Rhode Island Gov. Don Carcieri has proposed cutting millions of dollars meant to reimburse hospitals for providing healthcare to the poor during a recession that has cost thousands of Rhode Island residents their jobs and employer-provided health insurance. The latest budget proposal from the Republican governor would eliminate $3.7 million in funding to four hospitals—South County, Miriam, Westerly, and Kent Hospital—that have seen an increasing number of patients who have health insurance, but cannot afford to make copayments or pay deductibles of $1,000 or more required under their insurance plans. Carcieri included the cut as part of a package intended to close a $220 million budget deficit for the fiscal year ending in June, a shortfall equivalent to about 7% of what the state expected to take in. With unemployment hovering around 13%, that budget shortfall could grow larger as people lose jobs and cut back on spending, which drives down state tax collections.
For years, the federal government has spent billions to entice senior citizens into private Medicare Advantage plans run by private insurers that offer bonus care for low premiums. Now that nearly a quarter of Medicare patients have enrolled in these health plans, including 350,000 in South Florida, Congress is poised to pass legislation that would yank billions of dollars from them. Many patients resent this turnabout and want to preserve the program, which offers extras, such as vision care and gym memberships. On the other hand, patients who pay for care in other ways say they resent subsidizing those who get gold-plated treatment at bargain rates. The controversy over Medicare Advantage is one of the thorniest issues complicating final passage of landmark legislation to overhaul the nation's healthcare system. Republicans have turned potential cutbacks into a rallying cry against reform.
A compromise on the healthcare overhaul that the Senate reached this weekend offered some relief for insurance companies, specifically for nonprofits that could win exemption from a new $6.7 billion tax. Part of the deal was an exemption for nonprofit insurance companies that met several requirements. One way to qualify is to spend an average of 92% of premiums on healthcare expenses. That spending measure, called a company's medical-loss ratio, is closely watched to determine how much insurers take in profits. Few companies, though, would qualify for that exemption. Goldman Sachs analyst Matt Borsch says just four insurers reached that threshold in 2008. America's Health Insurance Plans, the industry trade group, said federal data show that plans on average spend 87% of premiums on care.
Maumee, OH-based St. Luke's Hospital is considering merging with another local hospital group—most notably Mercy or ProMedica Health System—as it continues to be shut out of lucrative insurance contracts, its chief executive says. The independent nonprofit Maumee hospital had an operating loss last year of $8.8 million, an amount based on the business of caring for patients that is expected to be even higher this year. Although it has upward of $70 million in reserves to keep it going, a merger or other arrangement may be necessary unless St. Luke's can negotiate better health insurance contracts with existing or additional insurance providers, said Dan Wakeman, St. Luke's president and chief executive officer.
That's an increase of about 4 million people from previous estimates released in August 2007.
Additionally, 45.4 million people of all ages, or 15.1% of the population, were uninsured at the time of an interview, which covered a period between January and June of this year. And 31.9 million, or nearly one in 11 people, had been uninsured for more than a year.
Other highlights of the report, collected from the National Health Interview Survey, revealed that during the first six months of 2009, 8.2% of children under 18 were uninsured. During the same period, 60.6% of unemployed adults between the ages of 18 and 64 had been uninsured for at least a portion of the last year.
"During the first six months of 2009, 22.7% of persons under age 65 years with private health insurance were enrolled in a high-deductible health plan (HDHP), including 6.4% who were enrolled in a consumer-directed health plan. Almost 50% of persons with a private plan obtained by means other than through an employer were in a HDHP."
The number of people under age 65 with private health insurance who were enrolled in a HDHP also increased between 2007 and 2009, regardless of whether the enrollee was covered by his or her employer or purchased coverage directly. For example, for those purchasing health coverage directly, the numbers of people with a HDHP went from 39.2% in 2007 to 48.7% for 2009, as measured in the first six months.
The survey was based on interviews with 32,694 people.
The CDC released the report as elected officials debate various ways to enable more people to have health insurance coverage.
The report disclosed additional findings:
From January to June 2009, 12.3% of poor children and 11.6% of near poor children, defined as living in families earning below the federal poverty threshold, did not have health coverage at the time of the interview. But the percentage of near poor children who lacked coverage at the time of the interview decreased from 15.6% in 2008 to 11.6% in the first six months of 2009.
The percentage of near poor adults aged 18-64 years of age who lacked coverage at the time of the interview increased from 37.7% in 2008 to 43.2% in the first six months of 2009.
Lack of health insurance coverage was greatest in the southern and western regions of the U.S.
Hispanic persons were considerably more likely than non-Hispanic white persons, non-Hispanic black persons, and non-Hispanic Asian persons to be uninsured at the time of the interview, to have been uninsured for at least part of the past 12 months, and to have been uninsured for more than a year.
Cheryl Clark is a senior editor and California correspondent for HealthLeaders Media Online. She can be reached atcclark@healthleadersmedia.com.
The Senate healthcare bill could enable insurers to avoid some of the strongest consumer protections and benefit requirements adopted by state governments, Democratic lawmakers from Maine and California said in a letter to House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Harry M. Reid (D-NV). The bill would allow insurers to sell policies across state lines, subject to the laws and regulations in a state of the insurers' choosing, 31 Democratic House members said. "Practically speaking, insurers will domicile their plans in states with less stringent regulations and market to the population in more protective states like ours, just like nationally chartered banks have done," the House members wrote on behalf of lawmakers from the two states.