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Health Care Costs and Medical Tests

(9/22/17)- The average premium for health-care coverage offered by employers rose 3% to $18,764 in 2017, the same rate of increase as in 2016, according to an annual poll conducted by the nonprofit Kaiser Family Foundation., along with the Health Research & Educational Trust, a nonprofit affiliated with the American Hospital Association.

Employees paid on average $5,716, or 31% of the premium, for a family plan in 2017, according to the Kaiser poll. For the individual worker, the average cost of employer coverage was $6,690 in 2017, or 4% higher than the prior year.

This year, 51% of employers in the poll offered heath plan benefits to their employees, down from 56% in 2016 and 61% in 2012. This droppage may be explained by the fact that the Affordable Care Act of 2010 offered individuals the opportunity to purchase their own coverage.

Also keep in mind that the deductible in the employer offered plans have been steadily increasing over the last few years.

(10/15/16)- Health care costs at a sample of major U.S. businesses are expected to rise 6% in 2017, according to an annual survey of 133 major employers, offering coverage to more than 15 million employees by the Business Group on Health (NGBH), a nonprofit association that focuses on employer provided health care coverage to its employees.

That same survey showed that more than 51% of the employees will have deductibles in excess of $1,000 covering a single person, compared with 46% last year.

(2/9/16)- Twenty major companies that employ about 4 million people have formed an alliance wherein they will share health information about members’ employees health spending and outcomes, as they try to contain medical costs and improve health care results.

The Health Transformation Alliance will share data about provider costs and patient outcomes starting as soon as this year. American Express, Macy’s and Verizon and the other members of the alliance will band together to use their collective data and marketing power to hold down medical costs, while at the same time, hoping to achieve better medical results.

In checking their collective date the alliance hopes to be able to judge which type of medical treatment is the most effective, taking into account the costs charged by medical professionals as well as the result.

The American Health Policy Institute, a health-care think tank conceived the idea behind the alliance.

(9/25/15)- Is the increase in the amount that is deductible before health-insurance kicks in causing beneficiaries to delay, postpone or even eliminate medical exams and treatments? Data from a study conducted by the Kaiser Family Foundation concluded that employee deductibles have climbed from a yearly average of $900 in 2010 for an individual plan to above $1300 this year.

Four of five workers covered by their employers’ plans now must pay a deductible for their health-insurance coverage. One in five workers has a deductible of $2,000 or more. In a similar vein, please see our article on Health Savings Accounts (HSA) wherein large deductible mean lower premiums

Data from the study showed that the cost for the premium for the coverage for both individual and family coverage rose an average of 4% this year.

The average cost of a family plan rose to $17,549, with employees paying an average of over $5,000 for their cost of the premium.

(10/17/14)- Because too many patients were re-admitted to a hospital within 30 days of their release, Medicare will cut payments to a record 2,610 of those eligible according to an analysis of federal records by Kaiser Health News. These hospitals will see cuts in their Medicare reimbursements for every beneficiary they treat from October 1 through September 30 next year.

These penalties will save Medicare an estimated $428 million, according to a statement from a spokesman for the Centers for Medicare and Medicaid Services.

Nationwide, the percentage of Medicare patients readmitted within 30 days for any reason dropped from 19% to 18% last year, according to a spokesman for the Centers for Medicare and Medicaid Services. Knee and hip replacement surgeries and chronic lung problems were 2 new categories that are now included in the test categories.

(9/20/14)- A federal rule that went into effect in April entitles patients to see the results of their medical tests including complete blood counts, urine analysis and allergy tests within 30 days after the tests are taken. No physicians’ permission is required, and labs have until October 6 to comply.

This federal rule preempts any state laws that prevent their disclosure to the patient. The 30-day time period is permitted so that the individual’s private physician can see the records first in case that medical professional wants to talk over the results with the patient before the patient has a chance to get the results.

(5/25/13)- The Census Bureau's official poverty measure estimates that 9 percent of seniors nationally live in poverty. However, some have criticized that measure for not taking into account health care costs, the impact of taxes, and in-kind government assistance (such as assistance with energy costs) and for not varying poverty standards regionally based on the cost of living.

To address those concerns, the Census Bureau in 2011 released an alternative "supplemental" poverty measure that shows 15 percent of seniors nationally living in poverty. The increase in the poverty rate is largely due to the consideration of health care costs in the supplemental measure." (Kaiser Foundation Report accessed May 20, 2013)

(10/3/08)- The average premium paid by employers and their workers rose 5% in 2008, according to an annual poll of nearly 2,000 employers by the Kaiser Family Foundation and the Health Research and Education Trust.

Towers Perrin, an employer-benefits consultant firm, projected a 6% rise in premiums for 2009, which is slightly lower than a projection from Hewitt Associates, another employer-benefits consulting firm, which estimated a 6.4% in increase next year.

The annual cost for an average family health plan rose to $12,680 this year, more than double the $5,791 cost in 1999, according to the Kaiser survey. Workers' annual contribution for those premiums rose to $3,354 in 2008, up from $1,543 in 1999.

About 8% of all workers in employer covered plans have high deductibles of $1,000 or more, although much of this may be due to the requirement of a high deductible to be eligible for a Health Savings Account..

More than one-third of covered employees at smaller companies-those with fewer than 200 employers must pay at least a $1,000 deductible before their plan will cover a share for may services. That amount is up from 21% last year.

Hewitt predicts employees on average will contribute $1,946, or 22% toward health-insurance premiums in 2009, compared with $1,806, or 21.6% in 2008.

In addition, Hewitt also predicts employees will co-pay $1,880 next year, compared to $1,707 this year. Overall, employees can expect to pay $3,826 in 2009 for health care, which represents an 8.9% increase over 2008.

(9/6/07)- A recent court ruling will require Medicare officials to release physician-claims data in four states and the District of Columbia. The Department of Health and Human Services had argued against the releasing of the data, saying it would violate the physician-patient privacy rule. The federal court in the District of Columbia ruled that the public interest outweighed the privacy concern.

The data at issue include medical -procedure and billing details that physicians sent to Medicare to get reimbursement from the program. The government has until September 21 to release the data, covering Maryland, Illinois, Washington, Virginia and Washington D.C. the nonprofit Consumer's CHECKBOOK/Center for the Study of Services.

The consumer group said it would set up a free database on its Web sire for public use. It has filed similar public-information request for Medicare claims data for all 50 states.

(5/18/05)- Medem Inc., a for-profit company affiliated with the American Medical Association is offering a free Web based program where individuals may enter their own medical records that will become available to medical professionals to view upon approval of the patient. The service will be free, and access to the records can be granted only through the approval of the patient or an agent of the patient.

The site that will offer a "personal health record" is located at www.ihealthrecord.org and must be set up by the patients themselves. The patients will fill in their own medical history, including medications and allergies, and will be given a password that they can pass on to others. Unfortunately this site was discontinued in 2011.

The AMA and six other medical societies founded Medem in 1999. The pilot program involves 50 physicians promoting it to their patients. About 90,000 physicians currently pay up to $25 a month to subscribe to Medem's other services, which include Web sites for their practices and doctor-patient email capabilities. Medem plans to offer it subscriber doctors an iHealthRecord link for their Web sites at no additional charge.

Medem plans to send participants in its service all information it receives from the FDA and the CDC about the particular conditions that a patient suffers from. Medem said that it would not sell medical information to insurance companies and has hired an outside security firm to insure the confidentiality of it records.

Among the safeguards that Medem intends to use to protect the confidentiality of the medical records is a log on the individual's site that will indicate the last time that the site has been viewed. Later this year a service will be added to the site that will advise the member by email that the site is being viewed.

(5/29/04)- Medicaid paid for 49%, or about $51 billion of the health care costs for the needy and disabled in 2002. Medicare paid for about 13% of the costs for those over 65 years of age during this same period. Nursing homes get paid less by Medicaid than by people paying their own bills or using private insurance. That is the major reason why there was about a 5% drop off to 16,491 in the total number of nursing homes certified to take Medicare and Medicaid.

Many individuals "spend down" so that they receive Medicaid coverage for their nursing home costs, rather stay under the lesser coverage under Medicare. For more details on this please see our article Medicare-Who Pays and How Much. As a general rule an individual is allowed to keep $2,000 in assets and still be eligible for Medicaid. The spouse can keep assets that vary from $18,552 to $92,760 depending on the state of residency of the individual. The spouse may also keep a monthly income of from $1,515 to $2,319 also dependent on the state of residency.

Many states are cracking down on the assets that a spouse of a nursing home Medicaid resident may keep, and are also cracking down on the "look back" formulas to determine how much must be repaid to the state for these costs. In Washington state the amount of assets that your spouse can keep if you qualify under Medicaid for nursing home care dropped from $90,660 to $40,000. In Kentucky single nursing home residents on Medicaid can be forced to sell their homes to help pay for their care if they are institutionalized for more than 6 months and don't move back. Kentucky also did away with an exemption of $50,500 it used to let heirs keep when recovering costs from the estates of nursing-home residents after their death.

Medicare boosted payments for more than 100 treatments given on an outpatient basis in hospitals by more than $1.2 billion for 2004 and 2005. The agreement on biotech drugs sets a minimum payment level for certain hospital outpatient drugs for this same period of time. For products that treat rare diseases, hospitals would be reimbursed for their costs. The payment increase was a boon to the biotech industry, which had claimed that the payment for its high-tech products had been set too low. Medicare reimburses for very few drugs that are administered outside the hospital setting. Johnson & Johnson's Remicade for rheumatoid arthritis is one of the few drugs presently administered in a doctor's office that is covered by Medicare.

According to the Bureau of Labor Statistics, the average annual out-of-pocket expenses for health care rose 26% between 1995 and 2001 to $2,182. A workers' average monthly contribution to premiums for family coverage more than tripled to $174 for $52 between 1988 and 2002 according to a study done by the Kaiser Family Foundation, a nonpartisan research group based in Menlo Park, Cal. The employers are shifting more and more health care expenses to the employees.

A group of 175 large employees that provide benefits for 40 million employees has announced a campaign to encourage overweight workers to slim down a s a way to both improve their personal health and also to help lower health care costs. The group, which is known as the Institute on Costs and Health Effects of Obesity, includes companies such as Ford Motor, Honeywell, General Mills, Pepsi Co., Fidelity Investments, Morgan Stanley, Pfizer Pharmaceuticals Group and Aetna.

The group estimates that obesity adds over $12 billion a year to their medical bills in the form of lower productivity, higher medical bills and higher insurance rates. The institute will draw on research from the federal Centers for Disease Control and Prevention and the Institute of Medicine of the National Academy of Sciences. The centers and the Institute of Medicine have also joined the new obesity institute board.

Several recent news events have shown that the rising costs for health care insurance coverage is becoming a greater issue in labor negotiations. Seventeen thousand workers at G.E. went on a two-day strike at 48 locations, in 23 states. The company began requiring 121,000 of its American employees, as well as 25,000 retirees under age 65 to pay what the company estimates will be $200 more annually toward their health-care costs. Union officials estimate that the cost will be nearly double that amount.

Under the plan that G.E. adopted on January 1 this year, co-payments will rise to $25, from $15, when workers visit medical specialists. The co-pay will rise to $50 from $30 for emergency room visits.G.E officials stated that the company's overall health outlay jumped to $1.4 billion in 2002. It estimates that its health-care costs will be $2,350 higher per worker this year than they were in 1999. Hershey Foods had a 44-day strike last year with the main issue being the company's request that the employees shoulder a greater share of the company's health-care costs.

In the dispute between the New York City's workers and it transit authority, the main issue for the union was ensuring the solvency of a health plan depleted by spiraling costs. The health-care costs are expected to be one of the main issues in the contract negotiations that will arise this year between the United Auto Workers union and also the International Brotherhood of Teamsters union and their respective managements.

DuPont Co. is hitting their retirees with an exceptionally high percentage increase for premiums to cover health-care benefits. Employees of the company are going to be paying a 13% increase this year, but retirees over the age of 65 must pay a 135% premium increase forhealth care coverage.

Because of the serious financial difficulties that many of the states now find themselves in, about two-thirds of the states are cutting Medicaid benefits. In addition to cutting Medicaid benefits, they are increasing co-payments, putting more restrictions on eligibility, and removing many poor people from the rolls.

Matt D. Salo, director of health legislation of the National Governors Association, estimated that one million to two million low-income people would lose their Medicaid coverage because of the cutbacks. Medicaid provides health care for more than 40 million people, at an annual cost of $250 billion. Douglas Porter, the Medicaid director in Washington state stated: " You reduce the benefits package before you cut people off the program."

According to data in a report released by the Centers for Medicare and Medicaid Services (CMS) spending for health care is increasing at the fastest rate in a decade. Katherine Levit, director of the National Health Statistics Group at CMS stated: "We probably should be on the lookout for some policy change or private-sector initiative that helps to put the brakes on spending growth."

Health spending rose to about $1.4 trillion in 2001, an increase of 8.7% over health spending in 2000. It accounted for 14.1% of the total economy, the largest share on record. Spending averaged $5,035 for each person in the United States.

Hospital spending was responsible for about 30% of the increase in overall spending. According to Ms. Levit a major reason for the increase was due to an increase in the amount of medical goods and services purchased to care for an aging population.

Medicare spending, for the elderly and disabled rose 7.8% in 2001. Medicaid spending increased by a whopping 10.8%. The substantial growth in Medicaid spending was driven by an increase in enrollment, resulting from the recession and from state efforts to expand coverage. Because of the large deficits that the states now face, they are looking for ways to hold down or even cut back on Medicaid spending.

The data in the report shows that prescription drugs are the fastest growing category of health spending. Americans spent $140.6 billion on prescription drugs, which was up 15.7% from 2000. Spending on drugs exceeded spending on nursing homes and home health combined for the first time in history.

Private health-insurance premiums rose 10.5% on average in 2001, and out-of-pocket spending rose by about 5.1%. Of every $100 spent on health care, consumers pay $14 from their own pockets, for co-payments and deductibles and items not covered by insurance.

The United States devotes more of its economy to health care than any other industrialized country in the world. In 2000, health care accounted for 14.1% of the gross domestic product (GDP), up from 13.3% in 1999. Switzerland spent about 10.7%, Germany 10.6%, France about 9.5% and Canada about 9.1%.

Actually the growth in drug spending eased in 2001 to 15.7%, after an increase of 16.4% in 2000 and an increase of 19.7% in 1999. "If this isn't an argument for Medicare and Medicaid reform, I don't know what is, " said CMS administrator Thomas Scully.

Prescription drugs accounted for 9.9% of the total health spending in 2001. Spending on hospitals rose at the fastest clip since 1991, reaching $451.2 billion in 2001, up 8.3% from 2000. Spending for doctors and clinical services rose 8.6% to $313.6 billion in 2000.

Mercer Human Resources Consulting reported that the increase in health-care costs for employers this year was running seven times the rate of inflation. The annual Mercer study surveys 2,900 employers, both public and private, with an estimated error range of plus or minus 3%. The average employee is costing his employer $5,646 this year in health costs, up 56% from five years ago when the cost was $3,594. For 2003, employers expect their health-care costs to increase 14% with a large percentage of the increase being borne by the employees themselves. In addition to the increase in the premium that is being paid for by all the employees who work for the firm, co-pays and deductibles will also increase sharply. Prescription drug costs rose 16.9% so far in 2002 for employers, following a 17.8% increase in 2001.

 

FOR AN INFORMATIVE AND PERSONAL ARTICLE ON PRACTICAL SUGGESTIONS WHEN SELECTING A NURSING HOME SEE OUR ARTICLE "How to Select a Nursing Home

By Allan Rubin
updated September 22, 2017

To e-mail: hrubin12@rr.nyc.com or allanrubin4@gmail.com

 

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