The percent of premium dollars allocated to administrative costs and profit dropped in all markets since the introduction of the 80/20 rule. (Click to enlarge image.)
A new report on how health insurers are complying with the medical loss ratio rules shows insurers spent more on care delivery and less on profit and overhead in 2013 than they did in the previous two years.
The report, “Consumers Benefited From 80/20 Rule in 2013,” from the federal Department of Health and Human Services (HHS) shows that the percentage of consumers insured by companies that met or exceeded the requirements under the MLR rules has risen each year since the rules became effective in 2011. Tables accompanying the report offer some great story ideas for journalists who want to dig deeper into why insurers in their states would pay rebates to consumers rather than put those funds into care delivery.
Also called the 80/20 rules, the MLR regulations in the Affordable Care Act require insurers to spend a minimum of 80 percent of premium income on delivering care (and not on profit and overhead) in the small group and individual markets and at least 85 percent of premium income on care delivery in the large group market.
Under the MLR rules, if insurers fail to spend at least at these levels, they have to rebate the difference to consumers. Those rebates are due by Aug. 1.
“In the first three years of the MLR program, individual and employer plan enrollees received or will receive over $1.9 billion in refunds,” the HHS report said. Continue reading
Even for those of us who cover the Affordable Care Act (ACA) more or less full time, July 22 was a pretty zany day. Here’s a recap and some resources to help you going forward.
First an appeals court in Washington, D.C., ruled, 2-1 that people can’t continue to get subsidies in the federal exchanges – just on the state exchanges. Only it didn’t move to enforce that ruling – which would cut off millions receiving subsidies – because the three judges on that panel knew they didn’t necessarily have the last word. There are more legal fights to come in the case, known as Halbig v. Burwell. (It was v. Sebelius but the name was updated.)
Then, less than three hours later, another appeals court – also a panel of three judges – in Richmond, Va., issued the exact opposite ruling. They said, 3-0, that the subsidies in the federal exchange were fine. Well, maybe not fine – they thought the law was ambiguous. But even with the ambiguity, they said that the IRS had the right to interpret the law to allow the subsidies in the federal exchange. That case is known as King v. Burwell. (The IRS set the rules for the subsidies, which take the form of premium tax credits.)
The question in very simple terms is this: Did the ACA allow the subsidies through the federal exchanges? The plaintiffs argue no – and cite a specific section of the law that refers to subsidies for people enrolled “through an Exchange established by the State.” They say it’s clear as day – the subsidies are tied to state exchanges. The administration and its supporters say that’s far too narrow and literal an interpretation. The whole law is designed to expand coverage and the federal exchanges are meant to stand in when the states don’t stand up exchanges.
Now what? Continue reading
Carla K. Johnson
When Illinois awarded a $33 million contract to a high-priced PR firm to promote insurance coverage under the Affordable Care Act, Carla Johnson began filing open records requests under the state’s Freedom of Information law.
Eventually Johnson, a medical writer for The Associated Press, filed 10 FOIA requests while reporting on how public money was spent to promote the health law.
She says the “88-page contract, obtained through a records request, contained clues about other existing documents, such as monthly detailed explanations of invoices and a ‘work plan’ required by the contract.” She continued filing requests until she had enough documentation to detect some trends.
Read more about how Johnson reported the story, what she learned and tips for other reporters.
We posted some data tools from the Robert Wood Johnson Foundation for the health reform beat and AHCJ’s New York chapter recently got to hear about them in more detail with some help from RWJF. If you’ve done stories using this data, we’d love to see them and learn about how you used the data. Send them to firstname.lastname@example.org.
Charles Ornstein Storyfied the meeting and we have this guide for you from RWJF. Continue reading
When the Affordable Care Act passed in 2010, Tammy Worth, an award-winning freelance health and business writer in Kansas City, Mo., was interested in how undocumented immigrants would fare under the new law.
She recognized that undocumented immigrants were ineligible for both of the main provisions of the law meant to extend coverage to 32 million Americans: the Medicaid expansion and the state insurance exchanges.
To fund her work, she applied in 2011 to the Association of Health Care Journalists for an AHCJ Reporting Fellowship on Health Performance, supported by the Commonwealth Fund. At the time, the fellowship program was in its second year of supporting journalists in their work reporting on the performance of local health care systems and the U.S. health system as a whole. In December 2011, she was named one of three fellows for 2012. (Note: Applications for the 2015 program are being accepted until Oct. 1.)
In 2012 and 2013, she focused her reporting on three areas: the economics of immigration, the effect of the law on providers and the health care community, and immigrant health stories.
The result was a three-part reporting project that was produced earlier this year for the Hale Center for Journalism at KCPT, a Kansas City public television station. Read more about how she did the reporting and her advice for other journalists.
Kentucky, a southern state implementing the ACA, has gotten a fair amount of media attention and we’ve highlighted some of the coverage.
But, in impoverished rural areas that stood to gain the most from the greater access to care that the ACA promised, many residents remained fiercely opposed to the law and the president who pushed it.
Against this backdrop, a team from USA Today and The (Louisville, Ky.) Courier-Journal decided to launch an in-depth examination of how the law is beginning to play out in Appalachian Kentucky.
In an article for AHCJ, Courier-Journal medical writer Laura Ungar writes about how the team tackled the issue, combining local and national perspective and expertise. Read more.
Given the recent discussion on the AHCJ discussion list and elsewhere about the right balance between covering the politics of the Affordable Care Act versus the policy of the ACA, I thought it would be a great time to showcase a reporter who does both.
David Ramsey of the Arkansas Times has been all over the story of Arkansas’ “private option” Medicaid expansion. That’s definitely been a political story – Arkansas legislators have slugged it out for two sessions and it’s going to happen again next year, with the fate of Medicaid expansion always on the line. But Ramsey (@arkdavey) recently did a long and readable piece on the faces of Arkansas health care expansion. He matched the politics, the policy and the people. And he did more than present their faces. He captured their voices. Continue reading
Photo by Truthout.org via flickr.
Insurers are preparing to announce their premium rates for 2015. To learn how insurers set rates, Families USA and Consumers Union (the policy and advocacy arm of Consumer Reports) will host a national conference call on Thursday at noon ET for health care journalists.
Premium rates will be one of the biggest stories of the year because so much depends on whether they will rise by double digits or stay at about 10 percent, as they have in recent years. If rates rise much above double digits, Republicans in congressional midterm races are likely to use that information against Democrats who support the Affordable Care Act. If rates are at 10 percent or below, Democrats may be able to fend off such criticism.
Last week, Kelly Kennedy reported in USA Today that health insurance premiums grew an average of 10 percent annually in the three years before the ACA was enacted. She cited a report (PDF) from The Commonwealth Fund, “Growth and Variability in Health Plan Premiums in the Individual Insurance Market Before the Affordable Care Act” that explained the recent history of insurance rate increases. Continue reading
So health spending is going up. Big time.
But health costs are still growing at historically slow rates.
And the Affordable Care Act gets credit for both – and neither.
Spending and costs aren’t the same thing. Health care costs, including Medicare, have been rising very slowly for several years, way lower than the historical trends. (Although individually we may be paying more, especially if we get insurance at work and our employers are shifting costs to us through higher premiums deductibles and co-pays)
Health spending is what we’re utilizing. Maybe an MRI has only gone from $500 to $505. But if we’re buying 10 MRIs when last year we only bought eight, spending is increasing. Continue reading
Daniel Chang wrote a piece for The Miami Herald on some of the hidden hospital fees that can take patients by surprise – and which insurers don’t necessarily cover.
These hidden fees are coming about because hospital executives have been preparing their institutions for payment reforms they see coming as a result of the Affordable Care Act – particularly the way the law shifts financial risk away from patients, private insurers and government payers, and to the caregivers themselves, namely hospitals, physicians and other providers.
One of the most visible ways that hospitals have been preparing for this shift is that they are buying physician practices and building new outpatient clinics and urgent care centers to assemble teams that can practice integrated medicine and deliver care across a continuum owned and controlled by the hospital.
But as hospitals build these integrated systems and extend their geographic reach, consumers are increasingly encountering fees that are intended to support these new facilities.
Here’s what Chang learned while reporting this story.