For Hospitals and Insurers, New Fervor to Cut Costs
After years of self-acknowledged profligacy, hospitals, doctors and health insurers say there is a strong effort under way to bring medical costs under control. Their goal is to slash the rate of growth in the nation’s $2.7 trillion health care bill by roughly half to keep it more in line with overall inflation.
Private insurers, employers and government officials are providing urgency to these efforts, and the federal health care law passed two years ago helped accelerate them.
Even if the Supreme Court decides next month to declare the entire law unconstitutional, many experts in the field say the momentum is likely to continue.
Your health insurer may owe you money.
Under a provision of the federal health overhaul, insurers have to give refunds if they don’t spend a certain amount of the premium dollars they take in on health-care costs. The law requires insurers to pay out 80% of premiums from individuals and small businesses, and 85% of those from large employers, on medical claims and quality-improvement efforts. If they don’t, they must give back the difference to customers.
An analysis from the Kaiser Family Foundation, based on estimates that insurers filed with state regulators, found that insurers may have to refund $1.3 billion this year, with about $426 million going to people who bought their own health plans; $541 million to large employers; and $377 million to small businesses.
The insurers’ filings to the federal government, revealing their rebate calculations, were due June 1, and consumers “will know, come August, whether they are getting a rebate or not,” says Steve Larsen, a U.S. Department of Health and Human Services official.
Individual Health Policies Fall Short, a Study Finds
More than half of all medical insurance policies sold to individuals now fail to meet the standards of coverage set by the federal health care law under review by the Supreme Court, a new study says.
Even if the law is upheld, employer-provided insurance plans are likely to continue to be more generous, but the law would significantly improve the quality of coverage for individuals in several ways, the researchers concluded.
Insurers would be required, for example, to limit how much people pay toward their own medical bills, even if they have a chronic and expensive condition. Insurers would also have to provide a comprehensive set of benefits, like maternity coverage that is now excluded by some policies, and cover pre-existing medical conditions, which may be excluded under certain policies.
Employment-Based Health Coverage Rate Continues to Shrink
The percentage of workers with employment-based health coverage continues to shrink despite an uptick after the recession, according to a report by the Employee Benefit Research Institute (EBRI)
Between December 2007, when the most recent economic recession officially started, and June 2009, when the recession technically ended, the percentage of workers with coverage in their own name fell from 60.4% to 56%. While that figure increased by almost one percentage point by the end of 2009, the coverage rate was down to 55.8% by April 2011.
“While the link between health insurance coverage and employment has long been known, these data underscore the degree to which unemployment rates directly affect the levels of the uninsured in the United States,” said Paul Fronstin, director of EBRI’s Health Research and Education Program and author of the report.
Trends in the percentage of workers offered coverage and the percentage of workers taking coverage when offered have remained steady. The EBRI report notes that most uninsured workers reported that they did not have coverage because of cost: anywhere from 70% to 90% over the December 1995 to July 2011 period.
Employment-based health benefits are the most common form of health insurance for non-poor and non-elderly individuals in the United States, covering 69% of workers, 35% of non-working adults and 55% of children, according to EBRI.