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Americans Have Mixed Feelings About The ACA’s Future — But Like Their Plans

Use Our Content This story can be republished for free (details). Most Americans are happy with the insurance they buy on the individual market, yet those same people think the markets are collapsing before their eyes.

A poll by the Kaiser Family Foundation, released Tuesday, found that 61 percent of people enrolled in marketplace plans are satisfied with their insurance choices and that a majority say they are not paying more this year compared with last year’s premium costs.

Yet, more than half of the overall public — 53 percent — also think the Affordable Care Act’s marketplaces are “collapsing.” (Kaiser Health News is an editorially independent program of the foundation.)

Experts have warned that some policy actions supported by the Trump administration would undermine the market, including repealing the penalty for going without insurance and giving people the option to buy short-term plans. Such plans are often less expensive but cover fewer benefits. They are not automatically renewable, and insurers are able to charge people with medical conditions more — or exclude them altogether.

But only about one-fifth of people who obtain coverage on the individual market were even aware that the mandate penalty had been repealed as of 2019, according to the poll. It is still in effect this year.

Nine in 10 enrollees said they would still buy insurance without the penalty, and 34 percent said the mandate was a “major reason” they chose to buy insurance at all.

“They may have been prompted to buy the coverage in the first place because of the mandate,” said Sabrina Corlette, a professor at Georgetown University’s Health Policy Institute. “But now that they’ve got it, they clearly value it.”

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Most of the people who buy plans because they don’t get coverage through work or the government, 75 percent, said they bought insurance to protect against high medical bills, and 66 percent said peace of mind was a major reason.

In February, President Donald Trump eased some of the restrictions on short-term insurance plans, allowing them to cover people for 12 months instead of three.

Critics worried this alternative would draw people away from traditional insurance plans and weaken the individual market. According to the poll, though, only 12 percent of respondents buying on that market said they’d be interested in buying one of the short-term plans.

Georgetown’s Corlette cautioned that these numbers could change when people are faced with an actual choice next open enrollment season.

“If you look at how these things are marketed, your average consumer will not be able to tell that these products are any different from a traditional health plan,” she said.

Most people said they didn’t face a premium increase this year. Thirty-four percent said their premiums were “about the same” as last year and 23 percent said they actually went down.

That’s not surprising, said Joseph Antos, a resident scholar at the conservative American Enterprise Institute who follows the health industry. Many consumers saw their premium subsidies rise too.

Thirty-five percent of people said one of the major reasons they bought insurance was because government subsidies made it affordable.

The subsidies that people receive, Antos noted, went up to offset the premium increase in many cases, especially if consumers took the advice of experts and shopped around for coverage.

“They’re buying because they feel they need insurance and that their net premiums and deductibles add up to something they’re willing to buy,” Antos said.

The poll was conducted Feb. 15-20 and March 8-13 among 2,534 adults. The margin of sampling error is +/-2 percentage points for the full sample, +/-7 percentage points for all non-group enrollees and +/-9 percentage points for marketplace enrollees.

Kaiser Health News senior correspondent Julie Appleby contributed to this report.

Medicaid Minus Stigma: In Indian Country, It’s Part Of The Fabric Of Life

Kaiser Health News:Insurance - April 02, 2018

This KHN special series examines the reach and the role of Medicaid, the federal-state program that began as a medical program for the poor but now provides a wide variety of services for a large swath of America.

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GALLUP, N.M. — On a crisp sunny day, Tyson Toledo, a precocious 5-year-old boy, hobbled into a private health clinic to have his infected foot examined.

Pediatrician Gayle Harrison told his mother to continue to apply antibiotic ointment and reminded them to come back if the swelling and redness worsened.

The appointment at Rehoboth McKinley Christian Health Care Services’ outpatient center comes at no charge for the Toledo family, who live 30 miles away on the Navajo Nation Reservation. That’s because Tyson is covered by Medicaid, the state-federal health insurance program for the poor.

New Mexico leads all other states in Medicaid enrollment, with 43 percent of its residents on the program. That’s partly because the state has a large Native American population, living in communities historically riven with poverty. The numbers offer an eye-popping snapshot of the promotion of Medicaid expansion since 2013: Nearly a third of the 900,000 New Mexico beneficiaries joined as part of the Affordable Care Act’s option to expand Medicaid.

This story also ran on CNN Money. This story can be republished for free (details). Kaiser Health News is examining Medicaid’s role in the U.S. as the health care program comes under renewed fire from Republicans who generally want to put the brakes on the program, even as many Democrats credit the expansion with reducing the number of uninsured Americans to historic lows. Conservatives view the costs as prohibitive for state and federal budgets.

Nina Owcharenko, a senior research fellow in health policy with the conservative Heritage Foundation, said the enrollment boost is “not a positive story.” While the high enrollment underscores the pervasive poverty in New Mexico, it also signals surging costs for taxpayers, she said.

“I am growing more concerned about the cost of shifting Medicaid dollars to the federal government and without a budget cap on the program. … That is a dangerous fiscal course for the country,” she said.

“This is a problem that needs to be fixed. … We need to find a way that is more rational and more fiscally sustainable,” said Owcharenko, who was a top Health and Human Services official in 2016.

Tyson Toledo and his mother, Stephanie Ranger, sit outside Rehoboth McKinley Christian Health Care Services’ outpatient center in Gallup, N.M., in October 2017. (Heidi de Marco/KHN)

In Gallup, a city of about 23,000 people, Medicaid is as much a part of the fabric as Native American-crafted jewelry and green chile sauce. Recipients include the waitress at the downtown bar, the clerk at a loan store and the maid at the hotel.

And multigenerational families are common in Gallup and surrounding McKinley County. Tyson’s mother, grandmother, aunt and uncle also are enrolled in Medicaid.

Fifty-two percent of the county’s residents have coverage through the program. That’s the highest rate among U.S. counties with at least 65,000 people, according to a KHN analysis of Census data.

Tyson Toledo, his mother and grandmother are all are on Medicaid. Multigeneration Medicaid families are common in McKinley County, N.M., where 52 percent of residents are on Medicaid, the highest rate among U.S. counties. (Heidi de Marco/KHN)

“Pretty much everybody is on Medicaid here,” said Libby Garcia, 36, who lives in a trailer overlooking downtown Gallup.

Garcia, who works as a custodian at a local Head Start agency, quit a second job cleaning businesses because that extra income would put her over the eligibility level for coverage. She can’t afford private insurance, and Medicaid gives her free care at a community health center and insulin and other medicines for her diabetes without out-of-pocket costs, she said.

McKinley, where more than 40 percent of the population lives below the federal poverty level ($12,140 for an individual), is the nation’s only county of at least 65,000 people in which more than half the population is on Medicaid. Nationwide, about 23 percent of Americans are enrolled, with more than 16 million people added since the expansion.

In McKinley County, many residents see Medicaid as vital. There’s no stigma around it, and enrollees and providers speak positively about it.

“Pretty much everybody is on Medicaid here,” Libby Garcia says of her mobile home community in Gallup, N.M. Garcia, who lives in a trailer overlooking downtown Gallup says she had to quit her second job because she would make too much to qualify for Medicaid. The federal-state program for low-income people enables her to get free care at a nearby community health center and afford insulin and other diabetes medication. (Heidi de Marco/KHN)

The heavy concentration of Medicaid in this high-altitude desert is a result of two factors: the high poverty rate and the Indian Health Service’s relentless work to enroll patients in the program.

Large swaths of McKinley County lie within the Navajo Nation, the largest Indian reservation in the United States. Nearly 80 percent of McKinley County’s 75,000 residents are Native American.

Medicaid enrollees in Gallup say the coverage has opened up new opportunities for them to get more timely care, especially surgery and mental health services. It has been vital in combating high rates of obesity, teen birth, suicide and diabetes, according to local health officials.

Outside a local Dollar Tree store, Linda James, 55, who sells jewelry she makes, said Medicaid paid for her son’s braces and her teenage daughter’s drug rehabilitation. “It’s a lifesaver for us,” she said, noting it helps her get quicker care than waiting at Indian Health facilities.

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‘Safety Net’ For Indian Health Service

For the Gallup Indian Medical Center — the main Indian Health Service facility in the area — Medicaid has stoked the local budget and eased overcrowding. When patients on Medicaid are treated there, the center is reimbursed by the program. That money supplements the Indian Health Service’s annual federal grant, which is set by Congress.

Last year, Medicaid funding made up 34 percent of the center’s $207 million budget. Among all U.S. hospitals, Medicaid provided only 18.5 percent of revenue. “Medicaid has become the safety net for the Indian Health Service,” said John Ratmeyer, deputy chief of pediatrics at the Gallup Indian Medical Center. “It’s providing an extra pod of money to pay for services not within our hospital system.”

Medicaid this year is projected to add more than $800 million to Indian Health Service hospital funding, supplementing the $4.8 billion in annual federal appropriation.

The medical center in Gallup looks like a relic of the 1960s, with fading-blue exterior walls, sandstone-colored outpatient trailers, cramped nursing stations and hard plastic seats in its emergency room waiting area. The hospital doesn’t have an MRI machine or any designated private patient rooms.

Native Americans can receive free care at Indian Health Service hospitals and its clinics, such as this facility in Gallup, N.M. (Heidi de Marco/KHN)

“One of our biggest challenges is just maintaining the building,” said Dr. Kevin Gaines, acting deputy clinical director at the hospital. The extra money coming from patients covered by Medicaid are helping the center pay for a badly needed $13 million modernization of its ER and urgent care unit, he said.

Another problem is a shortage of nurses and doctors, which leads to long wait times for patients — three or four months for primary care appointments or for dental services or eyeglasses. Some patients seeking specialized care need to go 140 miles to Albuquerque, a hardship for many Native Americans, some of whom don’t have access to cars or money for such transportation. But Medicaid will cover some non-emergency transportation for medical appointments.

State Feels The Pinch

The county has a host of medical challenges related to its economic problems. According to a 2016 report sponsored by Rehoboth McKinley, the county’s suicide rate for ages 10 and up is twice the U.S. average, alcohol-related deaths are nearly four times higher than the national rate, and teen birth rates are three times the U.S. average. Average life expectancy in McKinley is 74 years, four years less than the typical U.S. life span.

Without Medicaid covering doctor visits and substance abuse treatment, the situation would likely be worse, said Larry Curley, director of program development for Rehoboth McKinley.

This kind of care doesn’t come cheap. The federal government paid the full cost of the expansion through 2016, but now New Mexico and other states have to pick up a 5 percent share. To deal with rising costs, the state in 2017 began cutting the fees it pays hospitals, doctors and other providers.

Asked about her Medicaid health plan while at a popular doughnut shop, Corrine Rosales, 60, of Gallup, said it’s invaluable for her and her two young nieces, Mya and Destiny. Medicaid pays for her diabetes medications and helped Mya get treated for attention-deficit disorder.

“I don’t know what we would do without it,” she said.

California Takes On Health Giant Over High Costs

California’s attorney general sued Sutter Health, accusing the hospital giant of illegally quashing competition and for years overcharging consumers and employers.

The lawsuit marked a bold move by state Attorney General Xavier Becerra against the dominant health care system in Northern California as concerns mount nationally about consolidation among hospitals, insurers and other industry middlemen.

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“It’s time to hold health care corporations accountable,” Becerra said at a news conference Friday. “We seek to stop Sutter from continuing this illegal conduct.”

The antitrust suit, filed in San Francisco County Superior Court, asks the court to prevent Sutter from engaging in anticompetitive practices and “overcharges.”

It said Sutter employs a variety of improper tactics, such as gag clauses on prices, “punitively high” out-of-network charges and “all-or-nothing” contract terms that require all of its facilities to be included in insurance networks.

Taken together, Sutter’s actions “improperly block any and all practical efforts to foster or encourage price competition between Sutter and any rival Healthcare Providers or Hospital Systems,” according to the state’s complaint. “Sutter’s conduct injured the general economy of Northern California and thus of the state.”

Sutter, which owns 24 hospitals, reported net income of $893 million last year on $12.4 billion in revenue. Sutter’s nonprofit health system also has 35 surgery centers, 32 urgent-care clinics and more than 5,000 physicians in its network.

In a statement Friday, Sutter said it had not yet seen the state’s complaint and couldn’t comment on specific claims.

Overall, Sutter said, “healthy competition and choice exists across Northern California” for consumers seeking medical care. It also said its charges for an inpatient stay are lower than what other nearby hospitals charge.

“Sutter Health is proud to save patients, government payers and health plans hundreds of millions of dollars each year by providing more efficient and integrated care,” the statement said.

This high-profile legal fight caught the attention of employers and policymakers across the country amid growing alarm about the financial implications of industry consolidation. Large health systems are gaining market clout and the ability to raise prices by acquiring more hospitals, outpatient surgery centers and physicians’ practices.

Martin Gaynor, a health care economist at Carnegie Mellon University, said California’s lawsuit may portend more litigation at the state level.

“There are a number of markets in the U.S. that are dominated by one very large, powerful health system,” Gaynor said. “It could be that we’re going to see a new level of activity by state antitrust enforcers looking at competition in their own backyards.”

Glenn Melnick, an economist and expert on hospital finances at the University of Southern California, said if the state prevails against Sutter it could put “a chill on anticompetitive practices that are being adopted across the U.S. and that could help slow down hospital price increases. That would be good news for consumers.”

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The complaints about Sutter’s high prices and market power have persisted for years.

The state said its investigation started in 2012 under Kamala Harris, California’s previous attorney general and now a U.S. senator. Six years ago, her office sent subpoenas to several health systems and insurers seeking information about market concentration and its effect on medical prices.

A 2016 study found that hospital prices at Sutter and Dignity Health, the two biggest hospital chains in California, were 25 percent higher than at other hospitals around the state. Researchers at the University of Southern California said the giant health systems used their market power to drive up prices — making the average patient admission at both chains nearly $4,000 more expensive.

This week, researchers at University of California-Berkeley issued a report that examined the consolidation of the hospital, physician and health insurance markets in California from 2010 to 2016. The authors said 44 of California’s 58 counties had “highly concentrated” hospital markets.

The problem is worse in Northern California, and the report said prices for medical procedures are often up to 30 percent higher there than in Southern California, which has more competition.

“Consumers are paying more for health care as a result of market consolidation. It is now time for regulators and legislators to take action,” according to the report by the Petris Center on Health Care Markets and Consumer Welfare at UC-Berkeley.

After the report was issued Monday, Becerra said his office would be reviewing those findings and pledged to apply more scrutiny to health care mergers and anticompetitive practices across the state.

Sutter Health has gobbled up doctors’ practices across the Bay Area, gaining market muscle that has pushed costs upward. Obstetricians employed by Sutter Health, for example, are reimbursed about three times more for the same service than independent doctors, according to a KHN review of OB-GYN charges on several insurers’ online cost estimators. It’s a key reason why Northern California is the most expensive place in the country to have a baby.

At his news conference, Becerra said he’s committed to scrutinizing other players besides Sutter in the health care industry who may be engaging in anticompetitive behavior and potentially harming consumers.

“We hope what we do with this case sends a signal — watch what you do and obey the law,” Becerra said.

Consumer advocates and state lawmakers applauded Becerra’s aggressive action because of the toll high prices take on millions of Californians. Many residents struggle to pay rising insurance premiums and out-of-pocket expenses for emergency room visits or routine hospital tests.

“Consumers bear the burden of these monopolistic activities,” said state Sen. Ed Hernandez (D-West Covina), chairman of the Senate health committee. “To ensure health care is affordable and accessible to all, we have to get a handle on predatory pricing.”

In many ways, Becerra’s lawsuit mirrors a similar civil case filed in 2014 by a grocery workers’ health plan.

“It’s time to hold health care corporations accountable,” California Attorney General Xavier Becerra said at a news conference Friday. (Ana B. Ibarra/California Healthline)

The plaintiffs in that case allege Sutter is violating antitrust and fair competition laws. The plaintiffs have been requesting documents related to contracting practices, such as “gag clauses” that prevent patients from seeking negotiated rates and choosing a cheaper provider. They also are challenging “all-or-nothing” terms that require every facility in a health system to be included in insurance networks.

In November, the state judge handling the grocery workers’ case said Sutter was “grossly reckless” when it intentionally destroyed 192 boxes of documents that employers and labor unions were seeking in the lawsuit. San Francisco County Superior Court Judge Curtis E.A. Karnow said Sutter destroyed documents “knowing that the evidence was relevant to antitrust issues. … There is no good explanation for the specific and unusual destruction here.”

The lead plaintiffs, the United Food and Commercial Workers and its Employers Benefit Trust, are a joint employer-union health plan that represents more than 60,000 employees, dependents and retirees. The court certified its case as a class action in August, allowing hundreds of other employers and self-funded health plans to potentially benefit from the litigation.

The attorney general’s office filed a motion in court asking for its lawsuit and the class action to go to trial together before the same judge. The trial is scheduled for June 2019 in San Francisco.

“While we certainly would have preferred this happened earlier, we respect the attorney general’s care in conducting a thorough investigation before filing charges,” said Richard Grossman, the lead plaintiffs’ lawyer representing the class of more than 1,500 employer-funded health plans. “This lends additional credibility to the allegations we made in our complaint four years ago.”

In its lawsuit, the attorney general’s office blamed Sutter for much of the increase in health care costs across Northern California because “Sutter embarked on an intentional, and successful, strategy of securing market power in certain local markets.” State lawyers also pointed out that Sutter’s conduct triggered an “umbrella effect” by encouraging other providers to  raise their own prices.

The state’s lawsuit said Sutter used its windfall from excessive prices to acquire more hospitals and medical groups. It also enabled Sutter to “bestow extremely high salaries for its officers and upper management,” according to the state complaint.

Patrick Fry, Sutter’s chief executive from 2005 to 2016, had $13.4 million in total compensation during his last year there, according to Sutter’s 990 tax filing for 2016, the most recent year available.

Overall, 18 executives at Sutter had $1 million or more in total compensation during 2016, the federal tax filing shows.

Karen Garner, a Sutter spokeswoman, said Fry’s compensation in 2016 reflects retirement benefits he accrued over many years. She added that “industry comparisons show our salaries are reasonable and competitive, given the size, scope and complexity of our organization.”

KHN senior correspondent Jenny Gold contributed to this report.

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