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Who’s Not Afraid of Rising ACA Premiums?

November 3, 2016

Consumer Power Report #524

Approximately 200,000 U.S. patients are paying up to 22 percent more now than they paid in August for health care coverage, without government assistance to ease the burden, and they don’t seem to mind, partly because their coverage has nothing to do with the Affordable Care Act (ACA).

The first week of ACA’s fourth open enrollment period since the law’s implementation has reinforced suspicions Obamacare customers are paying more for insurance plans than the value they receive in coverage. The opposite is true of a happier group of shoppers who have managed to purchase health care coverage but no insurance plan.

Approximately 625,000 patients among 50 states participate in faith-based medical cost-sharing as an alternative to buying health insurance. These patients are members of health care sharing ministries (HCSMs). HCSMs are not health insurance, but members pay no fine for going without insurance: Congress and President Barack Obama exempted HCSM members from paying ACA’s tax penalty when drafting the law.

HCSM members win big under ACA in the sense the law leaves them alone. Consequently, the HCSM market is booming with variety, value, and new members to prove it.

One HCSM, Samaritan Ministries, recently increased the monthly “share” members pay by 22 percent. A family of three or more members contributed $405 per month toward other members’ medical bills during part of 2014, all of 2015, and most of 2016. Samaritan increased this share to $495 in September.

A 22 percent increase totaling $1,080 extra per year sounds ghastly, so at a conference in October, I asked Dr. Chad Savage, one of more than 200,000 Samaritan members and a direct primary care provider in Brighton, Michigan, for his reaction.

“To be honest with you … my thought regarding Samaritan’s recent price increase is, ‘So what?’” Savage said. “From what I’ve heard, the previous plan that I left for Samaritan increased by $2,000 per year.”

Jeff and Julie Thompson of Dayton, Ohio, are members of Christian Care Ministry, a separate HCSM with a cost-sharing program called Medi-Share. Their monthly share increased from $304 to $342 on November 1, Jeff Thompson told me.

“We’ve been thrilled to take part in a sharing ministry and even turned down the traditional plan my new employer offered in order to stay with it,” Thompson said. “It took some getting used to at first, at least mentally, but Julie and I both feel more empowered as consumers.”

Obamacare customers are less easygoing about comparable percent increases in their monthly premiums, and for good reason. Eric Jans, an insurance broker, said his customers are “really nervous” about Blue Cross Blue Shield (BCBS) exiting Nashville, Tennessee’s Obamacare marketplace. The insurer’s exit also cost Jans income and health insurance benefits he received as compensation from BCBS, CBS News reported on November 1, the first day of this year’s open enrollment period.

As a result, “As of January 1, unless we jump on to something else ... we’re looking at $750 a month this year to $1,100 next year,” Jans told CBS News.

Average premiums for ACA’s benchmark plan, the second-lowest Silver Plan offered on the exchanges, will increase by 25 percent nationwide in 2017. Averaging all premium increases in a single “metal” group is only slightly less discouraging: 21 percent (Bronze), 17 percent (Silver), 22 percent (Gold), and 15 percent (Platinum), according to the price comparison site HealthPocket.com.

In addition to the cost of premiums, maximum out-of-pocket costs for these Obamacare plans for individuals average $6,904 (Bronze), $6,449 (Silver), $4,889 (Gold), and $2,159 (Platinum), states HealthPocket.com.

The same plans cap families’ out-of-pocket maximum costs on average at $13,810 (Bronze), $12,952 (Silver), $10,168 (Gold), and $4,318 (Platinum).

In contrast to insurers bound by costly ACA mandates, HCSMs are free to set their own terms of coverage. Consequently, many people find Samaritan and Medi-Share’s cost-sharing contributions less onerous. Because Samaritan members assume responsibility for medical needs costing less than $300 each, they technically have no out-of-pocket maximum. For needs costing more than $300 each, however, members’ expenses are capped at a low $900--per family--per year.

Unlike Samaritan, Medi-Share caps family contributions to their own medical expenses according to tiers ranging from $500 to $10,000 per year, depending on how much families choose to pay in monthly shares. Medi-Share also gradually increases monthly share amounts based on the age of the oldest family member.

Furthermore, HCSMs compete on reimbursement limits, with some capping reimbursements to members at $250,000 per medical need and others at $1 million or more.

If Congress and the next president want to repair damage ACA has wrought on the U.S. insurance, health care, and job markets, they should learn from HCSMs. Leaving these groups largely free from direct regulation under ACA has caused innovators to compete, families to flourish, and patients to prosper.

-- Michael T. Hamilton (mhamilton@heartland.org) is a Heartland Institute research fellow and managing editor of Health Care News, author of the weekly Consumer Power Report, and host of the Health Care News Podcast.


IN THIS ISSUE:


VICE PRESIDENTIAL CANDIDATE GOV. MIKE PENCE (R-IN) PLEDGES ACA REPEAL AND REPLACEMENT

At an event Tuesday in Valley Forge, PA, Gov. Mike Pence introduced the Trump campaign’s plan to repeal and replace Obamacare.

He spotlighted the broken promises made by President Obama when he passed the law:

Pence said: “President Obama said his health plan would cut the cost of family premiums by up to $2,500 a year. Not true. If you like your doctor, you can keep your doctor. Not true. If you like your health insurance plan, you can keep it. Not true.”

“The truth is premiums for employer plans have gone up by almost $5,000 since President Obama took office. And last week the Obama administration announced that the average premiums under Obamacare on the Exchanges are going to go up another 25% nationally,” Pence said.

“But that average hides the specific states where families are about to be pummeled with unprecedented sticker shock: for a 27 year-old buying an Obamacare plan, Arizona’s premiums are going up by 116%; Tennessee, 63%; Minnesota, 59%; Alabama, 58%; North Carolina, 40%. American wages haven’t gone up by this much. Right here in Pennsylvania, it’s a whopping 53% for next year, and a total of 69% increase when you add it to last year’s rate hike. Your paycheck didn’t go up by 53%!

“In Pennsylvania almost 110,000 households will see their rates spike drastically with absolutely no help from the government.

“Remember how Nancy Pelosi famously said ‘we have to pass the bill so you can find out what is in it.’ Well, they did, and it’s even worse than we feared. What good is a healthcare plan if you can’t afford to use it? With its increasing costs and high deductibles, most people are paying for something they can’t afford to use. Fifty percent of Obamacare customers are now skipping medical visits to cut costs. Think about that, Americans are putting their personal health second because Obamacare’s skyrocketing costs come first.

“Obamacare truly is a crushing weight on the American people and the American economy.

“I mean, even Bill Clinton said ‘costs are going up, coverage is going down, it’s the craziest thing in the world.’ I guess even with the Clintons, sometimes the truth happens. …

“A Trump plan will make health care affordable and will put people back in the driver’s seat of their health care, not the government. We will get rid of the individual mandate, because the government shouldn’t tell you how to spend your money. We will allow people to purchase insurance across state lines, just like you can with your auto or life or other insurance policies. We will create a transition period for those receiving subsidies to ensure that Americans don’t face disruption or other hardship in their coverage.

“We will make it easier for Americans to open Health Savings Accounts (HSAs) that they can use to pay for health insurance. The idea of a tax-free account to pay for medical expenses was pioneered in my home state of Indiana to fix the flaws in our health care system. …

“States know what’s best for their people and Donald Trump and I will give states new freedom and flexibility through block granting Medicaid so states can innovate and reform and design programs that meet the unique needs of their citizens. …

“And we will protect Americans with pre-existing conditions so that they are not charged more or denied coverage, just because they have been sick, so long as they have paid their premiums consistently.

“And we will reverse Obamacare’s federal takeover of the insurance market. We didn’t see the type of rate increases across the nation when the States were running things.” …

SOURCE: Tim Hains, RealClearPolitics


SIDES IN TELEMEDICINE BATTLE CALL FOR A CEASE-FIRE

It looks like the sides in the battle over telemedicine in Mississippi have called a truce of sorts.

Neither Teladoc Inc., the leading private provider of the service in the state and the country, nor the Mississippi State Medical Association, which represents the majority of physicians in the state, says it plans to introduce legislation in the upcoming session.

In the 2016 session, Teladoc-backed legislation sailed through the House, only to stall out in a Senate committee.

Dr. Dan Edney, then-president of the association, used strong rhetoric to describe telemedicine without a mandatory visual component.

Edney said in an interview in March that the bill, which was at that time still under review in the Senate, was “terrible” legislation that would “blindfold” telemedicine physicians.

Teladoc – which has 68,000 patients in Mississippi and has operated in the state for 11 years – leaves it up to the physician, who must be licensed to practice medicine in Mississippi, to decide whether a visual element is needed, based on the standard of care.

Dr. Lee Voulters, currently president of the association, said in a hearing on Oct. 18 before the Senate Public Health and Welfare Committee that “we’re against audio-only,” and that requiring the video component means doing telemedicine “the right way.”

Yet Voulters said in an interview several days after the hearing that the association is not planning to introduce legislation in the upcoming session.

“We want the telemedicine rules and regulations to stand as they are promulgated by the medical licensing board,” he said.

“Our position is that we want all physicians to be treated the same way; we don’t want special interest groups treated differently.”

Voulters said that the University of Mississippi Medical Center’s telemedicine program is the “gold standard” for the state. It was recently awarded an “A” on its telemedicine outreach, which covers most of Mississippi. The award was granted by the American Telemedicine Association.

SOURCE: Jack Weatherly, Mississippi Business Journal


STUDY: HEALTH CARE CONCERNS JUMP FROM #4 TO #1 THIS ELECTION CYCLE

As many begin enrollment in the healthcare exchange under the Affordable Care Act this may not come as a surprise that healthcare is the number one concern among Utahns.

As ABC4 reported, during this election cycle Utahns are most concerned about the rising cost of health insurance.

That’s the finding of a year long study of top priorities of 2016 by the Utah Foundation. On Wednesday, researchers released details of those findings.

Researchers at Utah Foundation [say] the elections, higher premiums under the Affordable Care Act, and Medicaid expansion are what’s driving the costs and concerns about healthcare in the state.

Mike Stapleton, Utah Resident, “price [keeps] going up and coverage [keeps] going down. It’s time to straighten this thing out – better coverage for less price that’s what everyone wants.”

Researchers say despite having some of the best healthcare coverage and lower costs in the country families are struggling to pay for healthcare.

Utah ranks one of the healthiest states with a higher number of children compared to other states. Those factors drive the cost of healthcare down.

Christopher Collard, Utah Foundation, “It’s still a burden on people’s budget spending they’re still spending a substantial [amount of] money making sure they have health coverage and Utah and they feel the pressure.”

The Utah Foundation spent a year on its Utah Priorities Project and took a cross section of 800 people in [the] state to rank their top priorities.

Healthcare ranked 4th in terms of priority in the last presidential election in 2012 but jumped to first this go around. …

“I’m stuck with a system that I don’t like. I gotta find my own healthcare. Some of the doctors I want to go to are not on my plan. Sometimes I’m going to doctors paying out of pocket to see a better doctor than what’s on my plan.” …

SOURCE: Surae Chinn, Good4Utah.com


FDA CRACKDOWN ON DOMPERIDONE LEAVES PATIENTS WITH LIFE-THREATENING CONDITION FEW OPTIONS

Cassie Le’s seven-year-old daughter was put on a feeding tube when she was seven months old. Four years ago, doctors tried a new treatment that worked so well the feeding tube was removed and the girl was able to eat normally. Now, the FDA is blocking the Le family and thousands of others from accessing the only drug that allows them to live a normal lives.

Today the Goldwater Institute released an investigative report documenting the FDA’s efforts to cut off access to domperidone, a drug commonly used throughout the world to treat a potentially deadly medical condition called gastroparesis.

Domperidone is available in more than 100 countries, including Canada and throughout the European Union. In many of those countries it is sold over the counter. Since its introduction in 1978, domperidone has been a common treatment for such things as heartburn and bloating, as well as more serious conditions like gastroparesis.

In the past couple of years, the FDA has been aggressively enforcing an import ban on domperidone. Patients who until recently had little trouble filling prescriptions for the drug can no longer get it. And people who had previously benefited from this drug are being forced off the only medication that has allowed them to live normal lives.

Those who can no longer get domperidone face terrible consequences. They are people like Cassie Le’s daughter. “I fear she will need to get a feeding tube again,” Le said. “How do I tell her that? She is a little girl who has worked extremely hard to overcome her fears of eating. And now, her joy of being a normal little girl will be taken away.” …

Federal legislation is pending that would make drugs that have been approved in other developed countries like Canada, European countries, and Japan available to Americans without delay.

SOURCE: Goldwater Institute

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Michael Hamilton writes and edits for the liberty-minded clients of Good Comma Editing, LLC, a freelance writing and editing company.
media@heartland.org @MikeFreeMarket