Tag Archives: premiums

Health Care Costs Rising for Workers

Axios is reporting that health care costs for workers is rising while overall costs of employer-based health benefits is growing modestly from year to year.

This is slowly eating up all of the average workers wage increases, and then some, as reported by the Kaiser Family Foundation’s  2018 Employer Health Benefits Survey.

The survey covers the last ten years, from 2008 to 2018. Most of where the employees are paying for health care comes from deductibles, which has seen a +212% increase over that period, and is out of pocket. These costs, the survey said, is rising faster than inflation and wages.

Premiums for families have risen over this period +55%, while workers’ earnings have risen +26%, and inflation has risen +17%.

According to Kaiser, employees are paying an average of about $1,200 per year in premiums. That’s 65% more than what they paid in 2008, for single coverage plans that cover only the worker, no family members.

Besides the increase in deductibles, the number of employees who have a deductible has gone up, and the number of employees with above-average deductibles is up as well.

Three takeaways:

  • More patients are more attuned to the high costs of care.
  • The underlying cost of health care services is growing relatively slowly right now, compared to historical trends.
  • But there’s a sense, at least among some liberal-leaning health care experts, that employers have just about maxed out their ability to shift more costs onto employees — meaning that once price increases start to pick up steam again, businesses and workers will both feel the pain quickly.

What does this mean?

As workers’ wages are stagnant, and health care costs are rising, shifting the cost of health care onto the backs of workers is not only counterproductive to lowering the cost of health care, it puts an undue burden on those who can least afford to shell out more of their hard earned income on health care, especially when they have a serious medical issue to deal with.

Single payer will relieve the worker from having to pay out of pocket when wages are stagnant, and when wages rise again. This will enable them to have more money to spend on things that otherwise would have been prohibitive before.

To do no less is to saddle the working class with perpetual debt and decreased economic power. Not a good way to run an economy.

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Immigrants Pay More In Private Insurance Premiums Than They Receive In Benefits | Health Affairs

A press release from Dr. Carol Paris of the Physicians for a National Health Program (PNHP) reported the following article from yesterday’s Health Affairs journal.

Two of the authors of the study, Steffie Woolhandler and David U. Himmelstein are regular contributors to many articles appearing in Health Affairs, and you may remember them from my review of the book they published along with Howard Waitzkin and others, Health Care Under the Knife: Moving Beyond Capitalism for Our Health.

Here is the press release in full:

FOR IMMEDIATE RELEASE:

Despite recent claims that immigrants are a drain on the American economy and health system, a study published yesterday in Health Affairs shows that immigrants make a net contribution to private health insurance plans. The research team, which included several PNHP members, found that as a group, immigrants paid $88.7 billion in private insurance premiums but used only $64.0 billion in insurer-paid health care, generating a surplus of $24.7 billion in 2014.

In “Immigrants Pay More in Private Insurance Premiums Than They Receive in Benefits,” researchers Leah Zallman, M.D., M.P.H., Steffie Woolhandler, M.D., M.P.H., Sharon Touw, M.P.H., David Himmelstein, M.D., and Karen Finnegan, Ph.D. found that between 2008 and 2014, immigrants generated a cumulative surplus of $174.4 billion for private insurers, heavily subsidizing the the benefits of U.S.-born enrollees and boosting the profits of insurance companies. On a per-enrollee basis, immigrants provided an average premium-over-payout surplus of $1,123 each, while U.S.-born Americans incurred an average deficit of $163 each. Undocumented immigrants, who generally use little medical care, generated the largest surplus at $1,445 per enrollee.

While recent studies have examined the financial impact of immigrants on public health programs like Medicare, this project was the first to look specifically at immigrants’ role in financing private health insurance. Since undocumented immigrants or those residing legally in the U.S. for fewer than five years are not eligible for Medicaid and Medicare, private insurance is often immigrants’ only coverage option. Even so, many immigrants are afraid to use the coverage that they earn and pay for.

“Almost every day I see immigrant patients who avoid seeking the care they need to stay healthy,” said lead author Dr. Leah Zallman, who is director of research at the Institute for Community Health, physician at Cambridge Health Alliance, and assistant professor of medicine at Harvard Medical School. “Political leaders have created a climate of fear by blaming immigrants for driving up health care costs. However, this study and our prior research shows that by paying more into the system than they receive, immigrants actually subsidize both private insurance and Medicare for U.S.-born citizens.”

Don McCanne added the following on his post this afternoon about immigrants and private health insurance premiums.

From the Discussion

Immigrants contributed far more in premiums for private coverage in 2014 than their insurers paid out for their care, with undocumented immigrants generating the largest per enrollee surplus. This net surplus offset a deficit incurred by US natives and exceeded total insurance industry profits by about $10 billion that year. Our 2014 findings were not anomalous: Immigrants made large net contributions in every year in the period 2008–14, with little change over time.

While immigrants’ premiums were similar to those for US natives, immigrants incurred much lower expenditures—a disparity that was present in analyses limited to working-age adults. Among immigrants, expenditures increased with duration of time in the US, a phenomenon documented previously. This may reflect worsening health habits related to acculturation, increased care-seeking behaviors, and increased educational standing with time in the US. However, because premium contributions also increased with time in the US, immigrants made a net contribution to private health insurance regardless of their length of residence in the US.

Our findings contradict assertions that people born in the US are systematically subsidizing the medical care of immigrants, particularly those who are undocumented. On the contrary, immigrants subsidize US natives in the private health insurance market, just as they are propping up the Medicare Trust Funds.

Immigrants’ subsidies to private insurance and Medicare likely reflect their relative youth and good health, as well as the reluctance of many to seek care. Policies that curtail the flow of immigration to the US are likely to result in a declining number of such “actuarially desirable” persons, which could worsen the private insurance risk pool.

Source: Immigrants Pay More In Private Insurance Premiums Than They Receive In Benefits | Health Affairs

Americans Are Skipping Health Insurance

Bloomberg on Monday published an article by John Tozzi that reported that some Americans are taking a risk and skipping health insurance because of the cost.

In the article, “Why Some Americans Are Risking It and Skipping Health Insurance”, Bloomberg interviews three families; the Buchanans of Marion, North Carolina, the Owenses of Harahan, Louisiana, and the Bobbies in a suburb of Phoenix, Arizona.

The Buchanans decided that paying $1,800 a month was too much for health insurance and decided to go without it for the first time in their lives.

Doubling insurance premiums convinced the Owenses to do so as well, and Mimi Owens said that, “We’re not poor people but we can’t afford health insurance.”

Saving money to pay for their nine-year-old daughter Sophia, who was born with five heart defects, forced the Bobbies to go uninsured for themselves and their son Joey.

These three families are but a small part of the dozen other families Bloomberg is following to understand the trade-offs when a dollar spent on health insurance cannot be spent on something else. Some are comfortable financially, others are just scrapping by.

According to Tozzi, the share of Americans without insurance is near historic lows, the current administration is rolling back parts of the ACA. At the same time, Tozzi reports, the cost for many people to buy a plan is higher than ever.

In the case of the Buchanans, wife Dianna, 51, survived a bout with cancer 15 years ago, her husband, Keith has high blood pressure and takes testosterone. Both make more than $127,000 a year from an IT business and her job as a physical therapy assistant. They have additional income from properties they own.

However, their premium last year was $1,691, triple their mortgage payment, and was going up to $1,813 this year. A deductible of $5,000 per-person meant that having and using coverage would cost more than $30,000.

What made the Buchanans take this step was when Blue Cross and Blue Shield of North Carolina and the major hospital system in Asheville, could not reach an agreement, putting the hospital out of network. Keith Buchanan said, “It was just two greed monsters fighting over money.” He also said, “They’re both doing well, and the patients are the ones that come up short.”

The Buchanans are now members of a local doctors’ practice, for which they pay $198 a month. They also signed up for a Christian group that pools members’ money to help pay for medical costs. For this membership, it costs the Buchanans $450 a month, and includes a $150 surcharge based on their blood pressure and weight.

After dropping their coverage with Blue Cross and Blue Shield, Keith injured his knee, went to an urgent care center and was charged $511 for the visit and an X-ray. “If we can control our health-care costs for a couple of years, the difference that makes on our household income is phenomenal,” Keith said.

There is evidence, Tozzi writes, that having insurance is a good thing. People with insurance spend less out of pocket, are less likely to go bankrupt, see the doctor more often, get more preventive care, are less depressed and have told researchers they feel healthier.

Yet, some 27.5 million Americans under age 65 were uninsured in 2016 (myself included), about 10 percent of the population, according to the Kaiser Family Foundation.

The most common reason cited by KFF was that the cost was too high. A Gallup poll suggested that despite declining for years, the percentage of adults without coverage has increased slightly since the end of 2016.

However, other data, Tozzi writes, showed no significant change.

The following chart outlines the household income and health insurance status of people under 65 who qualify for government help with having insurance.

For the Bobbie family, the current administration’s proposal to make it easier for Americans to buy cheaper health plans could open options for the rest of the Bobbie family, but with over $1 million in medical costs for Sophia, these less-expensive choices would lack some of the protection created by the ACA that allowed her to get coverage.

The tax scam that became law in December will lift the ACA’s requirement that every American have coverage or pay a fine.

Some states are trying out the new rules, offering plans that don’t adhere to ACA requirements. This is the case in Idaho where the state’s Blue Cross insurer attempted to offer a so-called “Freedom Plan” that had annual limits on care and questionnaires that would allow them to charge higher premiums to sick people or those likely to become sick.

The current administration judged reluctantly that this plan violated ACA rules.

The Owenses decided to do something like what the Buchanans did. They tried a Christian health-sharing ministry for a few months, but joined a direct-primary care group, which Mimi Owens called, “the best care we’ve ever had.”

The three American families are by no means not alone in having to decide whether to have insurance or to take the risk and forgo paying huge premiums to save money or to use it for another family member with more pressing medical issues.

Two of these families are not low-income, as they both earn over $100,000 a year and could afford to buy health coverage if it was affordable. But the reality is that premiums have risen and will continue to rise and will price them out of the market.

Except for the Bobbies, no one in the other two families have serious medical issues that are exceedingly expensive, and they have found lower cost alternatives, but for many other families in the U.S., that may not be an option.

The only real solution is universal health care. Then the Buchanans, Owenses, and Bobbies of America will not have to worry about how they are going to pay for medical bills if some serious medical condition arises. We can and should be better than this.

Fallout of the End of ACA Subsidies

Joe Paduda today gave a very succinct and clear-minded assessment of the fallout of the ending of the ACA subsidies, also known as Cost-Sharing Reimbursement (CSR) payments.

Here is Joe’s article.

It makes perfect sense that what the Orange man said yesterday will do more damage to health care than his false and misleading pronouncements of the past year that the ACA is failing and doing harm.

It is you, sir, who are doing harm. To the poor, to minorities like those in Puerto Rico despite your morning mea culpa, to African-Americans and Latinos,  to women, to international agreements and organizations,  and to our credibility with our allies and adversaries.

 

Insurers Jacking Up Premiums Ahead of End of CSRs

An article in Healthcare Finance News.com on Friday, said that insurers are factoring in the end of the cost-sharing reduction payments into their rate increases from 2 to 23 percent, according to a report from the Kaiser Family Foundation.

The article states the following:

“Insurers in 20 states and the District of Columbia have filed premium rate requests for the federal exchange ahead of an August 16 deadline, many on the assumption that cost-sharing reduction payments will not be paid and that the individual mandate will either not be enforced or weakly enforced, according to a Kaiser Family Foundation report released Thursday.”

According to Kaiser, silver premiums would have to increase by 19 percent on average to compensate for the loss of CSR payments.

Susan Moore, the Associate Editor for Healthcare Finance News.com, also said that insurers are building uncertainty into their rates, filing under multiple scenarios involving CSRs and the individual mandate.

The threat from the POTUS to Mitch McConnell to push him to repeal and replace the ACA means that if POTUS does get his way, CSR’s would end and so would the individual and employer mandates. Also, the health insurance tax return in 2018 will add 3 percent to premiums.

You can read the rest of the article yourselves, but consider this. Isn’t time to end this nonsense of charging people insurance premiums that are constantly rising just so that a bunch of greedy health insurance companies and their Wall Street investors profit from people’s health?

When are we going to wise up and put and end to this game of playing with people’s health and forcing many into bankruptcy because they have severe medical issues?

When are we going to realize that health care is a human right, and not a commodity that can be marketed like consumer goods?

Medicare for All will end this constant round of rate increases and shenanigans the health insurers perpetrate on the American people.

And Then There Was One

In what may well be one of the last posts written about opt-out for workers’ comp, Joe Paduda today reports that Oklahoma is opting out of opt-out.

That leaves the Lone Star State as the only state that allows employers to “opt out” of the statutory system, but as Joe indicates, most Texas employers opt in.

There is a strange relationship in Texas between opting out and insurance premiums that runs counter to what many might think natural otherwise. Large employers opt out when the rates are low, and small employers opt out when the rates are high, a point I highlighted in the post, “Large Employers in Texas Opting Out of Work Comp.”

So as rates are decreasing in Oklahoma, according to Joe, employers there are opting out of opting out.

Maybe at last we are seeing the end of this extremist, turn-the-clock-back to the 19th century way of providing workers’ compensation to injured workers.

And amen to that.

 

“Florida, We Have a Problem”

Tuesday, Judge David Langham, Deputy Chief Judge of Compensation Claims for the Florida Office of Judges of Compensation Claims and Division of Administrative Hearings, wrote a rather lengthy post about the differences between cost-shifting and case-shifting in workers’ comp.

Much of what the Judge wrote were subjects that I already discussed in a number of previous posts about cost-shifting and case-shifting, so I won’t go into it here. I am only focusing on the parts that relate to Florida workers’ comp. You can read the entire article yourselves.

But what caught my attention was what he said about Florida and what the Workers’ Compensation Research Institute (WCRI) reported in some of their studies on these issues.

As Judge Langham wrote this week, he wrote a post two years ago that asked the question “Why Does Surgery Cost Double in Workers’ Compensation?”

Judge Langham noted in that post that Florida employers have been documented paying almost double for shoulder or knee surgery that is paid for under workers’ compensation, compared to group health costs.

The implication of case-shifting in Florida, he says, could arguably be a doubling of cost.

He cited a WCRI report released earlier this year that suggests however that case-shifting is perhaps not as likely in Florida.

According to the report, Judge Langham continues, “as of July 2011, six states had workers’ comp medical fee schedules with rates within 15% of Medicare rates. They were California, Massachusetts, Florida, North Carolina, New York and Hawaii.”

However, Judge Langham pointed out that the WCRI concluded that case-shifting is more likely in states where the workers’ compensation fee schedule is 20% or more above the group health rates, and not in Florida.

Judge Langham stated that this analysis of workers’ compensation fee schedules does not appear to include analysis of the reimbursement rates for hospitals, and that It also seems contradictory to the assertions that Florida workers’ compensation costs for various surgeries have been documented as roughly double the group health rates (100% higher, not 15% higher).

Injured workers who missed work in the Florida workers’ compensation system could be compensated in 2016 at a rate as high as $862.51 per week, the “maximum compensation rate.”

So, if recovery from such a “soft-tissue” injury required ten weeks off-work, he wrote, the case-shifting to workers’ compensation might add another four to nine thousand dollars to the already doubled cost of surgical repair under workers’ compensation.

This could be directly borne by the employer if the employer is self-insured for workers’ compensation; or, if the employer has purchased workers’ compensation insurance, the effect on the employer would be indirect in the form of potentially increased premium costs for workers’ compensation following such events and payments, Judge Langham states.

According to WCRI, the Judge quotes, “policymakers have always focused on the impact (workers’ compensation) fee schedules have on access to care as well as utilization of services.

This has been a two-part analysis, he says:

First, fee schedules have to be sufficient such that physicians are willing to provide care in the workers’ compensation system; and second, the reimbursement cannot be too high, or perhaps overutilization is encouraged.

Lastly, Judge Langham points out that the disparity between costs has also been noted in discussions of “medical tourism.”

The last question he posits is this, “might medical decision makers direct care to more efficient providers, across town, across state lines?”

What about national borders?


I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp.

I am also looking for a partner who shares my vision of global health care for injured workers.

I am also willing to work with any health care provider, medical tourism facilitator or facility to help you take advantage of a market segment treating workers injured on the job. Workers’ compensation is going through dramatic changes, and may one day be folded into general health care. Injured workers needing surgery for compensable injuries will need to seek alternatives that provide quality medical care at lower cost to their employers. Caribbean and Latin America region preferred.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com.

Will accept invitations to speak or attend conferences.

Connect with me on LinkedIn, check out my website, FutureComp Consulting, and follow my blog at: richardkrasner.wordpress.com.

Transforming Workers’ Blog is now viewed all over the world in 250 countries and political entities. I have published nearly 300 articles, many of them re-published in newsletters and other blogs.

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