5:54 PM | By

Fiscal Cliffnotes: Is That Tax Break on Your Job-Based Health Insurance on the Table?

(Karl Eisenhower/Kaiser Health News)

(Karl Eisenhower/Kaiser Health News)

Then-presidential candidate Mitt Romney made headlines when he asserted that 47 percent of Americans were “victims” dependent upon government assistance. I’m guessing he wasn’t thinking of people who receive employer-based health insurance as being the beneficiary of government largess. But, the government loses a lot of money in the benefit.

Here’s how: First, people who receive employer-based health insurance do not pay taxes on its cost. Second, employers deduct the cost of the policies as a business expense.

As the fiscal cliff approaches, some policy wonks are saying the U.S. can’t afford that tax break any more.

As Julie Appleby reports for Kaiser Health News, it’s the largest cost to the U.S. Treasury, “an estimated $246 billion annually, according to Congress’ Joint Committee on Taxation, dwarfing the second-largest break, the mortgage interest deduction, which costs an estimated $98 billion.”

That is a lot of money. Continue reading →

FILED UNDER: Money, Policy, Fiscal Cliff
December 14, 2012 | 12:34 PM | By

Federal Appeals Court Approves Cuts to Medi-Cal Providers

(David Mason/Flickr)

(David Mason/Flickr)

A three-judge panel of the Ninth Circuit Court has upheld payment reductions to Medi-Cal doctors, pharmacists and other providers. The cuts have been tied up in courts for more than a year — and they’re not settled yet. Advocates say they expect to ask for a review of the decision by the full court.

Some history:

  • Medi-Cal cuts must be approved by the federal government.
  • The current reductions, proposed by the Brown Administration, were approved by the Centers for Medicare & Medicaid Services in October, 2011.
  • That approval was promptly challenged by the California Medical Association (and others) in federal court.
  • In January, a federal judge blocked the cuts. Continue reading →
FILED UNDER: Money, Policy, Medi-Cal Cuts
December 7, 2012 | 3:24 PM | By

Fiscal Cliffnotes: What Are the Trade-offs in Raising Medicare’s Eligibility Age?

(Patrick/Flickr)

(Patrick/Flickr)

It seems seductively easy: people are living longer, so why not raise the Medicare eligibility age from 65 to 67? This kind of entitlement reform is key to Republican strategies to pull the federal government back from the so-called Fiscal Cliff.

The problem is that while raising the Medicare eligibility age looks great in the short run, longterm it could actually cost money.

First, the short run: the non-partisan Kaiser Family Foundation says the federal government would save an estimated $5.7 billion in 2014 if the eligibility age were raised. Using a slightly different analysis, the nonpartisan Congressional Budget Office says savings could total $113 billion over the next decade.

But, those 65 and 66-year-olds are the youngest and presumably healthiest people in the Medicare program — meaning that if they leave Medicare, they would then be the oldest and presumably sickest people in any other insurance pool.

What would happen to those people? Continue reading →

FILED UNDER: Money, Policy, Fiscall Cliff, Medicare