Risk Adjustment Payments Halted by the Trump Administration

The Trump administration stated on July 7, 2018 that it will be temporarily halting payments that help insurers meet the Affordable Care Act requirement to ensure coverage regardless of whether a person is healthy or sick. The estimated $10.4 billion being withheld cites a New Mexico US district court decision that found the formula used by the US government to calculate the payments as “arbitrary and capricious”.

The New Mexico district court decision spurned the Trump administration into withholding payments, still, a Massachusetts district court upheld the formula used to calculate the payments. The withheld $10.4 billion is meant for a risk adjustment program that transfers funds from insurers who enroll healthy members to those that take on sicker members. This is meant to protect insurance companies who take on burdening cases or people with pre-existing conditions. It also removes the incentive for insurance companies to solely select healthy members.

This risk adjustment program was a provision of the Affordable Care Act, which President Trump has been constantly attempting to cut. The Centers for Medicare & Medicaid Services will be executing the hold and has asked the New Mexico circuit court to reconsider its decision and to seek a quick resolution to the legal issue.

Insurers and opponents of the President find that the court’s decision and his actions are damaging, even if the withholding of payments is temporary. They fear that this is a “new market disruption” that would create more uncertainty and would greatly drive the current costs of medical premiums higher. Whether or not the halt is temporary is unknown as there is no definite timeline for the suspension nor is there a definite trigger for resuming of payments in the program.

Where does this leave high-risk patients or patients in immediate need of a procedure or funding for one? Tapping into one’s savings is an option if savings are available. One could pay out of pocket if funds are available. Another option is crowdfunding but that comes with the risk of not reaching your goals or not getting any funds at all. Last, technology like ours, eusoh, provides patients with the option of crowdfunding or crowdsourcing, where users can manage and share expenses together. Platforms, like eusoh, are being built to provide users an option that does not involve pricey monthly premiums.

What does the future hold for the Trump administration’s decision? Will it destabilize “Obamacare”? Will the New Mexico district court have their decision overturned? The insurers are urging the government and looking for a legal and regulatory path to reinstate the funding. But what can the insurers do? What last-minute options do they have aside from boosting premiums? Who knows which way the Trump administration, the district courts and the insurers go. Whichever way they go, there are millions of Americans needing a decision or a new option.

 

Single Payer Healthcare | Can It Be Done?

Single payer healthcare is the popular option right now according to a Washington Post-Kaiser Family Foundation poll that reported 51 percent of Americans support it while 43 percent oppose it. The poll was conducted between January 22-February 24 of 2018 with the results published on April 12, 2018, in the Washington Post. Despite what the results of this recent poll declared, the United States is a long way from a tried and true single payer healthcare system.

Single payer healthcare protest

Single Payer Healthcare. What Exactly Is It?

From your staunch conservative all the way to your ardent “Bernie-bro”, every politically-minded individual has an opinion on single payer healthcare. But before we continue on the subject of single-payer healthcare, let us first define what single payer is. The most popular online resource of the 21st century, Wikipedia, defines single payer as [note]https://en.wikipedia.org/wiki/Single payer_healthcare[/note]”a healthcare system financed by taxes that covers the costs of essential healthcare for all residents, with costs covered by a single public system (hence ‘single payer’).”

Elements of single-payer healthcare are:

  1. Single payer is a government (federal or state) takeover of universal healthcare. This is similar to the current healthcare systems in the United Kingdom (N.H.S.) and in Canada.
  2. Private health insurance would not be an option for residents.
  3. The single payer healthcare system would be funded by taxes.

Given the characteristics of single payer healthcare, the question now is whether it can be implemented in the United States. There are a handful of lucrative, successful insurance conglomerates that currently dominate the healthcare sector. Therein lies the first impediment to implementing single payer healthcare: The current system will be opposed by the likes of Kaiser, Humana, and Aetna. Obviously, large conglomerates of a specific business sector will have the resources to oppose any legislation that may dissolve their current business. They will have the time, the money, and the political influence to keep the single-payer debate going indefinitely or even squelched.

Sanders Plan

Recent Democratic Presidential candidates support a single payer healthcare system. One particular candidate, Senator Bernie Sanders of Vermont, proposed a bill titled, “Medicare For All”, which expands Medicare beyond residents over the age of 65. Aside from expanding Medicare, Senator Sanders’ plan also involves:

  1. Eliminating deductibles, copays, and premiums.
  2. Eliminating private insurance companies. This would be eliminating residents’ choice of private or public healthcare.
  3. Expansion of Medicare in phases. 1st year, Medicare would be available for resident 55 and older. And in subsequent years, the age minimum would be lowered by ten years, (Ex. The following year, the plan would expand to residents 45 years and older.)
  4. Vision and dental would be covered. Currently, both are not covered by Medicare.

[embedyt] https://www.youtube.com/watch?v=tg2ZUZo2FpU[/embedyt]

Another impediment to Senator Sanders’ plan for single payer is how ‘Medicare for All” will be paid for. The Vermont Senator has yet to come up with a definite plan for funding but he proposed a 7.5 percent payroll tax on employers, a 4 percent individual income tax and an array of taxes on wealthier Americans, as well as corporations.

Recap

Let’s recap. Senator Sanders’ plan is not yet “rock solid” on funding, or rather the taxing of citizens for his bill. Private insurance companies would be eliminated. Citizens would lose the ability to choose private and publicly run healthcare. And billion dollar healthcare conglomerates, [note]https://blog.eusoh.com/index.php/2018/04/02/walmart-buy-humana-amazon-looming/[/note]who are now merging with even bigger retail conglomerates like CVS and Walmart, would be out of business or unduly written out as an option.

Another factor: The Affordable Care Act, colloquially called “Obamacare” is still supported by Americans. This same Washington Post-Kaiser Family Foundation poll estimated 53 percent of Americans are still in favor of the public healthcare act even with the Trump Administration attempting to “chip” away at it.

More factors: Both houses of Congress are Republican controlled, which will obviously put any single payer healthcare plan on the backburner. Any still, Senator Sanders’ plan had 16 Democratic cosponsors backing it. It will take a lot more Democrats and more than likely a few Independents and Republicans to turn in order to make single payer into reality.

Do you honestly believe with all those factors, single payer can happen or even can be phased into reality? It’s a possibility but close to impossible as the insurance companies will put up a fight for their literal lives when Sanders’ bill gets debated. The “right to choose” between private and public healthcare will be an issue as it is heavily correlated with what is considered the utmost American value, “freedom”.

How Technology Can Help

Will single payer solve the issues that healthcare ails from? Well-respected economist and billionaire, [note]https://www.cnbc.com/video/2013/10/16/health-care-is-the-tapeworm-of-the-us-economy-buffett.html[/note]Warren Buffett, describes healthcare as a “tapeworm” infecting the American people and its economy. It will take more than a well written and well-constructed bill and trillions of tax dollars to solve healthcare. It may take the dissolving of the health insurance industry or a concerted effort to improve the current system.

Whether healthcare is a right or a privilege is not a question that has a correct answer. Modern technology  has given us ways to connect people directly  for the purpose of sharing unexpected costs of life whether it’s a health emergency, car accident or necessary home repairs. Eusoh was created based on the concept of providing better access to care without the expensive and burdensome legacy middlemen, aka private and public insurance companies. At Eusoh,  we connect people directly together and provide them with all the protection, transparency  and guarantees they should expect.  so that groups of people, not just individuals, have a platform to share expenses. No bills have to be drawn, no debates and no filibusters on the House floor. Eusoh’s technology allows people to share and manage costs with the utmost transparency.

Healthcare | How Administrative Costs Bog Down The American System

A recent Bloomberg article highlights a unique and rather large issue with the current U.S. healthcare system. This issue is the literal and unending amount of administrative staffing and its subsequent paper trail. In essence, the costs of administration, billing, settling payments are three times as much as in other affluent, developed countries.

Healthcare records

How Bad Is The Red Tape?

When most people think of the healthcare system, they imagine care providers from nurses to doctors to pharmacists, etc. Little do they know, the current healthcare is exponentially more than that. According to the Bloomberg article, For every $1 billion in revenue, the healthcare system employs the equivalent of 770 full-time people to settle the bills.

Generally, administrative costs involve procedures such as pushing a claim through different levels of the system, processing bills, answering patient phone calls and emails, chasing after unpaid bills and also, paying the large salaries of the administrators of insurers, marketing and executive hospital staff.

“Duke University Hospital has 900 hospital beds and 1,300 billing clerks. The typical Canadian hospital has a handful of billing clerks. Single-payer systems have fewer administrative needs.” David Cutler, PBS Newshour (link)

Here’s a stat: Administrative costs in the United States healthcare systems account for 25 percent of total hospital spending. These same costs in other countries account for 12 percent of spending in Canada, 16 percent in England, and 20 percent in the Netherlands.

Comparison of administrative spending

Image Source (link)

Can The Healthcare System Be Streamlined?

Experts in the field recommend standardization. This would involve standardizing billing practices along with updating and modernizing the computing systems of administration. Naturally, the transition to one unified standard in the American healthcare system would be daunting and will come with setbacks. But the end game would be a more efficient, more streamlined system that will pay off in years to come.

Standardization in healthcare has been visited before. The federal government proposed in 1996 (through the Health Insurance Portability and Accountability Act) preliminary standards for the electronic processing of claims, payments, and other bills. Unfortunately, it wasn’t enough as insurers needed to extract more information from patients. The Affordable Care Act of 2010 gave incentives to providers to adopt more advanced electronic records.

It may be some time until the entire system becomes standardized. There are certainly hurdles to that, starting with the insurance companies. Add to that the changing of the computing system and the importing records to this proposed standardized system could be difficult as well. Most of us will be deadlocked with this current system. This is where Eusoh can play a part in eliminating administrative costs all together. Hence, keeping expenses down for both healthcare providers and patients. By engaging and sharing costs with the crowd, the majority of people won’t have to feed the already top-heavy system.

 

 

Walmart Reported to Buy Humana With Amazon Looming in the Industry

In one of many recent mergers of industry titans, Arkansas-based Walmart is reportedly in the early stages of purchasing Kentucky-based health insurer Humana. Following the high profile purchase of Aetna by CVS[note]http://fortune.com/2017/12/04/why-did-cvs-buy-aetna/[/note], Walmart is quickly following suit. In a matter of months, these changes in dance partners have changed the landscape of the healthcare industry.

Walmart Storefront

2016 Healthcare Facts

  • Healthcare spending was 18% of the U.S. economy.
  • U.S. health care spending increased 4.3 percent to reach $3.3 trillion.
  • Healthcare spending is estimated at $10,348 per person in 2016.

With an aging population, rising costs of medication, and the arrivals and impediments of new middlemen, companies are now attempting to find ways to address the industry’s weaknesses. If there are weaknesses in a behemoth industry like healthcare, it will certainly affect the American economy as a whole. Financial sage Warren Buffet has described healthcare as a “tapeworm” in the economy[note]https://www.cnbc.com/video/2018/02/26/buffett-health-care-is-a-tapeworm-on-the-economic-system.html[/note].

The merger of Walmart with Humana is an unconventional one as most of Walmart’s recent acquisitions have been with e-commerce and Internet retail companies. But the merger seems appropriate because Walmart is already successful with pharmacies and they had a less successful foray into operating primary care clinics. And on top of that, they already have a partnership in a prescription drug plan that serves those on Medicare.

Walmart and Humana, CVS and Aetna But Now Amazon?

There may be a common belief that the “big, bad evil” corporation is going to make healthcare even more difficult or they will become an even bigger middleman; A middleman backed by billions of dollars and government influence. But with Warren Buffet of Berkshire Hathaway, Jamie Dimon of JP Morgan Chase, and Jeff Bezos of Amazon throwing their hats into the healthcare ring, not only is the market getting proven competitors but possibly the most brilliant minds dealing with the economy.

There will be questions on whether these deals are anti-competitive, the Justice Department struck down a merger between Aetna and Humana[note]https://www.bloomberg.com/news/articles/2017-02-14/aetna-humana-abandon-37-billion-merger-blocked-by-u-s-judge-iz5hjt3b[/note]. And a merger between Walgreens and Rite Aid was scaled back by regulators[note]https://www.cnbc.com/video/2018/02/26/buffett-health-care-is-a-tapeworm-on-the-economic-system.html[/note]. It is an exciting time being witness to industry giants and economic geniuses and leaders wanting to make a drastic change in healthcare and in turn, the economy.

The other factor or alternative for the consumer is the sharing economy, the crowdfunding, donation…there are many terms to describe it. Eusoh can be a platform to supplement or even usurp the current healthcare system. Time will tell how far Walmart, CVS, Amazon, JP Morgan Chase, and Berkshire Hathaway will achieve but we have to amplify to you, the consumer, is that the alternatives are out there.