December 07, 2018
Good morning ... A “bacon vending machine” cannot possibly be any good. You know it, I know it, the American people know it.
1 big thing: Critics see thumb on the scale for Medicare Advantage
Open enrollment for Medicare ends today, and privately run Medicare Advantage plans will likely continue to grow. But some consumer advocates tell my colleague Bob Herman they're worried that the Trump administration is steering people into MA while giving short shrift to its limitations.
Where it stands: MA enrollment is approaching 22 million people, and it has risen steadily even as the Affordable Care Act cut insurers' payments for the program. There are reasons for its popularity.
- Many MA plans offer $0 premiums and extra perks that don't exist in standard Medicare, like vision and hearing coverage and gym memberships. MA plans also cap enrollees' out-of-pocket expenses.
- Traditional Medicare, by contrast, has higher out-of-pocket costs that usually require people to buy supplemental medical policies, called Medigap plans, as well as separate drug plans.
Yes, but: Federal marketing materials rarely mention MA's tradeoffs.
- MA plans limit which doctors and hospitals people can see, and they require prior approval for certain procedures. Provider directories also are loaded with errors.
- MA plans spend less on care, yet continue to cost taxpayers more than traditional Medicare.
The big picture: The Trump administration has been talking up MA in emails to prospective enrollees, as the New York Times recently reported. But some experts just aren't convinced that seniors are especially rigorous shoppers when deciding on a health plan.
- "We know people don't" actively engage in health insurance shopping, said Tricia Neuman, a Medicare expert at the Kaiser Family Foundation who recently wrote about MA. "It's just too hard."
2. Spending grew slower than expected
Bob also has the lowdown on yesterday's update on national health expenditures.
By the numbers: The U.S. spent almost $3.5 trillion on hospitals, doctors, prescription drugs, medical devices and other health care services in 2017.
- One-third of the country's spending came from private health insurance premiums that people had through their jobs or bought on their own. Another 10% came from out-of-pocket spending like copays and deductibles.
- The amount spent in hospitals ($1.14 trillion) and doctors' offices ($920 billion) each increased above 4% annually, and together represented 59% of the country's health care spending.
- Prescription drugs bought at a pharmacy or other retail locations were about 10% of total spending, barely more than 2016 thanks to people using more generics and fewer high-priced drugs.
Between the lines: Total spending for 2017 was 3.9% higher than the health care tab from 2016 — a rate of growth that's lower than originally expected, and also slower than growth in the overall economy.
- That's partially because fewer people went to the hospital, saw the doctor, ordered tests and bought drugs. But that decline in utilization was offset by rising prices.
3. ACA enrollment still behind pace
We're probably in for a second straight year of declining enrollment through HealthCare.gov. The pace of sign-ups this year continues to lag noticeably behind last year's, and last year marked a modest decline from the year before that.
By the numbers: Just shy of 3.2 million people have picked plans through the federally run exchanges so far. That's about 12% lower than the 3.6 million who had signed up at the same time last year.
Many of the poorest enrollees are eligible for plans with a $0 premium, thanks to generous subsidies (but those plans come with higher out-of-pocket costs).
- But the availability of cheaper plans hasn't made up for declining enrollment among unsubsidized consumers, and cuts to outreach programs mean a lot of people may not know that low- or no-premium coverage is available.
What's next: Enrollment will likely spike ahead of the Dec. 15 sign-up deadline, but it would need to be a substantially bigger-than-usual jump to make up the ground that's been lost so far.
4. Health care eats up 12% of workers' income
Insurance premiums, combined with total deductibles, add up to 12% of workers' median incomes, according to a new analysis from the Commonwealth Fund. Overall costs have been rising steadily for years, and workers' share of those costs have been growing even faster.
Details: Unsurprisingly, health care coverage is especially expensive in the South and in rural areas, which often have less competition among providers and sicker populations.
- Workers' annual premiums and deductibles together add up to more than $8,000 in 8 states: Alaska, Arizona, Delaware, New Hampshire, North Carolina, South Dakota, Texas and Virginia.
- State by state, premiums eat up the biggest share of the median income in Louisiana, at more than 10%. Premiums and deductibles together topped 15% of the average income in Louisiana and Mississippi.
5. Maine will finally expand Medicaid
Maine voters approved the state's Medicaid expansion in 2017. In early 2019, it'll finally happen.
- Gov. Paul LePage has refused to implement the expansion, despite voters' approval and legal challenges to his recalcitrance.
- The judge handling those challenges issued a procedural ruling yesterday that effectively renders the lawsuits moot and sets a Feb. 1 deadline to begin enrolling people in the program, the Portland Press Herald reports. Benefits will be retroactive to July.
- Democratic Gov.-elect Janet Mills takes office Jan. 2 and has said she would immediately implement the expansion.
The bottom line: Maine's Medicaid program will finally, actually expand within a month of LePage leaving office.
Why it matters: The successful ballot initiative in Maine inspired three more this year — all of them successful — and advocates are already looking ahead to the states where similar ballot questions could stand a good chance in 2020.