For individuals ages 65 and older, Medicare fee-for-service coverage, even including the Part D prescription drug benefit, continues to less generous on average compared with preferred provider option (PPO) coverage in the standard Federal Employee Health Benefit Plan (FEHBP) and in the typical large employer plan, a new Kaiser Family Foundation report reveals. The average benefit value of Medicare for a person age 65 or older in 2011 is 97 percent of the FEHBP Standard Option benefit value and 93 percent of the typical large employer PPO benefit value, the study, conducted by Aon Hewitt for Kaiser, found. Medicare coverage likely is more favorably comparable with coverage provided in small and mid-size firms, the study added.
This analysis updates a 2008 Kaiser Family Foundation report that found Medicare’s benefit package to be less generous than the comparison employer plans, largely due to a higher deductible for inpatient care, the absence of a limit on out-of-pocket spending, a less generous prescription drug benefit, and a lack of dental coverage. Overall, the study found the following:
• Relative to the typical large employer PPO plan, Medicare provides somewhat more generous benefits for low-cost individuals ages 65 and older because of the relatively low Part B deductible for individuals who do not use inpatient care; however, Medicare is less generous than the typical large employer PPO plan for seniors with moderate and high costs. Similarly, relative to the FEHBP Standard Option (a national Blue Cross Blue Shield PPO that covers 44percent of all Federal employees), Medicare is slightly better for low-cost individuals ages 65 or older, but is notably less generous for moderate-cost individuals and somewhat less generous for high-cost individuals.
• Medicare’s average benefit value relative to the comparison employer plans has improved since Aon Hewitt last conducted the analysis in 2007, largely because of the 50 percent discount on brand-name drugs in the Part D “doughnut hole” included in the 2010 health reform law, and also because the actuarial value of the FEHBP Standard Option has contracted over the past few years due to changes in its benefit design (mainly, the increase in the limit on out-of-pocket spending).
Main differences between coverage in Medicare fee-for-service and in the two large employer plans reviewed were identified in the following categories:
1) Deductibles and coinsurance. Medicare requires multiple deductibles and coinsurance based on service type, whereas a typical large employer plan requires a single deductible for all medical services and the FEHBP standard plan requires a deductible of $350 for outpatient services and a $250 copayment for each hospital admission. In 2011, for an inpatient hospital stay Medicare required a $1,132 deductible and no coinsurance for the first 60 days, whereas the typical large employer plan required 20 percent coinsurance beginning from the first day.
2) Out-of-pocket limits. Medicare has none except for Part D; other plans have limits, but the typical large employer plan has not limits on prescription drug expenses.
3) Prescription drug “doughnut hole.” Medicare has such a spending gap but it is being reduced over time as provided by the Patient Protection and Affordable Care Act (ACA; see Report 324.4.-9). Other plans do not have such a gap.
4) Dental coverage. Medicare offers no coverage for dental services; other plans offer it. However, the Mercer annual National Survey of Employer-Sponsored Health Plans for 2010, found that nearly half of large employers that provide retiree medical benefits offered dental coverage for Medicare-covered retirees, but most required retirees to pay the entire cost of the coverage.
5) Separate network copayments. Medicare does not require different copyments based on in-or out-of-network services, while other plans required smaller copayments for in-network services.
This comparison does not account for changes between the 2007 and 2011 report periods studied of workers in the private plans shifting into other coverages, notably high-deductible health plans which saw a substantial increase from 4% of enrollees to 15%, and in the average increase by about 50 percent in enrollee premium contributions from $717 to $1,077 for the typical large plan and from $1,489.80 to $2,246.16 for the standard FEHBP plan. When these changes are taken into account, it just maybe that, at least for now, the good, old, reliable Medicare still is a better option than the ever-diminishing and ever more expensive employer-provided coverage or no coverage at all. Can Medicare for all be the answer to the nation’s growing uninsurance problem?
Friday, April 6, 2012
Wednesday, April 4, 2012
On Two Year Anniversary, Health Reform Benefitting Millions
Amid wide misunderstanding, misinformation, lack of knowledge, and fierce opposition to the provisions of the Patient Protection And Affordable Care Act (ACA) even on the second anniversary of the law’s enactment on March 23, 2010, the Barack Obama administration through the Department of Health and Human Services (HHS) is still trying to inform the American public of the law’s benefits currently in effect. In a statement released on March 23, marking the law’s second anniversary, HHS Secretary Kathleen Sebelius listed the law’s achievements thus far. She called the ACA “the law that gives hard working, middle-class families the security they deserve. It’s only been two years, but we’re already seeing that the law is making a difference in the lives of Americans,” as noted below.
Seniors. Recent data shows that more than 5.1 million seniors and people with disabilities on Medicare saved more than $3.2 billion on prescription drugs due to the ACA. The HHS estimated that this equals about $635 per person in average savings.
Women. Because of the ACA, 45.1 million women—including 20.4 million women with private health insurance and 24.7 million women with Medicare—can receive recommended preventive services without having to pay a copayment or deductible. Preventive services, such as mammograms or Pap smears, are covered free of charge to insured individuals.
Young adults. As a result of the ACA, 2.5 million young people ages 19 to 26 have health insurance coverage through their parent’s plans.
Lowering premiums and costs. Insurance companies can no longer raise premiums by double digits without justification. In addition, the ACA requires that premium dollars must be spent primarily on health care, not administrative costs like overhead or executive salaries. So far, an estimated 74.8 million people have been protected by this new requirement, HHS claims.
Individuals with pre-existing conditions. Nearly 49,000 individuals have enrolled in the Pre-Existing Condition Insurance Plan, and it is now illegal for children under 19 to be denied coverage due to a pre-existing condition. The ACA also eliminated lifetime dollar limits on coverage for over 105 million Americans.
Seniors. Recent data shows that more than 5.1 million seniors and people with disabilities on Medicare saved more than $3.2 billion on prescription drugs due to the ACA. The HHS estimated that this equals about $635 per person in average savings.
Women. Because of the ACA, 45.1 million women—including 20.4 million women with private health insurance and 24.7 million women with Medicare—can receive recommended preventive services without having to pay a copayment or deductible. Preventive services, such as mammograms or Pap smears, are covered free of charge to insured individuals.
Young adults. As a result of the ACA, 2.5 million young people ages 19 to 26 have health insurance coverage through their parent’s plans.
Lowering premiums and costs. Insurance companies can no longer raise premiums by double digits without justification. In addition, the ACA requires that premium dollars must be spent primarily on health care, not administrative costs like overhead or executive salaries. So far, an estimated 74.8 million people have been protected by this new requirement, HHS claims.
Individuals with pre-existing conditions. Nearly 49,000 individuals have enrolled in the Pre-Existing Condition Insurance Plan, and it is now illegal for children under 19 to be denied coverage due to a pre-existing condition. The ACA also eliminated lifetime dollar limits on coverage for over 105 million Americans.
Monday, April 2, 2012
Though Support For Individual Mandate Is Low, It Would Affect Few, Stabilize Insurance Market
As the U.S. Supreme Court considers the fate of the Affordable care Act (ACA) individual mandate that requires all individuals to either have health insurance coverage or pay a fine, public support for the mandate continues to be low, Kaiser Family Foundation research shows. The legal spotlight on the mandate shed by the ACA’s opponents has not only made the mandate the best known of the ACA’s provisions (two-thirds know that it’s part of the ACA) but also shaped public perception. However, public opinion of the requirement remains “malleable and basic factual information and messages can sway Americans’ opinion,” Kaiser asserted in its new Data Note, A Snapshot Of Public Opinion On The Individual Mandate.
The December 2011 Kaiser tracking poll found support for the mandate varied from 17 percent to 61 percent, depending on which messages or information opponents or supporters of the mandate hear on the issue. By far the most effective information in terms of changing people’s minds is that, “under the reform law, most Americans would still get coverage through their employers and so would automatically satisfy the requirement without having to buy any new insurance.” After hearing that message, favorable views of the mandate rose 28 percentage points to 61 percent.
In March 2012, Kaiser found that only one in three felt favorable toward the mandate, compared to majorities of the public who favor the law’s other provisions, such as tax credits to small businesses that offer coverage (80 percent), as well as the consumer‐friendly requirement that plans include easy‐to‐understand summaries of their benefits and costs (70 percent). Not even a majority of Democrats, who favor the law overall, have a favorable view of the mandate (45 percent). In addition, between November 2011 and March 2012, intense opposition to the mandate (the proportion who say they have a “very” unfavorable view of it), increased 11 percentage points from 43 percent to 54 percent.
Supporters of the mandate cite as a reason that everyone should have coverage (17 percent) and that people should be responsible for their own insurance and pay their fair share (16 percent). Those opposed say that government should not be able to force people to do something (30 percent), health insurance is too expensive (25 percent), and the fine for noncompliance (22 percent).
Most of the Kaiser survey participants do not see the Court’s ruling on the mandate as the final word on the ACA. Six in ten (62 percent) expect that if the Court strikes down the mandate, some parts of the law will continue to be implemented, while half as many (28 percent) think this will effectively mean the end of the entire law.
Mandate Would Affect Few
A recent study by the Urban Institute found that “if the ACA were in effect today, 94 percent of the total population (93 percent of the nonelderly population) or 250.3 million people out of 268.8 million nonelderly people—would not face a requirement to newly purchase insurance or pay a fine.” The study, The Individual Mandate in Perspective, was conducted using the Urban Institute’s Health Insurance Policy Simulation Model (HIPSM) to estimate the number and share of Americans potentially subject to the mandate, identify their insurance status absent the ACA, and simulate eligibility for Medicaid and exchange-based premium and cost-sharing subsidies.
The results of the Urban Institute analysis estimates the population exempt from the mandate; the population potentially affected by the mandate, but already covered by insurance of some type; and the remaining population required to newly purchase coverage or pay a fine. If the ACA were fully in effect in 2011, the researchers found, 87.4 million nonelderly Americans—33 percent of the population under age 65—would be “explicitly exempt” from the individual responsibility requirement because their incomes fall below the tax filing threshold, the direct premium of the lowest cost available plan exceeds 8 percent of family income, and they are undocumented immigrants. Almost three-quarters of the exempt population already have health insurance coverage of some type today; a little more than one-quarter is uninsured.
Of the remaining 181 million Americans under the age of 65 who are subject to the mandate, 86 percent are estimated to have health insurance without reform. The Urban Institute simulates that 95 percent of those with some type of insurance coverage (employer, nongroup, public) without reform will have the same type of coverage under the ACA. Virtually all of the remaining 5 percent will obtain coverage from a different source under reform than they do today (for example, some of those with nongroup coverage currently will be able to obtain coverage through an employer under the ACA).
Forty-three percent of the population potentially subject to the individual mandate receive coverage through large employers; 12 percent receive coverage through small employers; and 7 percent have employer-based coverage from an undetermined source (most commonly a family member living in another household or a previous employer). Nearly all of these people will continue to obtain their coverage from the same type of source once the reforms are fully in place. Five percent purchase coverage in the nongroup market, and 17 percent have coverage through a public program (for example, Medicaid, Children’s Health Insurance Program (CHIP), military), and nearly all will continue to do so once the reforms are fully in place. Some will have their coverage broadened somewhat so that it satisfies the ACA’s minimum or “essential health benefits” requirements.
Nearly 26.3 million Americans who are currently uninsured will be required to newly obtain coverage or pay a fine. In this group, 8.1 million people will be eligible to receive free or close-to-free insurance through Medicaid or CHIP and can avoid the mandate penalties if they do so. Consequently, 18.2 million Americans (6 percent of the total population, 7 percent of the nonelderly population) will be required to newly purchase coverage or face a penalty. Of that 18.2 million, 10.9 million people will be eligible to receive subsidies toward private insurance premiums in the newly established health insurance exchanges, but will have to make partial contributions toward their coverage. About 7.3 million people—2 percent of the total population (3 percent of the population under age 65)—are not eligible for financial assistance under the ACA and will be subject to penalties if they do not obtain coverage.
The insurance mandate has a positive effect, not only by substantially expanding the number of individuals with insurance, but also by stabilizing the insurance market and related premiums, the report found. “By encouraging the currently insured healthier individuals to stay in these markets and attracting newly insured healthy individuals into them as well, the individual responsibility requirement leads to lower premiums and more stable insurance markets than would be the case without it,” the Urban Institute concluded. “We find that premiums in the nongroup market would be 10 to 20 percent higher on average without the individual coverage requirement.”
The December 2011 Kaiser tracking poll found support for the mandate varied from 17 percent to 61 percent, depending on which messages or information opponents or supporters of the mandate hear on the issue. By far the most effective information in terms of changing people’s minds is that, “under the reform law, most Americans would still get coverage through their employers and so would automatically satisfy the requirement without having to buy any new insurance.” After hearing that message, favorable views of the mandate rose 28 percentage points to 61 percent.
In March 2012, Kaiser found that only one in three felt favorable toward the mandate, compared to majorities of the public who favor the law’s other provisions, such as tax credits to small businesses that offer coverage (80 percent), as well as the consumer‐friendly requirement that plans include easy‐to‐understand summaries of their benefits and costs (70 percent). Not even a majority of Democrats, who favor the law overall, have a favorable view of the mandate (45 percent). In addition, between November 2011 and March 2012, intense opposition to the mandate (the proportion who say they have a “very” unfavorable view of it), increased 11 percentage points from 43 percent to 54 percent.
Supporters of the mandate cite as a reason that everyone should have coverage (17 percent) and that people should be responsible for their own insurance and pay their fair share (16 percent). Those opposed say that government should not be able to force people to do something (30 percent), health insurance is too expensive (25 percent), and the fine for noncompliance (22 percent).
Most of the Kaiser survey participants do not see the Court’s ruling on the mandate as the final word on the ACA. Six in ten (62 percent) expect that if the Court strikes down the mandate, some parts of the law will continue to be implemented, while half as many (28 percent) think this will effectively mean the end of the entire law.
Mandate Would Affect Few
A recent study by the Urban Institute found that “if the ACA were in effect today, 94 percent of the total population (93 percent of the nonelderly population) or 250.3 million people out of 268.8 million nonelderly people—would not face a requirement to newly purchase insurance or pay a fine.” The study, The Individual Mandate in Perspective, was conducted using the Urban Institute’s Health Insurance Policy Simulation Model (HIPSM) to estimate the number and share of Americans potentially subject to the mandate, identify their insurance status absent the ACA, and simulate eligibility for Medicaid and exchange-based premium and cost-sharing subsidies.
The results of the Urban Institute analysis estimates the population exempt from the mandate; the population potentially affected by the mandate, but already covered by insurance of some type; and the remaining population required to newly purchase coverage or pay a fine. If the ACA were fully in effect in 2011, the researchers found, 87.4 million nonelderly Americans—33 percent of the population under age 65—would be “explicitly exempt” from the individual responsibility requirement because their incomes fall below the tax filing threshold, the direct premium of the lowest cost available plan exceeds 8 percent of family income, and they are undocumented immigrants. Almost three-quarters of the exempt population already have health insurance coverage of some type today; a little more than one-quarter is uninsured.
Of the remaining 181 million Americans under the age of 65 who are subject to the mandate, 86 percent are estimated to have health insurance without reform. The Urban Institute simulates that 95 percent of those with some type of insurance coverage (employer, nongroup, public) without reform will have the same type of coverage under the ACA. Virtually all of the remaining 5 percent will obtain coverage from a different source under reform than they do today (for example, some of those with nongroup coverage currently will be able to obtain coverage through an employer under the ACA).
Forty-three percent of the population potentially subject to the individual mandate receive coverage through large employers; 12 percent receive coverage through small employers; and 7 percent have employer-based coverage from an undetermined source (most commonly a family member living in another household or a previous employer). Nearly all of these people will continue to obtain their coverage from the same type of source once the reforms are fully in place. Five percent purchase coverage in the nongroup market, and 17 percent have coverage through a public program (for example, Medicaid, Children’s Health Insurance Program (CHIP), military), and nearly all will continue to do so once the reforms are fully in place. Some will have their coverage broadened somewhat so that it satisfies the ACA’s minimum or “essential health benefits” requirements.
Nearly 26.3 million Americans who are currently uninsured will be required to newly obtain coverage or pay a fine. In this group, 8.1 million people will be eligible to receive free or close-to-free insurance through Medicaid or CHIP and can avoid the mandate penalties if they do so. Consequently, 18.2 million Americans (6 percent of the total population, 7 percent of the nonelderly population) will be required to newly purchase coverage or face a penalty. Of that 18.2 million, 10.9 million people will be eligible to receive subsidies toward private insurance premiums in the newly established health insurance exchanges, but will have to make partial contributions toward their coverage. About 7.3 million people—2 percent of the total population (3 percent of the population under age 65)—are not eligible for financial assistance under the ACA and will be subject to penalties if they do not obtain coverage.
The insurance mandate has a positive effect, not only by substantially expanding the number of individuals with insurance, but also by stabilizing the insurance market and related premiums, the report found. “By encouraging the currently insured healthier individuals to stay in these markets and attracting newly insured healthy individuals into them as well, the individual responsibility requirement leads to lower premiums and more stable insurance markets than would be the case without it,” the Urban Institute concluded. “We find that premiums in the nongroup market would be 10 to 20 percent higher on average without the individual coverage requirement.”
