Kaiser Health Reform
Just days before the health law’s marketplaces reopened, nearly a quarter of uninsured said they expect to remain without coverage because they did not think it would be affordable, according to a poll released Friday.
That was by far the most common reason given by people who expect to stay uninsured next year, according to the latest tracking poll by the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.) Forty-one percent of individuals without health insurance said they expected they would remain uninsured, while about half said they plan to get coverage in the coming months.
The law includes subsidies to reduce premium costs and cost-sharing assistance for those who qualify, although it was not clear if the uninsured knew that.
Despite heavy news coverage and marketing from insurers about the re-opening of enrollment, about 9 in 10 of the uninsured said they didn’t know when the health law’s open enrollment period began (Nov. 15). That was similar to the findings in last month’s Kaiser poll.
More than 8 in 10 of the uninsured said it is at least somewhat important to them to have health insurance, with 62 percent saying it’s very important. Seven in 10 said health insurance is something they need.
Other findings in Kaiser’s November poll include that most of the public reports their families have not been directly impacted by the health law, with more (24 percent) saying they have been hurt than helped (16 percent).
Forty-six percent of those surveyed hold an unfavorable view of the law and 37 percent view it favorably, a slight change from last month’s survey, where 43 percent of those questioned held an unfavorable view of the law and 36 percent a favorable one.
With the midterm elections giving Republicans control of the Senate and increasing the party’s majority in the House of Representatives, Americans were divided about whether the debate between the two parties over the health law would increase, the poll found. Forty-seven percent expected it, while 42 percent predicted it would stay at about the same level.This KHN story can be republished for free (details).
There’s a variety of opinion about what Congress should do next with the health law. Twenty-nine percent of the public supports the law’s repeal, 17 percent favors scaling the law back, 20 percent wants the law to move ahead as is, while 22 percent chooses expanding the law.
Republicans are more likely to favor repeal (52 percent) or scaling it back (24 percent), while Democrats are more likely to favor moving ahead with the law in its current form (40 percent) or expansion (34 percent). Independents fall in between, but lean toward repeal or scaling back.
The poll was conducted from Nov. 5 through 13, using a telephone sample of 1,501 adults. The margin of error is +/- 3 percentage points for the full sample and +/- 9 percentage points for the uninsured.
Listen to Julie Appleby’s conversation with Gary Cohen:
https://kaiserhealthnews.files.wordpress.com/2014/11/102314_khn_appleby-cohen.mp3 >> Don’t see the player above? Click here to listen to audio of the conversation
Many consumers who signed up for health coverage through online insurance exchanges discovered their doctors were not in their plans’ networks.
While narrow networks aren’t new, they have emerged as one of insurers’ major levers for keeping costs down under the Affordable Care Act. Consumers have been attracted by lower premiums, but are often distressed at the restrictions. Lawsuits in California allege that some insurers duped customers into thinking their networks were larger by posting inaccurate provider lists.
But such plans can be designed right, says Gary Cohen, a former Obama administration official who helped oversee the launch of the federal health website. As examples, he cites integrated systems, such as Kaiser Permanente, and also accountable care organizations which encourage coordination of patient care while providing incentives to reduce costs.
Cohen, who now runs his own consulting firm, was deputy administrator and director of the Center for Consumer Information and Insurance Oversight in the Centers for Medicare & Medicaid Services until March. He sat down recently with Kaiser Health News’ Julie Appleby. An edited version of their conversation follows:
Q: You’ve written recently that narrow network policies can be done correctly by focusing on quality as well as cost. What are the pros and cons of smaller networks?
COHEN: One [important aspect] is access. Everyone has to receive care for the services covered by their policies. We also want people to have choice — to be able to choose which doctors and hospitals they go to and have the highest quality of care. We also want to try to control costs. Those various objectives may run into conflict. So there has been a lot written, a lot of complaints about people who couldn’t go to the doctor they used to go to, or who couldn’t find a particular physician close to where they live. This has gotten a lot of attention and caused regulators to want to look at whether further regulation of networks is appropriate. [But] not all narrow networks are the same.
Q: Critics say the new marketplace plans rely mainly on insurers choosing network providers based on price. Do you share that concern?
COHEN: I do share that concern. We need to encourage types of networks like accountable care organizations where providers and hospitals and insurance companies are sharing in [financial] risk and working together in managing care to make sure higher quality [is delivered] and costs are controlled. That kind of network is fundamentally different than a network simply based on what the cost of reimbursement is from the insurance company.
The challenge to the insurance industry is greater transparency. People have got to know when they buy a plan what it is they are getting. So far it has proven very difficult for insurance companies and for some of the marketplaces that have tried to put up provider directories to provide accurate, up-to-date information on just who is in the network and who is taking new patients.
Q: What is being done in the federal and state marketplaces to make sure information on particular doctors and hospitals is available?
COHEN: Both the federal government and a number of states now are making a requirement that these directories be provided and updated on regular basis. The question is, what kind of enforcement will we see? If insurers can’t provide up-to-date information, that risks the whole concept of these narrow networks.
Q: In some states, all or most of the plans being sold on the marketplaces are narrow networks. Many don’t offer out-of-network coverage at all. Should regulators require insurers to offer both broad and narrow network plans?
COHEN: I think the market really is providing that choice. [Consultant] McKinsey & Company did a study showing that 90 percent of people have the choice of a broad network. Generally speaking, a lot of the BlueCross BlueShield plans do offer both a broad and a narrow network.
Q: How do insurers select these networks? Should they disclose that?This KHN story can be republished for free (details).
COHEN: If a network is designed not just to be lower cost, but is designed to be higher quality, more efficient and therefore lower cost, then it’s important people understand that. And the criteria used to select the physicians and hospitals in the network [should] be made known to the public. If I am convinced that one network I’m being offered has higher quality of care, I might choose that network even if it meant I had to travel a little further to see doctor or wait a little longer for an appointment.
Q: Are any insurers doing that yet?
COHEN: A lot of these new types of organizations are just beginning to happen now in the wake of the ACA and in wake of what Medicare is doing with its ACO program. We don’t have a lot of data yet but as time goes by, we will. We need to rethink our measures of what is an adequate network. Typically we look at the time it takes to get to a doctor’s office or to get an appointment, but with increased use of telemedicine where people will see physicians in video calls or by email, some of those measures may be less important. Not unimportant, but less important.
Q: You warn that regulators could get in the way of creating good narrow networks. How?
COHEN: We have to recognize we have a physician shortage in this country that has nothing to do with the ACA or with what networks insurers create. When you listen to regulators from very rural states, what they will say is, “We don’t have enough doctors, regardless of what the network looks like.” We need to be sensitive to local conditions. Travel time to see a doctor is different in a densely populated urban area than in a rural area. We should look at what is the quality of care being provided in this network and is it serving the population well, rather than just looking at time and distance.
Q: What about data on how many patients had to go out of network for coverage? Are any insurers reporting that?
COHEN: That data is required and will be reported. We are still in the first year of people going to see their doctors with policies they purchased through the marketplaces. We will learn a lot more as we go forward as to what their experience really has been that will help inform what steps industry should take and regulators should take to make sure people are getting access to the care they need.
Q: This time last year, open enrollment had just begun through the state and federal marketplaces. The rollout for many was disastrous, marred by a myriad of technical problems. What’s different this year?
COHEN: Ironically, one of the biggest concerns going into open enrollment [last time was] polls showing people didn’t even know what the program was about. As a result of all the publicity we got because of the problems, we certainly cured that in a hurry. Everyone in the country was aware of healthcare.gov as a result of what happened.
We have broader knowledge of the ACA and the marketplaces in general [this time]. On other hand, folks who didn’t sign up the first time around may be a little harder to reach than the ones who did. One thing that emerged from the first open enrollment [is] it does matter if people have contact with someone in their community they trust to get information, as opposed to just getting it over the internet, or from radio or TV.
Q: What’s the biggest challenge facing the Obama administration concerning the health law in the next year?
COHEN: The challenge facing all of us, including the Obama administration, is really to make the case for what has been called the triple aim: better [health care] access for more people, better customer experiences and better outcomes at lower cost.
A lot of interesting things are being done, some prompted by the ACA, some prompted just by changes in the health market. We need to look at what works and what doesn’t [and] encourage what works. That’s why this whole question of narrow networks is critical. We need to see if we can make the case that smarter networks result in better outcomes, more efficient care, less overtreatment and lower costs.
After several years of modest increases, American spending on medications is projected to shoot up by 12 percent this year, pushing the nation’s drug bill to between $375 billion and $385 billion, according to a report by the IMS Institute for Healthcare Informatics.
Several factors are driving the spending spike, including the introduction of expensive new hepatitis C drugs and fewer drug patent expirations than in previous years, the report found. Such expirations typically lead to savings as cheaper generics replace brand-name drugs.
The 11.7 percent rise is a dramatic departure from the more modest average increases of 3.6 percent in annual drug spending during the past five years.
The report anticipates the pace of spending increases will slow to 7 to 9 percent in 2015, as the impact of the new hepatitis C drugs declines, less expensive biosimilar products become available and several brand-name drugs — such as cancer drug Gleevac and the antipsychotic Abilify — are replaced by generics.
“We expect this bubble of innovation around hepatitis C will pass, so we won’t see such a contribution to growth in outer years,” said Murray Aitken, executive director of IMS Health. “We think the spike in growth will moderate next year, and further moderate in 2016.”
Drug costs are projected to increase between 3 percent and 5 percent in 2016, he said.
The new hepatitis C drug Sovaldi, made by Gilead Sciences and approved in December 2013, costs $1,000 a pill, with a 12-week course of treatment running about $84,000. Another hepatitis C drug — Harvoni — approved by the FDA in October, costs $1,125 a pill, or $94,500 for a 12-week course of treatment.
An estimated 3 to 4 million Americans have hepatitis C and are potentially eligible for treatment. Hepatitis drug treatments accounted for $8 billion of the approximately $40 billion in projected increased drug spending this year.
“The hepatitis C drugs are Exhibit A when you look at escalating drug costs,” said Brian Henry, a spokesman for Express Scripts, the country’s largest pharmacy benefits manager. “You never had a drug that costs that much that can treat so many people.”
The price of Sovaldi “caught payers by surprise,” he said.
Innovative new therapies, especially in the area of cancer, have also pushed up costs. The Affordable Care Act, which expanded access to health care and medications, may also have played a role, along with a new emphasis on preventive care and adherence to medications, Aitken said.This KHN story can be republished for free (details).
Holly Campbell, director of communications for the drug industry trade group, PhRMA, said the cost of developing drugs has skyrocketed, pointing to a report this week by the Tufts Center for the Study of Drug Development that estimated the price of bringing a drug to market at $2.6 billion. The process can take a decade, the report said.
“These most recent findings underscore the ongoing challenges our industry faces,” Campbell said.
An AARP report noted the increase in prices of brand-name drugs. The report found that the prices of 227 brand name prescription drugs used by many older Americans increased by 12.9 percent on average last year, well above the 1.5 percent rate of inflation, bringing the average cost of a brand-name drug used regularly to $3,000.
“We have started to hear from members who have to decide between taking a drug they need and paying their electric bill,” said Leigh Purvis, director of health service research at the AARP Public Policy Institute and a co-author of the report.
But, she added, the impact goes beyond seniors. “This is a concern not just for our members but for everyone.”