BREAKING NEWS: Drug Prices Rose 8% in 2009 - The Largest Increase in Years
Posted by The Campaign on August 24, 2010 at 7:29 PM
The New York Times breaks news late tonight that brand name drug prices increased by more than 8% in 2009. Here are some highlights from the story:
A new report on retail prices of brand-name drugs shows the 217 products most used by older Americans increased by an average of 8.3 percent during 2009, the largest increase in years, even as inflation was negative.
Over the last five years, according to the report to be released on Wednesday by the senior lobby AARP, the retail prices for the most popular brand-name drugs increased 41.5 percent, while the consumer price index rose 13.3 percent.
The story focuses on an annual AARP report that was criticized by some because it focused on wholesale prices rather than retail prices. So AARP adjusted its study and found:
"the same result on price."
FACT CHECK: Medical inflation is only one factor contributing to rising health care costs
Posted by The Campaign on August 19, 2010 at 9:42 AM
Medical inflation is only one factor contributing to rising health care costs
Soaring medical costs are the primary driver of rising health insurance premiums. Medical inflation is only one of the factors contributing to rising health care costs. The medical component of the Consumer Price Index (Medical CPI) simply measures the inflationary component of prices charged for a defined group of services. It does not include other major factors that drive increases in health care spending, such as increased utilization, the needs of an aging population, and the development of new medical technologies and prescription drugs. As a result of these other factors, the cost of providing health benefits increases significantly above Medical CPI.
The Massachusetts appeals panel recently rejected the argument that medical CPI is an accurate measure of how much health care costs are rising. In its report reversing the commissioner's decision to deny Fallon's premium rates the panel said this about the medical CPI:
- "Fallon has proved that using the percentage increase of the New England Regional Medical CPI as the sole criterion for deciding whether to disapprove Fallon's proposed 2010 rates is incorrect for the following reasons":
- the CPI "is purely a backward-looking measure of past expenses and does not measure or forecast future costs"
- the CPI "does not measure costs that are comparable to the costs of Fallon's prospective claims"
- "focusing solely on the percentage increase, to the exclusion of the resultant premium number permits anomalous results, with another company's premiums that are higher than Fallon's proposed premiums for comparable products not being disapproved while Fallon's were disapproved"
- "using a metric external to Fallon's as the sole fact to determine whether Fallon's proposed 2010 rates are excessive violates actuarial and regulatory principles and thereby contravenes the statutory requirement that rates must be adequate"
ICYMI: Kansas City Star -- Without individual mandate, health care reform isn't reform
Posted by The Campaign on August 18, 2010 at 7:26 AM
The personal coverage requirment, or individual mandate, is one of the more politically charged policies of the new reform law. While the mandate is being challenged in the courts, health care economists, policy experts and opinion leaders of all stripes agree that many of the insurance market reforms that enjoy tremendous political support would not work without a personal coverage requirement. The latest to weigh in on this issue is the editorial page of the Kansas City Star.
The Kansas City Star editorial page argues "Universally affordable care, especially for sick people, is the sweet spot of health care reform. But nearly all health policy experts think you have to swallow the bitter pill of mandated insurance purchases to get there. Seven states have tried to ban insurance discrimination based on pre-existing health conditions without requiring participation in insurance plans from healthy consumers. In each instance, the experiment failed miserably." (To read more on the seven states that tried market reforms without a mandate, check out this report by Milliman.)
To read the entire editorial click here.
BREAKING NEWS: Bloomberg Reports that Biz Groups Say Grandfathering Regulations Are Too Restrictive
Posted by The Campaign on August 17, 2010 at 2:26 PM
Another day, another story on another regulation. This time it's a story on the grandfathering regulation and comments offered by various employer groups and trade associations. Bloomberg picks up the story:
"‘Grandfathering' rules designed to let employees keep their existing coverage plans as the U.S. health-care system is overhauled are too rigid for many employers to comply with, according to business groups. In written responses during a public-comment period that ended yesterday, the U.S. Chamber of Commerce, the National Retail Federation and the National Association of Manufacturers said many employers won't be able to maintain health plans under rules that limit a company's ability to control rising costs."
"The Chamber of Commerce, the largest U.S. business advocacy group, said in its written comment that its first concern is with the restriction on cost-sharing. 'By so severely restricting changes in cost-sharing, the regulations will effectively force plans to lose grandfathered status in order to remain solvent,' the chamber wrote."
For the full story, click here.
MUST READ: Former US Comptrollers Question Cost Containment in New Law
Posted by The Campaign on August 16, 2010 at 9:09 AM
This blog has spilled much e-ink (and many megabytes) on the need to address the ever increasing problem of out of control growth in health care costs. We have highlighted many experts who have talked about this issue and the need for the nation to get health care costs under control or risk crowding out of other priorities.
Today's OpEd in The New York Times on the latest Medicare trustees' report offers another example of independent experts questioning the cost containment provisions of the new law.
Here is the line from Stanford Ross and David Walker: "...we just don't know how effective its cost containment provisions will be." Click here for the full OpEd, definitely worth the read.
ICYMI: Background Information on MLR and Federal Tax Exclusion
Posted by The Campaign on August 16, 2010 at 8:57 AM
Early last week, a letter from the six Democratic Chairmen of the committees that have jurisdiction of the health care reform law sent a letter to HHS seeking to clarify a particular provision of the reform law. The provision in question related to how federal taxes should be counted as part of the MLR calculation definition.
This approach has raised legal questions and policy issues. To help provide background on this, here are a couple of documents:
Background information on the MLR and exclusion of federal taxes
Legal analysis of Congress trying to interpret a law after passage. The analysis concludes that "well-settled principles of statutory language and longstanding Supreme Court precedent establish that the post-enactment interpretive opinions of several members of Congress cannot alter the meaning of an otherwise unambiguous statutory provision."
MUST READ: Center for American Progress Study on the Personal Coverage Requirement
Posted by The Campaign on August 05, 2010 at 1:49 PM
In Case You Missed It: A new report released by the Center for American Progress, Health Care Reform Is a “Three-Legged Stool”, validates the need to pair an effective personal coverage requirement with insurance market reforms.
Here are a few highlights:
· Repeal of the requirement to buy insurance would mean more people would wait until they get sick to buy insurance in the new nongroup exchanges, which would increase the average premium by 27 percent in 2019.
· Retaining the law’s insurance reforms, but repealing the subsidies as well as the requirement to purchase insurance, would further discourage people from buying insurance when they’re healthy. Premiums in 2019 would cost twice as much as projected under the law as a result.
· Retaining the law but repealing the mandate would newly cover fewer than 7 million people in 2019 rather than the 32 million projected to be newly covered by the law. Federal spending, however, would decline by only about a quarter under this scenario since the sickest and most costly uninsured are the ones most likely to gain coverage.
· If insurance companies must charge the same price to people whether they’re sick or healthy many healthy people will view this as a “bad deal” and not buy insurance. This results in higher prices that chase even more people out of the market. The result is a “death spiral” that leads only the sick to purchase insurance at very high prices. Several states tried such community rating reforms—offering health insurance policies within a given territory at the same price to all persons without medical underwriting— in their nongroup markets over the past two decades, and sharp rises in insurance prices ensued along with rapidly shrinking market size.
COST ALERT: Florida Paper Draws Attention to Emergency Room Costs -- $4 Aspirins
Posted by The Campaign on August 02, 2010 at 10:11 AM
It is known that underlying medical costs continue to increase every year. These costs are seen in higher prices for prescription drugs, medical imaging tests and even doctor's visits. And an article in the Florida paper "Highlands Today" shows trips to the emergency room can't avoid higher costs either.
The article picks up on costs that individual Floridians have been charge upon visits to the emergency room. The article does not draw any conclusions, but it does provide a few anecdotes to highlight the ever increasing cost of care including:
One patient said "...it cost $36 to have an X-ray read and $4 for an aspirin."
For the full article click here.
MUST READ: The Wall Street Journal Examines How Health Plans Are Helping Patients Stay Out of the Hospital
Posted by The Campaign on July 28, 2010 at 1:18 PM
With the debate about MLR definitions still ongoing, we thought this story from The Wall Street Journal offered a great example of the types of programs health plans use to help keep patients healthy and safe and ultimately save them money. These are the types of programs that all health plans use to improve quality and value and are at the core of health plans' role in the system.
Here is a key excerpt from the story:
"It is more important than ever for health plans and patients to combat medical costs, growing at a clip of between 6% and 9% a year, according to various estimates. Heart failure-which can be triggered by simple mistakes such as consuming too much salt-is a leading cause of hospital readmissions, with about 25% of patients returning to the hospital within 30 days. It's also one of the biggest single claims expenses at insurance companies. Aetna estimates that 40% of readmissions are avoidable.
"For patients, the extra surveillance could cut down on trips to the hospital and provide peace of mind. That's what Carolyn Brown, a 63-year-old retired teacher's aide from Bronx, N.Y., found when she started using a new monitoring system covered by her insurer, MetroPlus Health Plan Inc., after she suffered two heart attacks."
For the full story, click here.
AHIP Statement on Coverage for Children
Posted by The Campaign on July 28, 2010 at 8:05 AM
AHIP Statement on Coverage for Children
Washington, D.C. – America’s Health Insurance Plans (AHIP) President and CEO Karen Ignagni today released the following statement on the announcement by the Department of Health and Human Services to clarify that health plans may use a structured open enrollment period implementing health reform’s provision eliminating pre-existing condition exclusions for children under age 19:
“Today’s announcement will help ensure millions of children have access to affordable health care coverage. For years, structured enrollment periods have been used in the Federal Employees Health Benefits Program, Medicare, and in employer based coverage to minimize disruption for families, seniors, and small businesses. Health plans are committed to working with federal and state officials to ensure consumers are aware of all of their coverage options, including how and when they are able to sign up for coverage.”
Health plans will engage in a multi-faceted consumer education effort by posting information on their web sites, coordinating with agents and brokers to educate consumers, and reaching out to insurance commissioners and community-based organizations that focus on children’s interests.
