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Updated: 23 hours 28 min ago

Trump Plan Might Cut Expenses For Some Insured Patients With Chronic Needs

July 21, 2017

Erin Corbelli takes three medications to treat high blood pressure, depression and an anxiety disorder. Her health plan covers her drugs and specialist visits, but Corbelli and her family must pay a $3,000 annual deductible before the plan starts picking up any of that tab.

Corbelli’s insurance is linked to a health savings account so that she and her husband can put aside money tax-free to help cover their family’s drug and medical expenses. But there’s a hitch: Plans like theirs can’t cover any care for chronic conditions until the deductible is satisfied.

Those out-of-pocket expenses could shrink under a Trump administration draft executive order that would change Internal Revenue Service rules about what care can be covered before the deductible is met in plans linked to health savings accounts, or HSAs.

“It would save us a lot of money,” said Corbelli, 41, who lives in Orlando with her husband and their two children, ages 3 and 5.

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KHN contributing columnist Michelle Andrews writes the series Insuring Your Health, which explores health care coverage and costs.

To contact Michelle with a question or comment, click here.

This KHN story can be republished for free (details).

Health plans with deductibles of thousands of dollars have become increasingly commonplace. Plans often cover services like generic drugs or doctor visits before consumers have satisfied their deductibles, typically requiring a copayment or coinsurance rather than demanding that consumers pony up the entire amount.

But plans that link to health savings accounts have more restrictions than other high-deductible plans. In addition to minimum deductibles and maximum HSA contribution limits, the plans can’t pay for anything but preventive care before consumers meet a deductible. Under current IRS rules, such preventive care is limited to services such as cancer screenings and immunizations that prevent a disease or condition, called “primary prevention.” With HSA-eligible plans, medical services or medications that prevent an existing chronic condition from getting worse or prevent complications from occurring — called “secondary prevention” — can’t be covered before the deductible is paid.

The Trump administration’s draft executive order, which was first obtained last month by The New York Times and has yet to be issued, would allow such secondary preventive services to be covered.

Under the Affordable Care Act, most health plans, including HSA-eligible plans, are required to cover services recommended by the U.S. Preventive Services Task Force without charging consumers anything for them. That requirement is generally limited to primary prevention.

“We know health savings accounts are here to stay and we’d like to make them better,” said Dr. A. Mark Fendrick, an internist who is director of the University of Michigan’s Center for Value-Based Insurance Design and who has advocated for the change.

If people have diabetes, for example, they need regular eye and foot exams to prevent complications such as blindness and amputations down the road. But HSA plans can’t pay anything toward that care until people satisfy their deductible. “The executive order gives plans the flexibility to do that,” he said.

Similarly, it’s critical to remove obstacles to treatment for people like Corbelli with high blood pressure or heart disease, said Sue Nelson, vice president for federal advocacy at the American Heart Association.

“For people with cardiovascular disease, affordability is their No. 1 concern,” Nelson said.

The draft executive order is short on details, and administration officials would have to determine which new preventive services should be covered pre-deductible. Guidelines from medical specialty boards and quality metrics that many physicians are already being measured against could be used, said Roy Ramthun, president and founder of HSA Consulting Services who led the Treasury Department’s implementation of the HSA program in the early 2000s.

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Back then, they took a conservative approach. “We said we can be more flexible later, but we can’t put the genie back in the bottle,” said Ramthun, who supports expanding preventive services coverage.

Many more employers would offer HSA-eligible plans if the list of services that could be covered pre-deductible were expanded, said Tracy Watts, a senior partner at human resources consultant Mercer. Fifty-three percent of employers with 500 or more workers offer HSA-eligible plans, according to Mercer survey data. Three-quarters of employers put money into their employees’ HSA accounts, she said.

Erin Corbelli’s husband’s employer contributes up to $1,500 every year to their health savings account, which can help cover their pre-deductible costs.

Not everyone is so fortunate. “You’re kind of at the mercy of what your employer can offer and what your disposable income is,” she said.

Republicans have long advocated for the expanded use of health savings accounts as a tax-advantaged way for consumers to get more financial “skin in the game.”

Consumer advocates have been much less enthusiastic, noting that the accounts typically benefit higher-income consumers who have cash to spare.

Still, given the reality of the growing prevalence of high-deductible plans, with or without health savings accounts, it’s a sensible proposal, many say.

“This is not a silver bullet or a solution to the problems that high-deductible plans can pose,” said Lydia Mitts, associate director of affordability initiatives at Families USA, an advocacy group. “But this is a good step in thinking about how we offer access to treatment people need in a timely and affordable way.”

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Read Latest CBO Scores Of Senate Replacement Draft Bills

July 20, 2017

Amendment Score

On July 20, the Congressional Budget office updated its original estimate (released June 26) of the Senate’s Better Care Reconciliation Act, based on its most recent revisions. This estimate does not include the Cruz Amendment, which CBO has said would take more time to complete:

Repeal-Only Bill

On July 19. CBO released its estimates on an amendment to H.R. 1628 that would repeal the Affordable Care Act outright.

Past Scores

This is the CBO’s fifth review of repeal-and-replace-related legislative drafts. It scored the House-passed version on May 24.

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Unpaid Premiums? Switching Plans? What Changes Are Coming For 2018 Coverage

July 18, 2017

People are anxious about what’s going to happen with marketplace coverage next year. Even as Republicans contemplate their next move in the effort to undo the Affordable Care Act after the Senate GOP plan unraveled Monday night, the marketplaces are still likely offer plans this fall for 2018 coverage. Below I explain some of the important changes that are in the works that could affect consumers’ enrollment and coverage next year.

Q: I stopped paying for my marketplace plan at the end of June because I couldn’t afford the premiums. Will I have trouble this fall when I try to sign up for a new plan?

You could run into roadblocks. The Trump administration is giving insurers leeway next year to demand payment for unpaid premiums during the previous 12 months before allowing consumers to enroll (see page 18349) in one of the insurer’s plans again.

The Affordable Care Act gives consumers who are receiving premium tax credits a “grace period” of three months to catch up if they fall behind on premiums. Under current regulations, if they don’t make up the payments in three months, insurers can cut off consumers’ coverage after the first month and aren’t responsible for paying any claims that are pending after that.

Insuring Your Health

KHN contributing columnist Michelle Andrews writes the series Insuring Your Health, which explores health care coverage and costs.

To contact Michelle with a question or comment, click here.

This KHN story can be republished for free (details).

But insurers complained that the rules encouraged consumers to game the system by halting their premium payments late in the year, hoping that they wouldn’t need care. Then they’d re-enroll the following year, thus saving up to two month’s worth of premiums without any penalty for the months that they didn’t pay.

There are many reasons why people might drop coverage during the year, including the one you describe – that they’re unable to afford it. According to a McKinsey & Company study, roughly 1 in 5 people who bought a marketplace plan in 2015 stopped paying it at some point during the year. Forty-nine percent of those people repurchased the same plan in 2016.

Insurers aren’t required to adopt the administration’s new approach and states can prohibit them from doing so if they wish.

The new rule for paying back premiums only applies if you want to buy a plan from the same insurer. If you switch insurers you can’t be denied a new plan because you owe premiums to another company.

Insurers have to notify consumers of their policy in enrollment applications and nonpayment notices. But, even so, consumer advocates expect changes to cause confusion among consumers. Further, there’s no mechanism in the new rule for consumers like you to contest a bill from an insurer for unpaid premiums that you don’t believe you owe.

“Insurers are certainly going to try to collect everything they can,” said Timothy Jost, an emeritus professor of law at Washington and Lee University who’s an expert on the health law.

To avoid problems next year, make sure to call your insurer and cancel your current coverage before your 90-day grace period ends at the end of September, consumer advocates say.

Q: What happens if I sign up for a marketplace plan this fall and find out in January when I start using it that it’s not a good plan for me? Can I switch?

Probably not. Unless you get married, have a baby or experience some other event that qualifies you for a special enrollment period, you’ll have to stick with the same plan you chose during the open enrollment period, which will run for six weeks this fall from Nov. 1 – Dec. 15.

Last year, people had more wiggle room to switch plans in January and February, since the open enrollment period ran for three months, from Nov. 1 until Jan. 31.

Consumer advocates are concerned that consumers, many of whom wait to sign up for coverage until the end of the open enrollment period, might miss their window of opportunity this year.

In previous years when computer or other glitches slowed down the open enrollment process, the

Obama administration allowed people more time to sign up, said Sarah Lueck, senior policy analyst at the Center on Budget and Policy Priorities.

“The administration should be prepared to extend the open enrollment period” this year as well, Lueck said. But don’t count on it.

Q: With all the uncertainty in the marketplaces, why not just buy a short-term plan that covers me up to $1 million? I know they’re not as comprehensive as exchange plans but they’re a lot cheaper.

The low premium may be tempting, but be careful what you wish for, say experts. If you have a pre-existing medical condition like high blood pressure or diabetes, insurers may simply decline to sell you a policy at all, or sell you one that doesn’t cover any medical expenses related to that condition.

Once you have the plan, chances are you won’t be able to renew it if you actually get sick, because unlike regular coverage short-term plans aren’t guaranteed renewable.

Then there’s the fine print. “A lot of the plans have hidden exclusions or caps on specific services that may come back and bite you,” said Sabrina Corlette, research professor at Georgetown University’s Center on Health Insurance Reforms. “When you read it through, it may say it will cover an appendectomy up to $2,500, or it will cover each day in the hospital up to $300.”

Since short-term plans don’t count as “minimum essential coverage” under the Affordable Care Act, you could owe a penalty for not having health insurance. For all the talk of repeal, that’s still the law of the land.

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Analysis: Senate’s Latest Health Blueprint Cuts Costs At The Expense Of Chronically Ill

July 17, 2017

The latest Senate health proposal reins in costs by effectively splitting the individual insurance market, with healthy people diverted into stripped-down plans and chronically ill individuals left with pricey and potentially out-of-reach options, insurance analysts said.

This draft — a fresh attempt by the Republican Party to undo the Affordable Care Act — injects more uncertainty into plans for people with preexisting conditions such as cancer, asthma, diabetes or other long-term ailments. Those people, insured through ACA marketplaces now, could be more isolated than in an earlier version of the Senate bill.

For such patients, “I would be pretty nervous,” said Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute. “You will have separate pools — one that only healthy people can get into and one for you. That pool is liable to get increasingly expensive — in fact, very expensive over time.”

The two biggest insurer trade groups went further on Friday, saying in an unusually strong-worded letter that “millions of more individuals will become uninsured” if the proposal becomes law.

Plans sold to individuals and families through the Obamacare exchanges cover some 10 million people, many with chronic disease.

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A draft bill released Thursday added a proposal from Texas Sen. Ted Cruz that would let insurers sell health coverage outside the ACA exchanges with no provisions for prescription drugs, mental illness, hospitalization or almost any other benefit.

Such plans would be far cheaper than comprehensive coverage and almost certainly draw younger, healthier people away from high-benefit insurance, analysts said.

Without healthy customers subsidizing the sick, premiums and other costs would soar for plans that accept chronically ill patients, experts said. The Senate draft includes $70 billion over a decade to help pay those costs, but it’s far from clear that would be enough.

Insurers were struggling last week to grasp the implications of the legislation, studded with ambiguous language. One big takeaway: The Senate’s version of health care would undermine historical assumptions and drastically shift risk in the individual market.

Letting carriers sell low-cost, low-benefit plans to healthy consumers “is simply unworkable in any form and would undermine protections for those with pre-existing medical conditions, increase premiums and lead to widespread terminations of coverage for people currently enrolled in the individual market,” America’s Health Insurance Plans and the Blue Cross Blue Shield Association, two lobbying groups, said in a Friday letter to the Senate.

The Republicans are nowhere near success with this plan. Already two of the 52 Republican senators — Kentucky conservative Rand Paul and Maine moderate Susan Collins — have said they won’t support the bill. One more defection would sink it, and a delay caused by the surgery of Arizona Republican John McCain gives opponents more time to build resistance.

Senate leaders had scheduled a vote for this week but postponed it to give McCain time to recover from treatment of a blood clot near his eye.

Meanwhile, the nonpartisan Congressional Budget Office is likely to issue its assessment of the bill this week. The CBO had said an earlier Senate bill would increase the number of people without health insurance by 22 million by 2026.

The Republican plan offers a freer insurance market — something the party has long favored — while purporting to protect those with existing illness. Insurers selling stripped-down plans would be required to also offer traditional Obamacare plans covering preexisting conditions.

You will have separate pools — one that only healthy people can get into and one for you.

Sabrina Corlette, Georgetown University’s Health Policy Institute

But such coverage risks becoming a high-cost ghetto for the chronically ill, experts said. It would likely become unattractive to carriers and unaffordable to members who could face paying thousands of dollars for premiums and thousands more out-of-pocket before coverage kicks in.

Even though insurers selling unregulated plans would be required to offer full-coverage plans to all comers, they could limit their risk with time-tested maneuvers to repel the sick, said Ana Gupte, who follows health care stocks for Leerink Partners.

“They usually find ways to minimize enrollment” such as jacking up premiums or cutting broker commissions for certain coverage, she said.

Nor would there likely be much choice in high-benefit Obamacare plans, she said. Under the Senate bill, carriers seeking to sell skimpy coverage would have to offer only one high-benefit “gold” plan and a medium-benefit “silver” plan as traditionally sold under the Affordable Care Act.

Even then, the legislation would allow state officials to alter Obamacare standards for out-of-pocket maximums and essential health benefits.

That even could allow richer plans intended for the chronically ill to drop coverage of prescription drugs, mental illness, maternity care or other items.

The bill includes two measures intended to keep costs in high-benefit Obamacare plans from spiking out of control. One is the $70 billion in federal subsidies to help cover the expense of the pool of sick people.

“It seems to me it’s not nearly enough” to keep plans affordable for those with chronic illness, said Timothy Jost, emeritus law professor at Washington and Lee University and an expert on health reform.

The other is a six-month waiting period for applicants wanting to buy full coverage who don’t already have it.

That’s supposed to induce healthy people to buy high-coverage plans and help subsidize the sick. Otherwise they risk a coverage gap if they become gravely ill or hurt, raising the chance they would have to pay thousands out-of-pocket for any unexpected medical expense.

But that incentive to buy comprehensive coverage is far weaker than Obamacare’s mandate, which fined people for not having insurance, Jost said. The Republicans’ bills would scrap the mandate.

“I just don’t think it’s going to be terribly effective,” he said.

Millions More Uninsured Could Impact Health Of Those With Insurance, Too

July 14, 2017

Much has been written lately about how individuals’ health could suffer if they lose insurance under the health proposals circulating in the U.S. House and Senate. But there is another consequence: creating millions more people without insurance could also adversely affect the health of people who remain insured.

“We know that communities with higher rates of uninsurance have worse access to care for those with Medicare or private insurance,” said John Ayanian, director of the Institute for Healthcare Policy and Innovation at the University of Michigan. And if either of the GOP proposals under consideration becomes law, he said, “it’s very likely we would go back to some of those same problems we had a decade ago with high rates of uninsurance.”

The Congressional Budget Office has estimated that either the bill passed by the House or the one under consideration in the Senate could result in more than 20 million more Americans without insurance over the next decade.

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Ayanian was part of an expert panel from the nonpartisan National Academy of Medicine that examined the implications of being uninsured in a series of studies from 2001 to 2009. An entire report looked solely at the spillover effect of large numbers of uninsured people on those around them. “The Committee believes it both mistaken and dangerous to assume that the persistence of a sizable uninsured population in the United States harms only those who are uninsured,” said the report.

That is mostly because it is difficult for health providers to maintain services in areas with large numbers of patients who cannot pay for care. “Those communities are less attractive for physicians and other health care providers to locate,” said Ayanian. “That affects access to care for everyone,” he said, particularly for critical but high-cost services like trauma care, burn care and neonatal intensive care.

The potential is not merely theoretical. Hospitals in sparsely populated areas, particularly in states that did not opt to expand the Medicaid program, have been cutting back services like maternity care or closing altogether in recent years. These are the same parts of the country that voted for President Donald Trump by large margins.

The impact is not just on availability of services. A 2007 study from researchers at the University of Pennsylvania in the journal Health Affairs found that in areas with many uninsured people, the quality of care was lower as well. Primary care doctors “reported that the higher the proportion of uninsured people in their community, the less likely they are to be able to refer their patients to high-quality specialists,” found the researchers. “Specialists also reported that the higher the community uninsurance rate, the less able they are to deliver high-quality care to their patients,” the study said.

That spillover effect extends beyond access to health care itself, according to a new report from The Commonwealth Fund. Researchers from George Washington University found that if the House-passed health bill were to become law, nearly 1.5 million jobs could be lost over the next decade.

“We’re talking about a net funding loss to states of millions of dollars,” said Leighton Ku, the study’s lead author. “What this means is that states will have higher needs, less revenue to pay for services, and at the same time the federal government is putting less money into Medicaid,” he said. “So it all adds up to a great revenue crunch that’s similar to the Great Recession” of the past decade.

While most of the job losses would be in health care, other jobs would be affected too, he said.

For example, health care workers who lose jobs will then purchase fewer goods and services, affecting the bottom line of local businesses. Health care facilities that were planning to expand might not, affecting the construction industry. And the impact could cross state lines, said Ku. “We might see fewer people going to Disney World,” he said, because people who lose their jobs would lack money to take vacations.

Opposition To GOP Repeal Bill Inches Up And Intensifies

July 14, 2017

Public opposition to the Republican effort to replace the Affordable Care Act grew stronger this month, but a core group of Republicans remained in support, according to a poll released Friday.

Sixty-one percent of the public said this month they did not like the GOP health care effort, now undergoing a revised push in the Senate. That was a 6 percentage point increase from the Kaiser Family Foundation’s monthly tracking results in June, when 55 percent expressed unfavorable opinions. (Kaiser Health News is an editorially independent program of the foundation.)

The poll also found opposition was becoming more passionate, with more of the public viewing the plan “very” unfavorably. The Affordable Care Act maintained the support of half the populace, nearly double the 28 percent of people who backed the GOP efforts. Two of three people opposed major reductions in Medicaid that are included in the GOP plans.

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Nonetheless, a majority of Republicans and supporters of President Trump continued to favor the GOP plan, which would increase the number of uninsured as it alters Medicaid and the private insurance markets that have been running since 2014. In fact, in this month’s poll more Republicans said health care is headed in the right direction than believed that in April, before the House passed its version of the health care replacement bill.

Still, most Americans said they would prefer Republicans and Democrats to work together on health care — 71 percent said they would like to see a bipartisan effort to fix the ACA.

The poll of 1,187 adults was conducted July 5 – 10, about a week after the Congressional Budget Office issued its report on the GOP draft legislation. The margin of error was plus or minus 3 points.

GOP Seeks To Sweeten Health Savings Account Deals. Will Consumers Bite?

July 14, 2017

A growing number of employers are offering workers insurance that links to health savings accounts, and now congressional Republicans want to expand the contribution limits and uses for these tax-exempt funds. But do consumers want them?

A new study found that fewer than half of people with health savings accounts (HSAs) deposited any money in them in 2016. The average total account contribution, including both employer and employee deposits, was $2,922, significantly lower than the maximum allowable contribution for family coverage ($6,750) or individuals ($3,350), according to the study.

Republicans would like to expand the use of health savings accounts and promote them as a way to help consumers play a larger role in controlling their health spending. Plus, they say, the tax advantages of HSAs help consumers afford their care. But the latest study suggests that current legislative proposals may miss the mark.

“If your goal is to increase the number of people with HSA-eligible health coverage and thus HSAs, simply increasing the contribution limits isn’t going to get you there,” said Paul Fronstin, director of the health research and education program at the Employee Benefit Research Institute and the author of the report.

Insuring Your Health

KHN contributing columnist Michelle Andrews writes the series Insuring Your Health, which explores health care coverage and costs.

To contact Michelle with a question or comment, click here.

This KHN story can be republished for free (details).

Only 13 percent of account holders contributed the maximum amount, Fronstin said.

Money that employees contribute to a health savings account doesn’t count as taxable income, and interest and other earnings in the accounts grow tax-free. In addition, to remain nontaxable, the funds must be used to pay for medical expenses, such as doctor or hospital care, dental services and prescriptions. The accounts must be paired with a health plan that has a deductible of at least $1,300 for individual coverage and $2,600 for family coverage.

Both employers and employees can contribute to the accounts, and the money belongs to the employee if he leaves his job.

People with coverage on the individual market who buy a plan that meets federal HSA standards can also open and fund health savings accounts.

In 2016, 20 million people were enrolled in high-deductible health plans with a health savings account, according to America’s Health Insurance Plans, an industry group.

Republicans have proposed to increase the limit on health savings account contributions to equal the deductible and out-of-pocket spending limit starting next year, or at least $6,550 for individuals and $13,100 for families. Their bills would also allow spouses to make catch-up contributions to the same health savings account and let people use funds from their health savings accounts to pay for over-the-counter medications, among other things.The bill being advanced by Senate Majority Leader Mitch McConnell (R-Ky.) also would allow beneficiaries to use their account to pay premiums.

Critics charge that expanding health savings accounts will provide little benefit to lower-income people who have no spare cash to fund them.

The EBRI analysis is based on its database of 5.5 million health savings accounts with $11.4 billion in assets, representing 27 percent of all HSAs. The EBRI study found that roughly two-thirds of account holders withdrew funds that totaled an average annual $1,771 in 2016.

People’s account balances grew over time, the study found. Accounts opened in 2016 had an average balance of just over $1,000, while those opened in 2004 had an average balance of nearly $15,000. Since most people don’t have high health care expenses in any given year, they can build up balances over time, Fronstin said, and people also might contribute more as they learn how the accounts work.

“The longer you’ve had the account, the better you understand the tax benefits and understand the value of making a contribution,” he said.

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Senate Revises Health Care Legislation: Read The New Bill

July 13, 2017

Senate Republicans released Thursday a revised version of the Better Care Reconciliation Act, their plan to replace the Affordable Care Act. The new bill, like earlier versions, would convert Medicaid from an open-ended entitlement to a system of fixed payments to states. Below you can read both versions. You can also compare side-by-side here.

Updated H.R.1628 Bill Text, Released July 13, 2017:

Bill Text Released June 22, 2017: