2015 – Another Year of Uncertainty?

By Cathy Eddy, February 25, 2015

This year on March 23, we will mark the 5th anniversary of the passage of the Affordable Care Act. Typically, you would expect that most of the unknowns that go along with a new law would have been worked out by now. Yet as we look ahead, we have several key elements that may change. There are also other drivers that are challenging our health plans.

Here are some of the uncertainties still ahead:

  • We now have a Republican Congress with the Senate flipping in the 2014 election. This will allow for legislative changes to ACA to make it to President Obama’s desk, but veto power will block most of these without some Democratic support. Some areas, such as eliminating the device tax and redefining the 30 hour “full time” work week to 40 hours, have bi-partisan support. 
  • The Supreme Court has agreed to hear arguments in March about the subsidies on the public exchanges in states where the federal exchange,, is in place. The wording in ACA indicates that subsidies will only be given if there is a state-run exchange and that would impact about 2/3 of the states using the federal exchange. Their decision is due by June. 
  • The health plans on the public exchanges had to set rates for 2015 with little experience about those members in these programs. It will become clearer as this year progresses just what the MLR is for this line of business. By the time open enrollment starts for the public exchanges in 2016, we’ll find out if premiums go significantly higher or stay at current levels. The impact of the 3 Rs on the plans will also become clearer. Standards for being a QHP remain unclear. Introduction of compliance requirements such as consumer satisfaction measurements will be tested in 2015. Technology bugs still abound with data flowing between plans and CMS.
  • Individual mandates are in place with increasing penalties for not having insurance coverage, but the implementation of the employer mandate is still uncertain. 
  • A new type of insurance company – the state Co-ops – were created by ACA with federal loans. Not all states were able to offer this model. In 2015, some of the established Co-ops are expanding to new states. Others are offering coverage through off-exchange products in the commercial space. Some are struggling to maintain the necessary level of capital.  The future of the Co-op model still has a level of uncertainty. 
  • Providers have been embracing the concept of “value based reimbursement,” and the movement away from fee-for-service, but the implementation of this strategy has been much slower than first expected. 
  • The trend for the past couple of years has been for providers to become payers and for payers to move more into the provider space. Many members of the Health Plan Alliance have been approached to work with health systems that don’t have their own health plans. Will this trend continue or will providers find that entering the insurance space and taking on more risk is outside of their comfort zone?
  • Will 2015 be the year that ICD-10 is finally implemented or will there be another delay? 
  • Many states are looking at their Medicaid expenditures and trying to find ways to control increases. Some states have made major changes to their programs and are implementing the changes. Dual eligibles are being moved into managed care programs. Will more states take the federal dollars for Medicaid expansion? 
  • Plans that are in the Medicare Advantage line of business continue to be challenged by risk adjustment, STAR ratings and reimbursement levels, as well as multiple audits. As plans expand these programs they continue to deal with uncertainty.

Well, at least 2015 won’t  be boring!


Medicare Obesity Counseling – it’s Free!

By Claire Thayer, February 23, 2015

The Center for Disease Control and Prevention shows alarming obesity trend rates among the elderly population within the United States.  Thirty-six percent of men aged 65-74 are considered obese, along with slightly over 44% of women in this same age bracket, as highlighted on the CDC’s FastStats for Older Persons’ Health web page:

These findings continue to trend upward from the data previously available from the National Center for Health Statistics that found more than one-third of older adults aged 65 and over were obese in 2007–2010. 

Consider that over the next thirty years, the number of U.S. older adults is expected to more than double, rising from 40.2 million to 88.5 million. Primary care providers are critically important in helping to reverse these trends. The Kaiser Family Foundation reminds us in an article published this week, Few Seniors Benefiting From Medicare Obesity Counseling, that the Affordable Care Act included a new Medicare benefit offering face-to-face weight-loss counseling in primary care doctors’ offices. Doctors are paid to provide the service, which is free to obese patients, with no co-pay.  Surprisingly, as reported in USA Today, a mere 1% of Medicare's 50 million beneficiaries have used the free counseling benefit.


How the Mighty Haven't Fallen

By Kim Bellard, February 17, 2015

I recently read an article that speculated on how even the mighty Google could fade into irrelevance faster than we might think.  It made me wonder why that kind of change doesn't seem to happen in health care.

The Google article, by Farhad Manjoo in The Wall Street Journal, cited one-time technology leaders like Wang and DEC, and pointed out that other long-time powerhouses such as Hewlett Packard and even Microsoft are furiously trying to reestablish themselves after decades of (relative) decline.  

Then there's health care.

Just out of curiosity, I looked at share of spending by type of service in the National Health Expenditures, from 1960 to 2013.  Here's what I found:

For all our many clinical and technological advances, the same three health sectors that dominated health care spending in 1960 still command virtually the same shares in 2013 -- over 60% of our overall spending.  They've "lost" less than 2% of share to other types of spending during those decades.  

It hasn't all been smooth sailing, of course.  Hospital spending reached almost 40% in the early 1980s, dipped below 30% in the early 21st century, and rebounded this decade.  The physician share has been steadier -- a peak of around 22% in the early 2000's, a low of 18.3% in 1978, but mostly stayed around 20%.  Prescription drugs spending, on the other hand, got to as low as 4.5% in 1981-82, reached a peak of 10.4% in 2006, and now seems to be on a slow decline.  But, all in all, the composition of Big 3 of the medical-industrial complex remains unchanged over a very long time.

It's as if the Big 3 U.S. auto manufacturers still maintained their 1960 dominance today, or the 3 TV broadcast networks still had their pre-cable/Internet share of viewers.  Both trios still have hefty market shares, still play key roles, but are nowhere near their historical dominance. New competitors emerged to give consumers more options, and took away significant shares of those markets.  

Unlike what has happened in health care.  

Hospitals, physicians, pharmaceuticals, and the health care industry generally have certainly evolved significantly in the past 50+ years, but it is more incremental evolution than the kind of "punctured equilibrium" Steve Jay Gould and others posit that result in rapid changes that overthrow species.  

I don't have anything against hospitals, doctors, or prescription drugs, at least not in principle.  It just doesn't feel like progress that we're not coming up with radically new care and delivery options that don't rely on them.  

Unlike most markets, health care isn't really driven by consumer demand.  A couple years ago, JAMA published a survey of physicians, in which  they blamed rising costs on pretty much everyone else but themselves, more than half even blaming patients.  A new study has cast doubt on the view that patient demand is driving unnecessary spending.   The saddest thing for me from the study was that only 8.7% of patient encounters included a patient demand.  We're a long, long way from informed patients taking responsibility for their own care, or their own health.

Having control over what constitutes the "practice of medicine" is certainly an effective way of forestalling new kinds of competitors.  That control has been placed in the hands of the providers practicing care, ostensibly to safeguard patients' interests,. but it's getting harder and harder to believe those interests are primary.  It seems more like protecting turf.  

A couple months ago I wrote a post that raised the question of whether, in a world where microbiome treatments, gene therapy, even nanobots may emerge as prevailing types of treatment, we'll even need physicians, at least in the same way we do now.  I received a number of comments that were aghast at the notion that we might not always need physicians to deliver our care.  I believe it is this kind of thinking that has allowed the Big 3 of health care to retain their dominance.  

If we can't even imagine a health care system that doesn't solely rely on the traditional sources of care, we'll certainly never achieve one.

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting


Are the Health Coverage and Tax Credit Details for Filing 1040s Really That Complex?

By Clive Riddle, February 12, 2015

Much attention has been given this tax season to the new intricacies involved with filing health coverage and related tax credit information for individual 1040s. H&R Block and many other tax services have taken the opportunity to nationally advertise their expertise to support tax filers this season.

So the question begs, how complex are they? This month’s issue of Health Insurance Marketplace News tackles that issue in their February Thought Leaders Corner, asking the question: “ Are the tax credit and related health coverage filing details required for individual 1040s really that complex, and do you feel there is adequate IRS guidance?”

Here’s what some Health Insurance Marketplace News panelists had to say:

“If 2014 premiums based on 2012 incomes prove to be different from actual 2014 incomes and the government seeks to claw back what proved to be excessive subsidies and compensate for too-low subsidies, it will prove to be very complex in practice and generate much paperwork and frustration. Also, if people were covered for only part of the year, the filing will be complex. Better if the subsidies were fixed dollar amounts not subject to retroactive adjustment.” Alain C. Enthoven PhD, Marriner S. Eccles Professor of Public and Private Management (Emeritus), Knight Management Center, Stanford University, Stanford CA

“My initial response to the tax filing requirements in a Health Affairs blog was to express a concern that the filing requirements for the individual responsibility penalty and for premium tax credit reconciliation were very demanding and would probably require most tax filers who were affected by either issue to use the help of tax preparers. Since then, the IRS and CMS have taken a number of steps to help taxpayers -- allowing taxpayers in states that did not expand Medicaid with incomes not exceeding 138% of the poverty level to claim an exemption on their taxes, offering calculators at that will allow tax filers to determine the premiums of the lowest-cost Bronze plan and second-lowest-cost Silver plan that would have been available to them and offering free tax filing software to most tax filers. It is still not going to be easy, but this should be manageable for most tax filers.”  Timothy S. Jost Esq., Robert L. Willett Family Professorship of Law, Washington and Lee University School of Law, Lexington VA

“Tax filing details are often complex. Adding anything associated with the ACA won’t make it any easier. If filers receive ACA-related IRS guidance primarily through written documents versus from a knowledgeable professional or through another more ‘modern’ approach to communication and education, it may be a real challenge for many to fully understand and timely and properly complete the required information. This could be seen as an outstanding opportunity for the various parties close to the ACA that have observed so much about the importance of consumer-level communication and education to work together to assist the IRS in its endeavor. There are some useful resources available, but accessing and understanding those resources may continue to be a challenge that must be continuously addressed to ensure consumers are knowledgeable about, and compliant with, the law.”   Simeon Schindelman, CEO, Bloom Health, Minneapolis, MN

“Yes, most consumers will find it very confusing and yes, there is sufficient IRS guidance. Consumers will fall into two broad categories; either they received a tax credit for 2014 tax year or did not.

(1) Did not receive tax credit:  Form 1040EZ. Easiest to file with some restrictions (e.g., claim no dependents and do not want to claim any advance payments of the premium tax credit); and (2) Received and will claim advance payments of the premium tax credit:   Form 1040A. Has some restrictions (e.g., do not itemize deductions, claim standard deductions and taxable income or $100K or less);  Form 1040. Filed for taxable income of greater than $100K (e.g., can itemize deductions);      Form 8962 for premium tax credit,; the 1095-A is required when filling out Form 8962 to claim premium tax credits. If consumers had private health insurance or had self-insured employer coverage or coverage through a government program (e.g., Medicaid or Medicare) they may receive a 1095-B. If consumers had health insurance through a large employer that had an employer-sponsored plan, they may receive a 1095-C. However, 1095-B and 1095-C are optional for 2014 tax year, which means it's unlikely most folks will receive one. Unfortunately, if consumers didn’t have or maintain coverage, they will have to get an exemption or make a payment with their federal income tax return.”  Peter B. Nichol, Director, IT/Head of IT , Access Health CT , Hartford, CT


Predictable savings when health plan members are engaged in preventative care

By Claire Thayer, February 12, 2015

There are many approaches to patient care intervention, in terms of managing chronic disease. Several years ago an important study, that is still widely referenced, finds that some of the most successful patient care intervention approaches include those that are customized for each individual patient, allow for intensive time commitment in terms of time multi-disciplinary teams spent face-to-face with patient, and use of technology that is highly interactive with patients.  These approaches to engaging patients in preventative care, along with the payoff in financial savings and health outcomes is the focus of MCOL's infoGraphoid this week:

MCOL’s weekly infoGraphoid is a benefit for MCOL Basic members and released each Wednesday as part of the MCOL Daily Factoid e-newsletter distribution service – find out more here