Checking Up On Health: June 2, 2015

Health Care Policy News and Views
Compiled by Benita M. Dodd



Any day now, the U.S. Supreme Court will announce its decision on King v. Burwell, in which the IRS decision to provide subsidies to enrollees in federally operated health care exchanges is being challenged. Georgia is among the 34 states that have a federally operated exchange under the Affordable Care Act.

King v. Burwell is one of four lawsuits arguing that the text of the Affordable Care Act only allows for subsidies on state-run exchanges, and that the IRS regulation offering subsidies through both state and federal exchanges exceeds the authority granted by Congress. If the court rules the subsidies are illegal, the 34 states currently operating under a federal exchange will face significant pressure to build their own state-based exchange. Subsidies trigger the ACA’s mandates, so no subsidies means no employer mandate and a weakened individual mandate in those 34 states. If you think the state-based exchanges are a good idea, you should probably look at what’s going on in Maryland, Massachusetts, Oregon and Hawaii.

Don’t be fooled into believing there are no alternatives to the Affordable Care Act. Georgia’s own Congressman Tom Price has one, and there are more. The idea is to encourage personal responsibility, reduce the role of government and promote a healthy population without burdening American consumers and taxpayers.

To live longer, walk faster and avoid cancer: Self-reported walking pace was a strong predictor of mortality for men while a previous cancer diagnosis was a strong predictor for women, and both were stronger predictors than smoking habits and other lifestyle measures, according to a database study from the University of Uppsala in Sweden. The study used data from nearly half a million people. Men ages 40-52 who said they had a slow walk speed had a 3.7 times higher risk for overall mortality within five years over men in the same age range who reported brisker speeds.

And you wonder why the health care system is in trouble: ObamaCare requires you to pay the first month’s premium to be considered insured. Meanwhile, issuers have to give enrollees a three-month grace period before cutting them off if they don’t pay. As of March 31, 91.1 percent of the 452,815 Georgians enrolled in ObamaCare had an “advanced premium tax credit (APTC) to make their premiums more affordable,” according to the Centers for Medicare and Medicaid Services. The average advanced premium tax credit for Georgia enrollees who qualified for the financial assistance was $274 per month. For those individuals receiving APTC, issuers are required to give enrollees a three-month grace period.

More challenges, ‘better’ competition: Health insurer Humana Inc. is exploring a possible sale of the company, which could trigger a round of mergers as the health care industry grapples with challenges and opportunities created by the Affordable Care Act, The Wall Street Journal reports. “Faced with pressure to cut costs and find ways to profits from the potential new customers the Affordable Care Act is generating, the big health insurers have long been expected by analysts to turn to mergers that will give them the heft to better compete as the industry involves.” Of course, while bigger may be better for the companies, fewer competing in the health care market won’t necessarily be a good thing for the consumers.

Or, as the National Center for Policy Analysis reported recently, the National Academy of Social Insurance (NASI) has published a “consensus report” on provider consolidation. “Basically, we have a growing problem in that hospitals are buying each other up and also physician practices, which leads to reduced competition and higher prices,” NCPA points out.

Who’s on top? The biggest health insurer, based on 2014 revenue, is UnitedHealth, which, with $130.5 billion, has nearly double that of No. 2, Anthem at $73.9 billion. Aetna is a distant third at $50.8 billion. Source: Wall Street Journal

Medicare by the numbers: The Center for Medicare and Medicaid Services has released its first annual update, providing the latest (2013) data on Medicare charges and payments for hospitals, physicians and suppliers. The data cover more than 950,000 distinct health care providers who collectively received $90 billion in Medicare payments. CMS paid at least 3,900 individual health care providers at least $1 million in 2013. On average, physicians received about $74,000 in reimbursement, although five received more than $10 million. Major joint replacement continues to be the most frequently occurring discharge nationally, with 446,148 total discharges and total allowed amount cost of $6.6 billion in 2013.  Source: Becker’s Hospital Review

High security, high costs: Hacking already costs the health care industry $6 billion a year, but the recent wave of data breaches is raising the cost of doing business, according to a Politico report. It’s no surprise the hackers like health care: One health care record can be exchanged for up to $50 on the black market, 10 times as much as a stolen credit card number, according to the report. Legal costs and credit protection could amount to $20 for each hacked patient record. It is estimated that $2 billion worth of health-related cyber insurance was sold on the black market last year, and the market is experiencing 20 to 25 percent growth per year.

Quotes of note

“I’m not going to discuss whether it’s fair for some physicians to be making 10 to 20 times the median income. But I do think it’s important to recognize that the vast majority of physicians are not seeing that exorbitant income. Also, let’s make sure when we discuss physician salaries that we are adjusting for medical school debt and lost income potential during medical school and residency. Then, it’s a fair comparison. With all of that being said: Don’t go into medicine for the money.” – Amanda Xi

Benita Dodd is vice president of the Georgia Public Policy Foundation.