The Obama administration unveiled new rules, today, specifying which preventive health services will be free to consumers under the new health law after Sept. 23. Mandated preventive care seeks to correct the problem of under utilization of preventive care services because of out-of-pocket expenses for consumers. Americans use preventive services at about 50% the recommended rate, according to research cited by the White House. Chronic diseases, which are often preventable, are responsible for 7 of 10 deaths among Americans each year and account for 75 percent of the nation's health spending.

Free preventive services are among the health insurance benefits that the White House is touting as it tries to show consumers that the health care overhaul has tangible benefits. The list of services likely to spark intense debate within the health industry over what's included and what gets left out.

• Children will get more than two dozen services, including vaccinations for influenza, diphtheria and tetanus, and screenings for hearing and vision impairment and autism.
• Women over 40 will still be able to get a mammogram screening every year or two.
• Colorectal cancer screening for adults over 50.
• Hepatitis B screening
• HIV screening for adults at high risk
• Depression screening for adults and adolescents
• Prenatal services including screenings for iron deficiency.
• Blood pressure screenings.
• Obesity screening and counseling for adults and children.
• Tobacco counseling for pregnant women

New health plans offered after September 23, 2010 must include these preventive services without a copayment or other direct costs for consumers on new health plans. However, these new health insurance plans are expected to be price higher than comparable old plans to cover the mandated services. Consumers who stick with their existing insurance plans won't benefit from the change, but it will become an individual health insurance comparison decision to determine if the new preventive benefits are worth the new health plan rates.

To determine which services qualify as preventive, government officials relied largely on existing recommendations by three groups, including the U.S. Preventive Services Task Force. The preventive services task force drew criticism last year for recommending that women delay annual mammogram services until age 50, instead of age 40. The health care law effectively ignores that recommendation, making mammograms a covered preventive service at age 40 under the law.

Americans who have been denied coverage because of a preexisting medical condition may begin applying July 1, 2010

The federal government and some state governments will begin accepting applications Thursday, July 1, 2010, for new insurance programs designed to cover people who have been denied health insurance because they have preexisting medical conditions. These so-called high-risk pools were included in the health insurance reform law, the Affordable Care Act. to provide relief for some of the most desperate uninsured Americans until 2014, when insurance companies will be required to cover everyone regardless of medical history.

Who will be eligible for the insurance plan?

American citizens and legal residents who have been without insurance for at least six months and have been denied coverage because they have a preexisting medical condition. Applicants in most states will need a recent copy of a letter from a private insurance company denying coverage altogether or denying coverage of a specific condition.

Which states will have programs and when?

These 21 states have asked the federal government to run the high-risk pool rather than administer it themselves: Alabama, Arizona, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Kentucky, Louisiana, Massachusetts, Minnesota, Mississippi, Nebraska, Nevada, North Dakota, South Carolina, Tennessee, Texas, Virginia, Wyoming. Residents of these states can apply starting July 1. Administration officials said people who apply by July 15 will begin receiving coverage by Aug. 1.

The remaining 29 states and the District of Columbia will run their own programs and begin accepting applications over the next several months. Several of the largest states operating their own plans, including California, Illinois and New York, are not expected to begin enrollment until August. The administration expects that all states will begin enrolling people by the end of the summer.

How much will the insurance cost?

Premiums, as well as benefits, are expected to vary greatly from state to state, with some plans charging as little as $140 a month and some as much as $900 a month, according to administration officials. Premiums could vary by age. And some states may offer a variety of benefit packages.

How do I sign up?

The federal government's new healthcare Web portal at http://www.healthcare.gov, will offer instructions. Residents of states where the federal government will run the high-risk pool will be able to find applications there. The website also contains instructions for residents of states that are running their own pools.

What if my state already has a high-risk pool?

Many states have been operating such pools for years, but some are prohibitively expensive or have been closed to new enrollees. Because the rules for the new plans will be different, administration officials are encouraging people who have been without coverage to consider applying for the new pools.

Will there be enough money to cover to everyone?

Very likely not. The new healthcare law allocated $5 billion for the new high-risk pools, but several independent analyses, including one by the nonpartisan Congressional Budget Office, have estimated that more money would probably be needed because demand will be so high. The Department of Health and Human Services will be able to shift money from states that are not using all their allotted funds to those that need more, but so far administration officials have been reluctant to talk about seeking more funds.

For years, private Medicare Advantage plans have enjoyed generous payments from the government, currently averaging 9 percent more than the cost of care in traditional Medicare. The government's benevolence enabled Medicare Advantage plans to offer lower out-of-pocket costs and extra insurance benefits compared with traditional Medicare - like dental, vision, and prescription drug coverage. About 11 million seniors are signed up, nearly one-fourth of Medicare recipients.

That's about to change under the health care overhaul. Payments are being trimmed back starting next year for all plans, to correct what Obama says is wasteful overspending. However, beginning in 2012, the law directs Medicare to award bonuses to high performing plans - plans that score four stars or better on a 5-star rating system. The payment shift means that high-quality plans will find it a lot easier to keep offering extra benefits, while others will struggle. Indeed, Medicare's own analysts predict an exodus from Medicare Advantage back to the traditional program after the cutbacks begin.

The government's rating system evaluates health plans according to several measures, including customer service, prevention and medical care for people with chronic health problems. The ratings, already available on medicare.gov, assign one to five stars for quality, with one signifying poor performance and five excellent.

How the private plans score on the quality rating system set up by the government is about to have a direct impact on insurers' finances -- not to mention seniors' benefits and premiums. President Barack Obama's health care law ties what the plans get paid by the government to the quality they provide, for the first time. These ratings are about to become much more important. When you start linking quality to payment, you can bet the plans are going to be very motivated to bring the scores up.

Millions of seniors signed up for popular Medicare Advantage insurance plans don't get the best quality, an independent study found. There seems to be plenty of room for improvement. The study being released in April 2010 by looked at the health plans that seniors pick, according to the plans' scores on a government rating system designed for consumers. Overall, senior have proven to be poor shoppers of Medicare Advantage plans. The analysis found that 47 percent of Medicare beneficiaries are in plans that rate three stars or two -- medium to fair quality. Just 23 percent were signed up in plans that rate four or five stars -- very good to excellent quality. Many of the rest were in plans not yet rated.

If the new system of rewarding the best plans and culling out the poor performers works, seniors will be more likely to be gravitate to the better plans.

Congressional Democrats have begun pushing legislation giving government regulators greater authority to block big increases in health insurance premiums. The move, which comes less than a month after President Obama signed the healthcare legislation, is aimed at giving all states the power to stop premium hikes deemed excessive and allowing the federal government to step in if the states don't act.

While politically astute, these efforts will not result in lower health insurance premiums. Health plan premiums are a symptom, not a cause of the problem. The cause of high health insurance premiums is high health care costs. State insurance regulators have no control over that, nor over the administrative costs of the insurers. If insurance company profits are abusive, then regulators can pare back profits to a reasonable level. The problem is that insurance company profits are an almost undetectable portion of our $2.5 trillion national health expenditures. Dramatically reducing insurer profits will not even appear as a footnote in the report of our health care spending.

Unfortunately, the medical insurance industry has been and will continue to be ineffective in controlling rising costs. The government must provide the solutions to rising costs, but under the reform model approved by Congress and the President, there are no effective solutions.

This subject matter will seem self-serving, coming from a health insurance broker, but I'll risk it. This article appeared in the Los Angeles Times yesterday, Uninsured trauma patients are much more likely to die by Karen Kaplan. I cited the article on twitter and it got so much attention that I thought that many of my blog readers would be interested.

The point is this: Patients who lack health insurance are more likely to die from car accidents and other traumatic injuries than people who belong to a health plan -- even though emergency rooms are required to care for all comers regardless of ability to pay, according to a study published on Nov. 17, 2009.

An analysis of 687,091 patients who visited trauma centers nationwide from 2002 to 2006 found that the odds of dying from injuries were almost twice as high for the uninsured than for patients with private insurance, researchers reported in Archives of Surgery.

Trauma physicians said they were surprised by the findings, even though a slew of studies had previously documented the ill effects of going without health insurance coverage. Uninsured patients are less likely to be screened for certain cancers or to be admitted to specialty hospitals for procedures such as heart bypass surgery. Overall, about 18,000 deaths each year have been traced to a lack of health insurance.

But insurance status isn't supposed to be a factor for trauma patients. The Emergency Medical Treatment and Active Labor Act, passed by Congress in 1986, guarantees that people brought to emergency rooms get all necessary treatment no matter what kind of insurance they do -- or don't -- have.

The research team from Harvard University and Brigham and Women's Hospital in Boston used information from 1,154 U.S. hospitals that contribute to the National Trauma Data Bank. The team found that patients enrolled in commercial health plans, health maintenance organizations or Medicaid had an equal risk of death from traumatic injuries when the patients' age, gender, race and severity of injury were taken into account.

The risk of death was 56% higher for patients covered by Medicare, perhaps because the government health plan includes many people with long-term disabilities, said Dr. Heather Rosen, who led the study while she was a research fellow at Harvard Medical School.

The risk of death was 80% higher for patients without any insurance, the report said.

The researchers also did a separate analysis of 209,702 trauma patients ages 18 to 30 because they were less likely to have chronic health conditions that might complicate recovery. Among these younger patients, the risk of death was 89% higher for the uninsured, the study found.

Rosen, now a surgical resident at USC's Keck School of Medicine, said the group expected to find at least some disparity based on insurance status. But she said the group was surprised at the magnitude of the gap.

Dr. Frank Zwemer Jr., chief of emergency medicine for the Hunter Holmes McGuire VA Medical Center in Richmond, Va., said he was "kind of shocked."

"We don't ask people, 'What's your insurance?' before we decide whether to intubate them or put in a chest tube," said Zwemer, who wasn't involved in the research. "That's not on our radar anywhere."

Possible Explanations

The researchers offered several possible explanations for the findings. Despite the federal law, uninsured patients often wait longer to see doctors in emergency rooms and sometimes visit ERs at several hospitals before finding one that will treat them. Other studies show that, once they're admitted, uninsured patients receive fewer services, such as CT and MRI scans, and are less likely to be transferred to a rehabilitation facility.

Patients without insurance may have higher rates of untreated underlying conditions that make it harder to recover from trauma injuries, the researchers said. They also may be more passive with doctors and nurses because they don't interact with them as often. All of these factors could influence whether a trauma patient is able to recover.

Coincidence?

But the link could also be coincidental, the authors acknowledged. Perhaps the hospitals that have fewer resources at their disposal also happen to see the most uninsured patients, they said.

The types of injuries may differ too, Zwemer said. Gunshot and stabbing victims -- frequently younger people involved in crime -- were much more likely to die from their wounds than other trauma patients tracked in the study. These people are generally uninsured, but the type of injury -- not insurance status -- is the reason for their higher fatality rates, he said.

More research is needed to figure out whether lack of insurance actually harms trauma patients or whether the data simply reflect a correlation, said Dr. A. Brent Eastman, chairman of trauma at Scripps Memorial Hospital in La Jolla.

The issue is particularly relevant as Congress and the Obama administration weigh various measures to reduce the number of uninsured Americans, Eastman wrote in a short critique that accompanied the study.

Unicare, a health insurance company owned by Wellpoint, Inc., the largest health insurer in the US, has announced that it is exiting the health insurance market in Texas and Illinois by the end of the year. Unicare's 400,000 members in Texas and 180,000 members in Illinois will have to find coverage elsewhere.

It seems strange, what with health insurance reform legislation promising to add many new government subsidized customers to the health insurers' rolls, but Unicare admits that they can't cut it against big names like Blue Cross Blue Shield and United Healthcare in the Texas and Illinois markets. The brand was created in the early 90's by parent company, Wellpoint, in order to sell health insurance products outside of California. They expanded quickly, particularly in Texas, by offering low-rate, bare bones health plans. That strategy ultimately failed when competitors matched and bettered their offerings and could negotiate lower rates from providers due to their larger membership.

So are Unicare's customers hung out to dry as far as finding new coverage? Fortunately not. Unicare has collaborated with Hallmark Services Corp. to provide a soft landing for its customers in the form of a transition to Hallmark's Blue Cross Blue Shield plans in both Illinois and Texas. Unicare says its members will be offered BCBS plans of comparable benefits and at similar rates.

What about Unicare members who are no longer insurable because of pre-existing conditions? Thankfully, BCBS will guarantee acceptance of coverage for Unicare members who opt for the unique deal. Unicare members will transition without a break in coverage and without requiring proof of insurability, no questions asked. Offers and acceptance forms are in the mail. Please note, the deadline for acceptance of the guaranteed acceptance deal is December 1, 2009.

What are the options for those Unicare members who do not want the Hallmark BCBS offer? Unicare will stop offering health coverage in Illinois and Texas on January 1, 2010. Members who do not transition to BCBS will be allowed to continue coverage with Unicare until June 1, 2010. Unicare members are, of course, free to shop for replacement coverage with any other health insurance company if they are willing to go through the standard requirement of answering health questions to qualify for coverage.

What about ObamaCare health care reform legislation going on in Congress? Whatever the details of the final bill that becomes law, health insurance reform provisions - like eliminating pre-existing condition underwriting - will not take effect for 3 years, January 1, 2013. So we have to continue to play the game under the current rules until then.

In 2010, American workers with employer paid health insurance can expect to pay a larger share of their health insurance costs. Over 60% of employers plan to deduct more from the salaries of workers to pay for health insurance. And health plans will cover less because of higher deductibles and copayments.

It's not like this hasn't been going on for a while. Employees' annual contributions to health insurance premiums have almost tripled, to $3,515 in 2009 from $1,543 in 1999. And workers also are getting less coverage. More than 40% of employers in a recent Watson Wyatt survey said they will raise deductibles, co-payments, and out-of-pocket maximums in 2010 due to the economic crisis.

Other ways workers will pay more.

• Some employers are reducing or even eliminating spousal and dependent coverage to control rising costs. Some are charging higher premiums for working spouses who have access to other health care coverage. More employers are also expected to audit their workers to eliminate dependents who are not eligible for coverage.


• More employers will offer consumer directed health plans (CDHP) next year as they are increasingly viewed as an effective way to control rising costs. Those employers adopting new plans are generally adding a high-deductible plan, often with a health savings account (HSA). Some employers are sweetening the deal by making contributions to the employees HSA that can be used for any medical or dental expense.


• Some workers will see changes to their prescription drug benefits in 2010. As part of an overall movement to CDHPs, a number of employers are introducing a CDHP prescription drug benefit option that typically offers workers 100 percent coverage on a list of preventive medications. Other companies are introducing value-based designs that include zero copays on certain prescription drug therapies that are known to help lower health costs and reduce hospitalizations.

An external insulin infusion pump is an FDA approved mechanical device used to deliver insulin to manage diabetes mellitus. The pump is about the size of a deck of cards, weighs about 3 ounces, and can be worn on a belt or in a pocket. It contains a cartridge reservoir filled with fast acting insulin. The pump connects to narrow flexible plastic tubing that ends with a needle inserted just under the skin near the abdomen. Users set the pump to give a steady trickle or "basal" amount of insulin continuously throughout the day. Pumps also release additional ("bolus") doses of insulin at meals and at times when blood sugar is too high based on user input. Frequent blood glucose monitoring is essential to determine insulin dosages and to ensure that insulin is delivered appropriately.

Private insurance companies as well as Medicare will pay for infusion pumps as medically necessary for patients with documented diabetes mellitus meeting all the following criteria:

1. Has been seen by their medical provider four times within the last year; and


2. Completed a comprehensive diabetes education program within the past two years; and


3. Follows a program of multiple daily injections of insulin; and


4. Has frequent self-adjustments of insulin doses for the past 6 months; and


5. Has documented frequency of glucose self-testing an average of at least 4 times per day during the past month; and


6. Has documentation of any of the following while on a multiple daily injection regimen:




a. lycosylated hemoglobin level (HbAlc) 7.0 percent; or
b. "Brittle" diabetes mellitus with recurrent episodes of diabetic ketoacidosis, hypoglycemia or both, resulting in recurrent and/or prolonged hospitalization; or
c. History of recurring hypoglycemia or severe glycemic excursions; or
d. Wide fluctuations in blood glucose before mealtime; or
e. "Dawn phenomenon" with fasting blood sugars frequently exceeding 200 mg/dl.
f. Pre- conception or pregnancy to reduce the incidence of fetal mortality or anomaly; or
g. The patient with diabetes mellitus successfully using a continuous insulin infusion pump prior to enrollment in a new health insurance plan has documented frequency of glucose self-testing on average of at least 4 times per day during the month prior to enrollment

Here's the insurance company's rationale:

"External subcutaneous insulin infusion pumps are considered medically necessary only for people who have demonstrated the ability and commitment to engage in a regimen of pump care, frequent self-monitoring of blood glucose and careful attention to diet and exercise.

The pump must be ordered by and follow-up care of the member must be managed by a physician with experience managing persons with insulin infusion pumps and who works closely with a team including nurses, diabetic educators and dieticians who are knowledgeable in the use of insulin infusion pumps.

Documentation of continued medical necessity of the external insulin infusion pump requires that the member be seen and evaluated by the treating physician at least every 6 months.

Some external insulin infusion pumps are able to take results of the blood glucose reading, calculate the appropriate insulin infusion rate, wirelessly transmit the results from the blood blucose monitor to the pump, and automatically adjust the insulin infusion rate, saving the member some extra steps. These insulin pump features, when present, are considered integral to the external insulin infusion pump and blood glucose monitor."

My friend, Bill is dying of cancer. He probably has two or three days left. He's not conscious and while the caretakers say that he can recognize my voice, I doubt it. He's being given a lot of drugs including morphine, but they don't seem to give him peace. His body struggles as if he is trying to free himself from unseen restraints. Perhaps he's pain-free, but he definitely does not seem comfortable. However, I was able to say goodbye to Bill with a smile on my face because of something his wife told me a few minutes earlier. She said, "Bill spent the last five days of his conscious life smoking pot." Now, if you knew Bill you'd know how utterly preposterous that statement sounds. Bill was a retired Pediatric Cardiologist. He voted Republican all his life until he voted for Obama. He did not waste money or words. And he definitely had never smoked marijuana.

Some weeks back, Bill's internist suggested that he consider medical marijuana as a way to restore his appetite which had been destroyed by chemotherapy. Later Bill decided to give it a try. Bill and his wife found a dispensary nearby after a brief internet search. They called the dispensary and were told they would need a referral letter and that a "doctor" would be on the premises that afternoon. At the time, Bill could only walk short distances and he was very weak, but they went over to the dispensary. They stood in a queue of seemingly able-bodied young men also seeking relief from something. The doctor relieved them of $140 and provided each with the referral letter. Bill's wife said that she was less than impressed with the certification process and ventured an opinion that "Bill was the only truly ill individual that doctor would see all week." The young dispensary clerks were very helpful. They suggested that Bill purchase two thumb sized buds "one of indica for pain and one of sativa for depression". Bill also picked out a nice psychedelic pipe. Once home, bill tried it. His wife said that once he felt the effects of the first puff a little smile brightened his face. He smoked some more and the smile broadened. His wife chuckled as she remembered his fondness for the stuff. She said, "I'd ask him if he'd like anything and he usually answered, "I believe I'll have some of that marijuana." It made Bill happy at the end of his journey. What a gift!

I agree with those that say that medical marijuana is mostly used by recreational pot smokers, but I know that there are other people like Bill who are truly ill and can't get anything from the medical community that works as well as marijuana to put a smile on their faces.

President Obama's $789 Billion Recovery Bill includes some health care benefits for those recently unemployed. If you lost your job after September 1st, 2008, this bill has some very good news for you regarding your health care. The federal government will soon subsidize 60% of your COBRA premium for 9 months. Doesn't sound like a big deal to you? Let me explain. COBRA coverage is offered to individuals and their families who had group coverage with their employer before they lost their jobs. The problem is that COBRA insurance premiums are high and unemployment benefits are no so high. In fact, the average premium for family COBRA coverage exceeds the entire monthly unemployment benefit in 9 states: Alabama, Alaska, Delaware, Florida, Louisiana, Mississippi, South Carolina, and West Virginia.

If you lost your job recently, you have 62 days to decide on taking the COBRA offer or not. TAKE IT. You'll have to pay the entire premium for a month or two, but once the new legislation takes effect, you'll be paying only 35% of the premium. It's a great deal. Purchasing your own individual health insurance, assuming you can qualify, will cost you more for less coverage. If you pass up on the COBRA offer or wait beyond the 62 day window, you can't opt in later. It's a one-time offer.

Unfortunately, last minute haggling removed from the bill a provision that would have extended COBRA coverage to age 65 for jobless Americans over age 55.

I'm in the health insurance business, but I was recently blown away by the absurdity of the medical billing system. I have lower back pain from a condition called spondylolisthesis. That's basically a slippage of one of the vertebra in my lower back that pinches the nerves and causes sciatic pain. When the pain gets bad, I get an epidural injection that takes away my pain for a couple of months at a time.

The outpatient surgical center billed $4,136 for the epidural procedure. My insurance company allowed only $1,039 of which I paid $208 for my coinsurance - just 5% of the amount originally billed.

Why are medical bills so outrageously overpriced? Who pays the full "retail" bill? Not the insured. It's the uninsured who are stuck with these inflated medical bills. As individuals, they have very little negotiating power to reduce the initial bill to a reasonable fee and are left with no choice but to pay the inflated fee which can wipe them out financially.

Medical administrators call this system "cost plus" billing. The cost plus bill includes the cost of the service plus a share of the provider's overhead expenses, including the unpaid bills of the uninsured. And so it goes in an ever escalating spiral of unrealistic medical costs.

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The uninsured that pay out of their pocket for medical care pay more overall and get a lot less care for their money. Someone who is uninsured all year pays 35 percent ($583) out of pocket toward their average annual medical costs of $1,686 per person. In contrast, annual medical costs of the privately insured average $3,915, with $681, or 17 percent, paid out of pocket.

One in every 5 Americans put off or avoided necessary medical care in 2007. That's a 43% increase in this behavior over the past four years. Obviously, the higher cost of medical care was a big factor. So was the increased cost of health insurance, leading to more uninsured residents - 38% of uninsured residents ignored necessary medical care.

The report is available online.

A Harvard Medical School study (published recently in JAMA) found that older individuals got sicker than insured people in a comparable age group. Additionally, the differences in health were quickly reduced when the uninsured individuals became eligible for Medicare at age 65. The study also found that previously insured participants experienced no significant change in their health as they transitioned to Medicare, while participants who previously had little or no prior coverage experienced a significant slowing of the decline of their health once on Medicare.

The status quo of American health care is unacceptable. What makes it a political nightmare to fix is that what one side really wants is a single payor government system like Medicare and what the other side really wants is to minimize government involvement and let a free market bring about changes naturally. How's that working for us so far?

Pragmatists, including most presidential candidates, occupy the middle ground seeking workable solutions at the risk of loosing their political constituancies. Such is the case in California, where Repubilcan Governor Arnold Schwartzenegger made a deal with Democratic Assembly Speaker Fabian Nuñez to compromise on a health care bill similar to the recently enacted Massachusettes plan. The California bill has passed the House and will face a Senate vote in January 2008. Both men are risking a lot of their political capital to make this happen. We could use more politicians like them.

On the plus side, insurers would no longer be able to reject applicants for pre-existing health conditions. Health insurance in California would be mandatory in 2010 and low income residents would be subsidized. Coverage will be extended to 4 million previously uninsured California residents.

California would get up to $4 billion in federal funds that the state has not previously been able to get its hands on, but there are some significant funding hurdles to overcome. In an effort to end-run a two thirds vote for the establishment of any new taxes, the bill's backers plan to introduce an initiative on the November 2008 ballot asking voters to authorize funding.

The nation is watching to see if California can pull this off. I sure hope we do.

Hospitals routinely pad their bills. For that matter, so do other health care providers. If you have health insurance and you've been hospitalized or had an outpatient procedure recently, you've probably been astounded at the difference between what the health care provider charged versus what the insurance company or Medicare paid them.

Hospitals and providers claim that bill padding is their defense against the aggressive fee cutting efforts of insurers and government programs. But the end result is that the only patients who are stuck with those outrageously inflated bills are the uninsured (without giant insurance companies to negotiate lower rates for them). Because few actually pay their bills, many escaping through bankruptcy, the hospital further increases its fees.

Wal-Mart continues to improve health insurance coverage for employees. The company has enrolled an additional 100,000 workers in health plans. For the last few years, Wal-Mart has been heavily criticized for not offering affordable health insurance to employees. While they still provide health insurance to less than half of their employees, they have been improving rapidly.

During 2008, Wal-Mart is offering employees a selection of health plans as well as 2,400 generic medications for $4. Enrolled employees can call a medical hotline staffed by nurses from the Mayo Clinic 24 hours a day. Employees can participate in a wellness program that promotes exercise and lifestyle changes like smoking cessation.

At least some of this improvement in Wal-Mart employee benefits can be credited to the power public opinion which turned negative on Wal-Mart a couple of years ago when their stinginess to workers became public.

United Auto Workers- UAW - reached a tentative agreement with Ford Motor Company for a four-year contract similar to General Motors and Chrysler. Central to the deal is the creation of a voluntary employees' beneficiary association - VEBA. Ford will transfer billions of dollars in retiree health care liabilities to a trust controlled by the UAW. The VEBA is expected to become operational in 2010. Until then, Ford will continue to fund its retiree health care.

The UAW will also get a 16% to 17% stake in Ford.

MEGA Life and Health Insurance, Mid-West National Life Insurance, and their parent company HealthMarkets, Inc are being sued by Massachusetts Attorney General Martha Coakley for routinely misleading people about what their health insurance policies cover. These are serious new allegations of misrepresentation and unfair and deceptive practices. The complaint also charges MEGA Life with disclosing the personal information of applicants and policyholders to various third parties. The suit seeks to require MEGA LIFE and Mid-West to pay refunds and make restitution to individuals harmed by the sales practices and substantial civil penalties and costs to the state.

These companies usually market under the umbrella of NASE, for National Association of the Self Insured, an association created solely to make it easier to target individuals and small businesses looking for low cost health insurance, but the coverage they provide is not what MEGA and Mid-West's advertising and sales agents make it out to be.

As of July 1, Massachusetts citizens must have health coverage or face increasing tax penalties. Those residents earning less than the federal poverty level qualify for free coverage. Additionally, the state subsidizes coverage for those who earn up to three times the poverty level. If an individual earns more than $30,630, or a family of four earns more that $61,950, they can keep their existing coverage or choose from some lower-priced private health plans. Businesses that employ at least 11 workers must offer health insurance or pay annual fees of $295 per worker. The deadline to obtain health insurance is December 31, 2007.

A poll released on Wednesday finds that two-thirds of residents support it. 57% support the law's individual mandate. People who support the law say "it is the right thing to do."

When consumers have health plans with more out-of-pocket cost responsibility, they're more likely to select lower-cost alternatives for their health care, Booz Allen Hamilton, reports. People responsible for a greater portion of the cost are beginning to act like retail consumers, that is they tend to be more aware of both cost and quality differences. For instance, they are more likely to use generic than brand name drugs to get a minor or moderate price reduction.

Illinois Business owners are voicing outrage over Governor Blagojevich's universal healthcare proposal for the state of Illinois. Illinois Covered would tax Illinois businesses with annual gross receipts of more than $2 million from 0.08% to 1.95% of gross sales. "That's more than thes profit fror many of these businesses and some businesses would move out of Illinois if the tax was imposed", says the state Chamber of Commerce who is conducting a campaign in opposition to the plan.

Workers' compensation insurance claims are more frequent and more expensive for employees who are obese according to a recent Duke University study*. Nearly twice as many claims were filed by the heaviest workers. Most of the claims are for falls, slips, and injuries to the joints. Compared to the cost of the medical claims for those workers with normal BMI, the severely obese cost almost 7 times more, and the moderately obese over 3 times more. The number of work days lost by the very obese is 13 times higher.

Companies have more incentive that ever to foster healthy lifestyles for their employees such as healthy options in the cafeteria and in-house gyms. It makes financial sense.

* Archives of Internal Medicine, April 23, 2007; Ostbye, T.

American workers value their health insurance benefits more than ever before. Perhaps realizing that their employers are paying 200% to 300% more that a few years ago, most U.S. workers employed at large businesses consider health coverage to be the most important part of their benefits packages including retirement benefits.

In February 2007, the National Business Group on Health surveyed 1,619 employees at mid-sized companies (2,500 employees or more). The majority of those queried said that would sooner take a pay cut than give up any health benefits. Over two thirds said they are satisfied with their health coverage. Even those who didn't like their coverage said that they would not want to purchase their own health insurance.

American workers are happy with the status quo when it comes to health insurance, but their employers can't afford to support their habit much longer. Something's gotta give.

Some doctors are complaining about a recent UnitedHealthcare letter that says that they may fine providers $50, reduce their fees, or kick them out of the UnitedHealthcare network if they regularly refer patients to out-of-network labs. UnitedHealthcare says they will use the penalty only for the worst offenders after first speaking with the physicians.

UnitedHealthcare wants doctors to use LabCorp, its national in-network laboratory. Some physicians prefer Quest Diagnostics - previously contracted with UnitedHealthcare nationally. UHC says they want to prevent members from paying higher out-of-network costs. Indeed, consumers are often blindsided with big out-of-pocket expenses (as much as seven times more than in-network costs) if their doctor refers them to an out-of-network lab - whether by inattention, habit, or his or her own agenda. Most health plan members won't know what happened when they get the bill.

The uninsured generally don't have routine physical exams, As a result, high blood pressure can go undetected leading to higher rates stroke and death. Sound logical? Yes. And now there's data to back it up.

The Journal of the Society of General Internal Medicine published a study (April 2007 issue) that found people with no health insurance are less likely to be aware of having high blood pressure and if they were disgnosed they were less likely to be well controlled than people with health insurance.

The study found that people who lack of health insurance don't use primary care resources, The health disparity between the haves and the have nots seems likely to dontinue to grow.

Giving rewards to employees to quit smoking or lose weight is apparently working for some companies because it reduces their overall health care costs, including health insurance, in the long run. Company wellness programs also follow employees with chronic illnesses, like diabetes and make recommendations. Becuase of equal treatment HIPAA rules imposed on employers, employees are getting discounts of up to 20% on their company insurance premiums just for signing up for the wellness programs whether or not they manage to alter their lifestyles.

A few years ago, professional and small business associations were a source of health insurance for many self employed Americans. They offered group health insurance coverage to association members, some of whom could not obtain individual health insurance because of pre-existing medical conditions.

Insurance companies began dropping associations in the mid-nineties, spurred by state mandates that required all groups to offer to include all members even those with potentially expensive medical conditions. Unlike employers, associations, unlike employers, don't pay any portion of premiums, so only those members who need the guaranteed acceptance of group coverage, namely those with pre-existing medical conditions, enrolled in the association plans. Young and healthy members opted for lower-cost individual policies, leaving the association plans with higher medical costs forcing the insurer to raise premiums to the point where only the sickest members remained in the plan.Insurers call this adverse selection. At that point, the underwriter waa looking for any legal excuse to drop the group.

Today, only a small fraction of the 1,020 associations surveyed offer health insurance. Since the self-employed and workers in small firms account for two thirds of the uninsured workers, the closing of this source of coverage impacts the number of uninsured American workers.

Fewer company sponsored health require no contribution from employees for their health insurance premium. The number of non-contributory health plans, fell from 27% to 18% from 1998 through 2004. Employers footing the bill for workers' dependent premiums are becoming rare. Family plan enrollment dropped from 19% to 15% over the same time frame. Workers in smaller companies - under 50 employees - were much more likely to have no-contribution plans.

Source: Agency for Healthcare Research and Quality.

High-deductible health insurance plans seem to work as intended. In addition to lower premiums, members utilize benefits less. For instance, a new study shows that patients went to the emergency room less frequently for non-emergency conditions. According to a recent study conducted by the Department of Ambulatory Care Prevention and published in the Journal of the American Medical Association, patients with high-deductible health plans attended the emergency department approximately 10% less often than patients with traditional more comprehensive plans.

High-deductible health plans have grown in popularity through making insurance more affordable to individuals and employers alike due to lower premiums. The pay off is that policy holders need to pay for most medical expenses until they reach their deductible which averages $1,000 to $4,000 per annum. ER visits and hospital stays are usually subject to the plan deductible.

One reason that the plight of the uninsured has moved swiftly to the top of the domestic political agenda is that the number of uninsured middle class is on the rise. More than 30% of uninsured individuals in the U.S. have annual household incomes in excess of $40,000.

The rising cost of health care could be a significant contributing factor, as well as a drop in manufacturing jobs combined with a migration of workers to the service industries and small businesses alike, both of which are less likely to provide insurance.
Without an employer-provided health plan, an employee must buy an individual plan or go without medical insurance altogether. Both individuals and independent contractors are more likely to put off buying coverage until they need it, which makes the pool of the insured less healthy. And, if the pool is less healthy, the costs associated with insuring them are higher.

Under value based insurance design costs would be lowest for those for whom the benefit is strongest and vice versa, with higher costs for services where the proof of benefit isn't strong. With VBID, a person with diabetes would pay little for drugs that can delay diabetes-related health problems, and for eye and blood tests that can spot those problems early. And employees in their 50s might get free or low-cost colonoscopies, to spot pre-cancerous polyps and treat them before they become cancer. While a person making a doctor visit with flu symptoms might pay the maximum copay.

One prominent example is the University of Michigan, where 2,200 diabetic employees and dependents are receiving free or reduced-cost medications and tests as part of a pilot project, designed to test the VBID principle rigorously including its ability to encourage patients who aren't yet taking beneficial medications to start taking them and to stick with them. For instance, people with diabetes are known to receive great benefit from taking inexpensive blood pressure drugs called ACE inhibitors but most of them aren't using the medications. The U-M project is looking at whether "free" availability of select medications will help encourage their appropriate use.

Other examples cited in the new paper include the Pitney Bowes Corporation, which has reported saving money by lowering co-pays for asthma and diabetes medicines across the board, and the city of Asheville, NC, which showed increased adherence to recommended diabetes medications and tests, and decreased sick leave and health costs, after reduced co-pays and other programs were put in place for employees with diabetes. Both illustrate the potential of the VBID approach.

Among the challenges to implementing VBID -- the initial short term increase in cost that would result from increased utilization of medications and tests by appropriate patients, and the lack of research on many health issues that would steer the tailoring of insurance plans to reduce costs for those who stand to benefit most from any one test or treatment. If these issues can be surmounted, the VBID approach could lead to better health and perhaps cost savings in the long term.

The health insurance industry in California has been quick to voice its qualified support for a proposal announced last week by Gov. Arnold Schwarzenegger that would require all state residents to obtain health insurance.

Their reaction suggests how much the political momentum behind health care reform efforts has intensified and how health insurers plan to cope, or even benefit. The new proposal could expand the industry's market by four million to five million currently uninsured Californians something health plans have been unable to do despite heavily marketing new products to some segments.

However, health insurers have raised concerns about some parts of the proposal, such as a provision that would require insurers to spend 85 cents of every dollar in premiums on health care and a provision that would require insurers to sell policies to all California residents, regardless of whether they have medical conditions.

WellPoint, the largest U.S. health insurer, on Monday announced a proposal to reduce the number of uninsured residents. Under the proposal, WellPoint will lobby states to expand their health insurance programs to children in families with annual incomes of as much as 300% of the federal poverty level. WellPoint also will lobby states to expand their health insurance programs to parents in families with annual incomes of as much as 200% of the federal poverty level and childless adults with annual incomes of as much as $10,000.

WellPoint said that states could use funds from increased cigarette taxes to help cover the cost of expanded health insurance programs. In addition, WellPoint will establish new health plans that target large populations of uninsured residents, such as young adults, early retirees and Hispanics and will promote public-private partnerships to provide health insurance for those who do not qualify for public programs. WellPoint will spend $30 million over three years to support local programs nationwide that seek to improve health care access .

Kaiser Foundation Health Plan Inc.is working with state regulators to develop standards to protect its members from unfair cancellations of health insurance, a move that hopefully will lead to industrywide reforms. The move comes amid a growing controversy over the insurance industry's cancellation of individual policies - the type people without employer-based group coverage buy for themselves. Kaiser said its proposed standards would include the requirement that it consult with policyholders before deciding whether to rescind their coverage. Such a consultation would help the HMO determine whether policyholders intentionally submitted inaccurate information about their health conditions in order to obtain coverage.

Kaiser embraces a standard for cancellation pushed by consumer advocates. Other health plans, are fighting regulators and former policyholders for the right to rescind coverage when medical information relevant to the policy-granting decision is left out of an application — even if the omission is an honest mistake.

Amy Dobberteen, enforcement chief for the Department of Managed Health Care, said Kaiser's plan to talk to policyholders first was a shift in the right direction. "Other plans have pointed out to us endlessly that that's not required by law," Dobberteen said. "For goodness sake, if you are consumer-friendly, why wouldn't you contact the consumer? … A health plan does have the moral responsibility to pursue [this information] when they are about to wipe out from under them their entire health security blanket."

The new protocol Kaiser is developing would require the HMO to contact policyholders and gather their input before making a rescission decision, said James Larreta-Moylan, Kaiser's business line manager for individual plans in California. "In the past, when we had investigated, if we had enough documentation, we would rescind and give them an opportunity to appeal," he said. "So now we're actually going to seek their input. We've flipped it around."

See full story by Lisa Girion of the Los Angeles Times, Kaiser to push for standards on health plans

It's difficult to get insured if you don't belong to an employer group. In California, 20% of people who applied for individual coverage were turned away or charged a higher premium because of preexisting conditions. California carriers turn people away or charge them higher premiums for conditions that range from the catastrophic to the common. Cancer, epilepsy and AIDS make the list, along with breast implants, ear infections, varicose veins and sleep apnea.

According to regulators' postings, rejection letters and interviews with brokers, conditions that can lead to outright rejection or a higher premium include: AIDS, allergies, arthritis, asthma, attention deficit disorder, autism, bed-wetting, breast implants, cancer, cerebral palsy, chronic bronchitis, chronic fatigue syndrome, chronic sinusitis, cirrhosis, cystitis, diabetes, ear infections, epilepsy, gender reassignment, heart disease and hemochromatosis (a common genetic disorder that causes the body to absorb too much iron).

Other conditions are hepatitis, herpes, high blood pressure, impotence, infertility, irritable bowel syndrome, joint sprain, kidney infections, lupus, mild depression, muscular dystrophy, migraines, miscarriage, pregnancy, "expectant fatherhood," planned adoption, psoriasis, recurrent tonsillitis, renal failure, ringworm, severe mental disorders, sleep apnea, stroke, ulcers and varicose veins.

Lisa Girion, a staff writer for the Los Angeles Times, published a comprehensive story on this subject, published Sunday, Dec. 31, 2006, Healthy? Insurers don't buy it I strongly recommend it.

When offered a choice of plans, relatively few employees (19%) select Consumer Directed Health Plans CDHPs (a combination of a high-deductible PPO health plan and a Health Savings Plan). This is a major reason why CDHP enrollment has not accelerated rapidly in the group insurance market. In comparison, based on a member survey, the industry trade group America’s Health Insurance Plans estimates that 23 percent of all new polices in the individual market were HSA-eligible plans.

From the employee’s vantage point, employee cost sharing is much higher in CDHPs. Not only are average annual deductibles more than a thousand dollars more than in PPO plans, but CDHPs also typically use coinsurance for physician office visits while traditional plans primarily rely on copayments.

On the other hand, if an employee does not expect to use many health care services, higher cost sharing is not so serious a consideration, and the employer’s contribution to the savings account makes a CDHP a savings vehicle.

Lacking historical experience, health plans and employers initially may have priced CDHPs too high to guard against favorable selection—where healthier-than-average people enroll. Employers also may have set similar monthly contributions for employees in CDHPs. If plans and employers did overprice CDHPs, then subsequent increases in premiums in the next few years are likely to be more modest in CDHPs than traditional plans, thereby increasing the appeal of CDHPs.

In the employer-based market CDHP enrollment may ultimately take off in a manner similar to the early experience of PPOs. For the moment, however, CDHPs have gained only a toehold in the employer-based market, and health plans appear to be more enthusiastic about consumer-directed health care than are employers, who in turn are more enthusiastic than employees.

See full article in Health System Change, Behind the Slow Growth of Employer-Based Consumer-Driven Health Plans

Lisa Dubay, a research scientist at the Johns Hopkins Bloomberg School of Public Health, and researchers at the Urban Institute found that more than half of Americans without health insurance cannot afford to purchase it and are ineligible for public assistance programs.

56% of uninsured U.S. residents are ineligible for public health programs and cannot afford coverage

25% of of uninsured U.S. residents are eligible but not enrolled in public health programs

20% of uninsured U.S. residents can afford insurance but have not purchased it

74% of uninsured children are eligible for public assistance

This study goes a long way toward putting a number on the target for public healthcare assistance. There's been too much shooting from the hip on both sides of the "uninsured problem". Again it seems obvious that the children that remain uninsured should be the first priority.

According to a nationwide survey by Mercer Health & Benefits, more employers are using consumer-driven health plans -- such as low-premium, high-deductible plans with health savings accounts -- and disease prevention programs as cost-management strategies. Six percent of employers offered consumer-driven plans in 2006, three times the percentage in 2005, the survey found. An additional 14% of employers said they plan to offer consumer-driven plans in 2007.

Employers preferred HSAs to health reimbursement accounts, which require an employer contribution. Six in 10 small employers offered a consumer-driven plan as their only insurance option, compared with one in 10 large employers. Small employers are showing a clear preference for HSAs, which don't require an employer contribution to the account. About one-quarter of employers offered preventive screenings in 2006. Among large employers, the percentage who offered preventive screenings has nearly doubled in the last three years.

(Los Angeles Times, 11/20).

Nearly 800 California residents were asked to design the best possible health plan for the uninsured, using a limited amount of dollars. The project used a game-like computer program called CHAT (Choosing Healthplans All Together) developed by University of Michigan and National Institutes of Health researchers.

Individually, and in small and large groups, the 798 participants picked from a range of options - including different coverage levels for preventive, chronic and last-hope care; different options for access to doctors; a variety of co-pays for appointments, hospital stays and ER visits; options for dental and vision care, different premium levels, and more.

In the end, the participants came to agreement on what to cover, what kinds of tradeoffs to make, and how much would be reasonable for participants to pay out of their own pockets. The result was a package that, for example, would pay for the least-expensive medicines first for chronic diseases like diabetes; give basic care for pregnancy, mental health, and rehabilitation; and cover only proven preventive tests and exams. But it wouldn't cover last-ditch catastrophic care, extraordinary end-of-life care, and conditions that interfere with quality of life but aren't seriously disabling.

The plan would cost two-thirds of the average cost for insurance plans in California. "They made many trade-offs to avoid saddling individuals with high co-pays and deductibles," says lead author Marge Ginsburg, executive director of SHD. "They also chose comprehensiveness of coverage over choice of doctor, and made a clear distinction between health care needs that are vital to basic living, and those that are less essential to productivity and longevity."

The CHAT game is designed so that individuals progress from designing a plan on their own, to working in small groups, and then to a larger group. A number of sessions lasting two and a half hours, and each involving 10 to 12 people, were held in 2005 and 2006. Half of participants were from Sacramento County. The participants varied in age, economic and educational background, and insurance status, though they were not fully representative of the California population.

Published in the November issue of the journal Health Affairs

The total number of Health Savings Accounts (HSAs), which allow consumers to set aside money tax-free for medical expenses, is expected to grow to about 3.6 million with $5 billion in combined deposits, compared with 1.1 million accounts with deposits totaling $1.2 billion at the end of 2005. As a result, the number of banks that offer health savings accounts has more than tripled since the end of 2005. Nearly 1,100 banks now offer HSAs.

The abundance of new HSA offerings is triggering competition that is helping to push fees lower and expanding the options for consumers to invest their savings. HSAs typically accrue interest, but banks increasingly are offering other investment options. Bank of America this week is expected to announce plans to introduce a new credit card in partnership with major health plans that will allow holders to earn rewards points that convert to cash for their HSAs. In January 2007, customers will be able to invest their HSA balances in mutual funds offered by the Bank of America's Columbia Management arm. In addition, JP Morgan Chase later this month will begin allowing individuals to enroll in HSAs online, rather than solely through their employers. The bank also offers mutual fund investments to its HSA holders.

(Carrns, Wall Street Journal, 11/14).

In San Francisco, the Golden Gate Restaurant Association has sued to block the city's plan to provide health care coverage to uninsured residents, saying federal law prohibits local governments from requiring employers to pay for insurance. The ordinance, scheduled to take effect next July, requires that businesses with 20 or more employees pay for their staff's health coverage.

"Health care is everyone's responsibility, not just the employers'," the association's executive director, Kevin Westlye, said in a statement. He said his group has tried for a year to find an alternative to employer funding.

The ordinance is designed to cover 82,000 uninsured San Franciscans and is expected to cost $200 million a year. Costs will be paid by employers and taxes.

See full story in Forbes, Restaurant Assoc. Sues Over Health Care

Dave and Darlene Henderson bought Mega Life health insurance through the National Association of Self-Employed (NASE). For $400 a month, the couple said, the Mega Life agent told them that they could have a catastrophic group health insurance policy that would cover 80 percent to 100 percent of their hospital costs up to $1 million.

In 2001, Darlene Henderson became ill with breast cancer. David was later felled by an aortic aneurysm the size of a baseball and needed emergency surgery.Those medical misfortunes left the Hendersons with more than $210,000 in medical and hospital bills. Mega Life covered $33,428 of the Hendersons' bills. The couple were left stunned and quivering when they learned they still owed more than $180,000.

The Hendersons asserted their agent didn't emphasize or explain critical information:

1. There was no cap on their out-of-pocket expenses with Mega Life, unlike traditional health insurance, and
2. Their benefits had daily maximums far below the average cost of modern-day medical procedures and hospital stays.

A Nevada County Superior Court judge has dismissed a lawsuit filed by the Hendersons. Judge Albert P. Dover rejected the claims, saying they received exactly the benefits they signed up for when they bought a policy from Mega Life and Health Insurance Co.. Dover suggested consumers must read the fine print before they buy any insurance policies.

The California Foundation of Taxpayer and Consumer Rights has denounced Mega Life policies as "skeletal." The group said Mega Life's policies are so technical and riddled with jargon that the Hendersons were unlikely to have understood its limits if they had read it.

For more on NASE and Mega Life check out The Rip Off Report

Aetna said its fraud-detection software helped it prevent more than $89 million in fraudulent reimbursements from being paid last year, compared with $15 million it was able to recover after fraudulent payments were already made. Companies are able to save far more money by detecting fraud before claims are paid than recovering the money after the fact. Mike Stergio of Aetna noted that the majority of medical providers are honest. "The hard part is finding [fraudulent providers] among all these good people and at the same time not branding everyone out there as bad".

Fraud accounts for an estimated 3% to 10% of the $2 trillion spent annually on health care in the U.S. Companies have developed software that detects suspicious patterns in claims data. A method called "spider-webbing" finds one common denominator and follows the thread. Red flags indicating possible fraud include medical providers charging more than peers; providers who administer more tests or procedures per patient; providers who conduct medically unlikely procedures; providers who bill for more expensive procedures and equipment when there are cheaper options; and patients who travel long distances for treatment.

See full story in USA, Computer programs help flag insurance fraud before payment

Last year, Ford spent $3.5 billion on health benefits for 590,000 employees, retirees and dependents, and health care costs for the company have increased by 67% since 2000. In a move to stop the bleeding, Ford announced:

Starting January 1, 2008, Ford salaried retirees will no longer get health benefits. Instead Ford will provide salaried retirees who qualify for Medicare and eligible spouses and domestic partners with $1,800 annual stipends to pay for supplemental health care, dental and vision costs. Ford will place the stipends in health retirement accounts. By switching to a defined contribution plan, Ford avoids further increases in health benefit costs.

In addition, Ford on June 1, 2007, plans to increase health insurance premiums for most active salaried employees by about 30% and end their merit pay increases.

See story in Detroit News, Ford retirees face tough medicine

Starting this fall, UnitedHealthcare's SecureHorizons Medicare managed-care plans will be marketed in more than 700 Wal-Mart stores in 30 states just before the Nov. 15 start of the seven-week open enrollment period for Medicare managed-care and prescription-drug plans.

Humana also has a marketing partnership with the giant retailer. Wal-Mart helped Humana sell 3.5 million drug plans -- second only to UnitedHealth's 4.5 million -- and double enrollment in its Medicare Advantage managed-care plans. Humana markets both its drug plan and Medicare Advantage Plan.

The deal gives Wal-Mart partnerships with the two largest Medicare Advantage providers. UnitedHealth has more than 1.4 million people in those plans, and Humana about 1 million.

See full story at courier-journal.com
Humana not alone at Wal-Mart, UnitedHealth sells Medicare plansThe Courier-Journal

Employers are getting the upper hand on health insurance costs, mostly by asking employees to pay more of the cost. In the third quarter, benefit costs rose between 3.3% and 4.9% depending on whose numbers you use, but either way it's the lowest gain in the last 5 years. But the tighter labor market is also causing companies to to increase pay. Salaries grew by 3.2% from a year ago. The average employee will loose about 16% of his/her pay increase to higher health insurance costs.

Employers have been "willing to allow more compensation gains to filter into take home pay", according to Morgan Stanley chief U.S. economist Richard Berner. Meanwhile overall inflation is also slowing down. The combination of improving income gains and slower inflation will translate into higher real wages.

BusinessWeek, Nov 13, 2006 - A Bigger Burden, But a Bigger Paycheck

A Kaiser Family Foundation study found that higher coinsurance rates (e.g. you pay 20% of medical expenses or more):

1. Do not have adverse consequences for individuals of average health and income when compared with a plan with no coinsurance.
2. Reduce use of health services and health care spending.
3. No Coinsurance plans benefited the health of high-risk people, especially those with low incomes.

The Role of Consumer Copayments for Health Care: Lessons From the RAND Health Insurance Experiment and Beyond," Kaiser Family Foundation: The report by Jonathan Gruber of the Massachusetts Institute of Technology reviews data from the RAND Health Insurance Experiment to offer insights into current health policy debates about appropriate levels of cost sharing. The RAND experiment, conducted in the 1970s, randomly assigned families to health plans with different ranges of coinsurance and followed them for three to five years to determine how coinsurance levels affected their health and use of medical services.

Medicare beneficiaries now have access to a new online resource to evaluate their prescription drug plan choices for 2007. By visiting http://www.healthdecisions.org/guide, beneficiaries can work through an interactive prescription drug plan guide to determine which type of drug plan best meets their individual needs. The guide provides clear and concise information to help seniors and their loved ones evaluate their current prescription drug plan and make decisions about future coverage.

America's Health Insurance Plans (AHIP), the National Association of Chain Drug Stores (NACDS), and the National Community Pharmacists Association (NCPA) launched this interactive online guide as part of an ongoing national campaign to educate seniors about their prescription drug plan choices.

Humana Inc., the second-largest provider of Medicare drug benefits, said its profit more than tripled on higher prescription-plan membership.Third-quarter net income increased to $159.2 million, from $46.8 million. The company expanded its share of the government's Medicare health plan for the elderly and disabled by offering the lowest prices for prescription benefits and promoting its managed-care plans. In the quarter, membership in Humana's Medicare managed care plans almost doubled from a year earlier. Humana will add as many as 200,000 members in 2007, a jump of about 20 percent.

See Bloomberg.com story, Humana Profit More Than Triples on Medicare Plans

Asked to choose between a $6,700 raise and employer-sponsored health insurance, 75% (of those polled) picked the health plan. Of those, 13% said no raise would be big enough to persuade them to give up their coverage. The average cost of employer-provided coverage was about $6,700 per worker in 2004. It has since gone up to more than $7,100. These results come from the annual Health Confidence Survey, released today by the nonpartisan Employee Benefit Research Institute. The telephone poll of 1,000 adults was the ninth such annual survey, and has a margin of error of plus or minus 3 percentage points.

Overall, the proportion of employees covered by a company plan dropped from 81% in 2001 to 77% in 2005. After annual increases in health insurance costs hit double-digit rates in 2001, employers responded by passing an increasing share of the burden on to workers in the form of higher deductibles and co-payments. Such measures have slowed cost increases for employers, although they are still running at about twice the rate of overall inflation.

The White House is encouraging Americans to consider so-called consumer-directed plans, which feature low-cost insurance for major medical expenses with a tax-sheltered "health savings account" to cover the cost of routine care. A Rand Corp. report found that such plans could help cut spending and slow the rate of cost increases by reducing the use of medical services 4% to 15%. However, individuals may offset some of those savings by spending more out of their health savings accounts. The researchers said more study would be needed to determine whether the savings would be a one-time phenomenon or an enduring trend. About 3 million people are enrolled in consumer-directed plans, but the number is growing rapidly as large employers add this option to their benefits.

See full Los Angeles Times story, Health costs bedeviling Americans, survey shows

The economist Milton Friedman, a Nobel Prize winner, said, "When a man (precedes gender consciousness) spends his own money to buy something for himself, he is very careful how much he spends and how he spends it. When a man spends his own money to buy something for someone else, he is very careful how much he spends but somewhat less careful about what he spends it on. When a man spends someone elses money to buy something for himself, he is very careful about what he buys, but doesn't care at all about what he spends. And when a man spends someone elses money on someone else, he doesn't care how much he spends or what he spends it on. And that's the government for you."

With the trend toward higher deductibles in both the employer and individual health insurance markets, we find ourselves spending our own money for health care. Now we should begin to see people spending more carefully and buying more wisely. They should also be more receptive to behavioral changes such as diet, exercis ang good preventive care.

As scrutiny over cancelled policies grows, the California Department of Managed Health Care ruled that Kaiser Permanente illegally canceled coverage for a Northern California woman. The cancellation was illegal, the agency ruled, because there was no evidence the woman intended to deceive the health maintenance organization about her medical history when completing her application for coverage. With the order against Kaiser, all three of the state's largest health plans are now embroiled in the controversy. Blue Cross of California, owned by Indianapolis-based WellPoint Inc., recently settled more than 70 lawsuits and claims filed by patients who accused the state's largest health insurer of illegally canceling their coverage after they got sick. Suits have also been filed against Blue Shield of California.

Kaiser faulted the woman for not disclosing an appointment she had for arm and neck pain. The agency ruled the rescission illegal because Kaiser made no showing that the woman willfully misrepresented her health history.

Follow the thread of this issue in Healthcare Shopper, Blue Cross Settles Lawsuits

Blue Cross of California has agreed to settle more than 70 lawsuits and claims filed by patients who accused the state's largest health insurer of illegally canceling their coverage after they got sick. The settlements will allow the former policyholders to pay hefty medical bills that they were stuck with after losing their insurance.

The issue behind this story is the fact that carriers of individual health insurance policies have been rescinding or cancelling policies after they have been issued, based on alleged errors or omissions in the applications for coverage. State regulators say that the carriers must prove that the application errors or omissions were intentional. Blue Cross has canceled some policies based on errors that could not be proven to be intentional on the part of the applicant.

Pick up the thread of this story at Healthcare Shopper, Hospitals sue Blue Cross of California

The promise of consumer driven health plans is that high-deductible health plans combined with health savings accounts (HSAs) can help make the insured spend more carefully and reduce health care costs, but so far few employers have embraced the plans. According to a recent survey conducted by the Kaiser Family Foundation, only 7% of U.S. employers offer high-deductible health plans with HSAs, and only 4% of employees with health insurance are enrolled in such plans.

A plan by Wal-Mart to offer employees high-deductible health plans with lower premiums, rather than traditional low-deductible plans, will serve as a massive test of the claim that consumer-driven health plans can slow the sharp rise in medical costs by making individuals responsible for spending decisions. Under the plan, which will begin on Jan. 1, 2007, new employees can enroll in a health plan with a $1,000 deductible or a $3,000 deductible. One of the health plans will allow new employees to contribute to a health savings account after one year and Wal-Mart will contribute as much as $2,400 to the HSAs annually.

Because of the large number of relatively low income individuals employed by Wal-Mart, this should prove to be a solid test of the wider appeal of consumer driven health plans beyond the affluent self-insured market it has captured so far.

See full story at Kaiser Family Foundation - Kaiser Daily Health Policy Report, 9/27

A class-action lawsuit filed Friday on behalf of all California hospitals accused Blue Cross of California of routinely violating state law by refusing to pay hundreds of hospitals statewide for patient care it authorized. At issue in the suit, filed in Los Angeles County Superior Court, is the cost of care for patients whose coverage Blue Cross later canceled. The unpaid bills could be huge because Blue Cross cancellations often involve costly medical procedures. In many cases, canceled patients are unable to fully reimburse hospitals. The suit seeks payment for all treatment the state's largest health insurer authorized for such patients over the last four years, as well as interest and punitive damages.

Earlier Healthcare Shopper reported that Blue Cross was fined $200,000 for rescinding individual health insurance policies, the cause of these unpaid hospital bills.

A contributing factor to the increasing number of uninsured Americans, is the fact that more of them are working for small ccomapnies than in years past.

Only 60% of businesses with less than 200 employees provided health benefits in 2006, compared with 98% of those with 200 or more employees. Small businesses have been gaining the U.S. employment base for three consecutive years. Large firms are more likely to reduce staff during recessions and slow-growth economies. In addition, large companies are more likely to be manufacturers, which can replace workers with automation through technology, and to outsource work, which also results in downsizing. Meanwhile, smaller businesses are often in service industries such as consulting and health care fields that require workers rather than machinery.

See USA Today story, Small businesses again gain ground in overall U.S. employment

Medical identity fraud, where individuals use the names and medical records of others to obtain healthcare is becoming frequent. Experts "believe that the rising cost of health care is driving more identity theft and that many people are unaware they have become victims unless they receive a hospital bill or query from their insurer," according to the Times. In addition to bills from hospitals and health insurers "fraudulently run up" by others, victims of medical identity fraud "face a greater risk of injury or even death if doctors make treatment decisions" based on errors in their medical records that can result, the Times reports.

Medical privacy rules established under the 1996 Health Insurance Portability and Accountability Act "can make it difficult for patients to see their own medical records" when identity theft is suspected, the Times reports. In addition, "once a person tells a keeper of records that someone else's data might be intermingled, the file becomes even harder to obtain" because "it includes another person's medical history, which many hospitals argue can't be turned over without consent."

Read Los Angeles Time Article, ID Theft Infects Medical Records

Ms. Austin-Fink, a 59-year-old writer who lives in Las Vegas had breast cancer. She received six doses of the chemotherapy drug Abraxane at $4.200 per dose. The cost of the drug did not concern her because she has excellent insurance coverage. “My insurance company just paid it, because my doctors said they needed it, and the insurance company doesn’t argue with stuff like that,” Ms. Austin-Fink said.

Abraxane’s effectivness and side-effect profile is similar to that of Paclitaxel, which was approved for treatment of breast cancer in 1992 and is still widely used. Bristol-Myers Squibb’s patent on Taxol expired in 2000. Now the drug is available as a generic at a cost of about $150 a dose. But, because of the odd economics of the cancer drug market, Abraxane’s price does not seem to be hurting its popularity

While insurers have tried to save money in other drug categories by encouraging patients to use cheaper generic drugs, they face public pressure not to restrict access to new cancer treatments. In addition, doctors treating cancer patients are imune to treatment costs. “When I’m with a patient, my job is to be a patient advocate, not to try to save society money on chemotherapy,” said Dr. Barbara McAneny, of Albuquerque.

The rise in cancer-drug prices is a microcosm of broader trends pushing up health care costs nationally. Despite decades of efforts by governments and insurers to restrain costs, patients continue to want the newest — and most expensive — drugs and medical devices. And doctors and the health care industry have little reason to keep costs in check, because insurers rarely deny coverage for new treatments on the basis of price.

See full new York Times story - Hope, at $4,200 a Dose

America's Health Insurance Plans (AHIP) surveyed member companies offering coverage in the small-group health insurance market including premium and benefit data from more than 650,000 small groups (those with 50 or fewer employees), covering 4.0 million workers and 3.2 million dependents.

Of workers offered an HSA plan, approximately one-third also had a choice of a PPO or HMO/POS plan. Almost half (46%) of enrollees in small groups chose HSA/HDHP plans when offered a choice of HSA plans and other types of health plans.

However, less than 10 percent of small groups offer health savings account (HSA) benefit, with a qualifying high deductible health plan (HDHP).

More than half of workers in the United States -- 54 percent -- said that health benefits are more important to them than higher wages, according to results from the American Payroll Association's 2006 "Getting Paid In America" online survey.

Most of those with employment-based health benefits view them favorably and value them highly. "Getting health coverage through employers is convenient and reassuring," said Jeff Lemieux, Senior Economist, Progressive Policy Institute. "Employers handle the paperwork and payroll deduction of premiums, and can help resolve disputes with health plans."

The online survey was held in conjunction with APA's annual National Payroll Week campaign. More than 33,000 employees provided opinions on payroll-related issues.

The Florida Health Care Coalition - FHCC - a coalition of Florida employers including Macy's, county governments and school boards -- studied the state's six largest insurers. Insurers' services were measured using a tool called eValue8, a quality measuring system developed by the National Business Coalition on Health. Cigna ranked highest among Florida insurers in four categories: overall profile, consumer satisfaction, disease prevention and behavioral health. Aetna ranks first for chronic disease management, Humana is first for information on health care providers and Blue Cross and Blue Shield of Florida leads for adoption of information technology, and UnitedHealthcare ranks No. 1 for prescription drug benefits, the report finds

We offer our clients an annual review of their health insurance coverage because things change. To make the best decisions about your benefits, go through this checklist:

1. Review the benefits you used last year and evaluate the money you allocated to those various benefits.

2. Take into account any major life event, such as marriage, divorce or childbirth. Those events affect your needs.

3. Make a list of the major preventive and diagnostic procedures you're likely to need, and make sure your health and dental plans cover those services.

4. Consider any job related benefits your spouse may have so you don't pay for double coverage if you don't need it. Compare coverage levels and cost to get the best plans.

5. Since health insurance premiums go up every year, your coverage may become unaffordable. If so, it's probably time to consider a higher deductible plan.

In the first sanction of its kind, California's top HMO regulator fined Blue Cross on Thursday for illegally canceling a woman's medical policy because she did not disclose corrective surgery she had 23 years earlier. In announcing the fine, Cindy Ehnes, director of the Department of Managed Health Care, said that insurers are prohibited from canceling health policies unless a policyholder lied.

In the case at hand, her department found that Blue Cross broke the law in two ways. First, the agency said, the insurer failed to adequately underwrite, meaning scrutinize the woman's medical history before issuing her policy. Second, it found that Blue Cross "failed to prove that the member willfully misrepresented her health history."

The fine comes in the wake of scores of lawsuits filed in California in recent months by consumers. They say they were stuck with medical bills after insurers canceled them for making innocent mistakes on their applications or for leaving out health history details the individuals viewed as insignificant or irrelevant.

Small business tax incentives, along with more Spanish language and Latino-specific health programs, are needed to reduce uninsured rates among the Latino population, according to a report by the Latino Coalition, the Houston Chronicle reports. According to the coalition, many Latinos are employed by small businesses that do not offer health insurance. Most Latino adults lack employer-provided insurance coverage, the report states. In addition, Latinos have the highest uninsured rates among all ethnic groups, and one-fifth of Latino children are uninsured. Meanwhile, Latinos face a higher risk of chronic diseases, such as diabetes and obesity, than non-Latinos.

Government officials should consider these statistics when establishing health programs, the study finds. The group calls for tax incentives for small businesses that would reduce taxes by one dollar for every dollar contributed into health savings accounts. It also urges increased efforts to enroll Latino children into federally funded insurance programs, such as Medicaid and SCHIP, and recommends more funding for community health centers that offer no-cost or low-cost health services in areas with high Latino populations. "These strategies are doable and easy to achieve," Latino Coalition President Robert de Posada said, adding, "We are tired of waiting for people to act" (Tran, Houston Chronicle, 9/14).

Blue Cross of California is being sued by some former policyholders for canceling or rescinding (in insurancespeak) their insurance policies after the policies were issued. Blue Cross claims that their applications for coverage contained errors or omissions that, if divulged, would have caused Blue Cross to deny coverage initially.

Some angry consumers claim that Blue Cross looks for any inconsistencies in the applications of customers who make expensive claims shortly after obtaining coverage. The conspiratory flames have been fanned by Blue Cross employees who have detailed in sworn depositions that look-back underwriting units do indeed exist to look into these applications.

Reacting to the pressure, Blue Cross has announced changes, including creating an ombudsman and revising its appeal process — but maintained that it had done nothing wrong See Los Angeles Times Article "Blue Cross Moves to Quell Furor".

This underwriting issue is a slippery slope for health insurance carriers that sell individual policies. In order to generate more sales, Blue Cross of California is among those insurance companies that make the application process as easy as possible for the applicant, basically accepting whatever the applicant says. Other insurance companies do stringent underwriting before issuing coverage, often requesting medical records, checking on prior claims, and looking into public information like DMV records (any DUIs?). Such intense underwriting hurts sales because often applications are delayed for weeks, causing applicants to shop elsewhere. Consumers and brokers alike prefer the Blue Cross approach to application processing.

Like most horror stories, rescisions are rare. HealthcareShopper.com does more health insurance business in California that any other state. We place most of our business with Blue Cross - that amounts several thousand policies over the past five years. As far as I know, only one policy written by our agency has been rescinded in that period of time.

A new report from the Commonwealth Fund finds that an overwhelming majority--89%--of working-age adults who sought coverage in the individual market during the past three years ended up never buying a plan. A majority (58%) found it very difficult or impossible to find affordable coverage. One-fifth (21%) of those who sought to buy coverage were turned down, were charged a higher price because of a pre-existing condition, or had a health problem excluded from coverage. My own internal numbers here at HealthcareShopper.com mirror these results very closely.

Additionally, the study found that those with high deductible health plans were also more likely to report that they did not get needed health care or prescription drugs because of costs. In addition, many adults with such plans said they had problems with medical bills or were paying off medical debt over time and were more likely to give low ratings to their coverage. This makes me very uncomfortable because the individual health insurance market has been moving toward higher-deductible plans for the past 3 to 4 years. For those who can afford to put aside some savings to cover the higher out of pocket expenses, higher deductible health insurance equates to lower health insurance premiums. For low income people, these high deductible plans may all that they can afford, but the out of pocket expenses may be more than they can handle. We here at HealthcareShopper need to be more sensitive to that issue.

The report, Squeezed: Why Rising Exposure to Health Care Costs Threatens the Health and Financial Well-Being of American Families, by Commonwealth Fund Assistant Vice President Sara Collins and colleagues, is based on findings from the Commonwealth Fund 2005 Biennial Health Insurance Survey.

Employer sponsored wellness programs and HSA plans make a smart combination for employers and employees alike. While HSA qualified health insurance plans immediately reduce employer costs, wellness programs also put a lid on health insurance and workers' compensation claims over time.

Today, many companies offer a spectrum of services to their entire work force: access to workout facilities, informal brown bag health talks, screenings for common conditions such as high blood pressure, and intensive follow-up with a nurse or a health coach for employees with ongoing health issues.

As an added incentive, some employers contribute into a health savings account for each participating employee. That would help cover the health plan's deductible if the employee had a major medical problem. If not, the money would roll over into the tax-free account to be tapped later for medical expenses.

I recently read an article in the Washington Post, reporting on census figures released last week. For the first time since 1998 the number of children younger than 18 without health coverage increased. I find this discouraging because there are resources for children of low income families for low-cost or free healthcare coverage. Visit the Healthcare Options Matrix, a state by state matrix of options for individuals unable to obtain health insurance due to medical conditions or financial need.

It is estimated that 70% of uninsured children are eligible for low-cost or publicly subsidized coverage. Some are not aware that they might be eligible or they don't know how to apply. Pride also is a factor, with some families reluctant to accept government aid.

Uninsured children are less likely to be up to date on immunizations and to receive treatment for sore throats, earaches and other common childhood illnesses. Kids without insurance tend to have more school absences.

Acceptance of HSA plans has financial institutions racing for a piece of the action. Here's why:

* Each month HSA administrators add 60,000 new accounts.
* Americans have banked nearly $1 billion in HSAs
* The average balance in HSA accounts is $1,181
* 60% of individuals with HSA qualified insurance have opened an HSA

As a consequence, it's easier to find banks and other financial institutions that offer HSAs now compared to a year ago. To see if your bank offers HSAs, try Googling "bank name and HSA". If you call your bank and ask, the person who answers the phone will probably be clueless about HSAs.

Young adults are dropped from their parents health plans between age 19 and 24. Most people this age know practically nothing about health insurance and many could care less. Unless their parents lead them by the nose or purchase individual plans for them, they are at a loss.

Sponsored by Aetna and the Financial Planning Association, the interactive website, AllAboutTheBenefits.com, guides young workers through typical experiences with information and real world examples - - graduating from high school or college, interviewing and starting a new job and budgeting for new expenses. AllAboutTheBenefits.com focuses on topics such as:

* Bridging from their parents' or college's health plan to their own
* Asking questions about health benefits during a job interview
* Making sense of health benefits options
* Translating insurance lingo
* Budgeting for health expenses

Health Savings Accounts (HSAs) are going to be the most prominent health plan option for the individual buying his or her own health insurance within a year or two. In five to ten years. I think, it will be the only option for many Americans on employer paid health plans. Why? Because the premiums for traditional health insurance keep going up, and by using HSA-linked plans, employers can more precisely budget what their health tabs will be. “With traditional insurance plans, employers are basically giving employees credit cards and paying the bill for them at the end of the month”, said Kate Kohn-Parrott, director of integrated health care and disability for the Chrysler Group.

Critics say the plans are just another tax-sheltering tool for the healthy and wealthy and I agree. If you are “wealthy” enough to save some of the money you earn and are healthy enough to qualify for health insurance, there is no better option for you than the high-deductible health plan with a health savings account.

What’s new is that big companies like Chrysler are offering high-deductible health plans and health savings accounts. In most cases, the employee is responsible for building up savings in the tax-free HSA. But at Chrysler and some other companies, the employers also are contributing to the accounts. In 2006, Chrysler contributed $500 to each individual's HSA and $1,000 to each family's HSA. Chrysler also offers paid coverage for health screenings and annual physicals.

Nationwide, 3.2 million Americans -- from corporate employees to the self-employed -- have enrolled in the high-deductible health plans, up from 1 million just a year ago, reports America's Health Insurance Plans. The U.S. Department of Treasury projects that between 7 million and 21 million Americans will have HSAs in four years.

Young adults make up the fastest growing portion of the uninsured population. Insurance companies refer to them as “Young Invincibles”, probably because people at this age think that they will last forever. Many colleges have begun to require students to purchase health insurance - either private insurance on their own or a university policy.

College students are already more likely to be insured than others their age. Most state laws let parents keep college students on their policies until age 23. Those that don't attend college, leave their parents' policies by age 19, under most state laws. Most young workers don't have health insurance where they work or think the price is too high. Some young workers just decide to go without. Young people do not perceive health insurance as a good deal, paying the cell phone bill is much more immediate.

Assurant Health Insurance Company aggressively sells short-term policies for young people. Wellpoint Insurance company markets health insurance plans targeting this market called Tonik Plans in California or Sound Plans in Texas and Illinois. Wellpoint’s tactics of blending hip marketing materials, quick online applications, and comprehensive coverage at competitive prices have worked well.

I am Phil Daigle and I author the Healthcare Shopper Blog. I am the founder and CEO of HealthcareShopper.com, LLC. - a national health insurance agency based in Laguna Beach California. I pioneered the marketing of health insurance via the internet in 1996. Today, HealthcareShopper.com provides health insurance to individuals and families throughout the United States. Currently, we have over 2,000 customers.

I share what I know about the health care business with my customers. potential customers, and friends to help them become informed consumers of healthcare.

Just yesterday I wrote abouth the need for medical cost transparancy to help us become smarter consumers of healthcare. Today I spotted this article in the PalmBeachPost.com.

Quote, "The information helps consumers doctor shop because rates can vary. For example, Aetna pays West Palm Beach orthopedic surgeon Pierre Girars $1,713 for a hip replacement. But it pays another West Palm Beach orthopedic surgeon, Milan DiGiulio, $1,456 for the same procedure. Doctors get paid differently because they negotiate with insurers separately."

Kudos to Aetna, the first to break the veil of secrecy. "Insurers have closely guarded payment data in the past, citing competitive pressures...Aetna tested its new doctor-pricing data in Cincinnati last year. In that market, about 1,000 consumers each month looked at the database, Aetna officials said. In addition to South Florida, the program is being rolled out in other markets, including Ohio, Connecticut and the Washington, D.C., area." The information is available to Aetna members in the markets mentioned above at AetnaNavigator.com

Health insurance companies who offer private health insurance to individuals and families get to pick whom they want to insure (notable exceptions NY and NJ). They will decline us for coverage if they think they might loose money by insuring us. Also, a lot of us just can't afford decent coverage. It's not fair. It is what is.

I refer my friends and clients who are unfortunate enough to fall into this category to the Healthcare Options Matrix, a state by state matrix of options for individuals unable to obtain health insurance due to medical conditions or financial need.

I'd like to thank Phil Lebherz, Executive Director, of the Foundation for Health Coverage Education’s (FHCE) for putting this information together. The FHCE’s original mission was to focus on the uninsured population in California; however, news about the Matrix and Help Line traveled fast and many states began asking the FHCE for versions based on their state’s options. In response to the demand, the FHCE developed a customized Matrix for every state in the nation.