By George W. Chapman
Five Health Insurance Myths
Alexis Pozen is a professor of health economics at CUNY School of Public Health. She recently debunked five widely held myths about health insurance.
• 1. “The ACA forced millions to buy insurance they didn’t want.” Not true. Both before and after the ACA, the majority of the uninsured have consistently claimed they want coverage. Cost, life changes (job, school, divorce, etc.), denial of coverage, insurance not available through their employer, were most often cited as reasons for lack of coverage. Before the ACA, 45 million people lacked insurance. Since the ACA, 2010, 20 million people opted in and got decent coverage.
• 2. “Expanding coverage saves money”. Unfortunately, not true. The costs from increased demand for services has far overwhelmed any savings due to improved health, at least so far.
• 3. “Health insurance companies make massive profits”. Not true. In 2010, when the ACA was introduced, the average profit margin for publically traded health insurance companies was 3 percent, well below the profits of drug and medical device manufacturers. Insurance profits tend to be more aligned with economic growth (GDP) than any price gouging or denial of services.
• 4. “People on Medicaid are free loaders”. Not true. Most, 67 percent, of “able bodied” Medicaid recipients work. Just 30 percent of Medicaid recipients are considered “able bodied” and they account for only 20 percent of total Medicaid spending. 44 percent of Medicaid recipients are kids. The bulk of Medicaid spending, 60 percent, is for the elderly and disabled.
• 5. “Job-based insurance means your employer pays and the government doesn’t.” Again, not true. The cost of coverage is actually borne by the employee indirectly, through lower wages than a competitive market would otherwise support, and directly through increased out of pocket expenses (employee contribution to premium, deductibles and co-pays). By not taxing employer-based premiums, the government forgoes hundreds of billions in revenue annually. This government “subsidy” was worth $275 billion last year. The government subsidy is what has tied employment to insurance. Taxing premiums frees up job seekers to choose employment based on their skills/interests vs. what the employer offers for coverage.
2016 Open Payments
Each year, for transparency purposes, the federal government issues a report that shows how much money went from drug and device manufacturers to physicians and teaching hospitals. Last year, over $8 billion went to 631,000 physicians and 1,146 hospitals; up $90 million from 2015. About half or $4 billion was for research; about $3 billion was for travel, meals and consults; and the remaining $1 billion was for ownership and investment interests.
Job Loss Projection
Most of the publicity and concern around the proposed American Health Care Act has been about the projected loss of insurance by 23 million Americans. Little attention has been given to the projected loss of jobs in the healthcare sector as a result of the loss of 23 million insured paying customers. According to research by the politically neutral Commonwealth Fund, nearly 1 million healthcare jobs would be lost by 2026. Researchers believe that initially, if the ACA is repealed, the economy would gain about 864,000 jobs in other sectors because of the end of ACA taxes (which would only add to the federal deficit if not offset with other revenues.) The initial gain of 864,00 jobs, however, would be short-lived and eventually turn around into job losses. New York state is among top 10 states in predicted job losses.
This is a bill you could receive from an out of network provider, hospital or physician, for the difference between their normal charge and what your insurance pays. This typically occurs in an emergency situation where you are transported by ambulance to an out of network hospital or when you are attended to by an out of network physician at an in-network hospital. In most of these cases, you aren’t in control. Only 21 states afford consumers some sort of protection from balance bills. Only 6 of those states provide comprehensive protection and New York is one of them.
Coming to a Mall Near You
As reported by the Wall Street Journal, malls are very appealing to healthcare systems looking to expand their primary care footprint. Many malls, conveniently located but faced with declining occupancy, are negotiating very competitive occupancy rates with providers. Vanderbilt University Medical Center in Nashville has been an anchor tenant at the One Hundred Oaks mall since 2009. The mall, once considered almost dead, now has a 98 percent occupancy rate. Dana Farber in Boston took space in a mall near Chestnut Hill where in addition to primary care opened a gym and wellness facility for patients and staff. The increase in these hospital-based outpatient centers is due primarily in response to the encroachment of for-profit retail clinics, like Walmart, in the marketplace.
New Surgeon General
The president has nominated physician Jerome Adams to be the U.S surgeon general. The 42-year-old Adams, an anesthesiologist, was appointed Indiana Health Commissioner in 2014 by then-governor Mike Pence. Adams took the lead in Indiana’s fight against opioid addiction. Adam’s nomination is sure to be approved. Trump fired the former surgeon general Vivek Murthy in April.
George W. Chapman is a healthcare business consultant who works exclusively with physicians, hospitals and healthcare organizations. He operates GW Chapman Consulting based in Syracuse. Email him at firstname.lastname@example.org.