The Health Shopper

Today, the provision known as the Medical Loss Ration will drop. This provision requires health insurance companies to spend 80% of their consumers’ premiums on medical care, as opposed to marketing or overhead costs. If they do not do this, the companies will be required to send back a rebate check detailing the amount they did not spend on medical care.

The Department of Health and Human Services has detailed the parameters for qualification as a medical expenditure, though these rules are still being “fine-tuned”.

Yesterday the Supreme Court confirmed that, as expected for this year’s term term, it will rule on the constitutionality of the Patient Protection and Affordable Care Act. The Court plans to hear 5.5 hours of arguments on the case by March of next year; a ruling is expected in June.

The ruling aims to answer two essential questions: is the individual mandate, which requires individuals to purchase health insurance, is constitutional? And if not, should the entire piece of legislation be nullified?

The federal government has pushed through various consumer protection and premium regulation pieces in the act; the law also provides a number of options for individuals to get insured, such as the new federal and state-run health exchanges. Florida, leading a coalition of 26 states, is spearheading the case against the law on the grounds that the government cannot mandate the purchase of health insurance.

Update: Shortly after the confirmation of the hearing White House Communications Director Dan Pfeiffer released a statement saying, “We know the Affordable Care Act is constitutional and are confident the Supreme Court will agree.”

Califonia gov. Jerry Brown made his way through approximately 140 proposed laws in time for a midnight deadline. Among the new CA laws passed are the following:

• Insurers are required to provide autism coverage.
• Children aged 12 and above are given access to STD-preventive care sans parental consent.
• Cancer-causing tanning beds are now illegal for use by teenagers under the age of 18, in an effort to curb early-onset skin cancer and exposure to known carcinogens.

It’s that time of the year again, folks! The Surpreme Court’s 2011-2012 term began yesterday on Oct. 1, and a number of cases have reached the Court’s desk, two of the which have important implications for health care.
According to Andrew Cohen at The Atlantic, “in Caraco Pharmaceutical v. Novo Nordisk, the justices will broker a dispute between generic drug manufacturers and their brand-name counterparts. And in Mayo Collaborative Services v. Prometheus Laboratories, the justices will return again to the issue of whether a doctor’s diagnostic methods may be patented”.
The former, Caraco Pharmaceutical v. Novo Nordisk could massively impact prices of pharmaceuticals and the consumer’s access to generic drugs. The Mayo Collaborative Services v. Prometheus Laboratories case examines whether labs can patent certain diagnostic tests.
The star of the health care cases, however, is the Affordable Care Act. The constitutionality of reform has long been a subject of debate, and CNN predicts that we may have a verdict on the case by next June.
So keep your eyes peeled: there are big cases coming up in the high courts!

On Sept. 1 the Obama administration will begin review of proposed premiums and rate hikes in 10 states, which currently do not sufficiently regulate health insurance rates. The federal government’s ability to broadcast and expose unfair or unreasonable rate increases under reform is expected to serve as a major protection for consumers, who saw rate increases of 20% or more last year.

Alabama, Arizona, Idaho, Iowa, Louisiana, Pennsylvania, Missouri, Montana, Virginia and Wyoming will all be subject to federal review of health insurance premiums. The government will review both individual and small group health plans for all but three states. Iowa, Pennsylvania and Virginia will be subject to review of only individual health plan rates
Oregon consumers have benefitted from similar federal rate regulation, with a recent proposed hike of 22% whittled down to about 12%.

Resolving one minor “glitch” in the new health care law could save billions over 10 years. It would put under 1 million people out of Medicaid, which is a surprisingly small percentage of the almost 50 million on Medicaid as of 2009.

Examination of Social Security benefits has been put forth as an alternative to simply providing early middle-income retirees from 62-65 Medicaid eligibility. Less than a million people would be affected by the legislation and about $13 billion would be saved over the next decade.

Of those affected, half would still be eligible for subsidies on health care via state-run exchanges and a little under half a million people would be insured by their employers.

Approved by the Senate Health Committee, a new bill would allow the California Department of Managed Health Care and the Department of Insurance to reject health insurance rate hikes. Any increase that department officials find to be “excessive, inadequate or unfairly discriminatory” could be rejected.

The bill mandates regulators’ approval before a hike passes. So far, 35 other states have a similar regulation.

Economists and legislators’ long-standing question has finally been addressed: Does health insurance for the poor really make a difference? As Medicare/Medicaid debts hit all-time highs, many states are cutting back their Medicaid programs. And while affordable health insurance remains a reach for the poor and uninsured, the first large-scale controlled study tackles the question of Medicaid’s influence on the uninsured.

Professor of health economics at the Harvard School of Public Health Katherine Baicker and professor of economics at M.I.T. Amy Finkelstein conducted a groundbreaking study, thanks to a peculiar situation in Oregon. Low on money, Oregon wanted to grow its Medicaid program but could only provide for 10,000 new enrollments. When almost 90,000 uninsured applied the state had to select applicants by a lottery, setting the stage for Dr. Baicker and Dr. Finkelstein’s study on the benefits of health insurance for the poor.

Using the uninsured applicants as a control group, the researchers asked those who had gotten Medicaid what difference the insurance made. The first phase of the study found vast differences between the two groups, and found that the insured had spent 25% more on medical costs. Under Medicaid, they were 35% more likely to see a doctor and 30% more likely to gain admission to a hospital, though there was no major change in ER use. Those who had insurance were also more likely to have a particular clinic and doctor they regularly checked in with.

Outside of the numbers, insurance also reported feeling much better. They were more likely to partake in preventive care with women being 60% more likely to get mammograms. And insurance made a difference for the subjects’ financial stability as well: those with Medicaid were 40% less likely to borrow money or fail to pay non-medical bills due to insurance costs.
Currently, the study is examining the health effects of health insurance. So far, 12,000 people have been interviewed and assessed for health via blood pressure, cholesterol, etc. Half of the interviewees are covered under Medicaid and half are not.

Dr. Baicker was surprised by the difference insurance made. “Being uninsured is incredibly stressful from a financial perspective, a psychological perspective, a physical perspective,” she said. “It is a huge relief to people not to have to worry about it day in and day out.”

Last week Health and Human Services Secretary Kathleen Sebelius announced that HHS would start to collect health data on the lesbian, gay, bisexual and transgender (LGBT) community, as well as introduce new standards for reporting and collecting data on ethnicity, sex, disability status, etc.

“Health disparities have persistent and costly affects for minority communities, and the whole country,” Sebelius said. “Today we are taking critical steps toward ensuring the collection of useful national data on minority groups, including for the first time, LGBT populations. The data we will eventually collect in these efforts will serve as powerful tools and help us in our fight to end health disparities.”

The Congressional Budget Office has some news on federal health care spending, and it’s not all good: one projection asserts that federal health care spending could nearly double in the next two decades, comprising around 11% of the nation’s GDP (currently 5.6%). A less optimistic projection of the health care budget presents the debt at 100% of GDP in the next decade, almost 200% by 2035.

The numbers are startling, but there’s a catch: CBO is using pre-ObamaCare growth rates. Given the effects of the Affordable Care Act, from doctors’ payment cuts to decreased insurance subsidies, CBO has stated that the level of federal health care spending would not be easy to maintain long-term.

With the constitutionality of the Affordable Care Act currently up for debate in federal courts, what are your thoughts? Do you consider Medicare and Medicaid as a priority regardless of debt?