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Pulse Magazine

Pulse Magazine

Health Care Costs: Employer Health Care Costs Projected to Increase at Slower Rates

Projected cost increases for all types of medical plans are anticipated to decline by between 0.1 percent and 0.5 percent in 2014, according to results of a survey of insurers and administrators in the United States by Buck Consultants.  The results show the trend of slow, steady declines in medical plan costs since 2010 is continuing.

In a national survey of 126 insurers and administrators, Buck Consultants measured the projected annual increase in employer-provided health care benefit costs. Insurers and administrators providing medical trends for the survey cover a total of approximately 119 people.

The 28th National Health Care Trend Survey found costs are projected to increase at rates that are lower than its recent prior surveys. For example, costs for preferred-provider organization plans could rise by 8.7 percent this year compared to 9 percent in 2013, according to the survey.

Health care maintenance organization plans could increase by 8.6 percent, compared to 9.1 percent in 2013.  Some survey respondents cited reduced utilization as the primary reason for the decrease in health plan costs.  “This may be a result of the economic slowdown and its impact on consumers’ willingness to seek medical treatment,” said Harvey Sobel, a principal at Buck Consultants and co-author of the survey.

“Even though the decline is good news, most plan sponsors till find 8-9 percent cost increases unsustainable.”  According to a Los Angeles Times article on the results of the survey, some experts attribute the slowdown to the remaining effects of the Great Recession. Others say the health care options through the Affordable Care Act are contributing factors, according to the article.

“It’s too soon to tell the impact of public and private health exchanges on trend,” said Daniel Levin, a principal at Buck Consultants and co-author of the survey. “It may take another few years before we really know if (and by how much) the exchanges will ‘bend’ the cost curve.”

More information:

Medicare CMS Issues Proposed Hospital Inpatient Payment Regulation

The Centers for Medicare & Medicaid Services has issued a proposed rule that would update fiscal year 2015 Medicare payment policies and rates for inpatient stays at general acute care and long-term care hospitals (LTCHs).

This rule builds on the Obama administration’s efforts through the Affordable Care Act to promote improvements in hospital care that will lead to better patient outcomes while slowing the long-term health care cost growth.

The rule’s most significant changes are payment provisions intended to improve the quality of hospital care that reduce payment for readmissions, and hospital acquired conditions (HACs). The rule also describes how hospitals can comply with the Affordable Care Act’s requirements to disclose charges for their services online or in response to a request, supporting price transparency for patients and the public, according to CMS.

“This proposed rule is geared toward improving hospital performance while creating an environment for improved Medicare beneficiary care and satisfaction,” said CMS Administrator Marilyn Tavenner. Specific proposals include:

·       The maximum reduction in payments under the Hospital Readmissions Reduction program will increase from 2 to 3 percent as required by law. For FY 2015, CMS proposes to assess hospitals’ readmissions penalties using five readmissions measures endorsed by the National Quality Forum.  Already, CMS estimates that hospital readmissions in Medicare declined by a total of 150,000 from January 2012 through December 2013.

·       CMS proposes to implement the Affordable Care Act’s Hospital Acquired Condition (HAC) Reduction Program. Beginning in FY 2015, hospitals scoring in the top quartile for the rate of HACs (such as those with the poorest performance) will have their Medicare inpatient payments reduced by one percent.  CMS will respond to comments on the proposal in a final rule to be issued by Aug. 1, 2014.

More information:

Medicaid Enrollment Grows By 3 Million

Three million additional individuals enrolled in Medicaid or the Children’s Health Insurance Program through the end of February 2014 compared to the enrollment period before the Affordable Care Act Health Insurance Marketplace opened on Oct. 1, 2013, according to former Department of Health and Human Services Secretary Kathleen Sebelius shortly before her April 2014 resignation from the department.  “Enrollment in states that adopted the Medicaid coverage expansion increased five-fold compared to states that are not expanding Medicaid,” she said.

Across the 48 states that provided enrollment data for February 2014, states reported that approximately 62.3 million individuals were enrolled in Medicaid and CHIP.  Among states that adopted the Medicaid expansion and whose expansions were in effect in February 2014, Medicaid and CHIP enrollment rose by 8.3 percent compared to the July-September 2013 period. States that are not expanding Medicaid reported a 1.6 percent increase over the same period.

“Eligibility determinations also continued to grow,” Sebelius said.  “Between October 2013 and February 2014,

11.7 million people were determined eligible for Medicaid and CHIP by state agencies, up from 8.9 million reported last month for the October-January period.”  There is no deadline for states to expand Medicaid coverage. 

“Coverage for newly eligible adult beneficiaries is fully federally paid for under the Affordable Care Act for the first three years, and never less than 90 percent for the years following,” Sebelius said. “Expanding coverage reduces hospitals’ uncompensated care, lowers ’cost shifting’ to businesses that see higher health insurance premiums as some of the costs of caring for the uninsured are passed on to them, and strengthens local economies.”  More Information:

Report: Fewer People Have Problems Paying Medical Bills

  • June 9, 2014
  • Published in Billing

The percentage of people having problems paying their medical bills is declining, according to an April 2014 report from the National Center for Health Statistics, which is part of the U.S. Centers for Disease Control and Prevention. Specifically, the percentage of people under age 65 who were in families having problems paying medical bills decreased from 21.7 percent (57.6 million) in the first six months of 2011 to 19.8 percent in the first six months of 2013. The report defines “family” as an individual or a group of two or more related people living in the same home.

“Almost 5 million fewer people than two and a half years ago are in families having problems paying medical bills,” said report co-author Robin Cohen, a statistician with the U.S. Centers for Disease Control and Prevention, in a HealthDay News article.  According to the report, the percentage of people under age 65 with private coverage who were in families having problems paying medical bills decreased from 15.7 percent in the first six months of 2011 to 14.1 percent in the first six months of 2013. For those with public health insurance, that rate decreased from 28 percent in the first six months of 2011 to 24.7 percent in the first six months of 2013. 

It also states that in the first six months of 2013, among people under age 65, 34.3 percent of those who were uninsured, 24.7 percent of those who had public coverage and 14.1 percent of those who had private coverage were in families having problems paying medical bills in the past 12 months.  More information:

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