A recent research project (1), with more than 14,000 responses, found Health Savings Accounts are "helping employees make better decisions about their own health care."
Some of the findings include:
+ 56% of individuals found "their HSA qualified plan provides an affordable health care option".
+ 75% of individuals indicated "the ability to personally control their own health is an extremely or very important benefit of HSAs".
+ Individuals are doing things such as " engaging in healthier lifestyle choices - researching preventive care programs - shopping for lower priced prescription drugs - plan health care better throughout the year".
+ 82% of individuals reported "the ability to save tax-free money was extremely or very important in selecting an HSA."
+ 79% indicated "having an HSA is valuable to them."
Employers report HSA plans cost less than standard PPO plans:
+ 77% of them believe "their High Deductible Health Plan with a HSA are key in controlling health care costs."
+ 69% contributed "an average of $1,000 for individual coverage".
(1) The survey, created this fall by two Xerox companies, was commissioned by ACS and conducted by Buck Consultants.
Tuesday, November 15, 2011
Wednesday, November 02, 2011
The role of Accountable Care Organizations in reform health care
Much of the medical treatment being provided today is done by MDs, Labs, Hospitals and other facilities indpendent of each other. This approach is called a fee for service system and has a lot of inefficiencies. As a way to more away from fee for service the Federal level health reform provided funding to establish what are called Accountable Care Organizations (ACO).
This new approach involves a significant change in technology to support the delivery of medical treatment. It will effect not only providers but for you and I as consumers of health care services. When ever a change as significant and expensive as this takes place there will be considerable debate over whether it will be effective. This is certainly the case with ACOs.
It is important for employers to understand this change as it begins to evolve, since it may lower the cost of delivering medical treatment. The way a ACO develops will not be the same in all areas. Consumers should also be aware since they will begin to notice changes in the way services are provided as ACOs are implemented over a period of time.
I recently became aware of and want to share a report by the Institute for Health Technology Transformation. It details ten useful things to understand about this approach. It provides some interesting insight into accountable care organizations (ACOs).
Thursday, August 25, 2011
Things effecting medical treatment
Survey results from a study by the Center for Studying Health System Change of about 15,000 individuals found:
+ A little more than 20% put off treatment because of things such as “long wait-times for appointments and inability to take time off work”.
They had responded to questions such as “Was there any time during the past 12 months when you didn’t get the medical care you needed?”
The study made recommendations, as health reform is being discussed, on ways to eliminate things that cause people to hold off seeing medical professionals including:
+ “Offering night and weekend outpatient services”
+ “ Increasing the se of telemedicine so patients don’t always need to travel to see doctor in-person”
+ “Offering onsite care for people with inflexible work schedules”
Saturday, August 06, 2011
What does regulatory review of medical insurance rates do?
Federal health reform implements a provision to require a review of what is called "unreasonable" increases in the cost of medical insurance. Here in Connecticut the General Assembly passed a law in the 2011 session to also review rates. It even included a provision to hold a symposium on proposed increases! If I recall the proposal was to have one of these up to four times a year at an estimated cost over 7 figures. Luckily the Governor vetoed this bill because of the big cost and that it duplicated existing regulations.
Anyway lets do a quick look at what a medical insurance rate review might do?
Background: Over quite a few years 85% of each premium dollar small businesses pay for their medical insurance goes to pay medical treatment costs. Of the 15%, which is for plan administration about 3% is for company profit. Consequently, rates have been going up 10% or more each year because of the rapidly increasing medical treatment costs. Data also is available that connects about 70% of these treatment costs to lifestyle choices such as smoking, eating to many burgers and fires, etc.
Now to reviewing rates: Conn. has regulations that proposed premium increases have to be sent to Connecticut's Insurance Department along with lots of justification. The federal Department of Health and Human Services (HHS) recently issued regulations to implement the federal law. It states a public review must be held for any increases of 10% or more.
The question to be asked then is - What is a public hearing going to do to change peoples lifestyle choices and the increasing amount of dollars going for treatment? Yes no one likes to pay more for medical insurance but folks jumping up and down at a public hearing to complain about all this is certainly not going to change ever increasing medical treatment costs.
One interesting thing about requiring increase reviews it's just a kind of price control and results in what is called a price ceiling, which really becomes a price floor. In other words a medical insurance company might have, for competitive reasons, sent in a proposed increase of 7.5% now can just send in 9.9% and the federal regulators will be happy. Studies of price controls have documented this effect does happen! Again - what did that do for consumers?
There is another purpose for Connecticut's regulations to review rate increases and that is to watch for examples of a company keeping rates low to attract more business when in fact the increase will not cover their treatment costs. This could result in the company becoming insolvent! If that were to happen policy holders and taxpayers (you & I) would become liable for the treatment costs the company could not pay!
Guess what? The federal HHS also provided big grants of about 1 million to each state, including Connecticut, to set up the procedures for these rate review hearings! I raise the point these federal review procedures could very easily conflict with the procedures Connecticut has developed during it's long history of premium review regulations! Who is the better regulator to look for what is best for Connecticut residents. State procedures, which have evolved over time, or federally mandates procedures?
Bottom line - what does all this do to control the cost of medical insurance!
Anyway lets do a quick look at what a medical insurance rate review might do?
Background: Over quite a few years 85% of each premium dollar small businesses pay for their medical insurance goes to pay medical treatment costs. Of the 15%, which is for plan administration about 3% is for company profit. Consequently, rates have been going up 10% or more each year because of the rapidly increasing medical treatment costs. Data also is available that connects about 70% of these treatment costs to lifestyle choices such as smoking, eating to many burgers and fires, etc.
Now to reviewing rates: Conn. has regulations that proposed premium increases have to be sent to Connecticut's Insurance Department along with lots of justification. The federal Department of Health and Human Services (HHS) recently issued regulations to implement the federal law. It states a public review must be held for any increases of 10% or more.
The question to be asked then is - What is a public hearing going to do to change peoples lifestyle choices and the increasing amount of dollars going for treatment? Yes no one likes to pay more for medical insurance but folks jumping up and down at a public hearing to complain about all this is certainly not going to change ever increasing medical treatment costs.
One interesting thing about requiring increase reviews it's just a kind of price control and results in what is called a price ceiling, which really becomes a price floor. In other words a medical insurance company might have, for competitive reasons, sent in a proposed increase of 7.5% now can just send in 9.9% and the federal regulators will be happy. Studies of price controls have documented this effect does happen! Again - what did that do for consumers?
There is another purpose for Connecticut's regulations to review rate increases and that is to watch for examples of a company keeping rates low to attract more business when in fact the increase will not cover their treatment costs. This could result in the company becoming insolvent! If that were to happen policy holders and taxpayers (you & I) would become liable for the treatment costs the company could not pay!
Guess what? The federal HHS also provided big grants of about 1 million to each state, including Connecticut, to set up the procedures for these rate review hearings! I raise the point these federal review procedures could very easily conflict with the procedures Connecticut has developed during it's long history of premium review regulations! Who is the better regulator to look for what is best for Connecticut residents. State procedures, which have evolved over time, or federally mandates procedures?
Bottom line - what does all this do to control the cost of medical insurance!
Wednesday, August 03, 2011
Insights on the high cost of medical treatment
A study in the Philadelphia area provides useful insights on how medical treatment costs are used.
You can change the names and find the same issues happening in Connecticut. In thinking about this one becomes curious about why there is not more media coverage on these real issues! Guess the media just likes to blame medical insurance companies for the high cost of medical insurance vs reporting and educating people about the real reasons.
You can change the names and find the same issues happening in Connecticut. In thinking about this one becomes curious about why there is not more media coverage on these real issues! Guess the media just likes to blame medical insurance companies for the high cost of medical insurance vs reporting and educating people about the real reasons.
Tuesday, July 26, 2011
One factor in government medical plans - costs are higher than they should be!
Many things influence the cost of group and individual medical insurance. One factor is the cost shift that takes place from MDs, Hospitals, and other providers. MedicAID (more so) and MediCARE pay providers significantly less than their real costs. They in turn charge higher rates (cost shift) to the commercial plans with which they work.
Thus, what we have is government medical programs working to control costs by under paying providers! A more effective approach, which would result in higher quality care for patients, would be to work on controlling inappropriate payments!
This video highlights the significance of this issue!
Suggest talking to state and federal legislators and ask - why is more action not being taken to stop this.
Thus, what we have is government medical programs working to control costs by under paying providers! A more effective approach, which would result in higher quality care for patients, would be to work on controlling inappropriate payments!
This video highlights the significance of this issue!
Suggest talking to state and federal legislators and ask - why is more action not being taken to stop this.
Thursday, July 07, 2011
Another look at medical treatment costs
Have mentioned before the point - about 85% of each employer premium dollar goes to pay for medical treatment expenses. When we look at this 85% we find that 70% or more are connected to lifestyle choices.
We also know from studies and reports, such as a recent one from the National Institute for Health Care Management Foundation:
+ About 5 percent of the population is responsible for almost half of all health care spending in the United States.
+ About half of the U.S. population accounted for only 3.1 percent of all expenditures.
+ 10 percent of the population hogged 63.6 percent of all health spending.
+ The top 5 percent of the population accounted for 47.5 percent of all spending.
+ The top 1 percent of the population accounted for 20.2 percent.
What does all this tells us? Medical treatment costs are responsible for rising medical premiums not "big bad insurance companies"
We also know from studies and reports, such as a recent one from the National Institute for Health Care Management Foundation:
+ About 5 percent of the population is responsible for almost half of all health care spending in the United States.
+ About half of the U.S. population accounted for only 3.1 percent of all expenditures.
+ 10 percent of the population hogged 63.6 percent of all health spending.
+ The top 5 percent of the population accounted for 47.5 percent of all spending.
+ The top 1 percent of the population accounted for 20.2 percent.
What does all this tells us? Medical treatment costs are responsible for rising medical premiums not "big bad insurance companies"
Tuesday, June 21, 2011
What's with all the "Medicare as we know it" talk?
Background: Medicare, implemented in 1965, pays medical treatment expenses on a fee for service basis. Thus, the more treatments performed the more pay the provider receives! This results in over utilization plus the cost for treatments continues to go up at twice the rate of national income. Then too, an ever increasing number of people are turning 65 and being covered, which adds significant costs. The 2011 Medicare forecast shows it running out of money five years sooner than in the 2010 report! It may even be sooner because of some questionable assumptions!
In recent weeks various words have been coming out of Washington DC saying Congressman Ryan’s proposal to fix this would “end Medicare as we know it”. These words are in fact unfounded because federal health reform already ended what we know by introducing two radical changes:
Note: An April 27th WSJ article called the effort behind these words a hoax!
First – When we look around we see more MDs are no longer taking new Medicare patients today because their reimbursements are 20% or more below what private plans pay. Rates are 30% or more less for hospitals. Adding to today's under payments federal reform implements, over the next few years, payment rate cuts for MDs, hospitals, etc. The result - reimbursements will be less than Medicaid in about ten years! Some reports say more than 80% of MDs will not accept Medicare patients if these cuts in the law, which are price controls are implemented.
Second - An Independent Payment Advisory Board was created with the power to recommend payment cuts. This means new medications and treatment technologies, which are generally more costly, may not be approved. Congress then either accepts the boards recommended cuts or develops their own. If not at the same level the Board cuts will be implemented. Interestingly this Board cannot look at cost containing ideas other than cutting fees!
No matter how much some want Medicare to be left alone the cost increase trends are unsustainable and must be fixed. Thus, the question becomes, which approach is the best way to continue these important benefits:
+ Federal health reform, which lowers provider pay and means far fewer MDs to treat people? Some are saying these changes “save health care costs”! Yes the actual dollars being spent will be lower because of the cuts but the effect of this savings is it makes things bad for people and providers!
+ Move Medicare from 1965 to the present! One idea is to change federal policy so individuals now 55 or younger, will be offered, in 10 years when they turn 65, Medicare benefits from private companies. People currently 56 or older and those now on Medicare will use the current system. The idea of using private companies has worked for the Medicare prescription program, which now has costs about 30% less than projected when it started. An approach like this would put people in charge and provide choices. Medicare payments to the company a person selected would cover most of the cost. An additional payment could be included for people with chronic situations like in Medicare Advantage plans. Since expenses go up as we age more premium support could be added for those who are older.
Putting people in charge of how they receive their benefits is certainly a better approach than having a cost cutting board making decisions for everyone on what is covered!
Bottom line, it is important for everyone to look at the real facts about Medicare’s cost situation and consider alternative ways for it’s important benefits to continue.
In recent weeks various words have been coming out of Washington DC saying Congressman Ryan’s proposal to fix this would “end Medicare as we know it”. These words are in fact unfounded because federal health reform already ended what we know by introducing two radical changes:
Note: An April 27th WSJ article called the effort behind these words a hoax!
First – When we look around we see more MDs are no longer taking new Medicare patients today because their reimbursements are 20% or more below what private plans pay. Rates are 30% or more less for hospitals. Adding to today's under payments federal reform implements, over the next few years, payment rate cuts for MDs, hospitals, etc. The result - reimbursements will be less than Medicaid in about ten years! Some reports say more than 80% of MDs will not accept Medicare patients if these cuts in the law, which are price controls are implemented.
Second - An Independent Payment Advisory Board was created with the power to recommend payment cuts. This means new medications and treatment technologies, which are generally more costly, may not be approved. Congress then either accepts the boards recommended cuts or develops their own. If not at the same level the Board cuts will be implemented. Interestingly this Board cannot look at cost containing ideas other than cutting fees!
No matter how much some want Medicare to be left alone the cost increase trends are unsustainable and must be fixed. Thus, the question becomes, which approach is the best way to continue these important benefits:
+ Federal health reform, which lowers provider pay and means far fewer MDs to treat people? Some are saying these changes “save health care costs”! Yes the actual dollars being spent will be lower because of the cuts but the effect of this savings is it makes things bad for people and providers!
+ Move Medicare from 1965 to the present! One idea is to change federal policy so individuals now 55 or younger, will be offered, in 10 years when they turn 65, Medicare benefits from private companies. People currently 56 or older and those now on Medicare will use the current system. The idea of using private companies has worked for the Medicare prescription program, which now has costs about 30% less than projected when it started. An approach like this would put people in charge and provide choices. Medicare payments to the company a person selected would cover most of the cost. An additional payment could be included for people with chronic situations like in Medicare Advantage plans. Since expenses go up as we age more premium support could be added for those who are older.
Putting people in charge of how they receive their benefits is certainly a better approach than having a cost cutting board making decisions for everyone on what is covered!
Bottom line, it is important for everyone to look at the real facts about Medicare’s cost situation and consider alternative ways for it’s important benefits to continue.
Friday, June 17, 2011
What’s with all the “Medicare as we know it” talk?
Background: Medicare, implemented in 1965, pays medical expenses on a fee for service basis. Thus, the more treatments performed the more pay the provider receives. This over utilization plus the fact that treatment costs are going up at twice the rate of national income. Adding to this issue is the fact that an ever increasing number of people are becoming eligible, which adds significant costs. The 2011 Medicare forecast shows it running out of money five years sooner than in the 2010 report. It may be sooner because of some questionable assumptions!
In recent weeks various words have been coming out of Washington DC saying Congressman Ryan’s proposal to fix this would “end Medicare as we know it”. These words are in fact unfounded because federal health reform already introduced two radical changes:
Note: An April 27th WSJ article called the effort behind these words a hoax!
First – When we look around we see more MDs are not taking new Medicare patients today because their reimbursements are 20% or more below what private plans pay. Payments are 30% or more less for hospitals. With that in mind along comes federal reform, which implements payment rate cuts. The result - reimbursements for MDs, hospitals, etc. will be less than Medicaid in about ten years! Some reports say more than 80% of MDs will not accept Medicare patients if the price controls in the law are implemented.
Second - An Independent Payment Advisory Board was created with the power to recommend cuts. This means new medications and treatment technologies, which are generally more costly, may not be approved. Congress then either accepts the cuts or develops their own. If not at the same level the Board cuts will be implemented. Interestingly this Board cannot look at cost containing ideas other than cutting fees!
No matter how much some want Medicare to be left alone it’s costs are unsustainable and must be fixed Thus, the question becomes, which approach is the best way to continue these important benefits:
+ Federal health reform with it’s lowers provider pay and thus far fewer MDs to treat people? Some are saying these changes “save health care costs”! Yes payment cuts will lower actual dollars spent but it also results in making things bad for people and providers.
+ Move Medicare from 1965 to the present! One idea is to change federal policy so only those individuals now 55 or younger, will be offered, in 10 years when they turn 65, Medicare benefits from private companies at 65 in 10 years. Using private companies has worked for the Medicare prescription program, which now has costs about 30% less than projected. An approach like this would put people in charge and provide choices. Medicare payments to the company a person selected would cover most of the cost. An additional payment could be included for people with chronic situations like in Medicare Advantage plans. More support could also be added for those who are older. Putting people in charge of how they receive their benefits is certainly a better approach than having a cost cutting board making decisions for everyone on what is covered.
Bottom line, it is important for everyone to look at the real facts about Medicare’s cost situation and consider alternative ways for it’s important benefits to continue.
In recent weeks various words have been coming out of Washington DC saying Congressman Ryan’s proposal to fix this would “end Medicare as we know it”. These words are in fact unfounded because federal health reform already introduced two radical changes:
Note: An April 27th WSJ article called the effort behind these words a hoax!
First – When we look around we see more MDs are not taking new Medicare patients today because their reimbursements are 20% or more below what private plans pay. Payments are 30% or more less for hospitals. With that in mind along comes federal reform, which implements payment rate cuts. The result - reimbursements for MDs, hospitals, etc. will be less than Medicaid in about ten years! Some reports say more than 80% of MDs will not accept Medicare patients if the price controls in the law are implemented.
Second - An Independent Payment Advisory Board was created with the power to recommend cuts. This means new medications and treatment technologies, which are generally more costly, may not be approved. Congress then either accepts the cuts or develops their own. If not at the same level the Board cuts will be implemented. Interestingly this Board cannot look at cost containing ideas other than cutting fees!
No matter how much some want Medicare to be left alone it’s costs are unsustainable and must be fixed Thus, the question becomes, which approach is the best way to continue these important benefits:
+ Federal health reform with it’s lowers provider pay and thus far fewer MDs to treat people? Some are saying these changes “save health care costs”! Yes payment cuts will lower actual dollars spent but it also results in making things bad for people and providers.
+ Move Medicare from 1965 to the present! One idea is to change federal policy so only those individuals now 55 or younger, will be offered, in 10 years when they turn 65, Medicare benefits from private companies at 65 in 10 years. Using private companies has worked for the Medicare prescription program, which now has costs about 30% less than projected. An approach like this would put people in charge and provide choices. Medicare payments to the company a person selected would cover most of the cost. An additional payment could be included for people with chronic situations like in Medicare Advantage plans. More support could also be added for those who are older. Putting people in charge of how they receive their benefits is certainly a better approach than having a cost cutting board making decisions for everyone on what is covered.
Bottom line, it is important for everyone to look at the real facts about Medicare’s cost situation and consider alternative ways for it’s important benefits to continue.
Tuesday, April 12, 2011
Connecticut Legislators considering proposals which will increase cost
The Connecticut General Assembly is considering a variety of proposals, which if enacted, would increase the cost of medical insurance. Interesting isn't it in these times when the focus should be on improving the business climate and working on policies to encourage job creation.
Here are the highlights of a couple proposals:
SustiNet is a proposal resulting from a study over the last couple years. SustiNet certainly has some worthwhile goals but the ideas on how medical insurance will be provided are based on approaches, which will not be economical for the state or effective for participants if it were to be created.
Some background on another proposal. Federal health reform includes a requirement for states to develop an Exchange. The idea is to have a central place for individuals or small employers to review different medical insurance options and then enroll. A yet to be developed high tech enrollment system, where a person will enter extensive personal financial information, will be used to determine:
+ If their income level qualifies them for MedicAID, the coverage for low income individuals,
+ If they will be eligible for a subsidy to purchase coverage. It will be available to those whose income is up to 400% of the federal poverty level.
The system will then automatically enroll them in their selected coverage.
The Exchange receives federal funds to help with development but it will have to be self sustaining within one year of beginning operation Jan. 1, 2014. To do that without an unreasonable assessment on participating health plans, which would make them more expensive than plans outside the Exchange it needs to have a flexible and economical operation.
One of the proposals would use lots of government management (expensive), would limit consumer choices, and require more extensive and thus more expensive coverage than planned in federal reform.
Questions? Contact me at (860) 451-9793.
Here are the highlights of a couple proposals:
SustiNet is a proposal resulting from a study over the last couple years. SustiNet certainly has some worthwhile goals but the ideas on how medical insurance will be provided are based on approaches, which will not be economical for the state or effective for participants if it were to be created.
Some background on another proposal. Federal health reform includes a requirement for states to develop an Exchange. The idea is to have a central place for individuals or small employers to review different medical insurance options and then enroll. A yet to be developed high tech enrollment system, where a person will enter extensive personal financial information, will be used to determine:
+ If their income level qualifies them for MedicAID, the coverage for low income individuals,
+ If they will be eligible for a subsidy to purchase coverage. It will be available to those whose income is up to 400% of the federal poverty level.
The system will then automatically enroll them in their selected coverage.
The Exchange receives federal funds to help with development but it will have to be self sustaining within one year of beginning operation Jan. 1, 2014. To do that without an unreasonable assessment on participating health plans, which would make them more expensive than plans outside the Exchange it needs to have a flexible and economical operation.
One of the proposals would use lots of government management (expensive), would limit consumer choices, and require more extensive and thus more expensive coverage than planned in federal reform.
Questions? Contact me at (860) 451-9793.
Thursday, March 31, 2011
Each of us can help control the cost of medical insurance
There has been and continues to be lots of coverage and discussion on the cost of medical insurance. However, there is not enough discussion about medical insurance being expensive because of the high cost of medical treatments.
For several years analysis has shown, for employer coverage, about 85% of every medical insurance premium dollar goes to pay medical treatment costs. In looking at this we also know 70% or more of this amount is connected to life style choices. Smoking, eating to many big burgers, etc.
The question then becomes - Who is responsible for this? A statewide survey of adults in PA found "93.3% of respondents believe they are more responsible for their personal health than their doctor." However, "32.5% said they do not engage in planned exercise on a weekly basis and 48.7% exercise three or more times weekly."
One interesting fact to me was the survey finding that only one-fourth "said they avoid high-salt foods and less than one-third pay attention to the amount of salt in foods they consume."
The Pennsylvania Medical Society reported they were "glad to see that Pennsylvanians believe they are more responsible for their own health - - but - - there are many hurdles to clear if they want to achieve better health."
Is this human nature and thus can't be changed? Is it something each of us needs to get involved in?
I believe each of us has a big part to play in controlling the cost of medical insurance, which now has an unsustainable growth rate.
For several years analysis has shown, for employer coverage, about 85% of every medical insurance premium dollar goes to pay medical treatment costs. In looking at this we also know 70% or more of this amount is connected to life style choices. Smoking, eating to many big burgers, etc.
The question then becomes - Who is responsible for this? A statewide survey of adults in PA found "93.3% of respondents believe they are more responsible for their personal health than their doctor." However, "32.5% said they do not engage in planned exercise on a weekly basis and 48.7% exercise three or more times weekly."
One interesting fact to me was the survey finding that only one-fourth "said they avoid high-salt foods and less than one-third pay attention to the amount of salt in foods they consume."
The Pennsylvania Medical Society reported they were "glad to see that Pennsylvanians believe they are more responsible for their own health - - but - - there are many hurdles to clear if they want to achieve better health."
Is this human nature and thus can't be changed? Is it something each of us needs to get involved in?
I believe each of us has a big part to play in controlling the cost of medical insurance, which now has an unsustainable growth rate.
Saturday, February 26, 2011
Obesity - a key issue in the cost of medical insurance
Obesity is on the rise, with two in three adults in the United States categorized as either obese or overweight, and one in five U.S. children suffering from the same condition.
What can be done? The drastic changes to diet and exercise needed to make changes to improve this condition aren’t easy. Some of the factors, which are required:
+ Behavioral and lifestyle changes that take self-discipline and determination.
+ Education and resources to understand not only what to do but how to make changes safely.
This video may be of interest:
Try this link if the first did not work.
What can be done? The drastic changes to diet and exercise needed to make changes to improve this condition aren’t easy. Some of the factors, which are required:
+ Behavioral and lifestyle changes that take self-discipline and determination.
+ Education and resources to understand not only what to do but how to make changes safely.
This video may be of interest:
Try this link if the first did not work.
Thursday, February 17, 2011
How can SustiNet provide affordable medical insurance?
Connecticut's General Assembly is considering a proposal to implement the SustiNet program. It certainly has various worthwhile goals such as improved medical technology and wellness, however it will do little, if anything, to lower medical treatment expenses. Some points about health reform:
First - Medical insurance rates are high because over 85% of each premium dollar goes to pay for ever increasing and expensive medical treatment. Then too, 70% or more of these expenses can be directly connected to people’s lifestyle choices. Activities such as smoking and the big costs that come from obesity. Consequently, an important focus in health reform efforts in Connecticut needs to be on treatment costs.
Second - There are also important, but unanswered questions on how a public medical insurance plan can create affordable coverage. For example:
+ Some supporters have the perception simply bringing the state employee medical benefits and Connecticut’s Medicaid system (Husky) together and then providing access to more individuals will lower the cost of coverage. Facts tell us otherwise. Actuarial studies have shown creating a larger medical plan by combining groups does not result in lower costs. What usually happens is the kind of organizations inclined to participate tend to have high medical claims, which just creates higher costs.
+ The proposal would also use self insuring, which does nothing to lower medical treatment costs.
+ Individuals on Medicaid have, by federal/state regulations, extensive coverage but because of Medicaid’s very low payments have access to limited providers. A high percentage of providers are also not accepting new patients. State employees are offered several very expensive benefit options and we know from when the Municipal Health Insurance Plan started a few years ago regulations did not allow funds in this benefit plan to be co-mingled with dollars covering people outside this group. How can these two very different plans be managed to lower costs and at the same time develop coverage options for others?
Some other observations about this proposed approach:
+ Lower medical insurance premiums can only be created by getting individuals more involved in their medical treatment or by limiting coverage as was done with the Connecticut Charter Oak plan. It's efforts to offer a low premium were only achieved by limiting benefits to a maximum of $100,000 a year. Federal health reform requires extensive coverage and unlimited benefits so limiting coverage won't work!
+ An important point on Connecticut’s ability to afford a public run medical insurance plan: In a couple years, most of the cost of expanding Medicaid to more people, which the law calls "newly eligibles" will be picked up by federal funds. However, federal law does not allow any of these dollars, except for certain primary care services, to go toward increasing payments to providers. Thus, with Connecticut big deficit where is the money going to be found for a significant increase in provider reimbursement that is needed today so MDs are available to treat those on Medicaid. Then too, many more dollars will be needed in a couple years for all the additional people that will qualify?
+ An important point on how federal health reform will affect SustiNets efforts: The program wants to participate in the Exchange, which will be set up to operate beginning January 2010. However, to participate a health plan must meet requirements such as - be in good standing - be accredited on quality standards – be subject to state insurance regulations and not self funded - to have a state license. How can SustiNet with no history qualify? In addition, Connecticut regulations require a health plan, wanting a license, to have significant reserves. Where will these dollars come from?
First - Medical insurance rates are high because over 85% of each premium dollar goes to pay for ever increasing and expensive medical treatment. Then too, 70% or more of these expenses can be directly connected to people’s lifestyle choices. Activities such as smoking and the big costs that come from obesity. Consequently, an important focus in health reform efforts in Connecticut needs to be on treatment costs.
Second - There are also important, but unanswered questions on how a public medical insurance plan can create affordable coverage. For example:
+ Some supporters have the perception simply bringing the state employee medical benefits and Connecticut’s Medicaid system (Husky) together and then providing access to more individuals will lower the cost of coverage. Facts tell us otherwise. Actuarial studies have shown creating a larger medical plan by combining groups does not result in lower costs. What usually happens is the kind of organizations inclined to participate tend to have high medical claims, which just creates higher costs.
+ The proposal would also use self insuring, which does nothing to lower medical treatment costs.
+ Individuals on Medicaid have, by federal/state regulations, extensive coverage but because of Medicaid’s very low payments have access to limited providers. A high percentage of providers are also not accepting new patients. State employees are offered several very expensive benefit options and we know from when the Municipal Health Insurance Plan started a few years ago regulations did not allow funds in this benefit plan to be co-mingled with dollars covering people outside this group. How can these two very different plans be managed to lower costs and at the same time develop coverage options for others?
Some other observations about this proposed approach:
+ Lower medical insurance premiums can only be created by getting individuals more involved in their medical treatment or by limiting coverage as was done with the Connecticut Charter Oak plan. It's efforts to offer a low premium were only achieved by limiting benefits to a maximum of $100,000 a year. Federal health reform requires extensive coverage and unlimited benefits so limiting coverage won't work!
+ An important point on Connecticut’s ability to afford a public run medical insurance plan: In a couple years, most of the cost of expanding Medicaid to more people, which the law calls "newly eligibles" will be picked up by federal funds. However, federal law does not allow any of these dollars, except for certain primary care services, to go toward increasing payments to providers. Thus, with Connecticut big deficit where is the money going to be found for a significant increase in provider reimbursement that is needed today so MDs are available to treat those on Medicaid. Then too, many more dollars will be needed in a couple years for all the additional people that will qualify?
+ An important point on how federal health reform will affect SustiNets efforts: The program wants to participate in the Exchange, which will be set up to operate beginning January 2010. However, to participate a health plan must meet requirements such as - be in good standing - be accredited on quality standards – be subject to state insurance regulations and not self funded - to have a state license. How can SustiNet with no history qualify? In addition, Connecticut regulations require a health plan, wanting a license, to have significant reserves. Where will these dollars come from?
Thursday, January 13, 2011
A look at a big medical insurance cost driver
Much continues to be written and talked about regarding the high cost of medical insurance in Connecticut. Regretfully little is discussed about the reason medical insurance is expensive, which is the ever increasing cost of medical treatment.
One big driver is the treatment costs, which result from lifestyle related choices. It is not unusual for medical insurance companies to report 70% or more of their claim expenses can be connected to lifestyle choices. This includes activities such as smoking and eating to much for example many big buggers.
In regard to the eating to much issue the slides on this link may be of interest. They show how our population has become bigger - meaning weight from 1985 to 2009!
When the page comes up simply click the button to advance the slides.
One big driver is the treatment costs, which result from lifestyle related choices. It is not unusual for medical insurance companies to report 70% or more of their claim expenses can be connected to lifestyle choices. This includes activities such as smoking and eating to much for example many big buggers.
In regard to the eating to much issue the slides on this link may be of interest. They show how our population has become bigger - meaning weight from 1985 to 2009!
When the page comes up simply click the button to advance the slides.
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