qotd: Some Covered California patients involuntary transferred to Medi-Cal

KCRA.com/AP
September 9, 2014
Income checks throw Californians off health plans

Some Californians who purchased individual health coverage through the
state's insurance exchange are suddenly being dropped or transferred to
Medi-Cal, the program for the poor that fewer doctors and providers accept.

The changes are occurring as incomes are checked to verify the
policyholders can purchase insurance through the exchange.

Officials at Covered California acknowledged that a number of people are
being shifted around during income checks and eligibility updates.

"It will happen continually," spokesman Dana Howard said.

This year, he said, the exchange adjusted its income eligibility scale
when the federal government updated the poverty scale. As a result,
Howard said, people near the thresholds are sometimes moved between
private health plans and Medi-Cal. The checks might also determine that
some people make too much money to receive a subsidy.

Evette Tsang, a Sacramento insurance agent, said some of her clients
unexpectedly received Medi-Cal cards even though they were content with
the plan they purchased through the exchange.

"There's a lot of people who have never been on Medi-Cal, and they don't
want to. You hear the service is not as good, providers are not easy to
find," Tsang said.

http://www.kcra.com/news/income-checks-throw-californians-off-health-plans/27962242

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Los Angeles Times
September 9, 2014
Editorial
A California solution for a Medicaid quirk

The 2010 federal healthcare reform law required virtually all adult
Americans to carry insurance, starting this year. And to help make
policies affordable, it offered subsidies to lower-income households
while expanding the Medicaid insurance program to more of the poorest
residents. But there's a key difference between those two groups: Only
those in the Medicaid program may find their estates billed after they
die to pay back some of the aid.

Most troubling, the new requirement to obtain coverage is prompting
millions of Californians to sign up for Medi-Cal, where they are put in
Medi-Cal's version of an HMO. Only after they enrolled are they told
that, if they are 55 or older, the state will seek to recover the value
of the coverage from their estates. They could be in perfect health,
receiving no medical care at all, but still be running up a bill that
their estate will have to pay.

The California Legislature responded by passing a bill (SB 1124) that
would stop Medi-Cal, the state's version of Medicaid, from trying to
collect repayment for routine medical care and insurance premiums. The
measure now awaits action by Gov. Jerry Brown, whose Department of
Finance opposes the bill because it would cost Medi-Cal an estimated $30
million a year.

http://www.latimes.com/opinion/editorials/la-ed-medi-cal-20140910-story.html

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Los Angeles Times
September 8, 2014
Editorial
What can be done about Covered California's doctor gap?

A separate study of three rural counties by the California Health Report
found that more than half of the doctors listed by Medi-Cal in those
counties either were turning away new patients or couldn't be reached by
phone.

A related issue is whether the networks offered by health plans can
actually deliver the coverage the plans promise.

Insurers say they're taking the problem seriously, which should help
both those who shop for individual policies and the growing ranks
enrolled in managed-care plans through Medi-Cal.

http://www.latimes.com/opinion/editorials/la-ed-health-insurance-networks-20140908-story.html

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Comment by Don McCanne

At the beginning of the health care reform process, we complained that
the various factors in the proposed multi-payer model that would
determine what health care coverage a person would have would be highly
variable and would result in instability of health care coverage. The
current experience in California provides an inkling of the extent of
this problem.

Some who purchased plans through California's ACA insurance exchange -
Covered California - are losing that coverage when auditing demonstrates
that income levels were not confirmed, income levels changed, or income
eligibility levels changed because of updates in the federal poverty
thresholds. Regardless, people were losing the coverage which they had
selected, and became uninsured or moved to other private plans, or, in
some cases, were involuntarily enrolled in Medi-Cal - California's
Medicaid program.

The latter is a particular problem. First, many of these people pride
themselves on their self-sufficiency, even though they need to accept
government subsidies so that they could afford the exchange plans. They
understand that these subsidies are necessary, not for their own
personal failings but simply because health care has become so expensive
that the average worker can no longer bear the full costs. For these
people, being forced into a welfare program - Medi-Cal - can be humiliating.

But what is even worse, the Medi-Cal ticket doesn't automatically grant
them admission to the health care system. Although there was already a
shortage of physicians who would accept Medi-Cal patients, the lists of
providers currently contain names of many physicians who are now turning
away new Medi-Cal patients. Also, most of the newly eligible are being
enrolled in Medi-Cal managed care plans when preliminary reports
indicate that these plans do not have the capacity to carry the load.

Just to add further insult, those moved into Medi-Cal may have their
estates billed to recover Medi-Cal costs, when there is no recovery
process for subsidies provided for the Covered California exchange plans.

There are thousands of other reasons that coverage is unstable under the
Affordable Care Act. In contrast, a single payer system provides the
same comprehensive national health program for life. You can't get much
better stability than that.

qotd: Federal Reserve report on consumer finances

Federal Reserve Bulletin
September 2014

Changes in U.S. Family Finances from 2010 to 2013: Evidence from the
Survey of Consumer Finances

The Federal Reserve Board's triennial Survey of Consumer Finances (SCF)
collects information about family incomes, net worth, balance sheet
components, credit use, and other financial outcomes. The 2013 SCF
reveals substantial disparities in the evolution of income and net worth
since the previous time the survey was conducted, in 2010.

Family incomes

* Between 2010 and 2013, mean (overall average) family income rose 4
percent in real terms, but median income fell 5 percent, consistent with
increasing income concentration during this period.

* Families at the bottom of the income distribution saw continued
substantial declines in average real incomes between 2010 and 2013,
continuing the trend observed between the 2007 and 2010 surveys.

* Families in the middle to upper-middle parts (between the 40th and
90th percentiles) of the income distribution saw little change in
average real incomes between 2010 and 2013 and thus have failed to
recover the losses experienced between 2007 and 2010.

* Only families at the very top of the income distribution saw
widespread income gains between 2010 and 2013.

* The differentials in average income growth between 2010 and 2013 are
also observed for other family groupings in which large differences in
income levels are observed, notably across education groups, by race and
ethnicity, homeownership status, and levels of net worth.

Net worth

* Consistent with income trends and differential holdings of housing
and corporate equities, families at the bottom of the income
distribution saw continued substantial declines in real net worth
between 2010 and 2013, while those in the top half saw, on average,
modest gains.

* Ownership rates of housing and businesses fell substantially between
2010 and 2013.

* Retirement plan participation in 2013 continued on the downward
trajectory observed between the 2007 and 2010 surveys for families in
the bottom half of the income distribution.

* The decrease in stock ownership rates was most pronounced for the
bottom half of the income distribution.

http://www.federalreserve.gov/pubs/bulletin/2014/pdf/scf14.pdf

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Comment by Don McCanne

The recovery of the economy has left behind everyone except the wealthy.
Most individuals and families are less able to afford housing,
education, retirement, vacations, college expenses, and, of especial
concern to us, health care. Many economists believe that this may
represent the new normal.

The public policies that we need to bring us all back on a solid footing
are straightforward. But politics has resulted in the erection of almost
impenetrable barriers. Just today the Senate reconfirmed the fact that
billionaires are still free to buy our elections (and the billionaires
have fared very well as the rest of us have been left behind).

If we could improve just the financing of health care so that it is
affordable for everyone, we would have taken one major step towards
implementing the public policies that we need to more equitably share
the gains in our economy. The Affordable Care Act falls far too short of
the level of equitable health care financing that we need. The
progressive financing that characterizes a single payer system would
move us more dramatically in the right direction. Not only would
everyone have health care, but we would be improving family incomes and
net worth as well.

Policy is easy. But we really have to work on the politics. The
billionaires can buy the souls of the politicians for only so long.
Start sharpening your pitchforks (Hanauer).

qotd: Narrow networks reduce specialized care for the sickest patients

The National Bureau of Economic Research
NBER Working Paper No. 20462
September 2014
Controlling Health Care Costs Through Limited Network Insurance Plans:
Evidence from Massachusetts State Employees
Jonathan Gruber, Robin McKnight

Abstract

Recent years have seen enormous growth in limited network plans that
restrict patient choice of provider, particularly through state
exchanges under the ACA. Opposition to such plans is based on concerns
that restrictions on provider choice will harm patient care. We explore
this issue in the context of the Massachusetts GIC, the insurance plan
for state employees, which recently introduced a major financial
incentive to choose limited network plans for one group of enrollees and
not another. We use a quasi-experimental analysis based on the universe
of claims data over a three-year period for GIC enrollees. We find that
enrollees are very price sensitive in their decision to enroll in
limited network plans, with the state's three month "premium holiday"
for limited network plans leading 10% of eligible employees to switch to
such plans. We find that those who switched spent considerably less on
medical care; spending fell by almost 40% for the marginal complier.
This reflects both reductions in quantity of services used and prices
paid per service. But spending on primary care actually rose for
switchers; the reduction in spending came entirely from spending on
specialists and on hospital care, including emergency rooms. We find
that distance traveled falls for primary care and rises for tertiary
care, although there is no evidence of a decrease in the quality of
hospitals used by patients. The basic results hold even for the sickest
patients, suggesting that limited network plans are saving money by
directing care towards primary care and away from downstream spending.
We find such savings only for those whose primary care physicians are
included in limited network plans, however, suggesting that networks
that are particularly restrictive on primary care access may fare less
well than those that impose only stronger downstream restrictions.

Full paper available at this link:
http://www.nber.org/papers/w20462

****

The New York Times
September 9, 2014
Narrow Health Networks: Maybe They're Not So Bad
By Margot Sanger-Katz

Lots of people shopping in the new health care marketplaces this year
picked health plans that limited their choice of doctors and hospitals.
The plans were popular because they tended to cost less than more
conventional plans that covered nearly every health care provider in a
region.

The proliferation of these more limited plans, called narrow networks,
has worried consumer advocates and insurance regulators. The concern is
that people will struggle to find the care they need if their choices
are limited.

Maybe we don't have to worry so much. A new study suggests that, done
right, a narrow network can succeed in saving money and helping certain
patients get appropriate health care. The study, published as a working
paper with the National Bureau of Economic Research, looked at a program
that used financial incentives to steer workers into narrow plans. Those
that chose the plans saved their employer money, saw their primary care
doctors more and used the emergency room less.

Mr. Gruber says this study should not be the final word on narrow
networks, but he said he hoped it would change the tenor of the debate
about them. Instead of automatically seeing a narrow network as a
sinister plan feature, he said, he hopes market watchers will now see
them as a tool that can, in some cases, help save money without hurting
patients.

"Nobody is talking about forcing people into these plans," he said.
"We're talking about offering people a choice with price incentives."

**

NYT Reader Comments:

Don McCanne
San Juan Capistrano, CA

Quoting from the Gruber and McKnight paper:

"We first find that patients are very price sensitive in their decisions
to switch to limited network plans…"

"…those who are most healthy are the most price sensitive."

"for the chronically ill… we find a strong shift in spending from
specialists to primary care physicians…"

"…we conclude that the real savings from limited network plans arises
from restrictions downstream from the primary care provider."

Healthy individuals buy the cheapest plans not worrying about the
choices in specialized care that they believe they will not need anyway.
But for chronically ill patients who are responsible for most of our
health care spending, they are losing specialized services when they are
enrolled in these narrow network plans.

This study was too short to be able to measure adverse outcomes due to
lack of specialized services. Shouldn't we find that out before most of
us are shoved into narrow networks?

Or better, shouldn't we take a closer look at proven systems that use
public policies to control spending without restricting patient choice -
models such as single payer or a national health service?

**

Kate
Portland OR

One thing that really concerns me about this is people with rare or
complex conditions that need specialty care. Waits, for example, for
endocrinology in my city are a minimum of 3 months for new patients and
diabetes is one of the nations' biggest health problems. It is also very
difficult now for new patients to find a new primary care MD depending
their insurance. Narrow networks prevent people from accessing care. I
am a nurse case manager, so arranging transitional care is what I do for
a living. I'm surprised to see this article. It's a little myopic.

**

sfdphd
San Francisco

Let's be honest. Narrow networks are fine for people who are not sick
now and are willing to take the chance that they will not get sick in
the coming year. If you are already ill or worry that you may become
ill, narrow networks are not good. Don't lie to us...

http://www.nytimes.com/2014/09/10/upshot/narrow-health-networks-maybe-theyre-not-so-bad.html?rref=upshot&abt=0002&abg=1

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Further comment by Don McCanne

The most important finding in this study is that enrollment of
chronically ill patients in narrow networks results in a strong shift in
care from specialists to primary care physicians. That reduces costs,
but does it change outcomes? According to the authors, "we are unable to
demonstrate health effects with any certainty."

The work of Barbara Starfield and others has previously demonstrated
that a strong primary care infrastructure does provide greater value in
health care. But people with serious chronic disorders - where a
disproportionate share of our health care spending is directed - may
very well benefit from specialized care.

This study shows that narrow networks are used to block access to that
specialized care, simply by excluding coverage of much of the
specialized services offered within the community. As this study shows,
the care defaults to the generalist regardless of the patient's specific
needs.

A well functioning system would provide liberal access to primary care
services, which would then provide a portal to an appropriate level of
specialized services. A singe payer national health program would do
precisely that - primary care not serving as a gatekeeper but rather
serving as a resource to improve integration of health care services.

Narrow networks are a tool of private insurers used to reduce spending
by impairing access to care no matter how appropriate it might be.
Jonathan Gruber indirectly acknowledges the concerns people have about
narrow networks when he states, "Nobody is talking about forcing people
into these plans." But patients are backing into these plans simply
because they cannot afford other plans with more comprehensive networks.

Under single payer, the network is the entire health care delivery
system. That's the network that we need - for all of us.