Will Healthcare.gov Get A California Makeover?

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When 28-year-old Charis Hill discovered the medication to treat her degenerative arthritis condition had risen to $2,000 a month, she chose to be in pain instead.

“I felt like an invalid,” said Hill, who lives in Sacramento and at the time had only catastrophic health coverage. She said the month without medication made it hard to get out of bed.

Paying for drugs isn’t a problem for Hill now: She has a more robust Covered California health plan, and she gets assistance from a drug company program.

And as of the first of this year, she won’t have to worry about sticker shock if she switches medications. All Covered California plans have a cap on how much patients pay for drugs: $250 a month in silver, gold and platinum plans, and $500 a month in bronze plans.

“I could try a better treatment,” said Hill, a patient advocate, who says she is exploring that because her symptoms are becoming more severe. “The $250 is something I know that I can always fall back on.”

This story is part of a partnership that includes CALmatters and Kaiser Health News. It can be republished for free. (details)

The copay cap on drugs is just one way Covered California chose to shape the health insurance marketplace this year. Experts say the California exchange uses more of its powers as an “active purchaser” than any other state. That means it can decide which insurers can join the exchange, what plans and benefits are available and at what price.

The federal government — in pending proposed rules for 2017 — has signaled it too wants to have more of a hand in crafting plans. Though there are no plans to go as far as a monthly drug copay cap, healthcare.gov would be forging ahead on a path California already paved, swapping variety for simplicity in plan design.

“Not letting [health] plans define what’s right for consumers, but defining it on behalf of consumers … is a better model for the market,” said Peter Lee, executive director of Covered California.

“We want to make sure every consumer has good choice but not infinite choice,” said Lee.

Most other states, including those in the federal exchange, haven’t subscribed to that idea so far. They have a clearinghouse model, in which all health insurers and plan designs are accepted as long they comply with the Affordable Care Act. That can mean the same insurer offers multiple plans with slightly different premiums, deductibles and copays. Even within one metal tier, say silver, the same insurer might offer half a dozen slightly different plans. (Obamacare plans come in four tiers, from bronze, with the most limited benefits, to platinum, with the most.)

Now, the federal government proposes to create standard cost-sharing designs in various metal tiers and make them easily accessible on healthcare.gov. And it’s considering how to improve “value” by being more selective about plans.

A simplified marketplace, the feds say, will make it easier to choose high-quality health insurance.

“Many consumers … find the large variety of cost-sharing structures available on the Exchanges difficult to navigate,” the proposed rules say. “We believe that standardized options will provide these consumers the opportunity to make simpler comparisons.”

The proposal signals a big change.

“Up until now the federal marketplace has really taken a hands-off approach” in shaping the marketplace, said Sabrina Corlette, research professor at Georgetown University’s Center on Health Insurance Reforms.

“The new proposed rule says ‘You know what? We actually are going to become more of an active purchaser.’”

California’s Approach

Covered California holds insurers to a higher bar than what’s required under the Affordable Care Act.

It negotiates premium prices down and requires quality goals to be met. Health plans must participate in health-disparity workgroups, collect information about enrollees’ health status and monitor rates of preventive health services use. In the first two years, California’s exchange rejected multiple health insurance carriers.

Covered California says it’s the only exchange in the country that requires all plans to be standardized (not just some, which the federal government is proposing). All gold tier plans, for instance, have the same costs for lab tests, doctors’ visits and deductibles.

“There was always a suspicion like ‘Oh, is that plan $80 more a month because it covers more?’” said Anthony Wright, of the advocacy group, Health Access. “And it was almost impossible to know. Whereas now people know ‘Okay, these are basically the same plans.’”

Price negotiations with insurers have paid off, according to Covered California. During 2016 plan year negotiations, insurers reduced premiums by 1 percent to 9 percent, said Lee. The exchange says this will result in $200 million in savings for premium payers and taxpayers this year.

This year’s Covered California average premium increases (4 percent overall) are on par with or lower than the increases in other states, according to the private health care consulting firm, Avalere Health.

But national researchers say the downward pressure on premiums may be more indicative of competition than the exchange’s negotiating power.

“It’s unusual to have four big insurers jockeying for market share like we have in many parts of California,” said Larry Levitt, Senior Vice President at the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)

An Industry “Partner”?

Health insurers in California acknowledge there’s more red tape if they sell in the subsidized marketplace there, but surprisingly, they don’t complain.

In fact, a California insurance trade group says it sees the exchange as a “partner,” and active purchasing as valuable for establishing ground rules.

“So far in California, it has worked,” said Charles Bacchi, president and CEO of the California Association of Health Plans.

The rules allowed new plans to get into the individual market and provided “more security in knowing what the playing field was.”

At the same time, Bacchi said, health plans don’t always agree with the exchange’s decisions.

“There is give and take,” he said.

Blue Shield of California, which in 2015 had 25 percent of the exchange’s enrollment, says it’s very happy with its relationship with Covered California.

Applying to sell through Covered California creates “different work” than in other states, said Ken Wood, Senior Vice President of Consumer Markets at Blue Shield of California, adding that he applauds its approach. But the business is worth it, he said. Covered California gives insurers access to more than a million consumers, whose monthly premiums are largely subsidized by government.

And “the standard benefits is an enormous simplification for consumers,” he said.

But one of two health insurance regulators in California, the state Department of Insurance, said Covered California’s strict guidelines may not benefit consumers.

It has created a situation in which the exchange “has fewer carriers than would otherwise be the case,” said Janice Rocco, deputy commissioner of the California Department of Insurance.

More insurers in the marketplace for the first two years would have had an impact on price in the long term, said Rocco.

Closely Watching California

Federal administrators may be trying to adopt active purchasing rules before the new presidential administration takes office, said Corlette, and California’s example may make it more politically feasible.

“There’s no question that the feds are closely watching the California experience,” said Corlette, commenting on Covered California’s ability to keep insurers in the marketplace and hold down premiums.

The federal rules also name other active purchasing exchanges as models however, including New York, Massachusetts and other state-based exchanges.

Health insurers on a national level are opposed to standardized benefits and being more selective about the plans offered.

“It could discourage many from enrolling if they can’t find a policy that works best for them,” said Clare Krusing from America’s Health Insurance Plans.

“There should be an environment that promotes as much competition and choice as possible [in the marketplace],” said Krusing.

Researchers raise other logistical and market concerns. Caroline Pearson, senior vice president of Avalere Health, said the risk of losing insurers under active purchasing is “significant.”

“Right now the federal government needs to focus on increasing enrollment and maintaining plan participation,” said Pearson.

Streamlining benefits like medical service copays could get tricky when spanning across more than 30 states with different economies, said Corlette.

What Consumers Say

Not all of Covered California’s actions have been met with applause. Consumer advocates say they’re still concerned about the high deductible in Covered California’s Bronze plans, an amount the exchange chose to raise for 2016 plans. But at the same time, advocates appreciate that policy decisions aren’t being made in the “back room of an insurance company.”

“Covered California has put itself apart from other states in that it is willing to be aggressive and do what’s right,” said arthritis patient and advocate Charis Hill.

She said she’s glad Covered California reminds insurance companies that they exist to serve patients: “If they’re not doing their job, then somebody’s going to step in.”

Pauline Bartolone is a reporter for CALmatters, a nonprofit, nonpartisan media venture explaining California’s policies and politics.

Narrow Marketplace Plans In Texas Pose Problems For Autistic Children

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AUSTIN, Texas — When Jennifer Nechetsky Maupin’s son was diagnosed with autism in May 2014, she and her husband quickly started looking into early intervention therapies for him.

Their employers’ insurance plans offered limited coverage, so for 2015 the Houston family purchased an individual plan for their son on the marketplace set up by the federal health law. Because Texas mandates that individual plans must cover applied behavioral analysis (ABA) therapy, other parents of autistic children have made a similar choice. But many of those families are facing difficulties finding adequate coverage in 2016.

Jill Albright Briesch says her family has been forced to absorb much of the therapy costs for her two sons, Alexander 5, left, and William, 3. (Courtesy Jill Albright Briesch)

The Maupins chose a preferred provider organization (PPO) plan, which covers some of the cost of doctors and hospitals that don’t have contracts with the insurer. Since they opted for an out-of-network therapist, that meant higher out-of-pocket payments, but the plan’s partial coverage made the intervention therapy affordable, and their son began to make strides.

“He went from a 2-year-old speaking three words, a kid we thought was significantly delayed, to a kid with normal language who is cognitively ahead,” Maupin said of her son.

But 2016 brought some major changes to the individual marketplace and they don’t have the same option this year. Most major insurance carriers in the state have done away with PPO plans and have replaced them with options that provide no coverage for out-of-network care, such as HMOs. Insurers said the move came after heavy losses from large numbers of high-cost enrollees buying individual plans and a shortfall in payments expected from the government.

This KHN story also ran in USA Today. It can be republished for free (details).

The new, narrower networks often mean families are losing access to therapists and providers they have used for their autistic children.

Many Texas providers, from neurologists to behavioral therapists who treat autistic children, are not part of the HMO plans. These insurers often do offer waivers if there are no providers in network within a reasonable distance, but many parents have said the waiver process is complicated and contentious.

Multiple Therapists And Doctors

While every autistic child has different treatment needs, many autistic children rely on multiple providers for occupational therapy, speech therapy and applied behavioral analysis. Providers licensed for that therapy may charge anywhere from $60 to $150 an hour. Because the ABA is evidence-based and has been linked to gains in social function and IQ, autism advocates have successfully lobbied to mandate its coverage through individual insurance plans in the District of Columbia and 43 states, including Texas.

Employer plans generally do not come under the states’ requirements to cover expensive autism therapies, so families often choose to buy individual plans for their children in those states. Insurers say that trend is among the factors driving up their outlays in marketplace business.

“The cost of individuals enrolling on the market far exceeded expectations,” said Clare Krusing, director of communications for America’s Health Insurance Plans, a national trade group. “What compounds the problem is that some co-ops failed as well, so plans had to take on the risk associated with new enrollees.”

Krusing said that another blow to insurance companies was a drastic reduction in expected federal payments as part of the Affordable Care Act’s premium stabilization program. That is supposed to help insurance carriers for several years during the health law transition, in part by transferring funds to individual marketplace insurance plans that are not making money.

“Plans will receive 13 percent of what they were owed,” Krusing said. “Every plan is impacted by that shortfall and has had to reevaluate their participation in the marketplace.”

Alexander 5, left, and William, 3. (Courtesy Jill Albright Briesch)

Alexander 5, left, and William, 3. (Courtesy Jill Albright Briesch)

The problems have been big in Texas. “Texas is particularly problematic for the insurance companies in terms of losses,” Justin Boulet, an insurance broker in Houston who works with families with special-needs children, wrote in an online forum. “The individual insurance market in Texas is suffering traumatic financial loss that is completely unsustainable long term.”

Blue Cross Blue Shield of Texas, one of the carriers that eliminated its PPO marketplace plans, was candid about the decision.

“The reality is, our individual policies just weren’t sustainable,” Dr. Dan McCoy, chief medical officer for the company, said in a video addressed to customers posted online Dec. 4. “We experienced significant financial losses … if we continued to offer the individual PPO, we’d have to raise those rates as well as the rates for all of our individual plans. Our competitors are facing the same dilemma … in fact, no one is offering a broad individual PPO anywhere in Texas anymore.”

Since the release of McCoy’s video, at least one carrier, Humana, did offer a broad individual PPO plan in some Texas counties. But the costs associated with that plan are high — an out-of-pocket maximum of $25,800 for out-of-network providers — which makes it unaffordable for many families.

And all these changes come at a time when more children than ever — 1 in 45 — are being diagnosed with autism.

‘It’s Pretty Drastic’

For Carol Markes, a Dallas-area parent who bought her autistic son an individual PPO marketplace plan in 2015, the changes in the marketplace plans meant suddenly losing access to her son’s general neurologist, the neurologist that deals with his epilepsy and his primary care doctor — all providers who had been in network.

“My husband is an independent corporate contractor and I substitute teach when I’m not at home because of my son’s many issues,” Markes said. “We simply cannot lose all his doctors! This is crazy!”

“It’s pretty drastic,” Lee Spangler, vice president of medical economics for the Texas Medical Association, said of the insurance company changes. “The ACA says a carrier can’t turn someone down for a preexisting condition. But these new narrow networks — that’s the new medical underwriting.”

Many parents say they will find ways to adjust. Markes and her husband opted to buy a small group plan for his business that would cover their son’s providers. That means their insurance costs will increase by 35 percent in 2016, but it also means all of their son’s doctors are in network.

Other parents, like Dallas residents Jill Albright Briesch and her husband, have decided to simply pay out of pocket for certain therapies. For Jill Briesch that also means picking up more work as a CPA to cover the bills for her two sons, Alexander and William, both of whom are on the autism spectrum.

“We’ve absorbed $1,100 a month in in-home ABA,” Briesch said. “Our speech therapist is out of network, and we just pay her.”

Briesch knows that her family is lucky to be able to make that kind of decision; many cannot.

“Texas is a very difficult state to live in if you have a child with autism and you’re not really rich, or really educated,” Briesch said.

She also lamented that the current policies are short-sighted. “Early intervention saves hundreds of thousands of dollars on the back end by improving [autistic] people’s life functionality,” she said. “If you can get even 25 percent of them to function as normal adults, you’re saving money. If they end up needing 24/7 supervision, the state doesn’t even want to know how expensive that will be.”

Some Dialysis Patients Give Medicare Failing Grade On Ambulance Trial

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Charles Prozzillo’s life changed for the worse when Medicare stopped paying for his ambulance rides to dialysis a year ago.

The 72-year-old Pennsylvania man, who had been a hairdresser with his own salon and volunteer firefighter in his younger days, was being treated for late stage of kidney failure. Three times a week for five years he had gone to a dialysis facility to have his blood cleansed of waste, a job his kidneys could no longer do. The sessions gave him crams and tired him, but they kept him alive.

He could still sit up and walk a few steps. He wasn’t bedridden. That’s why Medicare cut off his rides.

This KHN story also ran in The Philadelphia Inquirer. It can be republished for free (details).

In December 2014, Medicare began a pilot program in three states, including Pennsylvania, to cut down on what officials believed were improper payments, including some possible fraud and abuse, in nonemergency ambulance services. The program moved to more aggressively enforce Medicare’s long-standing policy requiring that beneficiaries be so weak they could only be moved on a stretcher before it would pay for repeated, nonemergency ambulance service — the kind that Prozzillo had been getting but technically wasn’t entitled to. And ambulance companies had to get Medicare’s approval in advance so that Medicare could be sure beneficiaries qualified.

The policy covered other patients needing regular medical treatments, too, such as those on chemotherapy.

Prozzillo’s appeals to Medicare failed.

To help her father, Prozzillo’s daughter, Ashely Kearsley, alternated with her 70-year-old mother in driving him to treatment. They couldn’t afford to pay for transportation.

On Sept. 21, while getting out of the car in his driveway, he fell, breaking a hip. Prozzillo was taken to a hospital and then to a nursing home. He died Oct. 14.

Kearsley blames Medicare. While her father didn’t qualify for the stretcher that Medicare pays for, she argues he needed professional assistance for trips.

The cremated ashes of Charles Prozzillo are in an urn on the mantle in the Ft. Washington living room of his daughter Ashely Kearsley (in framed portrait with her now ten year old daughter, Chloe Kearsley) January 28, 2016. When Medicare stopped paying for his ambulance rides to dialysis a year ago, his family took him in their car. One day he fell and broke his hip, and died soon after. His grieving family blames the policy change. (Tom Gralish/Philadelphia Inquirer)

The cremated ashes of Prozzillo are in an urn on the mantle in the Ft. Washington living room of his daughter Ashely Kearsley, pictured in framed portrait with her daughter Chloe. (Tom Gralish/Philadelphia Inquirer)

“There should have been another alternative for him. I understand people have taken advantage of Medicare, my father was not one of them. And now he’s gone,” said Kearsley, who lives in the Philadelphia suburb of Fort Washington near her mother. “He would have lived longer.”

The crackdown by Medicare was conceived to address problems cited by federal watchdogs.

The Department of Health and Human Services’ inspector general in 2006 noted that 27 percent of Medicare-paid ambulance transports to and from dialysis facilities in 2002 did not meet Medicare’s requirements, leading to $48 million in improper payments.

In 2013, the Medicare Payment Advisory Commission said that Medicare paid almost $700 million for ambulance service to and from dialysis facilities in 2011 — 13 percent of all Medicare ambulance spending — and the volume of claims for those transports rose 20 percent between 2007 and 2011.

So the Centers for Medicare & Medicaid Services, the part of HHS that oversees Medicare, announced it would require prior authorization for “repetitive, scheduled, non-emergency” ambulance transport in New Jersey, Pennsylvania and South Carolina. All three states showed evidence of high usage and improper payments. Up to 12 rides could be provided without prior approval, but authorization would be needed every 60 days.

This year, CMS expanded the test to the District of Columbia, Delaware, Maryland, North Carolina, Virginia and West Virginia.

The experiment is set to continue until Dec. 1, 2017, CMS said in a notice published Oct. 23 in the Federal Register.

CMS will continue to test “whether prior authorization helps reduce expenditures while maintaining or improving quality of care,” according to the notice.

At some point, the prior authorization requirement could be expanded nationally. HHS was authorized to do that in legislation passed by Congress in 2015 and signed into law by President Obama in 2015.

The hands of his "girls" touch a photo montage of the life of Charles Prozzillo made by his family for his memorial service. Clockwise, from left are hands of his granddaughter Chloe Kearsley, 10; daughter Ashely Kearsley; and his wife Roseann Prozzillo January 28, 2016. When Medicare stopped paying for his ambulance rides to dialysis a year ago, his family took him in their car. One day he fell and broke his hip, and died soon after. His grieving family blames the policy change. (Tom Gralish/Philadelphia Inquirer)

The hands of his “girls” touch a photo montage of the life of Charles Prozzillo made by his family for his memorial service. (Tom Gralish/Philadelphia Inquirer)

CMS said last month it did not yet have any “conclusive findings” about the impact on beneficiaries. It plans to do an evaluation after the policy ends next year.

The restrictions have aggravated some families and ambulance companies.

In New Jersey, Terry Wasko said she’s been paying $500 a week to cover a private ambulance since December 2014 when Medicare stopped paying for her mother’s transportation to dialysis by stretcher three times a week. She lives two hours away from her mother’s home on the Jersey Shore.

“She’s in an in-between place where she can’t really cross the room because of the arthritis in her hips and knees, and as a result of sitting so much, she has pressure wounds on her behind and backs of legs,” Wasko said.

“What’s a shame is that it’s not the individual patients who were abusing anything, and they’re the ones that are getting punished. But shame on Medicare, because they allowed themselves to be abused by vendors,” she said.

Some ambulance operators say they feel caught between wanting to help sick people and obeying the rules that determine whether Medicare will pay them.

Monet Daniels, with Cardinal Ambulance in Montclair, New Jersey, said her firm has dropped many patients who no longer qualify for Medicare-paid nonemergency transport and has also reduced the fee for stretcher service to some people who pay out of pocket.

“We feel bad because they’ll still call from time to time, but basically there is a gap in the system. We have had patients call crying and say, ‘What am I going to do, just sit here and die?’ ” Daniels said.

Marsha Simon, a medical transportation consultant in Washington, D.C., suggested Medicare start paying for wheelchair vans to dialysis. The government would save money in the end by avoiding costly emergency room visits and subsequent hospitalizations, she said.

In fact, Medicaid, the federal-state health program for low-income people, pays for nonemergency wheelchair transport and it has been picking up some of the costs for those enrollees who qualify for both Medicaid and Medicare. In New Jersey last year, Medicaid paid for 400 more wheelchair van trips a day and 600 more trips a day to dialysis, according to LogistiCare, which manages transportation benefits for Medicaid in the state.

Still, suitable transportation options are few in some places. In the four counties that surround Columbia, South Carolina, the only alternatives to Medicare-paid dialysis transportation is to qualify for Medicaid or pay for the transportation out of pocket. There is scheduled bus service for disabled people, but the bus does not pick up at individual residences.

Twenty ambulance companies have closed in South Carolina since the new Medicare policy went into effect. To Greg Shore, president of Medshore Ambulance Service in Anderson, South Carolina, that’s a sign that the program is weeding out fraud. “I feel more comfortable with this program,” he said, because he knows before picking up patients if Medicare will pay him.

Josh Watts, CEO of MedTrust, an ambulance company in Charleston, South Carolina, said Medicare rejects a third of the prior authorizations that MedTrust submits and pulling together the authorization requests is time-consuming and difficult. The ambulance company has to rely on doctors’ offices to provide information it needs to seek those authorizations and that can take longer than Medicare allows.

“I’ll go out of business before I let someone die because they haven’t been to dialysis for two weeks.”

KHN’s coverage of aging and long-term care issues is supported in part by a grant from The SCAN Foundation.

A Voter’s Guide To The Health Law

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Nearly six years after its enactment, the Affordable Care Act remains a hot-button issue in the presidential race — in both parties.

“Our health care is a horror show,” said GOP candidate Donald Trump at the Republican debate in South Carolina Dec 15. Texas Sen. Ted Cruz, winner of the Iowa caucuses, said at the debate in Des Moines Jan. 28 that the health law has been “a disaster. It is the biggest job-killer in our country.”

Democrats largely support the law, but even they can’t agree on how to fix its problems. Hillary Clinton said at the Jan. 25 town hall on CNN that she wants to “build on the ACA. Get costs down, but improve it, get to 100 percent coverage.”

This KHN story also ran on CNN.com. It can be republished for free (details).

Clinton’s rival for the nomination, Vermont Sen. Bernie Sanders, acknowledged that “the Affordable Care Act has done a lot of good things,” but added that “the United States today is the only major country on earth that doesn’t guarantee health care to all people as a right.” Sanders is pushing a government-run “Medicare for All” plan instead.

In some cases candidates are bending the truth. But in general, both praise and criticisms of the law are accurate. That’s because the health law is so big and sweeping that it has had effects both positive and negative.

Here is a brief guide to some things the health law has — and has not — accomplished since it was signed by President Barack Obama in 2010.

Voting booths at Hermosa Beach City Hall during California Primary

CLAIM: The law has increased the number of people with health insurance coverage.

This is true, no matter what measure you use. The official Census Bureau and polling firm Gallup both found substantial drops in the percentage of people without health insurance after the majority of the law’s coverage expansions took effect in 2014.

COUNTER-CLAIM: There are still millions of Americans who don’t have insurance.

This is also true. Even though approximately 90 percent of Americans now have insurance, that remaining 10 percent amounts to more than 30 million people.

Millions aren’t eligible for coverage under the law because they’re not in the U.S. legally. Another 3 million are in the so-called “Medicaid gap,” meaning they would be eligible for Medicaid under the ACA except their states opted not to accept the expansion after the Supreme Court effectively ruled the expansion optional.

Still others are eligible to purchase coverage on a health insurance exchange but either can’t afford it, don’t think the insurance available offers a good value or don’t know they are legally required to obtain it. An estimated 7.5 million Americans paid a fine to the IRS for failing to get covered in 2014; millions more were exempt from the requirement and didn’t have coverage.

In recognition of the fact that enrollment has been smaller than expected, the Congressional Budget Office recently lowered its projections for those who will buy insurance under the law from 21 million to 13 million in 2016.

CLAIM: The ACA has fixed the dysfunctional individual insurance market.

Prior to the passage of the health law, millions of people who did not have work-based or government coverage were shut out of buying their own insurance because they had been sick or because the coverage offered did not cover the services they needed.

The law aimed to address the problems in the individual market in several ways, including requiring insurers to sell to those with preexisting conditions at the same price as healthier people; standardizing the benefits package; and limiting the size of deductibles. Tax credits were made available in order to help people afford coverage. And the law created insurance exchanges intended to help consumers compare, choose, sign up and pay for health insurance.

How well these changes succeeded in stabilizing the market is not yet clear. What is clear is that more people are now insured through the market.

COUNTER-CLAIM: The ACA has made the individual market worse.

All is not well in the reformed individual market.

Even with help paying premiums, many moderate-income Americans are finding that their deductibles and copayments are so high they cannot afford to use their insurance.

In other cases, individuals can get insurance they can afford to use, but it does not include their regular doctors and hospitals. In fact, plans that do offer coverage outside of the insurer’s network are becoming harder to find and more expensive.

That change affected Cruz, who initially claimed his private insurance had been cancelled. In fact, his insurer had stopped offering his broad-choice plan and automatically transferred him to a narrow-network product.

CLAIM: The ACA has improved the Medicare program.

While most of the law was aimed at those without insurance, lawmakers also took the opportunity to beef up some benefits for the 55 million Americans in the Medicare program.

Medicare enrollees got new coverage for preventive services and annual checkups, and those with high prescription drug expenses got help to fill the “doughnut hole” gap left by the 2003 Medicare drug program.

Over the longer term, the law created several payment experiments intended to improve the quality of care Medicare patients receive and lower costs. These include efforts to prevent patients from going back to the hospital after they’ve been discharged.

COUNTER-CLAIM: The ACA has not saved money for Medicare.

The rate of increase in Medicare spending has slowed since the health law was passed in 2010. But it’s not clear how much of that can be attributed to the law, aside from some provisions that actually cut payments to hospitals and other health providers.

And some of the most highly anticipated projects, including “accountable care organizations” that are paid bonuses for keeping Medicare patients healthy and lowering spending, have not so far shown very good results.

CLAIM: The ACA has killed jobs.

One of Republicans’ favorite talking points — that the health law would depress employment, particularly part-time employment — has turned out not to be the case.

An analysis in 2015 by the Urban Institute found that the health law “had virtually no adverse effect on labor force participation; employment; the probability of part-time work; and hours worked per week by nonelderly adults.”

While there would be fewer people in the workforce due to the law, the Congressional Budget Office found in 2014 that “almost entirely” stems from voluntary actions by workers who could quit because they no longer depended on their jobs for insurance — now they could buy it on their own.

CLAIM: The ACA has slowed overall health spending.

The White House trumpeted the fact that health spending grew at its slowest rates ever between 2010 and 2013. But health policy analysts are still engaged in a lively debate about how much of the slowdown was attributable to the recession, to the health law and to other changes in the health care system.

Meanwhile, the rate of spending has begun to accelerate again, jumping from a 2.9 percent increase in 2013 to 5.3 percent in 2014. That has occurred as millions more Americans gained access to health care through the law.

Study: 29 Percent Of Colonoscopy Patients May Have Unneeded Pre-Screening Visits

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Nearly a third of patients who get colonoscopies to screen for cancer visit a gastroenterologist before having the procedure, at an average cost of $124, even though such visits may be unnecessary, a new study found.

Primary care doctors are generally in a good position to alert their patients that they should be screened, discuss the risks and benefits of the procedure with them and order the test, said Dr. Kevin Riggs, an internist at Johns Hopkins University School of Medicine who co-authored the study, which appeared this week in the Journal of the American Medical Association. Such “open access” programs, which allow providers and sometimes patients to schedule the screening test without first sitting down with a gastroenterologist for a consultation, are becoming routine.

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The gastroenterologist’s office can then contact the patient to discuss how to take the bowel preparation mix to clean out the colon before the test. The patient can simply show up for the colonoscopy on the scheduled day, without taking more time off work and saving the cost of a specialist office visit.

“These are things that streamline the care processes and lead to a better patient experience,” Riggs said. “We should be thinking about ways to make the process more efficient.”

Colorectal cancer screening is recommended by the U.S. Preventive Services Task Force for most people beginning at age 50. Under the health law, insurers are required to cover preventive services without charging consumers. But although the federal government has clarified that insurers can’t charge people for anesthesia received during a colonoscopy, the rules don’t state how insurers should handle other services, including office visits and facility fees.

colonoscopy 570The study analyzed the claims data of 843,000 patients between the ages of 50 and 64 between 2010 and 2013 who had a screening colonoscopy. They all had employer-sponsored coverage.

Twenty-nine percent of patients visited a gastroenterologist in the six weeks prior to a screening colonoscopy, the study found. It wasn’t possible to determine the precise reason for the office visits, and some may have been clinically necessary, said Riggs.

The average office visit payment was $124, including both patient and insurer portions. Across all patients, the office visits added an average $36 to the total cost of a colonoscopy.

“It’s nickels and dimes, but when you add it up over 7 million colonoscopies annually, it’s a pretty significant cost,” said Riggs.

Please contact Kaiser Health News to send comments or ideas for future topics for the Insuring Your Health column.

2016 Obamacare Enrollment Tops Expectations At 12.7 Million

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About 12.7 million Americans enrolled in private health insurance through the federal and state marketplaces for 2016, the Obama administration said Thursday.

Sign-ups in the third enrollment period for the Affordable Care Act’s online marketplaces — and the last that will be completed while President Barack Obama is in office — easily topped last year’s amount and also beat the administration’s forecast.

The 2016 enrollment period began Nov. 15 and ended Jan. 31. Except for limited exceptions such as job losses, Americans will have to wait until mid-November to enroll again.

The annual Obamacare enrollment numbers routinely draw debate. Supporters boast that millions of people have gained coverage. Republican detractors stress millions remain uninsured because they can’t afford coverage and that not enough healthy young adults are enrolling. The latter issue threatens to make coverage uneconomical for insurers, causing them to lose money and raise prices or drop out of the exchanges.

Of the 12.7 million consumers enrolling in marketplace coverage, more than 9.6 million came through the federal healthcare.gov exchange that handles 37 states. The rest, 3.1 million, selected a plan through the 13 state-based marketplaces.

About 4 million new enrollees on healthcare.gov this year enrolled in the coverage for the first time, according to the Department of Health and Human Services.

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At the end of last year’s enrollment period, 11.7 million people had chosen plans, but that figure dropped to 9.3 million by September because not everyone paid premiums and some found coverage elsewhere, such as through employers.

In October, the White House estimated that 10.1 million Americans would have health care coverage through the exchange at the end of 2016, a figure that counts people who paid and were covered at end of the entire year.

Cutting Edge DNA Technology Could Boost Cystic Fibrosis Screening For Newborns

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Stanford University scientists say they’ve devised a more accurate and comprehensive DNA test to screen newborns for cystic fibrosis, the most common fatal genetic disease in the United States.

Affecting about one in 3,900 babies born in the U.S., cystic fibrosis causes mucus to build up in the lungs, pancreas and other organs, leading to frequent lung infections and often requiring lifetime treatment for patients, whose median lifespan is 37 years.

Every state screens newborns for cystic fibrosis, but the current sequence of tests can miss cases, threatening babies’ lives.

The new DNA test to screen newborns for cystic fibrosis uses blood taken during the common newborn heel stick. (Maile and Justin McCarthy/Flickr)

The new method, presented in a study published Monday in The Journal of Molecular Diagnostics, promises to be more efficient and cost-effective, researchers said. It may also improve screening for non-white babies, for whom cystic fibrosis is rarer and harder to diagnose.

“I think this is a major advance. It offers the promise of potentially eliminating the false negative results that lead to missed cases,” said Dr. Philip Farrell, a former dean of the University of Wisconsin School of Medicine and Public Health, and a nationally-known expert on cystic fibrosis screening for newborns. “If you miss a case, you’ve got a baby out there who has a significant possibility of dying undiagnosed.”

Cystic fibrosis is caused by a defect in the CFTR gene, which regulates the movement of water and salt out of the body’s cells. In California, current genetic screens look for 40 of the most common mutations of the CFTR gene in newborns. Yet any of the more than 2,000 known mutations in that gene could play a role in the disease, and there are likely others that have not yet been discovered.

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The new test uses “next generation” DNA sequencing that can quickly and more cheaply look at the entire CFTR gene, not just selected mutations. It does not require an extra blood sample. Rather, it uses the tiny amount of blood drawn from the common newborn heel stick test that’s already used to screen for a number of diseases, including cystic fibrosis.

The researchers say this advance can enable testing labs to review many newborn samples at a time and reduce costs, allowing a technology previously used only to diagnose individual cases to be applied to a large population.

“Next generation” DNA sequencing has been used in recent years to diagnose disease, but is only now becoming cheap and fast enough to even be considered for large-scale population screening. About 500,000 newborns are screened in California each year.

Scientists from Stanford, the California Department of Public Health, and the University of Texas conducted the research. Other U.S. scientists have been working on similar newborn screening approaches using next-generation DNA sequencing.

The test is not only quicker and cheaper, but also “very accurate,” said Dr. Iris Schrijver, a Stanford University Medical School pathology professor who is one of the study’s authors. “We can look at the entire gene and assess … all kinds of mutations in this single test,” possibly in half the time of a current DNA test, Schrijver said.

California started screening newborns for cystic fibrosis in 2007. The screening involves several analyses, the first of which is a simple enzyme test that looks for elevated levels of a pancreatic substance associated with cystic fibrosis.

If the finding is positive, the next step is the current DNA screening test. Babies testing positive on that receive additional diagnostic tests to confirm the disease.

Not all infants with genetic mutations for cystic fibrosis will develop the disease. For that to happen, they need to inherit two copies of the defective gene, one from each parent. Babies with only one copy of the bad gene will not develop the disease, but they are carriers who could pass it to their own children.

About 30,000 children and adults in the US have cystic fibrosis, and about 10 million are carriers.

A spokesman for the California Department of Public Health, which oversees newborn screenings, said the current cost, including DNA testing, is approximately $113 per newborn, which is typically covered by insurers.

The department declined to make one of its scientists, a co-author of the study, available for an interview. It also declined to respond directly to questions about the cost of these new tests or whether it might adopt them.

In general, the spokesman noted, the agency’s newborn screening program evaluates potential new testing methods for effectiveness and cost.

“Historically, changes to existing testing methods have been rare, so the department cannot speculate on a timeline for this process,” the spokesman wrote in an email.

However, a Stanford spokeswoman said its laboratory is currently running side-by-side comparisons of the new test and the current one, and its lab physicians expect to meet with public state health officials within the year to discuss next steps.

Licking Wounds, Insurers Accelerate Moves To Limit Health-Law Enrollment

Stung by losses under the federal health law, major insurers are seeking to sharply limit how policies are sold to individuals in ways that consumer advocates say seem to illegally discriminate against the sickest and could hold down future enrollment.

In recent days Anthem, Aetna and Cigna, all among the top five health insurers, told brokers they will stop paying them sales commissions to sign up most customers who qualify for new coverage outside the normal enrollment period, according to the companies and broker documents.

The health law allows people who lose other coverage, families with new children and others in certain circumstances to buy insurance after enrollment season ends. In most states the deadline for 2016 coverage was Jan. 31.

Last year, these “special enrollment” clients were much more expensive than expected because lax enforcement allowed many who didn’t qualify to sign up, insurers said. Nearly a million special-enrollment customers selected plans in the first half of 2015, half of them after losing previous coverage.

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In addition, Cigna and Humana, another big health insurer, have ceased paying brokers to sell many higher-benefit “gold” marketplace plans for individuals and families while continuing to pay commissions on more-profitable, lower-benefit “bronze” plans, according to documents and interviews.

Gold plans typically enroll sicker members than do less comprehensive policies, say insurance experts. As of June, more than 695,000 people had enrolled in gold plans.

Those who want to buy individual and family plans can still do so directly through the Affordable Care Act’s online marketplaces or via navigators working for nonprofit groups.

But the retreat from broker sales, which includes last year’s decision by No. 1 carrier UnitedHealthcare to suspend almost any commissions for such business, erodes a pillar of the health law: that insurers must sell to all customers no matter how sick, consumer advocates say.

By inducing brokers to avoid high-cost members — whether in gold plans or special enrollment — the moves limit access to coverage and discriminate against those with greater medical needs, said Timothy Jost, a law professor at Washington and Lee University and an authority on the health law.

“The only explanation I can see for them doing this is risk avoidance — and that is discriminatory marketing and not permitted,” he said. “When people wonder why we’re not getting millions more enrollees in Affordable Care Act health plans, one reason is, the carriers are discouraging it.”

The insurance industry says it is not discriminating but adjusting to market realities including higher-than-expected medical claims and the failure of a government risk-adjustment program called “risk corridors” to cover much of that cost.

“Without making necessary changes to coverage and benefits, there was no way for health plans to remain in the market or to offer the kind of coverage as they had in the past without sustaining huge losses,” said Clare Krusing, spokeswoman for America’s Health Insurance Plans, an industry lobby.

The adjustments are critical to keeping coverage affordable and sustainable, said individual insurers contacted by a reporter.

If insurers are telling brokers they won’t be paid for enrolling people in gold plans, “that to me is pretty discriminatory,” said Sabrina Corlette, research professor at Georgetown University’s Center on Health Insurance Reforms.

The changes don’t affect job-based insurance or the government’s Medicaid and Medicare programs.

The nonpartisan Congressional Budget Office estimated as recently as last March that 21 million consumers would be enrolled by now in private health insurance plans sold through online marketplaces. Now CBO forecasts 13 million will sign up this year.

Brokers are critical to sign-ups and the success of the health law. For 2014, 44 percent of Kentucky enrollees bought through brokers. So did 39 percent of the California enrollees. No similar figures are available for the marketplace that serves most states, healthcare.gov.

Brokers are a “very important” part of enrollment for individuals and families despite alternatives provided by the health law, said Robert Laszewski, an insurance consultant. “They’re still big.”

With varying commissions, brokers will be tempted to promote only plans they make money on, even if those aren’t the best for some customers, said John Jaggi, an Illinois broker and consultant.

“Now they’re really forcing the agent to think only of the plan that he gets compensated for,” he said.

The race to lower commissions began last year with United’s move along with decisions by several, smaller insurance co-ops to suspend sales fees shortly before they failed, brokers said. Other insurers feared they might end up getting their competitors’ unprofitable business, so they too adjusted fees.

Last week, BlueCross BlueShield of North Carolina also told brokers it would stop paying commissions for special enrollment starting April 1, reported The News and Observer of Raleigh.

“We expect that at some point in time all of these companies will continue to reduce commissions where we’re not able to be compensated in a way that we can continue to run our businesses,” said Kelly Fristoe, who sells health insurance in Wichita Falls, Texas.

Regulators in at least two states, Kentucky and Colorado, have already warned insurers that altering broker commissions violates “fair marketing” rules or the terms approved rate filings.

Federal regulations prohibit insurers from marketing practices that “have the effect of discouraging the enrollment of individuals with significant health needs.” Violations can bring penalties of up to $100 a day for each adversely affected person.

The Department of Health and Human Services did not respond to requests for comment on the practices.

Insurers “can’t market their plans in ways that discriminate,” said Sarah Lueck, a policy analyst at the Center on Budget and Policy Priorities, a left-leaning think tank. “It’s going to take some more statements from regulators to make sure insurers get the message.”

What’s unclear is whether insurers intend to resume paying full commissions when open enrollment begins for 2017.

In its Monday letter to brokers, Anthem said it “remains committed” to individual and family insurance. United, however, said last year it might leave that business altogether — a drastic move because under federal law it couldn’t reenter for five years.

Few if any carriers want to go that far, said Laszewski.

“They can’t withdraw from the market,” he said. But by adjusting commissions, “they’re doing everything they can to slow it down until it gets fixed.”

Special-enrollment business is typically costlier than average because sick people are more motivated to sign up outside the normal marketing season, insurance experts say.

But last year’s special enrollments were especially unprofitable because regulators did little to ensure that consumers followed the rules — that they had lost previous coverage, gotten married, moved or otherwise qualified for off-season sign-ups, insurers say. As a result, any consumer could wait until he or she needed care to enroll, they say.

Aetna told HHS that a fourth of all its marketplace members joined through special enrollment last year and that many dropped out soon after receiving expensive care. Special-enrollment members used as much as 50 percent more care than those who sign up before the deadline, said the Blue Cross and Blue Shield Association.

Of the top seven health insurers, only Kaiser Permanente and Health Care Service Corp., which owns Blues plans in Illinois, Texas and elsewhere, haven’t changed commissions recently for gold plans or special enrollment, brokers say.

“Kaiser Permanente won’t be making any broker commission changes,” said spokeswoman Amy Packard Ferro. “It’s business as normal but we are always evaluating our commission structure,” said HCSC spokesman Greg Thompson.

The risk corridor program was supposed to reimburse insurers with sicker-than-average members. In November, however, HHS said it had only enough money to pay 13 percent of what it owed under the program for 2014.

The result for gold plans is that “the risk adjustment system does not work at all,” said Ana Gupte, a health insurance analyst at Leerink Partners. “So it’s impossible to make money.”

Analysis by Standard and Poor’s shows Humana, which is owed $243 million for 2014, as the biggest risk-corridor loser. United, Anthem, Aetna and Cigna, however, aren’t in the top 20.

For most of the largest insurers, blaming risk corridors for cutting broker fees “seems more like an excuse than a reason,” said Jost.

KHN Senior Correspondent Julie Appleby contributed to this story.

Head Of California Exchange Scolds UnitedHealth For Blaming Woes On Obamacare

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Amid growing questions over the future of insurance exchanges, the head of California’s marketplace said the nation’s largest health insurer should take responsibility for nearly $1 billion in losses and stop blaming the federal health law.

In a blistering critique, Covered California’s executive director, Peter Lee, said UnitedHealth Group Inc. made a series of blunders on rates and networks that led to a $475 million loss last year on individual policies across the country. The company estimates a similar exchange-related loss of $500 million for this year.

“Instead of saying we screwed up, they said Obamacare is the problem and we may not play any more,” Lee said in an interview with California Healthline. “It was giving an excuse to Wall Street and throwing the Affordable Care Act under the bus.”

Lee, a staunch defender of the health law and a former official in the Obama administration, has tangled with UnitedHealth in the past. He knocked the company for sitting out the launch of Obamacare in 2014, then welcomed UnitedHealth into Covered California for 2016.

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But now, he said, the company is “driving me bonkers” because it has “fed this political frenzy that Obamacare doesn’t work. It’s total spin and unanchored in reality.”

A company spokesman declined to comment on Lee’s criticism, and referred to UnitedHealth’s previous statements on the exchange business.

During a Nov. 19 conference call with analysts, UnitedHealth’s CEO Stephen Hemsley said: “We can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself … I think that basically is an industry-wide proposition.”

An Urban Institute report issued last week, however, found that some of UnitedHealth’s troubles may have been self-inflicted. The company’s premiums were substantially higher than its competitors in many of the largest U.S. markets. The insurer also offered broader provider networks that tend to attract sicker customers who incur big medical bills.

In November, UnitedHealth surprised analysts and health-policy experts with its steep losses and said it might leave the exchanges altogether, just after expanding into new states. The sudden reversal prompted questions about the sustainability of the government-run marketplaces, the linchpin of President Obama’s signature law.

UnitedHealth reiterated its dour outlook for the exchange market when it announced quarterly results Jan. 19. The company said it has seen an influx of sicker patients during special enrollment, fewer healthy people signing up and costs rising as a result.

UnitedHealth ended last year with about 500,000 customers in the public exchanges, and it expects membership to grow to about 800,000 during the recent open enrollment. It has said it will decide by mid-year whether to continue selling in Obamacare marketplaces.

Other major insurers have expressed similar concerns about doing business in the public exchanges, albeit with less red ink than UnitedHealth.

Anthem Inc., the nation’s second-largest health insurer, said last week that its exchange enrollment in California and 13 other states was running about 30 percent below expectations, but the business was still slightly profitable. Anthem ended last year with 791,000 exchange members.

Monday, insurance giant Aetna Inc. said it lost up to $140 million, or a negative margin of 3 to 4 percent, on individual coverage last year. It has 1 million members with individual policies, about 75 percent of them on public exchanges. It said it expects to break even this year, however.

“Our individual commercial business ended the year with improved results,” Aetna’s chief executive, Mark Bertolini, said Monday during an earnings conference call. “Despite our improved finish, this business remained unprofitable in 2015 and we continue to have serious concerns about the sustainability of the public exchanges.”

Ana Gupte, a healthcare analyst at Leerink Partners, said UnitedHealth and other insurers have valid complaints about the exchange market. But she acknowledged that UnitedHealth’s decision to sit out the exchanges during the first year in 2014 may have hurt the company, too.

“United was newer to the marketplaces than other companies, and the other guys incorporated lessons learned,” she said. “But there are broader issues. There are some changes needed from a policy perspective so all of these players can remain in the market for 2017.”

Gupte cited the need for federal officials to tighten the rules for special enrollment and revisit a risk adjustment program that compensates insurers for taking on costlier patients.

In response to industry criticism, the Obama administration is taking steps to prevent the misuse of special enrollment so people can’t wait to sign up until they need care. Special enrollment is designed for people who lose coverage or need to make a change because of an event in their life, such as moving, getting married or having a child.

Insurance markets can’t function properly without enough healthy customers paying premiums, which are used to cover expenses incurred by sicker policyholders. The three-month open enrollment period for the federal and state exchanges just ended Jan. 31. California extended its deadline to Feb. 6 for people who already had begun the sign-up process by Sunday.

John Holahan, a health-policy researcher at the Urban Institute, said the Obama administration does need to impose stricter rules for special enrollment. He also said concerns over affordability have hampered enrollment since some middle-class consumers and young, healthy people are put off by high premiums and large deductibles.

“But I haven’t seen anything that shows the exchanges are really in trouble,” Holahan said. “That doesn’t mean every insurer is going to make it. Some companies don’t make it, and that isn’t a sign markets are unsustainable.”

The U.S. Department of Health and Human Services expects about 10 million people to be enrolled in federal and state exchanges at the end of 2016. That’s far below previous government forecasts.

UnitedHealth sat out Covered California for the first two years before joining in several rural areas. Lee said both sides will be analyzing whether the company returns for 2017. As an active purchaser, Covered California can decide whether or not to contract with certain health plans and allow them on the state exchange.

“United will be looking at what their prospects are in California,” Lee said. “We will be looking at United as a plan to see if they offer good value for Californians. It’s to be determined on both ends.”

This story was produced by Kaiser Health News, which publishes California Healthline, a service of the California Health Care Foundation.

Buying Supplemental Insurance Can Be Hard For Younger Medicare Beneficiaries

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Danny Thompson’s kidneys have failed and he needs a transplant but in some ways, he’s lucky: Both of his sons want to give him one of theirs, and his Medicare coverage will take care of most of his expenses.

Yet the 53-year-old Californian is facing another daunting obstacle: He doesn’t have the money for his share of the medical bills and follow-up drugs, and he can’t buy supplemental insurance to help cover his costs.

“It’s frustrating to be in the shape I’m in,” said Thompson, who depends on dialysis instead of his kidneys to cleanse his blood. “My plan is to get a transplant so I can go back to work.”

Almost one in four Medicare beneficiaries has such a policy, known as Medigap, which is sold by private insurance companies. It can help pay for costs Medicare doesn’t cover, including the 20 percent coinsurance required for medical expenses, including certain drugs, plus deductibles and co-payments. Those expenses have no out-of-pocket limit for beneficiaries.

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Federal law requires companies to sell Medigap plans to any Medicare beneficiary aged 65 or older within six months of signing up for Part B, which covers doctor visits and other outpatient services. If they sign up during this guaranteed open enrollment, they cannot be charged higher premiums due to their medical conditions.

But Congress left it to states to determine whether Medigap plans are sold to the more than 9 million people younger than 65 years old who qualify for Medicare because of a disability.

In 20 states and the District of Columbia, home to more than 2 million disabled Medicare beneficiaries, insurers are not required to sell Medigap policies to customers under 65. In other states, insurers cannot reject applicants if they enroll when they first join Medicare. Companies in some states, including Virginia, can still charge higher premiums to younger beneficiaries or those with kidney disease, often making policies unaffordable.

In California, Massachusetts and Vermont. insurers are required to sell Medigap policies to anyone with Medicare, except to people like Thompson who are under 65 and have end stage renal disease.

“If it was the reverse — if you were discriminating against somebody because they were 65 or older as opposed to younger — people would be outraged,” said Bonnie Burns, policy specialist for the consumer group California Health Advocates and a member of the National Association of Insurance Commissioners’ Medigap committee.

The federal health law provides no relief for these younger Medicare beneficiaries. One of its most popular provisions prohibits discrimination by insurance companies in the non-Medicare market based on pre-existing conditions or age, but the law is silent on Medigap.

Thompson, who lives in Menlo Park, near San Francisco, said 12 Medigap insurers have turned him down. Buying a health plan through Covered California, the state’s health insurance exchange, is not an option since he has primary insurance through Medicare. “That is for people who don’t have insurance, and I have insurance,” he said. “But it is as if I don’t.”

The transplant costs are substantial, and Thompson said he does not have the resources to cover his share. Kidney transplant patients can expect the preparation, surgery, tests and treatment for the first year to run more than $262,000, according to the American Kidney Fund. The immunosuppressant drugs, which patients will need for the rest of lives to ensure their body does not reject the new kidney, cost another $2,000 to $4,000 a month.

No Hospital Mandate

Hospitals and doctors are not required to provide care for Medicare patients unless it’s a medical emergency, a Medicare official said.

Joe Baker, president of the Medicare Rights Center, said that they can turn away Medicare patients for any number of reasons, including inability to pay their share of the bills or because providers are not taking new patients.

“Medicare beneficiaries under 65 with end stage renal disease get an organ transplant if they agree to pay their share of the costs Medicare doesn’t cover,” said Lisa Kim, a spokeswoman for Stanford Hospital, where Thompson has sought treatment.

To help Thompson find financial assistance, a Stanford social worker referred him to Christina Dimas-Kahn, who heads the San Mateo County office of the California Department of Aging’s Health Insurance Counseling and Advocacy Program (HICAP). She said he is one of several clients with end stage renal disease that HICAP counselors have tried to help in the past few years, “But people with the disease don’t have whole lot of options if they are under 65,” she said.

Danny Thompson, 53, needs a kidney transplant and both of his sons want to give him one of theirs (Heidi de Marco/KHN).

Thompson needs a kidney transplant and both of his sons want to give him one of theirs. (Heidi de Marco/KHN)

Thompson recently learned that he could qualify for Medi-Cal, California’s Medicaid program for low-income people, which Dimas-Kahn said would cover his transplant expenses. But Thompson said that coverage would kick in only after he paid a $2,500 deductible every month, which he cannot afford.

If Thompson divorced his wife of 30 years, her income wouldn’t be counted along with his Social Security disability benefits and it’s possible he wouldn’t have to pay the deductible. That’s not a good alternative, he said. “We made vows — rich or poor, in sickness or in health — you stay married.”

‘Crazy Patchwork’ Of Regulations

Another solution could be moving to another state, such as Delaware. That’s where Heather Block, a politically savvy project manager for federal and international organizations, took on her state legislature after she was diagnosed with advanced breast cancer.

“I considered myself lucky when I became eligible for Medicare but that 20 percent co-pay with no out-of-pocket maximum is exorbitant for anyone let alone someone with a serious illness,” she said.

Block could get Medicare before turning 65 because she qualified for disability benefits, but she couldn’t get Medigap coverage. Two years ago, she spearheaded a successful campaign to change state law, forcing insurers to sell Medigap policies to anyone when they first enroll in Medicare regardless of age, without basing rates on their health conditions.

“It is insane that we have to go through this crazy patchwork of state regulations,” said Block, whose monthly charges for cancer drugs alone range as high as $9,800. Without Medigap, medical bills would eventually deplete her savings.

Prospects for a nationwide solution are dim because expanding Medigap coverage could lead to these beneficiaries with disabilities receiving more care and raising costs for the Medicare program. Congress is looking for strategies to curb Medicare spending, not increase it, Burns said.

The health insurance industry’s trade association opposes expanding Medigap to include all Medicare beneficiaries younger than 65 with end stage renal kidney disease. Since treatment for those patients can be so expensive, adding them could increase Medigap premiums for everyone, said Cindy Goff, a vice president at America’s Health Insurance Plans. She pointed to Medicare statistics that show when the program covers patients over 65 with end-stage renal disease, their care averages nearly nine times more than other Medicare beneficiaries.

Older adults are “super price-sensitive” and raising premiums “would basically price them out of being able to get the Medigap protection they want,” said Goff.

“The insurance company knows that these patients coming through the door are going to use services,” said LaVarne Burton, president of the American Kidney Fund. “In most instances, if they don’t get treatment, they will die.”