Preauthorizations And Legal-eze: Why Health Insurers Have To Use Them

[…] Starting in 2014, health insurance will be guaranteed issue and all of us will be required to have coverage. But until then, individual health insurance is priced based on medical underwriting and (in most cases) slightly less comprehensive benefits than group policies. That’s why it’s less expensive to have an individual policy than a group policy or a guaranteed issue policy like CoverColorado. If health insurance carriers (both individual and group) don’t go over their claims closely and utilize preauthorizations, they run the risk of being defrauded – which will only drive premiums higher than they already are. If they don’t use the specific legal-eze required by state regulations, they will run afoul of the Division of Insurance.

There are plenty of examples of health insurance carriers using unfair or deceptive practices. We’re lucky in Colorado to have a strong Division of Insurance that works hard to protect consumers. Regulations that protect patients and insureds from unfair business practices are largely beneficial (and tend to weed out the shady insurance carriers). But Jaan’s article highlights the fact that health insurance carriers also have to protect themselves. If they don’t, they will end up with premiums that are far higher than the rest of their competition – and that isn’t sustainable.

New T.R. Reid Documentary Highlights Greatness In Our Healthcare System

[…] Overutilization – driven by supply rather than demand – was another common theme in the program. Basically, that the more healthcare supply we have (eg, scanning machines), the more utilization we have. This accounts for a large part of the huge variation in healthcare costs from one city to another. And in all of the hospitals and medical practices featured on the program, curbing over-utilization has been a high priority. One hospital figured out that blood transfusions during surgery aren’t nearly as necessary as they once thought (and indeed, the patients often do better without them). Given that the total cost of blood transfusions is about $1000/pint (!), that’s quite a cost-saving discovery. In another large clinic, pharmaceutical reps were no longer allowed to visit and they also removed the samples of brand name drugs that once filled their drawers. This was a controversial move, but they analyzed a lot of data provided by their local Blue Cross insurance carrier and found that they could optimize pharmaceutical care for a lot less money – patients had better outcomes and the clinic reduced overall Rx spending by $88/million a year compared with the state average.

The Program also showed and example of how patient-centered medical homes work in the real world. PCMHs are a huge buzz word these days, but the PBS documentary shows one in action, and they did a great job of making it easy for patients to visualize how such a program would work and how it would benefit us – including things like much more face time with doctors, and a reduction in the number of hospitalizations and ER visits. In addition to PCMHs, shared decision making between doctors and patients (another buzz word in healthcare reform) was highlighted as having a positive impact on both utilization and patient satisfaction. […]

A Visual Of Our Healthcare Spending

[…] This RAND Corporation infographic paints a pretty clear picture of how healthcare costs have increased over the past decade (specifically, the data refers to 1999 – 2009). Healthcare spending nearly doubled in that time frame, from $1.3 trillion to $2.5 trillion, but the second graphic shows how our complicated method of paying for healthcare makes it harder for the average family to see how their own healthcare costs have been impacted. The last graphic in the series shows what the average family could have done with the extra $2880 they would have had in 2009 if healthcare costs had grown during the 2000’s at the same rate they did in the 1990’s (GDP + 1%). Given how cash-strapped a lot of families have been for the past few years, I’m sure an extra three grand could have made a big difference. […]

Anthem Blue Cross Blue Shield’s New Medical Home Program In Colorado

[…] I can obviously see how this structure can result in lower costs, and I particularly like the fact that it will be paying primary care doctors for “non-visit” services that are not currently reimbursed (the example given in the press release is “preparing care plans for patients with multiple and complex conditions” but I can see how this could be extended to other areas of care and could help to move away from the current ten minute visit + diagnosis + prescription scenario that is so common). But particular care will need to be taken to make sure that the end result is truly healthier patients, as well as lower healthcare costs.

A measure of patient satisfaction could also be beneficial here. This is a tough one though, as patients might tend to have less of a focus on the overall picture (outcome + cost) and more focus on the factors that directly and immediately impact them, such as outcome and convenience. Cost is a factor for patients, but since most of us have health insurance, we tend to be largely insulated from the immediate costs of our healthcare. We get the annual rate increase notification or a letter from our employer saying that our deductible and copays are going up, but most patients probably don’t consider how their own healthcare usage directly impacts the overall “big picture” of healthcare spending (and thus the resulting health insurance premium hikes). But in general, a program that results in an overall improvement in patient health and lower costs should also end up with satisfied patients. Things like more face-time with their primary care doctor (who is being compensated for keeping the patient healthy, not just fixing problems once they occur) ought to improve patients’ overall perception of the care they are receiving. […]

Health Wonk Review – Campaign 2012 Edition

All of the vote candidates are well qualified and knowledgeable about healthcare, from many different angles.  And they all write quite convincingly.  Some take polar opposite positions, while others lean more toward the center.  I’ll summarize each candidate’s platform, and you can get all the details by clicking on the names.  Once you’re finished, cast your vote for your favorite in the comments.  Be warned, however – you will have a hard time choosing!

Ladies and gentlemen, here are your candidates for Wonkiest Health Wonk 2012:

Anthony Wright‘s camp is taking issue with Rep. Dave Camp’s position that the ACA is the reason for the decrease in the percentage of employers who offer health insurance benefits and the increase in premiums (both trends that were well established long before the ACA was crafted, and as Anthony points out, most of the provisions of the ACA haven’t been implemented yet).  Rep. Camp quoted Wright on his website, and mis-used the words to support his position that the ACA is to blame for the current problems.  Anthony is – quite understandably – unimpressed.

Joe Paduda‘s platform is all about taking aim at Mitt Romney’s enjoyment of firing people – and insurance companies.  Although it sounds nice (and very “free-market-y”) to say that if you don’t like your health insurance company you can just fire them, that isn’t usually the case.  Joe explains how most people have limited options (if any at all) when it comes to their health insurance, particularlySIA2008-1616 if they have any health conditions.  Firing ones health insurance carrier isn’t really a possibility for most of the population.  Joe’s common sense approach should win over a lot of voters.

Gary Schwitzer‘s campaign is focused on calling out half-truths and shoddy journalism.  He cites an example of an ABC News segment that purports to be a journalistic look at a new “lifesaving” technology.  But it might just be blatant self-promotion on the part of the doctor being interviewed.  And even worse, it might convince countless viewers that they need the same high-tech test (along with several others that are mentioned in the story), despite the far less flashy stories about the comparative effectiveness data that indicate that the tests in question aren’t really useful for low-risk individuals.  And that leads to over-utilization of healthcare.  Which leads to increased healthcare spending.  Which leads to higher health insurance premiums.  Which leads to more people […]

A Brain Teaser Cavalcade Of Risk

[…] Jaan Sidorov’s article about health insurance exchanges is really good (and I had to read it to figure out the correct answer to the question for his post – it was one of the two I missed). He notes that it’s a bit illogical that so many of us are willing to spend hours comparison shopping for a new TV, but feel put out if we have to spend much time at all comparison shopping for health insurance. And he laments the fact that health insurance exchanges are in their very early days but already are being dismissed by some as too complicated for the average consumer to figure out.

The Elusive Nature Of Healthcare Costs

[…] I’m still a fan of consumer directed health plans, high deductibles, and HSAs. I think that they can be useful tools to help people keep their health insurance premiums as low as possible and also (if an HSA is involved) set aside pre-tax money to cover potential future medical bills. But they are not a panacea. They are probably not a good solution for anyone who has a chronic illness that needs ongoing, expensive care. They don’t work so well for people with very little money who would struggle to cover the relatively high out-of-pocket costs and would not likely be able to fund an HSA. And no matter how great the actual consumer directed health plans are, the fact remains that transparency with regards to healthcare costs is still quite elusive. For some procedures, it can be relatively easy to get a set figure up front in terms of how much it’s going to cost. But much of the time that number can be difficult or impossible to pin down. Obviously, complications can arise in any medical situation (and the resulting increase in costs would make earlier estimates irrelevant). But even without factoring in complications, “shopping around” for healthcare is often an exercise in futility. In order to make consumer directed health plans more effective, there is much work to be done with regards to cost transparency.

Colorado House Passes Resolution To Repeal ACA

[…] Although the Republican-led Colorado House passed the measure, Democratic lawmakers were not impressed. They chided the Republicans for wasting time and money on a resolution that isn’t going to end up going anywhere (presumably because of the extremely slim chances of having two thirds of the states pass a similar measure).

Given the fact that the legality of the ACA is going to come before the Supreme Court this year, I agree that the new Colorado resolution seems like a waste of legislative time. The Supreme Court will tell us whether or not the federal government has the right to make health insurance mandatory, and the states that are taking the opposing position on the matter have already joined in a lawsuit to express their position. Hopefully Colorado’s lawmakers will work together from both sides of the aisle and move on to other issues that are facing the state.

Claims Expenses In New Colorado High Risk Pool Are Double The National Average

[…] I realize that premiums cover a very small portion of the claims expenses incurred by the high risk pools, so perhaps it’s a better move from a financial standpoint to limit enrollment in the high risk pool. But expanding eligibility and increasing enrollment numbers have been discussed numerous times since the pools started operating in 2010. I haven’t seen any specific details explaining why Colorado’s per-member claims expenses are so much higher than they are in other states with similar programs. It could be that it’s random, but if that’s the case we should expect to see Colorado’s numbers even out with other states as time goes by. If we don’t, we can assume that there’s something specific to Colorado that is causing the difference – either healthcare is far more expensive here, or our federally funded high risk pool is enrolling applicants who are – on average – far sicker than applicants in other states. Once the program has had another year of claims data, it will be interesting to revisit the numbers and see whether Colorado is still spending significantly more than other states, or whether the numbers have started to equalize.

Obesity As A Factor In Healthcare Spending

[…] I think that the dichotomy remains when it comes to discussions about obesity: on the one hand, we see lots of articles and advice telling us to love our bodies at any size, and on the other hand we have studies like the one that illustrates the cost to public health insurance programs that is directly attributable to obesity.

In addition to asking people to take a more objective look at whether any of their health problems could be related to weight, Maybe lifestyle issues should be more of a priority during doctor visits. I believe that most doctors do at least mention in passing the importance of eating a healthy diet and being physically active, but perhaps they could spend more time on the issue, and make a bigger deal of it. The ad campaign featured in the CHI article indicates that people are poor judges of where they stand when it comes to their own weight. So instead of asking people to just figure it out on their own, maybe it should get more attention as a cornerstone of healthcare interactions between patients and their doctors. This makes particular sense when the patient is suffering from obesity-related diseases or showing precursor symptoms. And since money is a powerful incentive, HHS could provide doctors with information to distribute to patients regarding the additional lifetime healthcare costs one will incur as a result of being obese. As health insurance deductibles continue to climb and patients find themselves responsible for more and more of their healthcare costs, this could be an incentive to focus on a healthy diet and daily physical activity.

Overutilization Of Prescription Drugs

[…] Half of all Americans take at least one prescription drug. Prescription costs have skyrocketed over the past couple decades. When we got into this industry ten years ago, we saw lots of individual health insurance policies that offered prescriptions with simple copays based on whether the drug was generic or brand name. These days, nearly all of the carriers in Colorado have separate prescription deductibles (our family’s Anthem policy has a separate $2000 deductible for prescriptions), or ever-increasing prescription copays. And a lot of carriers have added a fourth tier to their prescription categories – drugs in that tier are generally quite pricey and patients generally have to pay a percentage of the cost rather than a flat copay.

We owe it to ourselves to seriously consider whether our over-reliance on prescriptions is actually beneficial in the long run, both from a health perspective and a financial one.

The Ineffectiveness Of Asset Testing For Public Health Insurance Eligibility

Every once in a while, we see a story about someone taking tremendous advantage of public assistance programs. And those stories tend to stick with us. They get repeated and passed along and before we know it, there starts to be a pervasive feeling that such incidents are much more common that they actually are.

In an ironic twist, Colorado Republican lawmakers are calling for the state to return to a system of asset testing for Medicaid recipients… right on the heels of Colorado receiving a $26 million grant from the federal government because of the state’s efforts to expand access to Medicaid and CHIP. Colorado received the grant money last week after increasing Medicaid/CHIP enrollment significantly over the past year. In order to qualify for the grant, the state had to implement at least five of the provisions that are known to improve access to public health insurance for children, and one of those provisions is the “liberalization of asset requirements”. […]

Colorado Gets $26.1 Million Award For Insuring More Children

For the second year in a row, Colorado has received a significant grant from the federal government (funded under the Children’s Health Insurance Program Reauthorization Act) to help fund the state’s Medicaid system. A year ago, Colorado received $13.7 million. Last week, Colorado got $26.1 million – the third highest amount awarded to any of the states that qualified for the performance bonuses this time around. Colorado was one of the states with an enrollment increase of more than 10%, which qualified for a higher “Tier 2” bonus award. The program awarded a total of over $296 million at the end of 2011, and it was spread across 23 states, as opposed to only 15 that qualified a year earlier.

In order to qualify for a bonus, a state has to implement at least five of the eight provisions that have been proven to increase enrollment and retention numbers for Medicaid and CHIP, and the state has to also prove that they have had a significant increase in the number of children enrolled in Medicaid during the year.
[…]

Prescreen Simplifies CoverColorado Eligibility Process

[…] If the health insurance carrier issues a denial letter based on the prescreen, that denial letter can be used as proof of eligibility for CoverColorado. The applicant can then proceed with an application for CoverColorado and include the denial letter.

The prescreen is intended to replace the need for an applicant (with one or more of those 21 medical conditions) to submit a complete application to a private carrier in order to receive a letter of decline and thus be eligible for CoverColorado. The prescreen is definitely shorter and easier to complete than a full application.

It should be noted however that all 21 of the medical conditions listed on the prescreen questionnaire are also included on the list of medical conditions that automatically make an applicant eligible for CoverColorado. This list of conditions has long been an option for CoverColorado eligibility, and it is more comprehensive than the new prescreen list (it includes the 21 conditions on the prescreen as well as 13 others). […]

Kaiser Permanente Pays Colorado Adults To Lose Weight And Keep It Off

Since last April, Kaiser Permanente has been offering cash to Colorado adults who lose weight and keep it off through their Weigh and Win program. Researchers have long known that cash is a powerful incentive, and the Kaiser program utilizes that motivation factor to encourage people to lose weight and establish a healthier lifestyle. Participants are eligible to receive quarterly checks for up to nine consecutive months after their second weigh-in at one of the Weigh and Win kiosks, as long as they continue to lose weight or keep off the weight they lost between their first and second weigh-ins.

The program is available to Colorado adults age 18 and up who have an initial BMI of at least 25. Those with a BMI of less than 25 are eligible to win prizes by completing weekly journals, weighing-in at the kiosks quarterly, and reading emails from the Weigh and Win program, but the cash rewards are only available based on weight loss for participants who start with a BMI of at least 25. […]

Record High Number Of Colorado Residents Enrolled In Medicaid

This short clip from Colorado Public News is well worth watching. It’s only a few minutes long but highlights the need for Medicaid among families who rely on the program, the controversy surrounding the expansion of Medicaid, and the impact that the recession has had on Medicaid enrollment in Colorado over the past few years.

The video notes that Colorado has experienced a 55% increase in Medicaid enrollment since 2007. This is likely due in large part to the recession, but Colorado has also taken active steps to expand access to public health insurance programs like Medicaid in recent years, and it’s reasonable to assume that this is driving some of the increase in enrollment. […]

When Advertising Masquerades As Journalism

[…] The days of news being disseminated once per day via newspapers and a few times a day via morning and evening TV and radio news programs are long gone. News is updated constantly now, and people expect to see brand-new stories every time they go online. There are fewer trained journalists ready to carefully research and write the news stories, and plenty of bloggers and freelance writers who are more than willing to write articles for anyone who will pay them to do so. And not all of those articles disclose the fact that the writer may have been paid for the story by a party that has a vested interest in the story getting out.

On the other hand, medical research is a hot topic. New research is constantly being conducted and not all of it is biased or funded by companies with a conflict of interest. We just have to be careful when we read medical “news”. Check the sources. If the story is about a study, look to see who funded the study. If the story openly promotes a particular product (or hospital, or health insurance policy, or a specific cutting-edge treatment, etc.), it’s wise to question whether the story is actually unbiased, researched medical journalism, or advertising pretending to be news. […]

HHS Allowing States To Define Essential Benefits In The Exchanges

[…] Colorado already has a comprehensive small group benefits mandate. Until this year, one of the most glaring differences between small group and individual plans was that individual policies in Colorado were not required to cover maternity. But that changed in January when all new and renewing individual policies had to begin covering maternity. I would say that the primary difference now between most of the individual plans and small group plans in Colorado is that the small group policies are guaranteed issue, whereas the individual plans are medically underwritten. But in 2014, when the exchanges get underway, the individual policies will be guaranteed issue too. Individual policies are still quite a bit less expensive than group policies in Colorado, but I wonder if that will change too once the exchanges get underway? It would seem so, since the benefits and underwriting will be virtually identical.

The small group market in Colorado is already quite structured by state mandates. The individual market also has quite a few mandates, including the new maternity benefit mandate. But it appears that the individual policies that are sold in the exchanges beginning in 2014 will have benefits at least as comprehensive as the benefits offered by the largest small group plans in Colorado. That means that “bottom of the heap” individual plans (ie, the ones with tons of fine print and huge holes in their coverage) probably won’t be making an appearance in the exchange, or at least not without a serious overhaul. […]

Health Wonk Review And A Thoughtful Look At Life Expectancy

[…] Lastly, Roy’s article points out that there isn’t just one “US healthcare system”. Rather, we have Medicare, Medicaid, private health insurance, and millions of people with no health insurance at all. Lumping everyone into one group when it comes to life expectancy doesn’t really tell us how our health insurance funded-healthcare systems are functioning, since there are so many people with sub-par health insurance or no insurance at all. It stands to reason that if we can get everyone covered by health insurance and secure realistic access to healthcare for the whole population, our life expectancy should increase. But that might be simply because of an increased life expectancy for the portion of the population that is currently under-insured or uninsured. It could be that the population that is currently covered by high quality health insurance would continue to have the same life expectancy, which is likely quite a bit higher than the population that is under-insured or uninsured.

Colorado Rises To 9th Place In America’s Health Rankings

[…] With regards to health insurance coverage, the America’s Health Rankings survey gave Colorado props for decreasing the percentage of the population without health insurance over the past year, from 15.6% to 13.8%. However, the Colorado Health Access survey results that were released in November indicated the exact opposite results: that study determined that the uninsured rate in Colorado had increased over the past two year from 14% of the population to 16% now. We know that Colorado has been taking steps to expand access to public health insurance programs like Medicaid and CHP+, and we also know that plenty of Colorado residents have lost their health insurance as a result of the economic problems that have plagued the whole country over the past few years. But it’s unclear from the results of these two surveys whether the state is improving or losing ground in terms of health insurance coverage.

CoverColorado Assessment For 2012

[…] As the cost of healthcare continues to rise, CoverColorado – just like every other insurer – needs more and more money to cover the cost of claims. Their website shows the fees that have been assessed over the past few years, and the increased fee that will go into effect next month for 2012.

Because the CoverColorado assessment is collected by health insurance carriers and passed on to CoverColorado, the fee is added to each policy’s premium every month. The end result is that we all pay a few dollars more per month than the actual cost of our policy. This can be confusing, especially if people are new to individual health insurance and haven’t had experience with paying their own health insurance premiums in the past. The amount that is going to be drafted from your bank account or billed to you will be a few dollars higher than your stated premiums because it includes the CoverColorado assessment. […]

Will Large Groups Encourage Sick Employees To Seek Coverage In The Exchanges?

[…] Amy Monahan suggested that there could be a law making employees ineligible for coverage in the exchanges if they are eligible for employer group coverage. Or there’s the possibility of a law similar to the one that Colorado designed to protect the state’s high risk pool from a similar scenario – employers here can’t reimburse employees for individual health insurance premiums if they have had a group plan in place within the past twelve months (in the case of the exchanges, they could make employees ineligible for coverage in the exchanges for at least a year after leaving a group plan, assuming they are still eligible for coverage under the group plan and have just opted out). Either option would help to protect the exchanges, but they don’t do much to prevent employers from structuring their health insurance policies to make healthcare significantly more expensive for the sickest employees. […]
A lot of this remains to be seen. The health care reform law still has to be reviewed by the Supreme Court, and we have a major election cycle next year and another full legislative year after that. But if everything about the PPACA remains as it is now, lawmakers will eventually have to address the possibility of self-insured employers designing health insurance plans that encourage their sickest employees to opt for coverage in the exchanges instead.

Access To Healthcare In Colorado Worsening

The Colorado Health Access Survey results were released earlier this month, and the results aren’t particularly surprising given the state of the economy for the past few years. The total number of uninsured Colorado residents is now 829,000 – up from 678,000 in 2009. The survey also counts the number of “underinsured” residents (those who aren’t able to afford their out-of-pocket expenses that total more than 10% of their income, or 5% for those below the poverty line). The two categories – uninsured and underinsured – amount to 1.5 million people, which is about a third of the Colorado population.

The 22% increase in the number of uninsured residents came despite strong efforts in Colorado to expand access to Medicaid and CHP+ over the past few years. Without the expansion of those programs, the numbers would undoubtedly be even more bleak. […]

Employer Funding Of Individual Health Insurance Varies By State

Over the past several months, I’ve written a few articles about the legality of employer reimbursement of individual health insurance premiums in Colorado. Our friend and fellow blogger Hank Stern (writing at InsureBlog) found the changes interesting, and noted that the laws surrounding employer reimbursement of premiums vary quite a bit from one state to another (he’s in OH).

Hank and I wrote a joint post about the topic, which he published last week on InsureBlog. Here’s Hank’s description of how the law works in OH (regular readers will note that it’s similar to how things used to be here in Colorado, before HRAs became a major issue, and of course before SB19 passed earlier this year). […]

Combining Patient Satisfaction With Clinical Outcomes And Cost Efficiency

[…] Particularly in the current era of spiraling healthcare costs, it’s a bit troubling to hear that hospitals are doing things like putting in extra elevators so that people don’t have to wait as long for an elevator… all for the sake of boosting their patient satisfaction rankings. Yes, it might increase patient satisfaction by a small margin, but somebody has to pay for it. Renovation projects like that add to the hospital’s overhead expenses, and that leads to increased charges for care at the hospital. Ultimately, health insurance carriers end up paying more for their insureds’ claims, and that translates directly to increased health insurance premiums […]