September 10, 2014 -- An authoritative annual survey of employer-sponsored health insurance says premiums for family coverage rose only 3 percent this year but that workers are getting socked by rising deductibles.

On average employees must pay $1,217 this year before their health costs are covered. That's up 47 percent since 2009, when deductibles averaged $826.

Eighty percent of workers now pay a deductible, according to the survey by the Kaiser Family Foundation and the Health Research and Educational Trust.

The survey of some 2,000 small and large employers also found that the requirements in the health care law (PL 111-148, PL 111-152) for more generous benefits are reaching more and more workers.

"The relatively slow growth in premiums this year is good news for employers and workers, though many workers now pay more when they get sick as deductibles continue to rise and skin-in-the-game insurance gradually becomes the norm," said Kaiser Family Foundation CEO Drew Altman.

"Today, four in 10 covered workers face at least a $1,000 deductible, nearly double the share from just five years ago," said the lead author of the survey, Gary Claxton, a Kaiser vice president who directs the foundation's health care marketplace research.

Almost one in five covered workers now faces an annual deductible of at least $2,000. Writing big checks for health care expenses is particularly a facet of coverage in the small employer market.

At employers with three to 199 workers, 61 percent pay at least $1,000 in deductibles and 34 percent pay at least $2,000 in deductibles. The average deductible is $1,800.

Health experts on both sides of the aisle can point to findings in the survey to validate their policy prescriptions.

Republicans in particular have pushed the idea that individuals would shop more carefully if they had to pay more of their own money before health coverage kicks in.
A system in which high deductibles are the norm would see slower spending growth and competition that slows medical inflation, they argue.

"These findings are positive and reflect a general slowing in health care costs overall," said Maulik Joshi, president of the Health Research and Educational Trust, a research arm of the American Hospital Association.

Premium growth has moderated considerably, increasing a total of 26 percent over the past five years compared to 34 percent in the five-year period before that. Premiums were growing at a double-digit clip in the late 1990s and early 2000s, researchers noted.

They added that the 3 percent increase this year is similar to the year to year rise in workers' wages of 2.3 percent and general inflation of 2 percent.

But employer sponsored family coverage, typically paid for mostly by the company but with employees kicking in a lot too, is very expensive. Premiums averaged $16,834 in 2014 with workers paying $4,823.

Annual premiums for worker-only coverage averaged $6,024 in 2014 with workers paying $1,081.

One of the goals of the health care overhaul was to require that certain preventive benefits be covered by employers with no cost-sharing and instituting an external appeals process for workers.

Two years ago, 48 percent of covered workers weren't seeing these improvements because their plans had grandfathered status under the health law. But plans lose that status if employers change them substantially. More and more are becoming subject to the coverage requirements of the law.

The survey found that 36 percent of covered workers were in grandfathered plans last year and that this year, the percentage fell further to 26 percent. The overhaul also has forced shorter waiting periods before new workers start getting their health benefits. The average length in 2014 is 2.1 months, down from 2.3 months in 2013.

Altman says the consensus among experts is that the overall slowdown in costs partly stems from a sluggish economy holding down the use of health care, and partly from changes in insurance and health care delivery. There is "no agreement on how much of the slowdown is due to one or the other of those factors, and no one knows for sure if or when costs will begin to escalate more rapidly again," he said in a briefing on the results. That is "equally true for what will be happening to employer premiums in the future as well."

By Rebecca Adams, CQ HealthBeat Associate Editor

September 16, 2014 -- U.S. government statistics released last week added to growing evidence of a drop in the rate of uninsured people. The data mirrored private polling data by Gallup and others showing that the percentage of Americans who say they are uninsured is falling.

What might have seemed beyond dispute—that the health care law would shrink the U.S. uninsured population—has actually been subject to debate following the late 2013 cancellation by insurers of hundreds of thousands of policies because they didn't comply with the requirements of the overhaul.

The impact on coverage shown by the new statistics is less than dramatic, but the information does not demonstrate the full impact of the law (PL 111-148, PL 111-152) so far.

The government released two sets of data early last week on the insured. One was prepared by the National Center for Health Statistics (NCHS) for the first quarter of 2014, the other by the U.S. Census Bureau for the full year 2013.

The National Center, part of the Centers for Disease Control and Prevention, found that 13.1 percent of Americans, or 41 million people, did not have insurance. That was a drop of about 8 percent, or 3.8 million people, from the previous year.

More people gained benefits with the launch of health insurance marketplaces and the expansion of Medicaid under the overhaul. The NCHS survey of 27,627 people was conducted from January through March, right before a large surge in enrollment in coverage options created by the law.

That late surge may not have been captured in the survey. About 47 percent of the people who enrolled in a marketplace plan did so in March and April, according to the Department of Health and Human Services.

The number of adults below age 65 who were uninsured fell from 20.4 percent in 2013 to 18.4 percent in the survey period. About 3.7 million of the people surveyed between January and March said that they got private insurance through the marketplaces established with federal money under the health care law (PL 111-148, PL 111-152).

HHS announced in April that more than 8 million people bought coverage through the exchanges. Officials said they had no data on how many of them were previously uninsured. The administration also said that about 7.2 million additional people were enrolled in Medicaid and the Children's Health Insurance Program (CHIP) in June. That data, the most recent available, is compared to enrollment in the programs in 2013 right before publicity about the health care law began. Updated Medicaid and CHIP enrollment figures are expected soon.

But despite the millions getting covered in these new ways, the precise effect of the law has been difficult to determine. That's because many policies were cancelled when they did not comply with coverage requirements.

The report provides "more evidence about how the ACA is affecting people a lot," says Larry Levitt, a senior official at the nonpartisan Kaiser Family Foundation. One interesting note, says Levitt: in states that did not expand Medicaid, the change in the uninsured rate was minuscule in the first quarter of the year.

The next version of the NCHS survey will be out in December and will provide "the best available official data on the full effect of the law this year," he added.

In July, the Gallup Organization, which has tracked the rate of uninsured since 2008 in its surveys of about 45,000 people, found that the percentage of uninsured people had fallen from 17.1 percent in the fourth quarter of 2013 to 13.4 percent in the second quarter of 2014, a decline of 3.7 percentage points.

The Centers for Medicare and Medicaid Services Office of the Actuary estimated earlier this month that the number of uninsured Americans is expected to fall from 45 million people in 2012 to 23 million by 2023.

Census Data

Separately, Census Bureau data showed that 13.4 percent or 42 million people lacked coverage throughout 2013.

But it doesn't provide much of a hint about the effect of the law. The insurance people could buy in the new marketplaces did not start until January and the biggest influx of new Medicaid applicants was in 2014. But the census statistics will help researchers gauge the impact of the law in the future.

The bureau in 2013 also changed the way it measures the rate of uninsured, said Census official Victoria Velkoff. As a result, it can't be compared to 2012 data. Velkoff said that the redesign, which was in the works for more than a decade, was planned before the health care law passed.

About 271 million Americans living in the United States had coverage last year. Of those, about 201 million had private health insurance, including 169 million with employer-sponsored coverage and 34 million who bought private coverage on their own.

September 19, 2014 -- Many people who enrolled in Medicaid this year do not realize that they need to renew their coverage, according to findings from six focus groups presented last week at the Medicaid and CHIP Payment and Access Commission (MedPAC).

The hard work that state and federal officials, providers and nonprofits are putting into finding and enrolling people may be undermined if they do not renew their coverage. Under the health care law (PL 111-148, PL 111-152), people must reapply after a year to maintain coverage, even if their personal circumstances haven't changed.

"It's a sleeper issue," said Mike Perry, a PerryUndem Research/Communication partner, in an interview after he presented the research to the commission, known as MACPAC. "I'm afraid that people will be alarmed when they get this [renewal] notification in the mail without any context."

Many states haven't told people who get Medicaid what to expect in the renewal process. Perry believes that could result in some people losing coverage. Some beneficiaries may not get any information at all before their coverage ends, especially if they have moved since they first enrolled. Perry is urging states that he advises to step up their efforts to make sure people understand when they enroll what they need to do to stay covered.

The research firm interviewed about 60 people in the six groups in late June and July. Enrollees were interviewed in Chicago, where consumers reported some problems; Denver, where people seemed relatively satisfied with their care; and Portland, where one of two groups indicated concerns with specific issues, such as finding a psychiatrist. Each city is in states that expanded Medicaid under the health law.

In other findings, a handful of people said their applications were lost and they had to reapply. But enrollees said the hassle of applying was worth the trouble.

Most people said they didn't get a packet of information after they enrolled to help them understand how to use their coverage. They also had questions about what services are covered in Medicaid, what limits apply to those services, what their own out-of-pocket costs will be, and how to find a physician.

MACPAC Chairwoman Diane Rowland said that the panel has heard anecdotally that navigators are helpful in signing up people who qualify for Medicaid but that many patients feel no one is there to help them figure out how to use services once they've signed up.

Some people who received Medicaid coverage in the past may have outdated information about the program, said Perry.

A lack of information is a big problem. Most of the people who applied hadn't even realized they were eligible. They tried to sign up through healthcare.gov, the federal website that handled enrollment for private individual insurance in 36 states, or through other means because they wanted any affordable coverage available. Most said they either had delayed getting care they needed or taken on debt to pay for treatment when they were uninsured.

The number of people in Medicaid and the Children's Health Insurance Program had grown by at least 7.2 million by July when compared to enrollment before Oct. 1, when the new marketplaces under the health care law (PL 111-148, PL 111-152) launched.

Impact of Lost Coverage

The problem of losing coverage can have serious effects, said Ben Sommers, a professor in the Harvard School of Public Health. He spoke at a separate briefing last week sponsored by the Association for Community Affiliated Plans. The group is lobbying for passage of legislation (S 1980, HR 1698) that would ensure 12 months of continuous coverage, regardless of whether income or personal circumstances change during that time.

Some people may lose their benefits without realizing it. If they get costly care when they aren't actually enrolled, they could face high medical bills. Others who do understand that their coverage ended may delay signing up again and put off care that they need so that their conditions worsen. For people with significant chronic conditions and mental health issues, a gap in coverage can be dangerous.

"There are a lot of reasons to worry about this," said Sommers.

One reason is higher overall expenses due to preventable problems and additional administrative costs.

In Ohio, people who lose coverage and then re-enroll are 34 percent more expensive than those continuously enrolled, said Steve Ringel, the president of the Ohio market in the CareSource Health Plan.

"When people lose their Medicaid coverage, it's costly," said Frank Micciche, vice president for public policy and communications at the National Committee for Quality Assurance, a group that ranks the quality of health plans.

September 19, 2014 -- Consumers would reshape Medicare benefits in all but two categories if asked to reallocate current funding levels, according to a study conducted by the Center for Healthcare Decisions (CHCD).

The report—which the American Enterprise Institute and the Brookings Institution highlighted in a recent panel discussion—suggested that participants would ultimately like to see a program design significantly different from current Medicare coverage.

"We're trying to understand what is most important to people when trade-offs are inherent," said Marge Ginsburg, founding director of the CHCD, at the event. "People think about health care very personally. But how do you get people to move from thinking solely in terms of what is in my best interest, to what would be in the best interest of all of us?"

Political leaders and health care groups have long agreed that it is crucial to address Medicare spending as baby boomers become senior citizens, but they have sparred over how to restructure the program. Meanwhile, the data illustrates that Medicare spending has slowed in recent years.

The CHCD study used a computer-based tool to simulate creating a Medicare benefits package by giving participants 100 "markers" that are equivalent to current program spending levels. In every category, participants were asked to pick from three tiers of coverage, each of which cost a certain number of markers based on its real world value, and one of which represented current Medicare coverage.

The results showed that participants were generally willing to reduce some low-value care coverage and restrict their freedom of choice in provider networks in order to gain greater long-term care and mental health coverage. They also did not believe that during end-of-life care, life-sustaining treatments should be offered when there is a high likelihood of failure. The only elements of the current Medicare program they did not want to see changed were routine and catastrophic care coverage.

Also noteworthy is that the majority of participants were willing to give up some of their markers in order to expand the solvency of the program.

Panelists at last week's event acknowledged the limitations of the study, such as the fact it only examined 800 Californians, but they maintained that the report is important for shaping policy debates in Washington and translating the results into meaningful proposals.

Robert Moffitt, senior fellow in domestic and economic policy studies at the Heritage Foundation, recognized the difficulty of reshaping Medicare in Congress. "It's nice that there was consensus" among participants in the study, he said. "If only that could happen here."

September 18, 2014 -- The Centers for Medicare and Medicaid Services (CMS) will fully test the federal website that handles enrollment for most states, said Administrator Marilyn Tavenner at a hearing last week. But federal officials are not planning to take all of the recommendations put forward by the Government Accountability Office (GAO) in a report urging CMS to improve the security of the site.

GAO Director of Information Security Issues Greg Wilshusen testified at the House Oversight and Government Reform Committee hearing that the site remains vulnerable to disruptions and attacks.

The agency is hopeful that the second open enrollment season that starts Nov. 15 will go much more smoothly than last year's inaugural start to the new marketplace websites created under the health care law (PL 111-148, PL 111-152). This year, Tavenner said that federal officials will be handling enrollment for two additional states, Oregon and Nevada, but that she didn't expect the costs would increase significantly as a result.

Still, she acknowledged that the second year will be an equally hard year.

The sign-up period is half as long as last year's, and an additional five million people or so are expected to sign up.

"It won't be perfection," said Tavenner.

Tavenner said that CMS officials have already implemented 19 of 22 technical recommendations suggested by GAO and are working on the rest. Of six additional major findings, Tavenner said that the agency agreed in part with all of them but had disagreements about parts of three of them.

One of the recommendations that federal officials are accepting in part is the GAO's admonition that the agency should do comprehensive end-to-end testing, with all of the components in place, soon. Tavenner indicated in her testimony that the agency would do end-to-end testing in late September or October. But an administration official confirmed after the hearing that the agency is planning to test each of the parts of the website individually but not at one time as a single complete unit.

Health and Human Services (HHS) spokesman Kevin Griffis said that the scheduled testing fully complies with federal standards.

Some Democrats urged CMS officials to do all they can to avoid any more technical problems like the ones that plagued the website last year.

"Just do it, please," said Elijah E. Cummings of Maryland, the top Democrat on the committee.

Tavenner also said at the hearing that 7.3 million people were enrolled and paying their premiums as of Aug. 15. The information was based on payment data from insurers.

"I'm very pleased to know that we have payment levels of 90 percent," said Tavenner.

She said she did not have additional details about how many people dropped their coverage or why they did so. Possibilities include that some consumers may have realized they were eligible for job-related coverage, or they may have lost their jobs and become eligible for Medicaid. Their personal circumstances may have changed.

"By the end of '14, we'll understand the circumstances," she said, adding, "We'll only know that when we went look back and we're careful not to look back too early."

September 16, 2014 -- Advocates of the Children's Health Insurance Program (CHIP) led by Democratic Sen. Jay Rockefeller of West Virginia argued at a hearing for continued funding for the program beyond its expiration date next year.

Although funding for CHIP ends on Sept. 30, 2015, the legal authorization for the program continues until 2019. Lawmakers will have to decide whether to fund the coverage until then.

Some policy analysts say that it does not make sense to continue CHIP now that families can buy coverage through the new marketplaces created by the health care law.

But Rockefeller, the chairman of the Senate Finance Subcommittee on Health Care that held the hearing, said that coverage under CHIP "generally is better" than insurance available in the marketplaces.

Rockefeller, who is retiring, used the hearing to emphasize the need to provide more funding and establish a record of support for the program before he leaves Congress. Several senators praised Rockefeller for his legacy of protecting the children.

"Safeguarding CHIP so that it can live on for years to come is my highest priority in the time I have left in office," Rockefeller said.

American Action Forum President Doug Holtz-Eakin did not suggest that the program's funding should stop next year, but he did say that Democrats in recent years have expanded the program and that lawmakers should think about whether to narrow the program's mission.

"Subsidized insurance is now available to many families currently enrolled in CHIP, and redundancies in coverage should be considered when making funding decisions, as should the children that are slipping through cracks in coverage created by the" health care law, he said.

"The $10 billion spent on this program in 2014 should not be taken as a given in years to come, and funding should be commensurate with the population needing coverage. CHIP coverage and funding must be assessed in the context of a changed health care landscape."

Holtz-Eakin said that when the 2010 health care law passed, he was one of those who assumed CHIP wouldn't be needed anymore.

But he said "that's just not true." By his estimate, at least 2.7 million children "have a real need for a CHIP program despite passage" of the health care law.

The Georgetown Center for Families and Children showed in a report last year that some families would probably face higher costs and fewer benefits under the marketplace insurance coverage than they enjoy under CHIP.

"No other form of coverage provides the same level of specific care and comprehensive pediatric networks at an affordable cost for working families," said Rockeller. The senator also said that refusing to fund the program would cause headaches for states that had assumed Congress would provide more funding.

Republicans expressed some support for the program. Sen. Michael B. Enzi, R-Wyo., voiced enthusiasm for his state's version, which he said is good at "targeting children who are really in need."

"That program is doing well partly because of the flexibility," said Enzi, adding that he hopes that the program will remain flexible. He praised the state's decision to allow Blue Cross Blue Shield and Delta Dental manage the benefits for children.

Ron Wyden, D-Ore., called CHIP "a program where there's a consensus that it genuinely helps people in need." Wyden said that CHIP prevents some children from falling between the cracks and that it reduced disparities between minorities and others.

Advocates such as First Focus President Bruce D. Lesley and American Academy of Pediatrics President James M. Perrin said that continuing funding for CHIP should be a top priority for lawmakers.

Cathy Caldwell, director of the Alabama Children's Health Insurance Program, said that if CHIP funding isn't continued, states may find that they have to shoulder the costs of continuing the program on their own.

"It's going to be a nightmare on many levels," she said, unless Congress continues the program at least temporarily.