Tag Archives: private health insurance

Third-Party Payment Is The Root Cause of Health System Dysfunction

InsFormSmall(A version of this Health Alert was published by RealClearHealth.)

Largely absent from the vigorous debate over reforming the nation’s health care laws is the understanding that simply being covered by health insurance does not reduce health care costs.

Before the Affordable Care Act (ACA) passed in March 2010, President Obama repeatedly promised that the typical family’s health premiums would go down by (sometimes “up to” but frequently “on average”) $2,500. That decline did not occur because the ACA strengthened the control that insurance companies—as opposed to patients—have over health care spending. In fact, Americans’ increasing dependence on health insurance over the last seven decades has been a major contributor to exploding health costs. Continue reading Third-Party Payment Is The Root Cause of Health System Dysfunction

Employer-Based Coverage Does Not Equalize Workers’ Access to Health Care

InsFormSmallOne reason public policy favors employer-based health benefits instead of individually owned health insurance is the former is supposed to equalize access to health care among workers of all income levels. Insurers usually demand 75 percent of workers be covered, which leads to benefit design that attracts almost all workers to be covered.

Employers do this by charging the same premium for all workers but only having workers pay a small share of the premium through payroll deduction. Most is paid by the firm. Last year, the average total premium for a single worker in an employer-based plan was $6,435, but the worker only paid $1,129 directly while the employer paid $5,306.

Although this suppresses workers’ wages, workers cannot go to their employers and demand money instead of the employers’ share of premium. The tax code also encourages this, by exempting employer-based benefits from taxable income.

Does this equal access to care? Not at all, according to new research: Continue reading Employer-Based Coverage Does Not Equalize Workers’ Access to Health Care

California’s Surprise Medical Bill Law Papers Over A Systemic Problem

Doctors Rushing Patient down Hall(A version of this Health Alert was published by Fox & Hounds.)

Insured patients who go into hospital for scheduled surgery are often shocked to find they owe bills well beyond what they expected to pay, especially if they understood the hospital and surgeon to be in their health plan’s network. The problem usually occurs when an anesthesiologist or other specialist involved in the procedure is not in the insurer’s network. Until now, when it came to the amount the out-of-network specialist could charge, the sky was the limit. A recent Consumers Union survey found nearly one third of Americans who had hospital visits or surgery in the past two years were charged an out-of-network fee when they thought all care was in-network. Continue reading California’s Surprise Medical Bill Law Papers Over A Systemic Problem

Obamacare Slightly Increased Short-Term Uninsured

NHISThe best measurement of people who lack health insurance, the National Health Interview Survey published by the Centers for Disease Control and Prevention (CDC), has released early estimates of health insurance for all fifty states and the District of Columbia in 2015. There are two things to note. Continue reading Obamacare Slightly Increased Short-Term Uninsured

Workers Increasingly Prefer Pay to “Benefits”

Businessman Sitting at His DeskThe Employee Benefits Research Institute (EBRI), a research organization with a mission “to contribute to, to encourage, and to enhance the development of sound employee benefit programs and sound public policy through objective research and education” includes members as diverse as AARP, Aetna, Boeing, Charles Schwab, and Wal-Mart. In the benefits world, it sits firmly inside the establishment.

That is why EBRI’s latest research on how employees view their benefits should give some encouragement to reformers who want to change the tax treatment of health insurance, and weaken the iron triangle of big business, big labor, and big government which enforces the discrimination against individually owned insurance. From EBRI’s latest Note: Continue reading Workers Increasingly Prefer Pay to “Benefits”

Pittsburgh Insurer Highmark Swings for the Fences on Obamacare Bailout

1(A version of this Health Alert was published by Forbes.)

Health insurers have not had much to cheer about lately, when it comes to Obamacare. They have been losing money on exchanges, and there is little hope that will change. So, a large health plan in Pittsburgh has asked judges to give it Obamacare money the Administration promised, but Congress declined to appropriate.

As reported by Wes Venteicher and Brian Bowling of the Pittsburgh Tribune-Review, Highmark lost $260 million on Obamacare exchanges in 2014, and claims it is owed $223 million by taxpayers. Unfortunately, it received only about $27 million. And things are getting worse. To date, Highmark has lost $773 million on Obamacare exchanges.

It is not that Highmark has been singled out by anybody. On the contrary, the Administration announced last year it was only going to pay about 13 cents on the dollar for all insurers’ exchange losses, via Obamacare’s “risk corridors.” This was not the Administration’s preferred course of action. The Administration wanted to pay insurers one hundred cents on the dollar, which it had promised them. Continue reading Pittsburgh Insurer Highmark Swings for the Fences on Obamacare Bailout

Health Status Related to Income Not Insurance

Women joggingAn extremely thorough analysis of changes in incomes and mortality in the United States, 2001 through 2014 presents some sobering conclusions for those who think fixing our health system will make us healthier. The research, let by Raj Chetty of Stanford University, ran data on incomes and mortality through a battery of statistical tools.

It is well understood that people in high-income households are healthier than those in low-income households. The latest research demonstrates how important incomes are to health status. Forty-year old men in households in the highest quartile of income (mean = $256,000 annually) had an average life expectancy just under 85 years in 2001. This increased by 0.20 years (a little over ten weeks) by 2014. For those in the lowest quartile ($17,000), life expectancy was about 76 years in 2001, and it only increased 0.08 years (a little over four weeks) by 2014.

Obamacare is likely to accelerate this gap, because it significantly reduces incentives for people in low-income households to increase their incomes. Continue reading Health Status Related to Income Not Insurance

Health Reform Through Tax Credits

health-care-costs(A version of this Health Alert was published by RealClearPolicy.)

Lost in the blur of the presidential campaign, the evidence indicates the Republican Obamacare replacement plan will include refundable tax credits. In its purest form, this means each person with employer-sponsored benefits, an individual health plan, or dependent on a welfare program like Medicaid or the Children’s Health Insurance Plan (CHIP) will start with a clean slate and a fixed sum of taxpayer-funded money to choose health care of his choice. The Republican proposal will not likely go that far, but it will go a long way to introducing fairness in the tax treatment of health benefits, which is currently broken. Continue reading Health Reform Through Tax Credits

Ted Cruz and Health Reform

CruzSenator Ted Cruz has won the Iowa Republican caucuses. Over the weekend, Chris Wallace of Fox News challenged Mr. Cruz on his proposal “to sell health insurance across state lines,” citing research published by NCPA that concludes federal action to mandate this would be ineffective. The research in question is on this blog, here and here.

We got quite a bit of feedback yesterday on this topic. As a think tank, we endorse policies, not politicians. Nevertheless, some of our audience took Mr. Wallace’s question to reflect opposition to Senator Cruz.

In fact, Senator Cruz’ proposal to sell health insurance across state lines does not appear in his presidential campaign platform. It is in a Senate bill he proposed last March, in anticipation of the Supreme Court’s decision in King v. Burwell. Continue reading Ted Cruz and Health Reform

What is Driving Health Prices Up?

The recent arrest of Martin Shkreli, former CEO of Turing Pharmaceuticals, for securities fraud, reminds us that high prescription drug prices are today’s whipping boy for the costs of health care. Hillary Clinton and other politicians have promised to impose federal controls on pharmaceutical prices.

However, prescription drugs have not been the fastest growing item in health care since the economy started to enter the Great Recession in 2007. That distinction belongs to health insurance (specifically, medical and hospital insurance, not workers’ compensation, income replacement, or long-term care). Table I shows price indices for various components of personal consumption expenditures, indexed such that 2007 equals 100.

PCE Continue reading What is Driving Health Prices Up?