Divided Government Means Small Ball for Health Reform

President-elect Joe Biden may be facing off the next two years against Senate Majority leader Mitch McConnell, who is unlikely to depart from his consistent and effective refusal to consider substantive health reforms.

That was Wall Street’s take-away last week. Health stocks soared after it became clear that the Senate would retain its Republican majority. There is a slim chance Democrats could prevail. Both U.S. Senate contests in Georgia denied any candidate 50 per cent of the vote, triggering January runoff elections under state rules. If Democrats won both of those seats, they would have 50 seats and Vice President-elect Kamala Harris would cast the tie-breaking vote as Senate president if needed.

The Dow Jones index of 30 industrial stocks dipped a bit Friday but still closed at 28320, up nearly 7 percent (1820 points) for the week. (26501 on Friday, Oct. 30). The Dow index of health stocks fared even better, closing at 2440, up 13 percent (280 points).

“Bipartisanship on health care is hard to come by, especially for big-ticket items,” Catlin Owens wrote for Axios. “Lawmakers tried to find common ground last year on drug prices and fixes for surprise medical bills, but both of those efforts failed.”

The big exception to meaningful health-care changes would occur if the U.S. Supreme Court strikes down the Affordable Care Act. Vox has a solid explainer on the tortuous legal path of ACA challenges.

If that occurred, Democrats would mount a major offensive to reinstate key ACA safeguards. Without Donald Trump in the White House, Senate Republicans are likely to be more receptive to an ACA compromise. For their part, health care companies and employers have little appetite for returning to pre-ACA rules.

Mercer, the employer benefits firm, polled employers at a webinar last week (before the Presidency had been decided but after it was clear that Republicans likely would retain control of the Senate).

“We asked our participants to consider which of the patient protections mandated by the ACA they would continue even if the law were struck down,” said Tracy Watts, senior partner for health policy. “The top three protections that respondents would keep: no pre-existing condition exclusions (87 percent), preventive care covered in network with no cost sharing (77 percent), and child coverage eligibility to age 26 (64 percent). Fewer employers thought they would continue with no annual dollar limits (33 percent would maintain no limits), or with the current mandated limit on out-of-pocket maximums (44 percent would maintain the limit).”

“We gave participants a long list of possible healthcare priorities for the next Congress and let them pick up to five from the list,” Watts said. “There were two clear winners: reduce prescription drug prices (83 percent) and promote greater healthcare cost transparency (66 percent). Both of those would be a real win for plan sponsors and consumers alike.”

The Coming Battles Over Disclosing Real Health Costs

The Trump Administration last week issued sweeping price disclosure rules that would require health providers and insurers to tell consumers the real prices of care, permitting them to comparison shop for the best deal and understand what their out-of-pocket costs would be.

The disclosure requirements would take several years to implement, are strongly opposed by health providers, and might not survive intact in either a Biden White House or even a second term for President Trump.

Nonetheless, they represent an inescapable consequence of how enormous amounts of digitized health information are being used to transform health care. One of the major themes of my forthcoming health care book is that such “big data” is already triggering significant health reforms.

Led by big, self-insured health plans, employers have built tools that identify health care providers producing the best care for the lowest prices. The lack of such price transparency has meant, for example, that there is no relationship between the quality of care and its price. Doctors who charge the most money for their services may, in fact, provide the worst care, but consumers have had no way of telling or making informed decisions.

Using millions of paid health insurance claims, employers and tech-driver entrepreneurs can now identify caregivers with the best health outcomes and, within this group, which ones charge the least money.

Even this single achievement can produce staggering changes. For example, Walmart and other savvy employers can now fund top-notch care for employees and save so much money they can afford to a pay employees a wellness bonus to take better care of themselves.

At the same time, such number-crunching is exposing huge price inefficiencies in U.S. health care, which costs twice as much per capita as in any other advanced society. This knowledge has, in turn, attracted thousands of venture capitalists into health care, where they often are disrupting long-established and often anti-competitive business patterns within the fraternities of big pharma, hospitals, equipment companies, and insurers.

The government’s price transparency rules would require health insurers to provide consumers with “personalized out-of-pocket cost information, and the underlying negotiated rates, for all covered health care items and services, including prescription drugs, through an internet-based self-service tool and in paper form upon request.” An initial list of 500 “shoppable” health services would be required in two years and all remaining items in three.

In only a year – lightning speed for health care – insurers would be required to provide three data files that would be provided to consumers: 1) negotiated rates for all covered services provided by a health plan’s in-network providers; 2) historical payments and billed charges from non-network providers, and, 3) in-network rates and prices for all covered drugs at a consumer’s local pharmacy.

Previous transparency rules would require comparable transparency from hospitals. They have sued but the hospitals’ case was not favorably greeted in an earlier court hearing.

ACA Open Enrollment Begins November 1

The annual enrollment period for coverage under the Affordable Care Act (ACA) begins in most states on November 1. Rules may differ in your state, so check  for details.

Typical premiums are expected to decline a bit (2 percent), although the costs for family coverage are hardly a bargain. More insurers are offering ACA plans, meaning that you are more likely to have two or three plans to choose from where you live instead of one, which of course is really no choice at all.

“At the same time, deductibles continue to rise, according to an assessment by Health Affairs.  “For bronze plans, the median individual deductible increased from $6,755 for 2020 to $6,992 for 2021. For silver plans, deductibles rose from $4,630 to $4,879. And gold plan deductibles rose from $1,432 to $1,533.”

The average cost of a benchmark “silver” plan will be about $380 for a 27-year old and $1,485 for a family of four. If you qualify for an ACA subsidy – and nearly nine out of ten policyholders do – your out-of-pocket costs will be much less.

The news this year is not so much about available ACA policies and costs but about how COVID-19 has sharply changed economic fortunes of many people who might seek coverage. If you’re one of them, it’s worth spending the time to see what kind of deal you can get for 2021 ACA coverage.

Figuring this out can be challenging. If you need a refresher on different ACA “metal” plans and the workings of ACA tax subsidies, check out Kaiser Family Foundation’s extensive ACA guides.

The Trump Administration has been trying for years to kill the ACA but it still funds a slimmed-down navigator program to help people enroll in plans. Here’s a list of state-by-state navigator programs with contact information. Georgetown University’s Center on Health Insurance Reforms also provides a Navigator Resource Guide.

Social Security Announces Modest 2021 Benefit Increase

Social Security benefits will rise 1.3 percent in 2021, the agency announced. Such a modest cost of living adjustment (COLA) — $20 a month for the average beneficiary — normally would translate into meager 2012 benefit gains once Medicare beneficiaries back out higher 2021 monthly premiums for Part B of Medicare.

The Centers for Medicare & Medicaid Services (CMS) has not yet announced the 2021 Part B premium. It is $144.60 a month this year for most people and would be expected to eat up much of the 1.3 percent Social Security COLA.

Last fall, however, Congress enacted a new rule limiting Part B premium increases to 25 percent of the rise that CMS otherwise could levy. In their annual outlook report last spring, Medicare trustees projected the 2021 Part B premium would rise to $153.30, an increase of $8.70. Under the new rule, CMS would be able to pass on only 25 percent of this amount, raising the Part B premium to roughly $147.40.

The COLA announcement also triggered other key program metrics for next year:

The wage ceiling subject to payroll taxes will rise to $142,800 from $137,700.

The earnings test limits that reduce benefits for recipients with wage income will rise to $18,960 ($1,580 a month) from $18,240 ($1,520) this year for people who have not yet reached full retirement age. For those who have, the limits will rise to $50,520 ($4,210 a month) from $48,600 ($4,050) this year, for those earning wages during the year they reach full retirement age. Wages earned after full retirement are exempt from earnings-test benefit cuts.

The agency’s COLA fact sheet lists other 2021 changes.

2021 Employer Insurance Trends; Shaky Social Security Benefit Projections

Employee health insurance will cost a bit more next year and, save for some pandemic tweaks, will look much like it has in recent years.

Surveys taken by Mercer, an employee benefits and consulting firm, and the National Business Group on Health, which represents big-employer plans, concur on these trends:

Rates will rise between 4 and 5 percent, and the typical employer plan will continue to pay 70 percent of the total insurance bill. Check with your plan during this fall’s open enrollment season for 2021 coverage details.

The rise in digital and telehealth services will continue, with many plans boosting virtual mental-health services to acknowledge the substantial rise in depression, anxiety, and drug abuse associated with the continued health and economic damage caused by COVID-19.

Big-employer plans will expand their use of onsite clinics and centers of excellence — high-quality health providers around the country who offers superior care at reasonable prices.

“Many employers are adding new resources to support and engage employees in the COVID era,” Mercer’s outlook said. “At the top of the list: virtual office visits and other digital healthcare resources . . .  such as telemedicine for episodic care, artificial-intelligence-based symptoms triage, ‘text a doctor’ apps and virtual office visits with a patient’s own primary care doctor.”

In 2020, according to a study by Kaiser Family Foundation, “the average annual premium for single coverage rose 4 percent, to $7,470, and the average annual premium for family coverage also rose 4 percent, to $21,342. Covered workers, on average, contributed 17 percent of the cost for single coverage and 27 percent of the cost for family coverage.”

Roughly 157 million people were covered by employer plans before the pandemic triggered widespread job losses. Many who have lost coverage were expected to enroll in Medicaid but specific numbers are not yet available.

Shaky Social Security Benefit projections

The Social Security Administration recently released an internal briefing paper that documents what most experts have long said – the agency’s benefit projections are often not accurate, especially for younger workers decades from claiming benefits. Briefing papers are not official SSA policy but evidence-based research to help senior agency managers. Here’s a table showing the wide variation of statement projections to actual benefits.

Age     Percentage of projections accurate to within 

            5%       10%     15%     20%     25%

25        7          14        20        27        32

30        14        25        34        41        46

35        23        38        45        50        55

40        31        45        54        61        65

45        40        57        66        73        77

50        55        71        79        84        87

55        74        86        90        92        93

The low percentages of many benefit projections in the table can mislead people. If your younger than 55, in particular, the odds are very high that your statement’s retirement projections sharply underestimate the actual benefits you will later receive. This is a big deal.

Researchers tried and failed to find a more reliable projection methodology. They concluded:

“We recommend enhancements to the benefit-estimating tools available online via the my Social Security portal, including permitting uninsured workers’ access to the portal, and increased capability for existing interactive calculators. Providing access to a benefit estimate for uninsured workers based on future covered work would allow workers with less than 40 credits to see the impact of continued covered work on becoming fully insured for benefits in the future. Expanding the flexibility of the interactive benefit calculators may improve the accuracy of the benefit estimates for workers whose knowledge of their current and future work situations may be better than SSA’s assumptions and so may be best suited to enter accurate expected future earnings and claiming-age variables.”

You can find your projected benefits in your My Social Security online statement. If you don’t have one, create it. It’s essential to informed retirement planning – essential, but often inaccurate. The message here is to not passively accept the accuracy of your statement.

Navigating Medicare Open Enrollment

Medicare’s annual open enrollment period begins October 15 and extends through December 7.

During this time, people already on Medicare have the option to:

  • Switch from original Medicare (Parts A and B) to a Medicare Advantage plan.
  • Switch from Medicare Advantage to original Medicare.
  • Keep their Medicare Advantage plan or enroll in a new one.
  • Keep their Part D drug plan or enroll in a new one.

All changes, even those made as late as December 7, will be effective on January 1, 2021.

If you have original Medicare and a Medigap supplement plan, you will have to drop Medigap if you switch to Medicare Advantage. There is no open enrollment period for Medigap, and you are free to change this coverage anytime. However, if you do drop Medigap, it may be hard to find a reasonably priced Medigap plan should you later decide to switch back to original Medicare. Call your broker or your Medigap insurer before you drop your plan to find out about re-enrollment terms.

If you have a Medicare Advantage plan, there is an additional enrollment period during the first quarter of next year when you can select a different plan. You also can switch from Medicare Advantage to original Medicare.

Original Medicare is largely the same as last year, although the government is offering some beneficiaries a reduced-price insulin benefit. This benefit should be disclosed on the Medicare Plan Finder, which is loaded with details of all 2021 Medicare plans.

Part D Plans

Part D drug plans are offered by private insurers for those with original Medicare and Medicare Advantage. Plan costs, coverage rules, and covered drugs often change each year, so don’t assume your current drug plan will continue to be the best one for you next year.

You can enter your prescription drugs on Plan Finder and it should provide coverage and pricing details for all Part D plans offered where you live. Low-premium plans may not be the best choice. Look at total out-of-pocket costs for the plans that include your drugs.

Drug plans also may have rules requiring you to get prior approval from the plan before it will cover a drug your doctor has prescribed. Other rules may include “step therapy,” which can require you to first take a lower-cost generic drug before being covered for a brand drug for the same condition. Plans also may impose quantity limits on your prescriptions. Check with a plan on these matters before enrolling.

If you find Medicare shopping daunting, you can get free help with the process from the federally supported State Health Insurance Assistance Program (SHIP). It has offices in all states.

Medicare Advantage Plans

The Centers for Medicare & Medicaid Services (CMS) has long promoted private MA insurance plans over original Medicare, and projects that they now account for nearly 40 percent of all Medicare coverage.

CMS has approved a menu of MA benefits more extensive than original Medicare. MA plans often provide dental, hearing and vision benefits not covered by original Medicare. They also may include fitness benefits and, during the pandemic, expanded telehealth benefits that include behavioral health.

In recent years, MA plans have been authorized to cover non-medical benefits such as food, transportation to health appointments, and in-home safety features such as bathroom grab bars. Plans were slow to adopt these new benefits but they are becoming more common.

CMS has also encouraged plans to reduce the monthly premiums that most beneficiaries must pay in addition to the basic premium for Part B of original Medicare ($144.60 a month for most people in 2020). Many insurers are offering zero premium plans in 2021 but, as with drug plans, you need to make sure zero premium plans aren’t charging higher deductibles and co-pays than MA plans with higher premiums.

MA plans also require people to use doctors and other caregivers in the plans’ provider networks. In original Medicare, people are free to use any doctors that accept Medicare. Make sure your doctors are in your plan’s network before making your 2021 enrollment choice.

I do not provide individual answers to your questions but may publish selected answers in a future blog post. If your question is included, I will let you know via email.

Taking Social Security reduces your ex-spousal benefits

Diana – Minnesota: I’m 71 and my ex-spouse is 67. I began drawing Social Security at age 62, and don’t know if my ex-spouse has begun drawing his Social Security or not. How should I proceed in order to apply for and receive ex-spousal benefits? And what benefit should I expect? Would it be based on his FRA (full retirement age) benefit, even though he hasn’t reached that age? It sounds as though accurate information isn’t always given by people who work for Social Security. Thank you for information and your guidance!

Phil Moeller: If you have been divorced for more than two years, you can apply for an ex-spousal benefit even if your ex- has not filed for Social Security.

Your benefit will be tied to his FRA benefit. However, because you filed for your own Social Security at 62, your ex-spousal entitlement will be much less than half of this FRA benefit. And if it turns out to be less than what you’re already receiving, you would get no additional payment.

People often don’t think about the implications of how filing early for Social Security might affect their future entitlements to other Social Security benefits.

While not wishing any ill will on your former husband, I should also note that the age at which you filed for your own benefits will not reduce your ex-survivor benefits should your former husband die before you.

If this happens, you would be entitled to receive an amount of money equal to the Social Security benefit he was receiving at the time of his death. If he had not yet filed when he died, Social Security would calculate your benefit as if he had filed on the day of his death.

Because you are already drawing your own Social Security, you would receive an additional payment equal to the amount by which his benefit exceeded yours.

Lee – Virginia: I had to file for Social Security at 62. I am 68 now. I was with my ex-husband for 13 years. I’m working full-time at a very good job but have serious medical issues. How do I find out if I can claim spousal benefits? He is about 60 years old or dead.

Phil Moeller: If he is still alive, he is too young for you to claim an ex-spousal benefit. He needs to be at least 62 and have filed for his own benefit or, if he has not filed, you need to have been divorced for at least two years.

If he is dead, however, you can file for an ex-spousal survivor benefit. The Social Security Administration maintains national death records. If you have your ex’s Social Security number, you should be able to call Social Security and explain that you’d like to file for an ex-spousal survivor benefit if your ex- has, in fact, died. You may need to go into an office to actually file for this benefit and bring records of your marriage and divorce.

As with Diana, if it turns out that you are eligible to file for an ex-survivor benefit, your additional benefit would equal the amount by which his benefit exceeded yours.

I do not provide individual answers to your questions but may publish selected answers in a future blog post. If your question is included, I will let you know via email.

Medicare Q&A

I periodically post answers to reader questions. Email yours to philsquestions@gmail.com. I will let you know if I answer yours.

Anonymous – Pennsylvania: I am 42, have three children, and am receiving Social Security disability benefits. I also have become addicted to Xanax, which has been prescribed to me in high doses. I wish the doctors would tell you had badly these medications mess with your mind! Despite my need for help, Medicare has denied me coverage for the rehabilitation help that I need.

Fortunately, I am about to get remarried to a wonderful man who has employer insurance that will cover the care I need. But here’s the rub. The rehab services we’ve contacted say that even though my new employer plan will provide primary coverage, they will send this claim to Medicare anyway, and it will once again be denied! The rehab people are thus telling me to drop Medicare.

I called the agency and was told I can drop Medicare without threatening my disability benefits. However, if I do cancel Part B, I will face big re-enrollment penalties if I again need Medicare before turning 65. That’s a long way off, and who knows what my health insurance needs will be over the next 20 years?

I just keep hitting roadblock after roadblock with Medicare. I am sure I am not the only person is this situation. I have been calling rehabilitation centers for years in state and out of state and no one will help me. I have even been kicked out of hospitals because they say there is no help for me there! This is so frustrating for people who really want help.

Phil Moeller: Unfortunately, you have lots of company here. Xanax is a powerful benzodiazepine drug prescribed for anxiety and depression; others include Ativan, Dalmane, Halcion, Librium, Restoril, Rivotril, Serax, Valium, and Versed, according to Pennsylvania state prescribing guidelines. Addiction to these drugs is a serious and growing problem.

In terms of whether Medicare will cover your treatment, the key variable is whether such care is proscribed as medically necessary, according to Patrice Muchowski, head of clinical services as AdCare Hospital, which operates treatment centers in Massachusetts and Rhode Island and is part of the larger, nationwide American Addiction Centers network.

Medicare will cover addiction treatment that doctors and other licensed caregivers think is medically necessary. If your doctors went through the proper steps, it’s likely that Medicare would cover your care, she said. But she said it’s not clear from what you described exactly what steps you and your doctor already have taken.

Odds are, however, that showing up at a hospital with your Medicare card is not going to get you the covered care you seek. Benzos are very powerful, she stressed, and the best way to come off of them is through “a very, very, very slow taper (program), done either by a physician prescribing it” or a hospital familiar with such treatments. Not all hospitals are equipped to provide that treatment, but ask for a “level 4” facility, Muchowski advised. This is rated as the highest level of addiction care by the American Society of Addiction Medicine.

Muchowski had these additional suggestions, while emphasizing that she would need to know much more about your situation to provide informed guidance:

  1. Not all drug rehabilitation facilities accept Medicare, so make sure you’re talking with one that does.
  2. A psychiatric facility might be worth pursuing, as they usually take Medicare. The American Academy of Addiction Psychiatry has a referral service.
  3. Speak to the person prescribing your Xanax to discuss outpatient programs that can provide you professional help in tapering off this drug. Your prescriber has the right to lower the dosage as well, which could be part of a formal tapering program.
  4. Your fiancé’s employer might have a formal employee assistance program that can help you.

Here’s an email from Steve in Massachusetts that illustrates the issues and decisions that people with disabilities may face if they return to work:

“I am 44 years old, blind, and have had Medicare for about 10 years because of my disability. I did go back to work full-time a few years ago but have continued to pay for Medicare (Parts A and B). It is my only insurance right now, but the out-of-pocket costs are getting expensive.

As a result, I have recently gotten health insurance from my employer and I had planned to stop Medicare. I saw my doctor last week and told him the situation. He recommended that I not stop my Medicare because he said that it could be very hard to get it back, given that I am more than 20 years away from retiring. He recommended that I keep Medicare and look for a secondary insurance. I trust my doctor, but I do not think he is an insurance expert by any means!”

One-size-fits-all answers don’t work here. A person’s specific circumstances – age, health needs, insurance plans, and the like – are all different. What they do share is the need to understand how Medicare does and does not “work” with other insurance programs. This is a big-enough deal at Medicare that the program has an operations manual dedicated to what are called “coordination of care” rules.

Steve’s doctor deserves praise for at least thinking of this issue. Most doctors know very little about health insurance or the financial implications of their treatment. But Steve is right to want a second opinion about what his doctor told him!

Medicare rules permit a disabled person to reacquire Medicare coverage at any time prior to age 65.

Medicare rules permit a disabled person to reacquire Medicare coverage at any time prior to age 65. The issue here is whether, when the person re-enrolls, he would be subject to substantial late-enrollment penalties because he did not have continuous Medicare coverage.

For someone on Medicare who is not disabled, getting employer insurance clearly permits them to drop Medicare without encountering penalties upon re-enrollment. The same should hold for those with disabilities. However, I’ve encountered many illogical things about Social Security and Medicare, so I recommend that people contact Social Security to confirm how the agency would treat them.

In nearly all cases, the employer plan is the primary payer of covered claims and Medicare is what’s called a “secondary” payer.

If a person has a high-deductible plan with, for example, a $3,000 deductible, basic Medicare (Parts A and B) can be used to pay claims in the deductible phase of the coverage. Even with its monthly cost of nearly $145 for most enrollees, Medicare can make sense in some situations.

Beyond high deductibles, Medicare also can help pay some of the covered expenses not fully paid by an employer plan. Usually, it does not make sense to get a Medicare Part D plan here or a Medigap supplemental plan. You would be paying for things your employer plan already covers.

Before making this decision, however, it’s important that anyone eligible for Medicare by virtue of age or disability ask their employer to certify that the employer’s drug coverage is at least as good as a typical Part D plan. If an employer plan does not meet this “credibility” test, then the person must get Part D. Employers are required to provide credibility statements annually.

One final point here is that anyone in this situation who must get a Part D plan need not also pay for Part B of Medicare, although they do need to sign up for premium-free Part A.

I am pretty sure that people with such options can get their coverage coordination questions answered by talking with someone in their employer insurance benefits office. I am also pretty sure, based on literally thousands of reader emails, that talking with their insurer has a popularity rating akin to having a root canal without anesthesia. Time and time again, the best advice I have is that people should speak first to their health insurers, not to me.



Employers are Helping to Clarify Real Health Costs

In Nashville, going to the Vanderbilt University Hospital emergency room for a moderate problem could be costly, according to detailed cost information compiled by a company called Healthcare Bluebook.

The cost for the visit would be $1,584 – the highest among 30 area hospitals and nearly four times higher than the region’s lowest-cost provider. Further, the quality of care at the hospital ranked in the bottom 5 percent of the more than 4,400 U.S. hospitals with comparable emergency care.

Until recently, such detailed health care pricing information was simply unavailable. Consumers with health insurance might not have cared anyway. Their insurers would have paid most of the costs, leaving them with modest out-of-pocket expenses.

Their employers, however, care a lot. Employer balance sheets are getting eaten alive by rising health expenses. They paid about 20 percent of the nation’s $3.6 trillion health expenses in 2018, or roughly $700 billion. That percentage has held steady in recent years but total costs are rising sharply.

Roughly 155 million workers in the U.S. have employer-sponsored insurance, more than are covered by Medicare and Medicaid combined, and dwarfing the 11 million or so covered by a marketplace plan under the Affordable Care Act.

The average family premium was nearly $20,000 per year in 2018, according to a comprehensive study. Individual premiums averaged $6,715 and coverage for two persons was $13,425. Also, nearly half of those insured were in high-deductible plans, and often had to pay several thousand dollars before their health insurance took effect.

For these reasons, employers have become the most powerful force today driving health-care reforms. They’re fighting back against high medical costs, in part by harnessing increasingly powerful databases to identify who the bad actors are in health care – hospitals, doctors, medical equipment companies and others who charge high prices and deliver substandard care.

To better control costs, large employers began years ago to self-insure their health plans. They call the shots, using private health insurers to administer the plans. This also permits them to see all of the information about their employees’ insured health care spending, including the prices they are billed and the ultimate costs paid after their insurance-company administrators have negotiated final payment terms.

Employer claim information has been pooled by both public and private organizations. When it’s possible to see millions of insurance claims, troubling and powerful trends appear. Prices for the same procedures vary wildly, often in the same ZIP codes.

Healthcare Bluebook, based in Nashville, Tenn., has become one of the largest health insurance claims aggregators. Jeff Rice and Bill Kampine founded the company in 2008 and now roll their eyes at how the steep national recession quickly derailed their development plans. However, they now track the health claims for more than 5,000 employers and say they have enjoyed six consecutive years of triple-digit gains in their business revenues.

By looking at prices charged around the country for thousands of health services, the company has developed a free tool that consumers can use to see how much health procedures cost where they live. The growth of high-deductible employer plans, the two men say, is turning more health care consumers into cost-conscious shoppers.

The growth of high-deductible employer plans is turning more health care consumers into cost-conscious shoppers.

By entering a ZIP code in the tool, users can access the range of local costs that doctors, hospitals, and other health providers accepted as payment for thousands of medical procedures, including dental, hearing, and vision care (items not covered by Part B of Medicare). The range of lowest to highest prices is shown, along with what Healthcare Bluebook has defined as a “fair” price for a procedure.

The procedures are accessible from pull-down menus and are extensive – roughly 30 different entries for different MRIs, for example. The company also provides quality ratings for hospital procedures, based on multiple indicators.

Employer access to the huge variations in health prices has been a wake-up call to them, Kampine said.

Employers are encouraging employees to use lower-cost, high-quality providers because it saves employers money as well. Increasingly, employers are redesigning their health plans to exclude high-cost providers in favor of lower-cost care that still yields high-quality results.

Some employers have gone further by identifying low-cost, high-quality health care providers around the country and sending employees directly to these providers, even if it means putting them on an airplane and paying for their temporary living expenses. The pricing variations are so great that creating what are known as “centers of excellence” programs can save a lot of money, produce superior care, and enhance employee appreciation.

Too many health insurers focus their consumer pricing tools only on a person’s out-of-pocket costs, Rice says. Doing so is “really a disservice to employers” because it does not help identify and weed out high-cost providers. Even if out-of-pocket costs are low, high total costs translate to higher premiums.

The big question is whether consumers use this information to change how they make their health care purchase decisions. Earlier research concluded that consumers did not pay much attention to these new tools and skepticism still exists. But Rice says that Healthcare Bluebook has plenty of consumer data to counter this view, and that the availability of more price information will inevitably lead to greater consumer engagement.

Thirty years ago, consumers did not know what cars cost and were at the mercy of auto companies and showroom salesmen. Today, best-available auto prices can be displayed on smartphones in a few seconds. Rice and other price-transparency advocates think a similar wave of consumer empowerment is happening in health care.


Medicare and Social Security Feel the Financial Heat

The trust funds supporting Social Security and Medicare have taken a double hit from the pandemic. While a gridlocked Congress has looked the other way for years as program finances deteriorated, the damage has reached the point that the new Congress elected this November cannot continue to kick this can down the road.

There is little doubt that Democrat control of the White House and Congress would lead to expanded federal spending on both programs as well as rejuvenation of the Affordable Care Act. I know that enormous federal budget deficits don’t seem to matter much these days. Still, I’d feel better if some adults in the room figured out how we’re going to pay for such expansions.

Republicans have opposed such spending but their attitudes could change if Joe Biden becomes president. Continued gridlock likely would produce only band-aid fixes, along with near-constant fights risking government shutdowns.

The biggest hit from COVID-19 to date is that it has reduced payroll taxes paid into the Social Security and Medicare trust funds. At the same time, Medicare expenses have risen sharply due to coronavirus treatment and testing.

It’s also likely that some older Americans facing income reductions have decided to file earlier for Social Security than they had planned. This will raise short-term spending by the program. Because earlier claiming dates entitle people to lower benefits than if they waited, however, the program’s longer-term prospects shouldn’t be adversely affected.

The programs weren’t in great shape before the disease hit. The details are in annual reports from Social Security and Medicare program trustees that were last published in April.

The primary Social Security fund that pays retirement benefits was projected to have enough money to pay all claims until 2034, after which incoming payroll taxes from current workers would pay only 76 percent of the benefits earned by retirees. A smaller fund that covers disability payments was projected to face no benefits shortfall until 2065.

The Medicare trust fund covers Part A of the program, which pays for hospital care. It has been in precarious shape for a long time and was projected to run short of funds in 2026, after which its income would cover only 90 percent of projected expenses.

Part B of Medicare covers doctors, outpatient, and equipment expenses. Part D covers prescription drug costs. These parts of Medicare have no trust funds and depend on Congress to fund ever-widening annual deficits. In calendar year 2019, the combined deficit for both parts of Medicare was nearly $340 billion, By 2029, the trustees projected, this deficit will more than double to nearly $717 billion.

To emphasize, this was all before the pandemic. It’s not clear how severe the financial hit will end up being. But it ranges from poor to worse. The Congressional Budget Office recently updated its look at the trust funds. Since just the beginning of the year, it said, the cumulative deficits of all federal trust funds (which also include military retirement and unemployment) over the 2021-2030 period rose by $130 billion, or 6 percent, to more than $2.3 trillion. The ultimate hit, as we know, will wind up being larger.

The amount of outstanding federal debt has just exceeded the total size of U.S. annual economic output – a level not reached since World War II. Unless the economy gets back into some kind of new normal, this ratio has not finished rising.

Again, I know deficits “don’t matter” these days. The Federal Reserve has made it very clear it will create enough new digital U.S. dollars over the next several years to fund our deficits and permit interest rates to remain at near-zero levels. But Fed leaders come and go, and so do prevailing notions of what’s best for the country.