Archive | Healthcare

Consumer driven health care is a myth and aiming at the wrong target

5 Jan

The CEO of Humana recently gave a talk on the health care system in which he correctly noted some of the fundamental problems in the system (unnecessary care being provided, little concern for cost (of care) by the consumer, lack of electronic medical records, variations among practice patterns and others). However, he incorrectly concludes as do many other “experts” in and out of government that consumerism by the patient is the key to solving our health care cost problem. In other words, if you shop for health care as you do for a new television, you will be more prudent and cost conscious when it comes to receiving an MRI or CT scan.

Let’s see what you actually know about that new television. You certainly know the price and you also know that if you go to a big box, no frills store you may save money. You may know something about the perceived quality, probably from word of mouth or perhaps a consumer report of some kind. And you also know something else; if you guess wrong in your purchase you may return it for a refund or replacement, or if all else fails you throw it out, learn your lesson, chalk up the loss of a few hundred dollars to a bad experience and start over.

Sure, buying a TV is exactly like that severe pain your child feels on her left side accompanied by a very high fever; start shopping!

Health care systems

Pick a system, any system

I have worked with thousands of people over the last fifty years as they navigate the health care system, deal with major illness, doctors, hospitals and their health insurance. Not one of those people knew the true cost of health care, not one could accurately assess the quality of care they received, not one knew if all the care received was necessary or appropriate. What they did know was that they or someone they loved were ill and wanted to get better, sometimes desperately so. On occasion (after the fact) there would be consternation over a high balance bill from a non participating physician, but more often than not the concern was that the insurer paid too little not that the doctor charged too much … “he saved my life.”

When it comes to health care we humans are not and can never be objective consumers motivated by cost (and sometimes even quality; witness the reaction to new guidelines for certain screenings that question popular wisdom).

All the well-known problems in the system must change, but it is the system that must change, not the consumer/patient. Why would we attempt to solve our problems by seeking to have 300 million people learn to question the next recommended MRI as opposed to changing the system so that we have confidence the next MRI is appropriate, necessary and cost efficient?  Let’s face it; if we believe that only external pressure from consumers can change the system, we are also saying the quality of health care in America is generally poor, overpriced, defensive and motivated largely by profit maximization.

Obamacare regulations and hidden costs

27 Dec

Money, money everywhere

By now we all know that the Affordable Care Act contains thousands of pages of new legislation mostly unread by those who enacted the law. It also contains about 1500 references to discretion to be exercised by the Secretary of Health and Human Services. Since enactment, various government departments have issued a flood of regulations, including in some cases changing provisions of the law (although for the better).

Medicare has initiated scores of pilot programs designed to change the way Medicare operates, pays for services and the way health care is practiced. Rules for employers are in process and of course, the biggy will be the rules operating the health insurance exchanges beginning in 2014. That’s a lot of rules and regulations for a lot of people to comply with.

On December 27, 2011 the Wall Street Journal published an editorial about regulations and this section caught my eye.

Then there’s the Affordable Care Act. Christopher Conover and Jerry Ellig of the Mercatus Center at George Mason University, in a trio of forthcoming papers, systematically examine every rule issued to date to create the new health-care entitlement. They conclude that “the federal government used a fast-track process of regulatory analysis that failed to comply with its own standards, and produced poorly substantiated claims about the ACA’s benefits and costs”—including an upward bias for benefits, a downward bias for costs, and numerous material omissions. Little wonder for a law that contains the phrase “the Secretary shall” 1,563 times. The Mercatus Center evaluates all major rules that cost over $100 million a year on a composite score of a dozen regulatory best practices. The Health and Human Services Department’s highest-scoring ObamaCare rules came in at 25 out of 60 points, the lowest at 13. These are not merely bad grades. They are relative Fs on the regulatory curve—about 35% to 40% lower than the averages for the other rules that the executive branch put out in 2008 and 2009. The ObamaCare rules score lower than other HHS rules in 2009.

You can think what you like about the ACA, but the fact remains it is a complex law and growing more so each day. It is not at all clear that the benefits outweigh the costs nor do we know the true costs, especially those hidden in employer and other entity compliance. The bottom line is that for good or bad the ACA is only the start of what must be done to manage health care costs in America.

We can only hope that first expanding coverage and enhancing benefits does not make the real task impossible to achieve.

Accountable Care Organizations (ACO) and the promise of savings without managed care or patient limitations.. I wish you all the best.

20 Dec

 Here is a text of an e-mail I received from HHS:

 Affordable Care Act helps 32 health systems improve care for patients, saving up to $1.1 billion

12/19/2011 12:01 AM EST

Thirty-two leading health care organizations from across the country will participate in a new Pioneer Accountable Care Organizations (ACOs) initiative made possible by the Affordable Care Act, HHS Secretary Kathleen Sebelius announced today.  The Pioneer ACO initiative will encourage primary care doctors, specialists, hospitals and other caregivers to provide better, more coordinated care for people with Medicare and could save up to $1.1 billion over five years

That headline really grabs you doesn’t it.  Seems like it’s a done deal and the savings are in the bank.  That’s far from the truth, of course. There is no new information here other than we know the names of some health care systems that will participate in this trial (“Pioneer”) effort for Accountable Care Organizations.  

Don’t get me wrong, this is a good idea because if there is one thing we need, it is more coordinated care, but we have a long way to go before we start patting ourselves on the back with a success under the Affordable Care Act.  We need it to work in terms of saving money and improving the care people receive.  That’s a tall order even for spin doctors.

I have one major reservation on the ability for this program to succeed and that is the limited involvement by the patient and the limited ability for the ACO to manage all of a patient’s care.  Working efficiently, the process should be virtually invisible to the patient, but that assumes the patient only uses health care providers within a given ACO.  Will the ACO that receives financial incentives to provide efficient care be reluctant to make outside referrals thereby losing some of the control over patient care?  In the long run there is no benefit to the ACO to do so, but this is one of the criticisms made of HMOs.  Here is what HHS says about patient rights.  I am concerned that we are again trying to have it both ways; efficient management of care and total freedom when seeking care.  I don’t think that can work, let’s hope I am wrong.

Beneficiary Participation

Under the Pioneer ACO Model, beneficiaries do not enroll in an ACO.    Primary care providers and other healthcare providers make the decision to participate in ACOs, meaning a beneficiary will not need to take proactive action to receive the benefits offered through an ACO.  ACOs are required to notify beneficiaries of their participation, ensuring the beneficiary is aware of the new arrangement, and his or her rights described in this document.  In addition, beneficiaries may affirmatively attest that their primary provider is in a Pioneer ACO, and can then be aligned with the ACO and benefit from the enhanced care coordination that it offers.

Beneficiary Rights and Protections

A beneficiary aligned to an ACO maintains complete freedom to visit any healthcare provider accepting Medicare, just as all Medicare beneficiaries participating in original, fee-for-service Medicare do.  These beneficiaries do not need a referral to see a specialist outside the ACO.   Unlike a managed care arrangement, like an HMO or a Medicare Advantage plan, a beneficiary aligned to an ACO is free to see any healthcare provider accepting Medicare at any time.  In addition, beneficiaries maintain all the benefits to which they are entitled in original, fee-for-service Medicare. 

Beneficiaries will have direct channels of communication to CMS to ask questions and relay concerns.  Through the initial notice of participation, beneficiaries will be informed that they can call 1-800 MEDICARE at any time to ask questions about the program,   alert CMS of any concerns they may have about the ACO.  Beneficiaries will also be surveyed each year to assess their experience with the new program.

 Here is a link to the list of the 32 organizations

Essential health benefits for exchanges left to states to determine

19 Dec

When ERISA was enacted a provision was included to exempt employer self-insured health plans from state regulation and mandates. This was done so that employers who operate in multiple states would not have to comply with scores of different regulations and mandates. There are about 1600 different state mandates related to coverage of health care services. Each of these adds to the cost of health insurance. Now the Obama administration has decided to take the opposite approach and allow each state to determine the essential health benefits to be used by plans within its exchange effective January 2014.

States will be allowed to base their essential coverage on one of several benchmarks.

Given the track record of enacting mandates promoted by special interest groups along with providing benefits to state workers considerably above competitive levels followed by private sector employers, this decision to defer to each state may well be a recipe for higher health care premiums.  That in turn translates to higher federal costs when providing the subsidies that are available to most families that will be used in exchanges.  In addition, the cost of mandates in excess of the essential health benefits must be defrayed by the state.  All of this is counterintuitive to affordable health care.

In effect, we are saying that government decisions on essential health benefits reflect what is essential to individuals, but that is not the always the case.  We are making this process  way too complicated.  Very basic, nearly catastrophic coverage should be the  standard. From there allow insurers to build higher level plans demanded by consumers who can then decide the coverage they need and can afford.  This is not the same as the current approach of starting with generous coverage and varying reimbursement levels.

Exactly what are we attempting to make affordable?  We appear to be starting with the Cadillac of coverage and working our way up.

Four Benchmark Plan Types

Our analysis of offerings that exist today suggests that the following four benchmark plan types for 2014 and 2015 best reflect the statutory standards for EHB in the Affordable Care Act:

(1)  the largest plan by enrollment in any of the three largest small group insurance products in the State’s small group market;26

(2)  any of the largest three State employee health benefit plans by enrollment;

(3)  any of the largest three national FEHBP plan options by enrollment; or

(4)  the largest insured commercial non-Medicaid Health Maintenance Organization(HMO) operating in the State.

HHS intends to assess the benchmark process for the year 2016 and beyond based on evaluation and feedback.

To reflect the State flexibility recommended by the IOM, under our intended approach, States are permitted to select a single benchmark to serve as the standard for qualified health plans inside the Exchange operating in their State and plans offered in the individual and small group markets in their State. To determine enrollment in plans for specifying the benchmark options, we intend to propose to use enrollment data from the first quarter two years prior to the coverage year and that States select a benchmark in the third quarter two years prior to the coverage year. For example, enrollment data from for the first quarter of calendar year 2012 could be used to determine which plans would be potential benchmarks for State selection and the benchmark plan specified during the third quarter of 2012 for coverage year 2014. If a State does not exercise the option to select a benchmark health plan, we intend to propose that the default benchmark plan for that State would be the largest plan by enrollment in the largest product in the State’s small group market.

Essential Benefits — Who Decides? – Huffington Post (

Early Retiree Reinsurance Program (ERRP) money is gone. Five billion dollars from the federal to state governments. What did we get for our money?

12 Dec

The Early Retiree Reinsurance Program was supposed to reimburse employers for some of the health insurance claim costs for retirees through 2013 until the Affordable Care Act exchanges were in place.  CMS has announced that $5 billion allocated for the program has run out and that claims incurred after 2011 will not be accepted. It appears the administrations earlier estimate how long the funds would last was off just about a year.  Here is the CMS release:

The Early Retiree Reinsurance Program (ERRP) was established by section 1102 of the Affordable Care Act enacted on March 23, 2010. Congress appropriated $5 billion for this temporary program and directed the Secretary of Health and Human Services (HHS) to set up the program within 90 days of enactment. By law, the ERRP is scheduled to end when its resources have been used to pay claims. Due to the significant response among the employer community, the Administration’s budget released in February 2011 projected that the funds would last through fiscal year 2012, which started on October 1, 2011. The program ceased accepting applications for participation in the program on May 6, 2011. On November 18, 2011, CMS notified plan sponsors that total payments reached $4.1 billion. On December 9, 2011, CMS notified plan sponsors that $4.5 billion had been paid and issued further guidance informing plan sponsors that claims incurred after December 31, 2011 will not be accepted.

Where did the money go? It went to a wide variety of employers of all sizes, but interestingly, if you scan the list of recipients you will find that most of the money went to state and local governments, including school districts (reflecting their large numbers and generous early retirement programs).  A few very large corporations such a Verizon, Prudential and Johnson & Johnson received sizeable checks as well.

The City of Minot in North Dakota has over 2000 plan participants and has received $112,933 in ERRP reimbursements. As a direct result of these reimbursements the City was able to reduce 2012 premiums by 17 percent.

And what will happen in 2013 when the premium increases will have to cover the shortfall created by artificially reducing premiums in 2012 in addition to the increases being generated over the next year? Wait until these organizations see a compounding of their premium increases in 2013, it will be like the middle class receiving a tax increase because the Social Security payroll tax is reinstated.

In the final analysis, what did the American tax-payer get for his money?  The purpose of the ERRP was to encourage organizations to retain early retiree coverage.  However, state and local government plans and large corporations, especially those heavily unionized, are very unlikely or completely unable to cease providing early retiree health care coverage, certainly not  before 2014.  So what we have is a transfer of federal (borrowed) money to the states, local government and mostly large corporations creating a windfall serving a very questionable purpose.  It is true that some retirees also saw a small benefit in all this, but that too is temporary and any reduction in their cost will quickly disappear.

That $5 billion could have been spent in more productive ways.

Will Obamacare, PPACA, Affordable Care Act save money and if so, for whom?

7 Dec

Much has been written, discussed and debated about health care reform.  Even more has been promised in terms of savings and making health care “affordable,” but what does it all mean?

Will there be savings and how will any savings generated benefit you? Read my assessment of the situation for a definitive answer to this important question.

Will health care reform save money and lower costs?


Death panels just wont die…another bogus e-mail is circulating, be careful what you pass along

6 Dec

I am beginning to think one can make a career out of debunking the nonsense e-mails that people believe and pass along or perhaps there is a fortune to be made writing this garbage.

In any case, here is the latest (unedited). Need I state emphatically that none of this is true or even logical? It is rather another attempt by ignorant people to undermine the affordable care act without the slightest understanding of what it is and is not.  Apparently the caller, also called other conservative talk shows as I heard a recording from the Mark Levine show as well.

The Bogus E-Mail


Before I finally decided to write this I had to think about it for some time as I know you are busy with the Thanksgiving day upon us but I felt it was important enough to write about it anyway.

I was listening to the Jerry Doyle radio program and he received a call from a listener that was completely different than the subject being discussed. Before Jerry Doyle allowed the caller on the air he had his call screener verify the callers credentials. The caller was a Neuro Surgeon and he had just completed a seminar in Washington DC which included a talk from a government official who was part of the set up team implementing the new Health Care Plan. He said they were told by this government official that starting in 2014 that anyone at the age of 70 or older with a major medical problem such as a stroke, heart attack or brain aneurysm as examples and will require an operation that the doctor will have to obtain approval from a government commission before the doctor can operate. He also said that the patient will be called a unit, not a patient. The commission will consider the age, other medical problems and cost before authorizing the operation on the unit. If the commission, who by the way are NOT doctors, deny the operation the only thing the doctor will be authorized to do is to – ready for this – make the unit as comfortable as possible until death. If the doctor operates anyway fines and sanctions would be taken against the doctor.

It wasn’t but a couple of minutes when Jerry Doyle received another call from another doctor who had been at the same seminar who verified what the previous doctor had said. This doctor added that the question was asked if this was the death panel that some had said was in the health care bill and the answer was, “We do not consider this a death panel but one of the ways they are going to reduce medical costs”. Both doctors said that they asked where they could go to read about this and they both said that there will not be anything published until the Health Care Bill is fully operational starting in 2014. That will be when all of the rules and requirements will become the law and made public. They were also told that none of this will apply to past, present and future congressional officials or those in the executive branch which past, present and future Presidents and Vice Presidents. When the health care bill was written this was one of two (2) exceptions. The second exception was – better be ready for this one also – ILLEGAL IMMIGRANTS! The rational behind this is being they are NOT United States Citizens that the law will not apply as it will only apply to United States Citizens or those in our country legally.

I know that some of you will read this and some won’t, some will believe this and some won’t but I hope that all of you do read this and believe it as I believe it is true. I have not heard anything else about this since the two doctors called Jerry Doyle’s radio program but there is no doubt that it won’t be long until the word about this gets out and hopefully this will help to terminate the so called health care bill. If you vote PLEASE vote intelligently as your life WILL depend on it this election.

If you want the facts on the only commission mentioned in the affordable care act including its mission and what it can and cannot do, go to this post on my blog.  The death panel, take a closer look

While the above e-mail is rubbish, the fact is that Medicare spends nearly 30 percent of its budget on beneficiaries in their final year of life. Slightly more than half of Medicare dollars are spent on patients who die within two months… and that must change if we have any hope of managing costs.

Words of wisdom from Dr Berwick

4 Dec

This is an excerpt from the New York Times December 4, 2011.  If you read this blog regularly, you have heard it all before, but the truth repeated is good. More and more expensive health care does not mean better health care.

WASHINGTON — The official in charge of Medicare and Medicaid for the last 17 months says that 20 percent to 30 percent of health spending is “waste” that yields no benefit to patients, and that some of the needless spending is a result of onerous, archaic regulations enforced by his agency.

The official, Dr. Donald M. Berwick, listed five reasons for what he described as the “extremely high level of waste.” They are overtreatment of patients, the failure to coordinate care, the administrative complexity of the health care system, burdensome rules and fraud.

“Much is done that does not help patients at all,” Dr. Berwick said, “and many physicians know it.”

Cash flowing to states to implement health insurance exchanges, but how will they control costs? Ability of state health insurance exchanges to “drive costs down” seems rather optimistic

2 Dec
Secretary of Health and Human Services Kathlee...

Ladies, remember, never let the facts get in the way of a good political goal

There coming, barely two years away and counting; that’s state health insurance exchanges by the way.

Federal money continues to flow to the various states to help them establish their exchanges. Initially the exchanges will be primarily for individuals and small businesses, but over time employers are expected to shift workers into the exchanges simply because there are financial incentives for employers and many workers to obtain health insurance through an exchange. Only time will tell.

What is interesting is that policy makers and bureaucrats still believe that the exchanges will somehow create new competition among insurers that will restrain costs. That is an interesting assumption since insurers already compete with one another with no positive effect on costs and by adding more insurers into a market their individual leverage to negotiate with health care providers is reduced. In addition, all insurers will be subject to the same mandates and minimum benefit packages. There will be little room to maneuver. We seem to keep missing the point that premiums are not the issue, underlying costs of health care are. Federal officials should articulate exactly what they expect insurers to do to hold down health care costs so we all have that information.

After you read the optimistic view of the world from the bureaucratic point of view in the following press release, read this:  Study: Employers Could Dump Sickest Employees On Public Health Care

News Release   FOR IMMEDIATE RELEASE   November 29, 2011
Contact: HHS Press Office
States receive more flexibility, resources to implement Affordable Insurance Exchanges.  More than half of states now creating marketplaces to help millions of families and small businesses buy insurance

The Department of Health and Human Services (HHS) today awarded nearly $220 million in Affordable Insurance Exchange grants to 13 states to help them create Exchanges, giving these states more flexibility and resources to implement the .  The health care reform law gives states the freedom to design Affordable Insurance Exchanges – one-stop marketplaces where consumers can choose a private health insurance plan that fits their health needs and have the same kinds of insurance choices as members of Congress.

The Department also released several Frequently Asked Questions providing answers to key questions states need to know as they work to set up these new marketplaces. Critical among these are that states that run Exchanges have more options than originally proposed when it comes to determining eligibility for tax credits and Medicaid.  And states have more time to apply for “Level One” Exchange grants.

Today’s awards bring to 29 the number of states that are making significant progress in creating Affordable Insurance Exchanges.  States receiving funding today include: Alabama, Arizona, Delaware, Hawaii, Idaho, Iowa, Maine, Michigan, Nebraska, New Mexico, Rhode Island, Tennessee, and Vermont.

“We are committed to giving states the flexibility to implement the Affordable Care Act in the way that works for them,” HHS Secretary Kathleen Sebelius said.  “Exchanges will give consumers more choices and make it easy to compare and shop for insurance plans.”

In the new Exchanges, insurers will provide new information such as an easy-to-understand summary of benefits and costs to consumers. The level of detail will sharpen competition between carriers which will drive costs down.  “OMG,” rdq

HHS also released today a set of Frequently Asked Questions (FAQs) in anticipation of state legislative sessions beginning in January. Answers will help advance state policy development for Exchanges.  For example, they clarify that Exchange grants can be used to build a state Exchange that is operational after 2014; that state-based Exchanges will not be charged for accessing Federal data needed to run Exchanges in 2014; and that state insurance rules and operations will continue even if the Federal government is facilitating an Exchange in the state.  HHS will also allow greater flexibility in eligibility determinations, allowing, for example, a state-based Exchange to permit the Federal government to determine eligibility for premium tax credits.

Of the 13 states awarded grants today, 12 are receiving Level One grants, which provide one year of funding to states that have already made progress using their Exchange planning grant.  The 13th state, Rhode Island, is receiving the first Level Two grant, which provides multi-year funding to states further along in the planning process.
Forty-nine states and the District of Columbia have already received planning grants, and 45 states have consulted with consumer advocates and insurance companies.  Thirteen states have passed legislation to create an Exchange.

Reporting value of employer-provided health benefits on W-2 effective January 2012 … Is taxation of health benefits far behind?

30 Nov

Starting in 2012 employers will be required to report the  cost of employer-provided health care benefits in box 12 of your form W-2.  The amount will use code “DD”.

The amount shown on the W-2 is for information purposes and is not taxable . .  . for now.  However, do not lose site of the fact that the tax-free status of health benefits is the single largest revenue loser for the federal government.  The Simpson-Bowles Commission recommended a gradual phase out of this tax break.

Employer Provided Health Care Insurance: Exclusion capped at 75th percentile of premium levels in 2014, with cap frozen in nominal terms through 2018 and phased out by 2038; Excise tax (on high cost plans) reduced to 12%.

Given the failure of the super committee of Congress to accomplish anything, this employee tax benefit is a prime target for dealing with the federal deficit.  A change is unlikely to come all at once and it may be income sensitive, but it is hard to see how this plum will be left on the tree for much longer.

Lipitor goes generic, but you can receive the brand for only a $4.00 co-pay, check with your doctor and health plan.

29 Nov
A non-working animation of atorvastatin (Lipitor)

On Wednesday November 30, a generic version of Lipitor the popular cholesterol lowering drug becomes available. This will substantially lower the cost of taking this drug.

It also means that many health plans will require patients to switch to the generic version of the drug or pay a considerably higher co-payment. Some plans may allow a transition period and the manufacturer of Lipitor is offering a co-pay deal.

If you are taking Lipitor, now is the time to check with your doctor and your health plan or pharmacy benefit manager (PBM) about the new generic version. This is true for Medicare beneficiaries as well.

For the next six months due to the Pfizer rebate structure, Lipitor will be less expensive than the generic. PBMs normally steer folks to generics but this case will be the exception. Many PBMs have such a pricing arrangement with Pfizer. So where does that leave the patient? The PBM may save money via the Pfizer rebate, but will the patient pay the brand co-pay or generic co-pay? And what about plan provisions that require the use of a generic when available? During this six month period using a generic may save the patient money, but cost the plan more. Best to check with your plan, your employer or your PBM.

For example, from Businessweek:

UnitedHealthcare has 9.5 million individuals, according to the company.  After Nov. 30, the insurer’s customer will pay about $30 to $35 for brand-name Lipitor, compared with $50 to $60 for the generic, Mason (a UHC spokeman) said.

After six months, the co-pay on the copycats will drop to about $15 as more generic competitors begin selling the pills, said Lynne High, a UnitedHealth spokeswoman. The co-pay for Lipitor at that point will depend on Pfizer’s pricing, she said.

Such a change in co-pays may not be so easy in employer plans with fixed co-pays for brand and generic drugs and requirements that a generic be used when available.

The generic version will look different, some inactive ingredients may be different, but the chemical make up is the same as the brand version.

In some states, such as New Jersey, unless the doctors checks otherwise on the prescription order, the pharmacy will dispense a generic when available.

In an effort to keep you using Lipitor, you can receive a one month prescription for $4.00 even if you have private coverage paying a portion of the cost (but not Medicare or Medicaid). 

Here is the link to Lipitor For You

Related articles


Democrats Urge Obama to Protect Contraceptive Coverage in Health Plans

21 Nov
Diana DeGette

"Free" Free at last!

The title of this post is actually the headline from a Sunday New York Times article on November 20th.   I find it incredible that as Rome burns our politicians, in this case apparently Democratic politicians, find their cause celeb is the “free” coverage by insurance of birth control pills.  I am trying to restrain myself at the stupidity of all this. 

Why in the world do birth control pills have to be “free?”  One exception may be within Medicaid where it makes sense to make this investment for people who likely truly need the help, but for the general population, give me a break. 

According to the one quote below millions of working women need coverage.  Get it “working women” need someone else to pay for their pills.  Apparently it is alright for them to pay 20% of the cost for open heart surgery, or treatment for breast cancer, but not 20% of the cost of a $35 prescription.   Many health plans have for years provided coverage for contraceptives with either modest co-pays or coinsurance, but that is now insufficient, it has to be free.

And you thought there was hope for us managing health care costs; not while this mentality persists there isn’t.

Quotes from the NYT article:

When the administration announced the requirement for contraceptive coverage, it said the decision was “based on science.”

House members have sent a letter to Mr. Obama urging him not to widen the exemption. Such a change, they said, would keep contraception out of reach for millions of women.

Representative Diana DeGette, Democrat of Colorado, said the broad exemption was “an outrageous idea.”

“Millions of women work for colleges, hospitals and health care systems that are nominally religious, but these folks use birth control and need coverage,” said Ms. DeGette, a leader of the Congressional Pro-Choice Caucus.

Based on science? . . . exactly what science tells us that people can’t afford to pay the cost or some part of the cost of a low-cost, voluntarily prescription drug?  Why is something that costs $15 to $50 a month out of the reach of millions of women when millions of (working} women already have such coverage with nominal co-pays or coinsurance?

Exactly what can a working women afford to spend $15 to $50 per month on; perhaps a few lattes, a trip or two to get their nails done, makeup, an extra pair of shoes, their hair?  No I am not being condescending or simply a smart ass, I am trying to point out that $1 spent on some important health care item is the same $1 spent on something not so important but that is not paid for by someone else.  We would think it ludicrous to say a manicure is covered by insurance, yet we don’t expect a person to make the choice between the manicure and a birth control prescription because “insurance should pay for the later.”  The prescription should be “free!”   As I have already said, we are not talking about the poor who cannot afford either. 

When I Googled(r) to find the current cost of oral contraceptives I often found something like this:

The initial physical exam in your healthcare provider’s office could range from $20 to $200. The monthly fee for each supply of pills ranges from $5 to $30 or more, depending on your medical coverage


Costs for generic birth control prescriptions change from pharmacy to pharmacy and also depend on your insurance plan, if it covers birth control. Often, insurance co-pays will be less for generics than for brand names. For example, you might pay $10 instead of $20 or $30. Some insurance plans will only pay for generics.

Get it, they don’t understand what the cost of something is, it depends on your insurance.  Here is a clue; the co-payment you pay is not the cost.

According to the Planned Parenthood website oral contraceptives cost between $15 and $50 per month.  “One popular birth control pill costs $48.07 per month for the brand name, or $27.99 for the generic.”

What hope does America have for controlling health care costs? Very little as long as we think we can cover it all and that the real cost of health care is only the portion we are expected to pay, which apparently is shrinking by the day.

The Early Retiree Reimbursement Program (ERRP); a word of caution about sharing savings with retirees

15 Nov

Employers who provide retiree health insurance received a windfall under the Affordable Care Act via the ERRP program which reimburses them for a portion of the expenses incurred by early retirees (pre-65).  Employers can use these funds in a variety of ways as long as they benefit the plan.  The idea is to help keep this coverage in effect at least until 2014 when the exchanges go into effect under PPACA.  Some employers are using a portion of the refund to keep 2012 premiums lower for the enrolled retirees, but is this a good idea? Perhaps it is not the best way to share this temporary payment.

Read more in this article I prepared for Health Insurance Illuminated.  

Note: The referenced blog post was written before HHS announced that the Medicare Part B premium for 2012 would be $99.90. That represents an average annual increase of only 1.2% since the last premium change several years ago and is far below the past five-year rate of increase in Medicare costs as reported in the Medicare Trustees in their 2011 annual report. The increase is also much lower than projected annual cost increases for 2012 and beyond.

  • Early Retiree Reimbursement Program (ERRP) – here comes the money, but what is the fair way to use it? (
  • More money for the Early Retiree Reimbursement Program (ERRP) S.1088 – not likely. (

Annual health benefit open enrollment … what you should be thinking about

4 Nov

Tis is the season, no not that season. It’s the annual open enrollment season for most health plans including Medicare. Did you know that most people spend more time buying a pair of shoes than they do thinking about their employee benefit options? It’s true and that is a big mistake.

On top of that many people are not enrolled in the health insurance plan that provides the best overall value for their family. They are either paying too much or taking too large a financial risk… not good.

To make an informed decision you must review all your options, evaluate premiums and potential out-of-pocket costs. You must leverage a flexible spending account or health savings account if available to you.

In other words, don’t go buying a new pair of shoes, rather spend a half hour looking at and evaluating your options, even if you are happy with what you have.

Read more tips on open enrollment here.

Don’t pay that doctor’s bill … yet. You may not be responsible.

3 Nov

When you receive a balance bill from your doctor or hospital you may or more likely are not responsible for the amount you are being billed.

Get the facts, look at your EOB, make sure you understand the agreement your doctor has with your health plan or Medicare.

Health costs enough, there is no reason to pay more than you actually owe.

Get all the facts in my blog post here.

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