Ask Tim

What the Senate Health Care Bill Means For Private Insurance

I've just spent a fulfilling afternoon reading through the Better Care Reconciliation Act of 2017, better known as the health care bill that was released to the public last Thursday by U.S. Senate Majority Leader Mitch McConnell (R - Kentucky). Many pixels have been spilled analyzing this legislation (numbered H.R. 1628), particularly the effects it would have on federal premium subsidies, coverage provided through the health insurance exchanges, taxes, and the Medicaid program. I want to focus on how the bill might affect the coverage IIABNY members sell, which in general is group health coverage sold outside the exchanges.

The 142-page text is devoted largely to Medicaid; most of the provisions that affect non-exchange private coverage are only in the last 10 pages or so.

Do Carriers Have To Send Conditional Renewal Notices on Disability Policies?

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Question from an IIABNY member: It is my understanding that New York State requires conditional renewal notices for changes in rates, terms or conditions for New York Statutory Disability policies. Can you confirm?

Answer: That is not correct. The answer is a little bit complicated. Here is my logic: 

1. The New York Disability Benefits Law is contained within Article 9 of the New York Workers' Compensation Law.

2. New York Insurance Law Section 1113 states in part,

"(a) The kinds of insurance which may be authorized in this state, subject to other provisions of this chapter, and their scope, are set forth in the following paragraphs…

(3) 'Accident and health insurance,' means (i) insurance against death or personal injury by accident or by any specified kind or kinds of accident and insurance against sickness, ailment or bodily injury, including insurance providing disability and family leave benefits pursuant to article nine of the workers' compensation law, except as specified in item (ii) hereof; and (ii) non-cancellable disability insurance, meaning insurance against disability resulting from sickness, ailment or bodily injury (but excluding insurance solely against accidental injury) under any contract which does not give the insurer the option to cancel or otherwise terminate the contract at or after one year from its effective date or renewal date."

This means that New York law considers DBL to be a type of accident and health insurance.

New State Rules: New WC Credit, Nurse Practitioners Can Certify Medical Marijuana Patients

Some people look at Wednesday as merely the halfway point of the work week, the day when the soul-crushing despair of Monday morning slowly begins to give way to the Snoopy dance of Friday afternoon. Such people overlook the true significance of the fourth day of the week, the reason why some of us bounce out of bed that day filled to overflowing with anticipation and excitement.

Wednesday, you see, is the day that the New York State Department of State publishes the new issue of New York State Register, the official compendium of the state government’s regulatory activity.

A Republican Alternative to the Affordable Care Act

Almost four years after the enactment of the Patient Protection and Affordable Care Act, three Senate Republicans have unveiled their own version of a health care reform bill. ​The measure, introduced Monday by Senators Richard Burr (N.C.), Tom Coburn (Oklahoma) and Orrin Hatch (Utah), contains some similarities to the ACA, but (as one would expect) a number of differences as well.

As with the ACA, low- and middle-income Americans would receive tax subsidies to help them buy insurance. Those who decide not to buy insurance would also face potential financial pain. However, rather than a tax penalty (which is the case under the ACA), the Republican plan would permit insurers to charge them more for pre-existing conditions when they finally do buy coverage. Insurance carriers would not be able to exclude pre-existing conditions or charge more for them for individuals who maintain continuous coverage.

'New York State of Health'

 

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The entity formerly known as the New York Health Benefit Exchange announced its new name yesterday - New York State of Health. When you hear that name (and I suspect you'll be hearing it a lot in the near future), know that you're hearing about New York's health insurance exchange.

The exchange also announced that its Web site now as an interactive map that shows which health plans are available in a given county. It also has the legally-required calculator to help individuals figure out how much they qualify for in premium tax credits.

They also unveiled a new video, which I imagine will be coming soon to a TV screen near you. If you want to preview it, here it is.

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The Real Health Care Reform Isn't Waiting Until 2014

Sarah Kliff of the Washington Post reports:

There are two big parts of the health reform law going into effect today. One penalizes hospitals if patients are re-admitted to the hospital within one month of a visit for a condition that should have been dealt with on the first trip. The other seeks to redistribute higher Medicare payments to the hospitals that are delivering better care.

Both are part of an effort to fundamentally transform the health-care system in the United States by moving it from a system that pays for value rather than volume. If efforts like these succeed, hospitals will become more concerned with delivering higher quality health care. If they don’t, health providers will continue to earn a living the way they have for decades: By earning a fee for every service they deliver.

via www.washingtonpost.com

When most of us talk about the health care reform law, we tend to focus on the insurance changes -- the exchanges, the individual mandate, the essential health benefits, and so on. Arguably, however, the more important changes are reforms like the ones described here.

The health care economists that I read uniformly cite America's traditional fee-for-service model as one reason for runaway health care costs. The equation is simple: The health care provider performs a test or procedure, and someone pays him for it. It doesn't take a great deal of thought to realize that performing more procedures and tests produces more payments to the provider.

I am not so cynical as to think that doctors perform unnecessary tests and procedures just to boost their incomes. They order these things because they believe there are sound medical reasons for doing so. However, the medical-only perspective may not necessarily contemplate a cost-benefit analysis of a test or an operation.

The goal behind these reforms is to get hospitals and doctors to ask, at least more often: How much good will this (test/procedure/treatment) do? How much will it cost? Given the cost and the odds of failure, does it make sense to go forward with it? What will the outcome be for the patient of going forward vs. not going forward?

Whether these changes will result in slowing down the growth of costs while improving patient outcomes is anyone's guess. If it works, look for a lot of similar changes to come over the next 10 years. It should be interesting to see.

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How Much Will That Cost?

Imagine the following scenario in which I am having a conversation with my auto mechanic.

Mechanic: You know, your car is at the age where it really should have this test.

Me: Is this really necessary?

Mechanic: Well, if you don't have it, and there's a problem with your car's engine, by the time you notice a problem it may be too late to fix it. I really recommend that you have us do the test.

Me (reluctantly): Okay...Any idea of what it'll cost?

Mechanic: Hmm...not sure about that. We'll have to check with your credit card company and get back to you.

Me: Wha?

Mechanic: Well, you'll probably use a credit card to pay, right? So we need to check with your credit card company.

Me: Okay...

(Three days later, the mechanic calls me back.)

Me: So, what is this test going to cost me?

Mechanic: I'm sorry, but your credit card company couldn't tell us, either.

Me: But...I'm going to end up paying for this test that you say I should have. No one can tell me before the test what it'll cost?

Mechanic: That's correct. I'm sorry. Would you like to schedule the test now?

Me: Okay...

Now, raise your hand if you think that scenario was ludicrous. How could a service provider not be able to tell the buyer what the service will cost? Nevertheless, substitute the words "doctor's office" for "mechanic," "body" for "car," and "insurance company" for "credit card company," and you have the essence of an experience I had earlier this year.

Without getting too detailed about it, last year my age started to begin with the number 5, and one's reward for that is a recommendation from one's doctor that one get a certain test involving one's posterior. Good times.

I happen to have a high-deductible health insurance plan, coupled with a health savings account. This meant that said HSA would be funding much of the cost of this test. Consequently, the price tag was of more than passing interest to me, and I called the physician's office to ask how bad the sticker shock would be. The person I spoke with said she would have to check with my insurance company, which she did. Unfortunately, even after checking with them, she still didn't know. 

There are some surprises I like and others I do not. Large bills fall into the latter category. I contacted the physician's office so that I wouldn't get that surprise, and they were unable to tell me the cost of the test I was buying.

So what did this little test end up costing? Well, there was good news and bad news. Under both New York State insurance law and the federal health care reform law, insurance companies must cover these sorts of preventative procedures in full. The doctor who performed the test is in my plan's network. According to the Explanation of Benefits form the plan sent me, he charged $790, they allowed $267.40, and they paid that amount. I was not responsible for any of that cost. So far, so good.

However, this is the sort of test for which the patient is placed under anesthesia (and the patient wouldn't have it any other way, believe me.) The anesthesiologist has his own charges, and New York and federal law don't say anything about insurers having to pay for that. The guy who sent me to my happy place charged $450, the insurer allowed $390, and all $390 was applied to my deductible. Therefore, the answer to the question I so naively asked ahead of time (how much will this test run me?) was $390. And, because no one could tell me this in advance, the amount shown on the bill came as a surprise.

This, my friends, is nuts. If you've followed this blog for some time, you know that I have an interest in the economics of health care, particularly as to how the federal health care reform law will change it. I therefore do a lot of reading on the subject, and if I've read it once, I've read it a hundred times: One reason why health care cost so much as that we patients are insulated from the cost. Of course we'll overuse the health care system, what with our $20 co-pays. We'll be more careful health care consumers if we have "skin in the game." We have to shop for health care services to ensure that we're getting value for our dollars, we have to be educated, we have to ask questions, yada yada yada.

Guess what? My family has to ring up $4,000 in allowed charges each year before my coverage kicks in (unless its for preventative measures like this test.) I have skin in the game. I asked the questions. A fundamental part of shopping is finding out the price of a product or service before you buy it. I tried to do that. And no one could tell me until after the service had been delivered.

There are people who over-use the health care system because they have low co-pays. I know a few of them. However, a) I doubt that they make up the majority -- going to the doctor or the emergency room is still quite inconvenient; and b) statistics show that at least 25 percent of annual Medicare spending is on people in the last year of their lives. If we all became Walmart shoppers for health care tomorrow, the very sickest people, those in the last days of their lives, would still consume a lot of health care and put upward pressure on costs. 

Nevertheless, for those of us fortunate enough to not be terminally ill, asking questions about cost makes sense. Or it would if someone could give us answers. Until there is something approaching good pricing information available to patients before there's an emergency, the talk about us becoming good health consumers is just talk. I can think of no other expensive purchase I make where I don't know the cost ahead of time.

It's no way to run an auto repair operation, and it's no way to run a health care system.

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Ask Tim, Episode #33: The New York Health Insurance Exchange

We go really high-tech with episode 33 of Ask Tim. We installed this fancy software called Skype in order to do a remote interview with IIABNY legislative representative Michael Barrett, who was comfortably ensconced in his office near the State Capitol. Yup, we're trend-setters here at IIABNY HQ.

Our conversation centered on the health insurance exchange that the Cuomo Administration is creating in order to comply with the federal Patient Protection and Affordable Care Act. We talked about:

• The technological preparations that are under way
• The potential roles for agents and brokers in governing the exchange
• What may happen over the next few months.

I conclude with a reminder about how IIABNY members may be able to use the exchange and potential tax benefits that may be worth investigating. Also, stay tuned for our upcoming new video series on health care reform.

Download Ask Tim Episode #33

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'Will Paint a Portrait For Health Care'

N.Y. Program Lets Uninsured Artists Exchange Art for Medical Services

January 24, 2012

A new program lets uninsured New York City artists exchange their art for medical services.

Tony-Award winning actor Lin-Manuel Miranda and rapper and radio personality Roxanne Shante helped launch the “Lincoln Art Exchange” at Lincoln Hospital in the Bronx on Monday.

They were joined by hospital officials and arts organizations including the Actors’ Fund and the Bronx Museum.

Organizers said the program addresses the growing number of freelance and independent artists who can’t afford health insurance.

Under the program, artists will earn “health credits” for every creative service they perform. In exchange they’ll be able to obtain doctor’s visits, laboratory tests, hospitalization, emergency care, dental care and prescriptions at Lincoln.

Their services could include performances at special hospital events and painting murals in Lincoln’s clinics.

Artists and arts workers in the New York area who are interested in enrolling in the program can send an email inquiry to [email protected].

via www.insurancejournal.com

I know many readers of this blog are opposed to the federal health care reform law (major portions of which do not take effect for two more years,) but really -- this is what we've come to? Bartering artwork in exchange for health care coverage? I admire the ingenuity of whoever thought this up, but it's not a rational way for a great country to care for the health of its citizens.

My opinion, not IIABNY's.

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Financial Markets and Health Care: More in Common Than You Think

The similarity between financial markets and healthcare: uncertainty

Written on August 18, 2011 by Wendy Lynch, Ph.D. in HHCF Blog

A question: Does uncertainty in medicine mean consumers should be more or less involved in choices?

As the country watched wild swings in the stock market these past weeks, every investor faced unfortunate hindsight: if only I had cashed out at 12,500! Combined with the pain of continued uncertainty, many investors decided to remove their (remaining) funds simply to stop the discomfort of an unknown future.

While we all dread the anguish of downward market fluctuations and wonder daily what it is store for our dwindling nest eggs, no one can change the fundamental truths of investing: risk and uncertainty.  Yes, experts can advise us and help us assess varying degrees of risk among options, but no one can guarantee the success of our investment decisions, no matter how well informed.

If the world of financial markets is this uncertain, should investors be less involved in the decisions about where they place their money and how much risk they assume?   One could easily argue that the average investor is not capable of making good decisions.  So, should we all find a seasoned stock broker to make decisions for us, independent of our personal circumstances and preferences? After all, they are the experts—right?

What about letting someone else make decisions about our health?

There is more of a parallel between managing financial assets and health assets than most of us would like to believe. Would it surprise you to know that of more than 1,100  medical studies conducted on new treatments or therapies between 2006 and 2010, 92%  were labeled unreliable (1)?  Or that 75% of new treatments in the past 20 years provided no clinical improvement (safety, efficacy or compliance) over existing treatment (2)? Or that scientists conducting medical trials admit being pressured or influenced by the sponsors or manufacturers funding the research (3)? Or that the popular press (or researchers themselves) often exaggerates research findings to make the study results more compelling (4)?

And this is just the part of standard medical practice that has been studied; a large part has never been investigated carefully at all.  By some estimates, over half of what is accepted as the “right” course of treatment has no scientific basis; rather, they’ve simply became customary based on anecdotes and traditions passed on over time (5). Almost every week we hear of a study that disputes, updates, or flat-out reverses a medical “fact” proving that a standard practice has no proven basis (6).

To be fair, the presence of uncertainty does not imply a failure of medic

via www.hcmsgroup.com

This is a very thought-provoking post by Wendy Lynch, as it draws an analogy between investing and health care. We're all investors and we all need health care. So how much do we need to know, and how involved should we be in decisions affecting our financial and physical well-being? Lynch provides a compelling answer.

This discussion has implications for us as consumers of health care and as insurance professionals. The end goal of insurance is to restore the person who suffers a loss to the same position or condition she was in before the loss. Consequently, much of the property-casualty insurance claim dollar goes toward paying for (hopefully) effective medical treatment. The answers to the questions Lynch raises in this post have a great influence on just how effective that treatment will be.

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