So Much Care It Hurts: Unneeded Scans, Therapy, Surgery Only Add To Patients' Ills

KFF Health News, October 23, 2017

Despite added cost an inconvenience, the longer of two treatment options is given to more than half of eligible breast cancer patients, highlighting concerns of possible overtreatment.

This article first appeared October 23, 2017 on Kaiser Health News.

By Liz Szabo

After Kathi Kolb was diagnosed with breast cancer, her doctor recommended seven weeks of daily radiation treatments. She persuaded him to shorten treatment to three weeks, based on clinical trials showing that the condensed course works just as well. (Katye Martens Brier for KHN)

When Annie Dennison was diagnosed with breast cancer last year, she readily followed advice from her medical team, agreeing to harsh treatments in the hope of curing her disease.

“You’re terrified out of your mind” after a diagnosis of cancer, said Dennison, 55, a retired psychologist from Orange County, Calif.

In addition to lumpectomy surgery, chemotherapy and other medications, Dennison underwent six weeks of daily radiation treatments. She agreed to the lengthy radiation regimen, she said, because she had no idea there was another option.

Medical research published in The New England Journal of Medicine in 2010 — six years before her diagnosis — showed that a condensed, three-week radiation course works just as well as the longer regimen. A year later, the American Society for Radiation Oncology, which writes medical guidelines, endorsed the shorter course.

In 2013, the society went further and specifically told doctors not to begin radiation on women like Dennison — who was over 50, with a small cancer that hadn’t spread — without considering the shorter therapy.

“It’s disturbing to think that I might have been overtreated,” Dennison said. “I would like to make sure that other women and men know this is an option.”

Dennison’s oncologist, Dr. David Khan of El Segundo, Calif., notes that there are good reasons to prescribe a longer course of radiation for some women.

Khan, an assistant clinical professor at UCLA, said he was worried that the shorter course of radiation would increase the risk of side effects, given that Dennison had undergone chemotherapy as part of her breast cancer treatment. The latest radiation guidelines, issued in 2011, don’t include patients who’ve had chemo.

Yet many patients still aren’t told about their choices.

An exclusive analysis for Kaiser Health News found that only 48 percent of eligible breast cancer patients today get the shorter regimen, in spite of the additional costs and inconvenience of the longer type.

The analysis was completed by eviCore healthcare, a South Carolina-based medical benefit management company, which analyzed records of 4,225 breast cancer patients treated in the first half of 2017. The women were covered by several commercial insurers. All were over age 50 with early-stage disease.

The data “reflect how hard it is to change practice,” said Dr. Justin Bekelman, associate professor of radiation oncology at the University of Pennsylvania Perelman School of Medicine.

A growing number of patients and doctors are concerned about overtreatment, which is rampant across the health care system, argues Dr. Martin Makary, a professor of surgery and health policy at the Johns Hopkins University School of Medicine in Baltimore.

From duplicate blood tests to unnecessary knee replacements, millions of patients are being bombarded with screenings, scans and treatments that offer little or no benefit, Makary said. Doctors estimated that 21 percent of medical care is unnecessary, according to a survey Makary published in September in Plos One.

Unnecessary medical services cost the health care system at least $210 billion a year, according to a 2009 report by the National Academy of Medicine, a prestigious science advisory group.

Those procedures aren’t only expensive. Some clearly harm patients.

Overzealous screening for cancers of the thyroid, prostate, breast and skin, for example, leads many older people to undergo treatments unlikely to extend their lives, but which can cause needless pain and suffering, said Dr. Lisa Schwartz, a professor at the Dartmouth Institute for Health Policy and Clinical Practice.

“It’s just bad care,” said Dr. Rebecca Smith-Bindman, a professor at the University of California-San Francisco, whose research has highlighted the risk of radiation from unnecessary CT scans and other imaging.

Annie Dennison said doctors offered just one option after her breast cancer diagnosis last year: six weeks of radiation treatment. (Courtesy of Annie Dennison)

Outdated Treatments

All eligible breast cancer patients should be offered a shorter course of radiation, said Dr. Benjamin Smith, an associate professor of radiation oncology at the University of Texas MD Anderson Cancer Center.

Studies show that side effects from the shorter regimen are the same or even milder than traditional therapy, Smith said.

“Any center that offers antiquated, longer courses of radiation can offer these shorter courses,” said Smith, lead author of the radiation oncology society’s 2011 guidelines.

Smith, who is currently updating the expert guidelines, said there’s no evidence that women who’ve had chemo have more side effects if they undergo the condensed radiation course.

“There is no evidence in the literature to suggest that patients who receive chemotherapy will have a better outcome if they receive six weeks of radiation,” Smith said.

Shorter courses save money, too. Bekelman’s 2014 study in JAMA, the journal of the American Medical Association, found that women given the longer regimen faced nearly $2,900 more in medical costs in the year after diagnosis.

The high rate of overtreatment in breast cancer is “shocking and appalling and unacceptable,” said Karuna Jaggar, executive director of Breast Cancer Action, a San Francisco-based advocacy group. “It’s an example of how our profit-driven health system puts financial interests above women’s health and well-being.”

Just getting to the hospital for treatment imposes a burden on many women, especially those in rural areas, Jaggar said. Rural breast cancer patients are more likely than urban women to choose a mastectomy, which removes the entire breast but typically doesn’t require follow-up radiation.

Too Many Tests

Meg Reeves, 60, believes much of her treatment for early breast cancer in 2009 was unnecessary. Looking back, she feels as if she was treated “with a sledgehammer.”

At the time, Reeves lived in a small town in Wisconsin and had to travel 30 miles each way for radiation therapy. After she completed her course of treatment, doctors monitored her for eight years with a battery of annual blood tests and MRIs. The blood tests include screenings for tumor markers, which aim to detect relapses before they cause symptoms.

Yet cancer specialists have repeatedly rejected these kinds of expensive blood tests and advanced imaging since 1997.

For survivors of early breast cancer like Reeves — who had no signs of symptoms of relapse — “these tests aren’t helpful and can be hurtful,” said Dr. Gary Lyman, a breast cancer oncologist and health economist at the Fred Hutchinson Cancer Research Center. Reeves’ primary doctor declined to comment.

In 2012, the American Society for Clinical Oncology, the leading medical group for cancer specialists, explicitly told doctors not to order the tumor marker tests and advanced imaging — such as CT, PET and bone scans — for survivors of early-stage breast cancer.

Yet these tests remain common.

Thirty-seven percent of breast cancer survivors underwent screening for tumor markers between 2007 and 2015, according to a study presented in June at the American Society of Clinical Oncology’s annual meeting and published in the society’s journal online.

Sixteen percent of these survivors underwent advanced imaging. None of these women had symptoms of a recurrence, such as a breast lump, Lyman said.

Beyond wasted time and worry for women, these scans also expose them to unnecessary radiation, a known carcinogen, Lyman said. A National Cancer Institute study estimated that 2 percent of all cancers in the United States could be caused by medical imaging.

Paying The Price

Health care costs per breast cancer patients monitored with advanced imaging averaged nearly $30,000 in the year after treatment ended. That was about $11,600 more than for women who didn’t get such follow-up tests, according to Lyman’s study. Women monitored with biomarkers had nearly $6,000 in additional health costs.

Reeves knows the costs of cancer treatment all too well. Although she had health insurance from her employer, she says she had to sell her house to pay her medical bills. “It was financially devastating,” Reeves said.

“It’s the worst kind of financial toxicity, because you’re incurring costs for something with no benefit,” said Dr. Scott Ramsey, director of the Hutchinson Institute for Cancer Outcomes Research.

Even simple blood tests take a toll, Reeves said.

Repeated needle sticks — including those from unnecessary annual blood tests — have scarred the veins in her left arm, the only one from which nurses can draw blood, she says. Nurses avoid drawing blood on her right side — the side of her breast surgery — because it could injure that arm, increasing the risk of a complication called lymphedema, which causes painful arm swelling.

Reeves worries about the side effects of so many scans.

After treatment ended, her doctor also screened her with yearly MRI scans using a dye called gadolinium. The Food and Drug Administration is investigating the safety of the dye, which leaves metal deposits in organs such as the brain. After suffering so much during cancer treatment, she doesn’t want any more bad news about her health.

Becoming An Advocate

Kathi Kolb, 63, was staring at 35 radiation treatments over seven weeks in 2008 for her early breast cancer. But she was determined to educate herself and find another option.

“I had bills to pay, no trust fund, no partner with a big salary,” said Kolb, a physical therapist from South Kingstown, R.I. “I needed to get back to work as soon as I could.”

Kolb asked her doctor about a 2008 Canadian study, which was later published in the influential New England Journal of Medicine, showing that three weeks of radiation was safe. He agreed to try it.

Kolb, a Rhode Island physical therapist, says she’s frustrated that fewer than half of eligible breast cancer patients receive a shorter course of radiation, even though studies proved it was safe nearly 10 years ago. (Katye Martens Brier for KHN)

Even the short course left her with painful skin burns, blisters, swelling, respiratory infections and fatigue. She fears these symptoms would have been twice as bad if she had been subjected to the full seven weeks.

“I saved myself another month of torture and being out of work,” Kolb said. “By the time I started to feel the effects of being zapped [day] after day, I was almost done.”

A growing number of medical and consumer groups are working to educate patients, so they can become their own advocates.

The Choosing Wisely campaign, launched in 2012 by the American Board of Internal Medicine (ABIM) Foundation, aims to raise awareness about overtreatment. The effort, which has been joined by 80 medical societies, has listed 500 practices to avoid. It advises doctors not to provide more radiation for cancer than necessary, and to avoid screening for tumor markers after early breast cancer.

“Patients used to feel like ‘more is better,’” said Daniel Wolfson, executive vice president of the ABIM Foundation. “But sometimes less is more. Changing that mindset is a major victory.”

Yet Wolfson acknowledges that simply highlighting the problem isn’t enough.

Many doctors cling to outdated practices out of habit, said Dr. Bruce Landon, a professor of health care policy at Harvard Medical School.

Meg Reeves believes that much of the treatment she received for breast cancer was unnecessary. (Courtesy of Meg Reeves)

“We tend in the health care system to be pretty slow in abandoning technology,” Landon said. “People say, ‘I’ve always treated it this way throughout my career. Why should I stop now?’”

Many doctors say they feel pressured to order unnecessary tests out of fear of being sued for doing too little. Others say patients demand the services. In surveys, some doctors blame overtreatment on financial incentives that reward physicians and hospitals for doing more.

Because insurers pay doctors for each radiation session, for example, those who prescribe longer treatments earn more money, said Dr. Peter Bach, director of Memorial Sloan Kettering’s Center for Health Policy and Outcomes in New York.

“Reimbursement drives everything,” said economist Jean Mitchell, a professor at Georgetown University’s McCourt School of Public Policy. “It drives the whole health care system.”

Smith-Bindman, the UC-San Francisco professor, said the causes of overtreatment aren’t so simple. The use of expensive imaging tests also has increased in managed care organizations in which doctors don’t profit from ordering tests, her research shows.

“I don’t think it’s money,” Smith-Bindman said. “I think we have a really poor system in place to make sure people get care that they’re supposed to be getting. The system is broken in a whole lot of places.”

Dennison said she hopes to educate friends and others in the breast cancer community about new treatment options and encourage them to speak up. She said, “Patients need to be able to say ‘I’d like to do it this way because it’s my body.’”

Despite GOP Efforts To Corral Medicaid Spending, States Expand Benefits

KFF Health News, October 19, 2017

States generally add benefits to Medicaid - one of the largest programs in state budgets - during strong economic times.

This article first appeared October 19, 2017 on Kaiser Health News.

By Phil Galewitz

While congressional Republicans and President Donald Trump have been seeking major cuts in federal funding of Medicaid, 26 states this year expanded or enhanced benefits and at least 17 plan to do so next year, according to a report released Thursday.

The increased benefits were largely for mental health and substance abuse treatment, but states also added telemedicine and dental care, according to the report by the Kaiser Family Foundation and the National Association of Medicaid Directors. (Kaiser Health News is an editorially independent program of the foundation.)

The number of states adding benefits was the highest in at least a decade, according to the 50-state survey. Last year, 21 states expanded benefits.

Just six states moved to cut Medicaid benefits in fiscal 2016.

Oregon last year became the first state to provide coverage for oral contraceptives prescribed by a pharmacist, rather than a doctor, with its Medicaid program, the report said.

Four states — Louisiana, Virginia, South Dakota and New York — added cancer screening benefits such as paying for genetic testing for the BRCA breast cancer gene mutation.

Medicaid, the state-federal health insurance program for the poor, covers nearly 75 million people and is one of the largest programs in state budgets. States generally add benefits to Medicaid during strong economic times.

States added the benefits while Congress debated making significant changes to the program, including ending the open-ended federal spending that has been a staple of the program since its beginning in 1966. The Republican efforts, including bills to replace the Affordable Care Act, have withered after stiff opposition from advocates and Democrats and three moderate Republicans in the Senate.

Medicaid also faces uncertainty as the Trump administration weighs whether to allow states for the first time to require non-disabled, adult enrollees to work in order to qualify for benefits. At least six states have such a request pending with the Centers for Medicare & Medicaid Services, and a decision is expected before end of the year.

Robin Rudowitz, associate director for the Kaiser Family Foundation's Program on Medicaid and the Uninsured, said states are adding benefits to respond to the national opioid abuse problem as well as to continue the trend to give enrollees who are elderly or have serious health problems the ability to remain in their homes longer instead of going to nursing homes. She said more states have been expanding benefits for several years coming out of the Great Recession, which ended in 2009.

"We are seeing the delayed effects of the improving economy — enrollment growth is going down … and states are increasing provider [reimbursement] rates and restoring and adding benefits," she said.

Even while Maine, Indiana, Kentucky and other states want to add an adult work requirement to Medicaid, which will make it harder for some people to qualify, some of these same states and others are enhancing benefits, she said.

"All of this is happening against a backdrop of major uncertainty about what is going to happen at the federal level," Rudowitz said.

After three years of supersized enrollment growth that peaked in 2015 as a result of most states expanding coverage under the ACA, Medicaid enrollment growth slowed to 2.7 percent nationally in fiscal year 2017, which ended Sept. 30, down from 3.9 percent the year before, according to a second Kaiser report also released Thursday.

Overall Medicaid spending increased 3.9 percent in 2017, up from 3.5 percent in 2016. States reported that increase reflected higher spending on such things as prescription drugs and long-term care services.

The states' share of Medicaid spending grew by 3.5 percent also in 2017 but is expected to go up 6 percent in 2018. That increase is mostly a result of states starting to pay 5 percent of the cost of new enrollees covered under the ACA expansion. The federal government paid the full costs for those enrollees through 2016.

The survey was prepared by Health Management Associates.

Chasing Millions In Medicaid Dollars, Hospitals Buy Up Nursing Homes

KFF Health News, October 18, 2017

As many rural hospitals nationwide face serious financial difficulties, the funding enhancements pioneered in Indiana have been a key factor in helping to keep city and county hospitals economically viable, advocates say.

This article first appeared October 18, 2017 on Kaiser Health News.

By Phil Galewitz

The common area of the nursing home at Westminster Village North in Indianapolis, which has benefited from additional federal Medicaid funding. (Courtesy of Westminster Village North)

Westminster Village North, a nursing home and retirement community in Indianapolis, recently added 25 beds and two kitchens to speed food delivery to residents. It also redesigned patient rooms to ease wheelchair use and added Wi-Fi and flat-screen televisions. This fall, it’s opening a new assisted living unit.

“We have seen amazing changes and created a more home-like environment for our residents,” said Shelley Rauch, executive director of the home.

The nursing home can afford these multimillion-dollar improvements partly because it has, for the past five years, been collecting significantly higher reimbursement rates from Medicaid, the state-federal health insurance program for the poor. About half of its residents are covered by the program.

In 2012, the nursing facility was leased to Hancock Regional Hospital, a county-owned hospital 15 miles away. The lease lets it take advantage of a wrinkle in Medicaid’s complex funding formula that gives Indiana nursing homes owned or leased by city or county governments a funding boost. For Indiana, that translates to 30 percent more federal dollars per Medicaid resident. But that money is sent to the hospitals, which negotiate with the nursing homes on how to divide the funding.

Nearly 90 percent of the state’s 554 nursing homes have been leased or sold to county hospitals, state records show, bringing in hundreds of millions in extra federal payments to the state.

Even though Indiana’s nursing home population has remained steady at about 39,000 people over the past five years, Medicaid spending for the homes has increased by $900 million, in large part because of the extra federal dollars, according to state data. Total spending on Indiana nursing homes was $2.2 billion in 2016.

The funding enhancements were pioneered in Indiana, but hospitals in several other states, including Pennsylvania and Michigan, have also used the process. Advocates say it has been a key factor in helping to keep Indiana’s city and county hospitals economically vital at a time when many rural hospitals nationwide are facing serious financial difficulties.

Westminster Village North, a nursing home and retirement community in Indianapolis, recently redesigned patient rooms in the nursing home to ease wheelchair use. (Courtesy of Westminster Village North)

But critics argue that the money flow has not significantly improved nursing home quality and has slowed adoption of community and home health services.

More than two-thirds of Indiana’s Medicaid long-term-care dollars go to nursing homes, compared with the U.S. average of 47 percent.

Joe Moser, who until May was Indiana’s Medicaid director, said while in office that the hospital-nursing home marriages were partly responsible for keeping more people in nursing homes. “It is a factor that has contributed to our imbalance,” he said.

Daniel Hatcher, a law professor at the University of Baltimore and author of last year’s “The Poverty Industry,” said this funding arrangement is a bad deal for the poor and undercuts the purpose of the Medicaid program. “The state is using an illusory practice and taking away money from low-income elderly individuals who are living in poor performing nursing homes,” he said. He noted Indiana is ranked near the bottom of states for nursing home quality by several government and private reports.

But proponents of the practice say that even when hospitals get most of the money, it is well spent.

Marion County Hospital and Health Corp., the large safety-net hospital system in Indianapolis, owns or leases 78 nursing homes across the state, more than any other county hospital.

Sheila Guenin, vice president of long-term care there, said the hospital keeps 75 percent of the additional Medicaid dollars and the nursing homes get the rest. Still, the additional money has improved care. The transfer of the license to the hospital has kept several nursing homes from closing and increased staffing rates at many others, she said.

A couple reads the paper in one of the common rooms at the Westminster Village North nursing home. (Courtesy of Westminster Village North)

About 40 percent of the county hospital’s nursing homes have five-star ratings from the federal government, up substantially from 10 years ago, she said. Among the improvements at the nursing homes were the addition of electronic health records as well as high-capacity emergency generators to provide power in case of a natural disaster.

Still, some patient advocates said the extra funding is flowing to hospitals and nursing homes with little public accounting. Ron Flickinger, a regional long-term-care ombudsman in Indiana, said, “A lot of extra money is being spent here, but I’m not sure patients have seen it benefit them.”

Practice Dates To 2003

Medicaid, which typically covers about two-thirds of nursing home residents, is jointly financed by the federal and state governments. States pay no more than half of the costs, although the federal match varies based on a state’s wealth. In Indiana the federal government covers about two-thirds of Medicaid costs.

The enhanced nursing home payments began in 2003 when a financially strapped Indianapolis hospital owned by the county took advantage of the Medicaid funding provision to bolster its bottom line. In this case, the hospital purchased a nursing home, then provided the money for the state to increase what it spent on the home to the federally allowed maximum.

That increase, in turn, drew down more federal matching funds. Since the federal remittance is larger than the hospital contribution, the hospital got back its initial investment and divided the extra money with the nursing home.

Other county-owned hospitals in Indiana slowly followed suit.

Hatcher said Indiana government leaders embraced the funding arrangement because it let them avoid the politically difficult step of raising taxes to increase state funding to improve care at nursing homes. “It’s a revenue generator for the state and counties,” he said.

All the Medicaid funding for nursing homes should be going to those homes to care for the poor, not shared with hospitals to use as they choose, he added.

The strategy, promoted by consultants advising hospitals and nursing homes in Indiana, is used heavily there because of the plethora of county-owned hospitals. But the federal government is tightening the rules about such payments.

Texas has secured Medicaid approval for a similar strategy starting this month, but federal officials have made the extra funding dependent on nursing homes meeting quality measures, such as reducing falls. Oklahoma is seeking to get federal approval as well.

And in a rule released last year, the federal Centers for Medicare & Medicaid Services announced that it would gradually force states to shift to payment systems that tie such reimbursements to quality of care. Michael Grubbs, an Indiana health consultant, said that rule does not stop the Indiana hospital funding program, but it’s unclear that it will last.

Nursing home operators in Indiana say the financing arrangement has helped them keep up with rising costs and improve care for residents.

Zach Cattell, president of the Indiana Health Care Association, a nursing home trade group, noted the number of nursing homes in the state earning Medicare’s top, five-star rating has increased 9 percentage points since 2011. He said the percentage of high-risk residents with pressure ulcers and those physically restrained also dropped significantly.

An Opportunity Or A Loophole?

In Indiana, the small, county-run rural hospitals generally are not facing the financial threat that has become common elsewhere, in part because of the extra Medicaid funding gained from buying nursing homes, hospital officials say.

“The money has meant a great deal to us,” said Gregg Malot, director of business development at Pulaski Memorial Hospital in northern Indiana. “I don’t see this as a loophole but see it as an opportunity for small rural community hospitals to improve our quality and access to care.”

His hospital is the only one in Pulaski County. The extra Medicaid revenue from acquiring 10 nursing homes statewide — about $2 million a year — has helped finance the hospital’s obstetrics care and the purchase of the hospital’s first MRI, so doctors don’t have to rely on a mobile unit that used to come twice a week, he said. The hospital also spent some of the funding to add a centralized telemetry unit to monitor patients.

Steve Long, CEO of Hancock Regional Hospital in Greenfield, Ind., said his hospital recently built two fitness centers in the county with help from its extra Medicaid dollars. “This would not be possible without the additional funding.”

He rejects the notion that additional Medicaid money reduces the hospital’s incentive to add home- and community-based care in the community. He said new Medicare financing arrangements, such as accountable care organizations, give the hospital motivation to find the most efficient ways to care for patients after they leave the hospital.

But he acknowledged the hospital benefits from seeing more patients go to nursing homes licensed under its name.

“Welcome to health care — it’s a complex and confusing environment where we have all different competing incentives,” Long said.

2 Senators Reach Deal On A Health Law Fix, But Bringing Congress Along Is Tricky

KFF Health News, October 18, 2017

The agreement would guarantee payment of subsidies that help some low-income policyholders, for two years. It would also restore $110 million in 'outreach' funding cut by the Trump administration.

Sen. Lamar Alexander (R-Tenn.) and Sen. Patty Murray (D-Wash.) talk during a Senate Health, Education, Labor and Pensions Committee hearing on Oct. 17. (Tom Williams/CQ Roll Call)

This article first appeared October 17, 2017 on Kaiser Health News.

By Julie Rovner

After nearly two months of negotiations, key senators said Tuesday they have reached a bipartisan deal on a proposal intended to stabilize the Affordable Care Act’s insurance market, which has been rocked by recent actions by President Donald Trump.

Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.), respectively the chairman and the top Democrat of the Senate Health, Education, Labor and Pensions Committee, negotiated the emerging deal. The milestone agreement, they said, would guarantee payment of “cost-sharing reduction” subsidies that help some policyholders with low incomes afford their deductibles and other out-of-pocket costs for two years, 2018 and 2019.

Trump announced last week that he would stop funding the subsidies, which have been the subject of a long-running lawsuit. These subsidies are separate from the tax credit subsidies that help eligible consumers pay for their premiums. Those premium subsidies are not affected by Trump’s action.

Even if it fails to become law, the deal marks a singular achievement that has been almost completely missing in Congress for the past eight years — a bipartisan compromise on how to make the nation’s health insurance system work.

“This is an agreement I am proud to support,” said Murray on the Senate floor, “because of the message it sends about how to get things done.

The proposal — which will require 60 votes to pass the Senate and agreement from a still-dubious House of Representatives — would also restore $110 million in “outreach” funding cut by the Trump administration. That funding would help guide eligible individuals to sign up for coverage on the health insurance exchanges during the open enrollment period that runs from Nov. 1 to Dec. 15.

In exchange for those provisions, urged by Democrats and state officials, Republicans will win some changes to make it easier for states to apply for “waivers” that would let them experiment with alternative ways to provide and subsidize health insurance. The deal would also allow the sale of less comprehensive “catastrophic” plans in the health exchanges. Such plans currently can be sold only to those under age 30.

On the Senate floor Tuesday afternoon, Alexander said, “This agreement avoids chaos. I don’t know a Democrat or a Republican who benefits from chaos.”

Senate Majority Leader Mitch McConnell (R-Ky.) reserved judgment about the deal.

Both parties still have some major disagreements when it comes to health care, Senate Minority Leader Chuck Schumer (D-N.Y.) told reporters Tuesday afternoon, but “I think there’s a growing consensus that in the short term we need stability in the markets. So we’ve achieved stability if this agreement becomes law.”

More than 60 senators have already participated in the meetings that led to the deal, Alexander said on the Senate floor. But the path to passage in the House is uncertain — with many conservatives vehemently opposed to anything that could be construed as helping the law they call “Obamacare” succeed.

Tweeted Rep. Mark Walker (R-N.C.), chairman of the conservative Republican Study Committee, Tuesday: “The GOP should focus on repealing & replacing Obamacare, not trying to save it. This bailout is unacceptable.”

Both Murray and Alexander said Tuesday they were still struggling over language to make sure that if the cost-sharing payments are resumed, insurers would not receive a windfall by keeping both those payments and the higher premiums that many states are allowing in anticipation of the payments being ended.

“We want to make sure that the cost-sharing payments go to the benefit of consumers, not the insurance companies,” Alexander said.

Trump, who as recently as Monday called the cost-sharing subsidies “a payoff” to insurance companies, took credit for the negotiations. “If I didn’t cut the CSR’s, they wouldn’t be meeting,” he said. That was not, in fact, the case. The negotiations had picked up some weeks ago after being called off earlier in September while the Senate tried for one last-ditch repeal vote.

On Friday, White House Budget Director Mick Mulvaney told Politico that the president would not allow a short-term fix, calling a restoration of the cost-sharing reduction funds “corporate welfare and bailouts for the insurance companies.”

But on Tuesday the president hailed the deal. “We think it’s going to not only save money, but give people much better health care with a very, very much smaller premium spike,” he told reporters.

The Storm Has Passed, But Puerto Rico's Health Faces Prolonged Recovery

KFF Health News, October 17, 2017

The situation in Puerto Rico’s health system is far more vulnerable than those in Texas or Florida, which also weathered hurricanes this fall.

Dr. Sandra Alvarez gives Mercedes Perez a health care checkup in her apartment at the Pedro America Pagan de Colon assisted living facility in San Juan in the aftermath of Hurricane Maria. Members of the First Medical Relief team visited the complex and said the residents need water, and many are hungry and need their medication, which is difficult to get. (Joe Raedle/Getty Images)

This article first appeared October 16, 2017 on Kaiser Health News.

By Carmen Heredia Rodriguez and Rachel Bluth

As President Donald Trump signals impatience to wind down emergency aid to Puerto Rico, the challenges wrought by Hurricane Maria to the health of Puerto Ricans and the island’s fragile health system are in many ways just beginning.

Three weeks after that direct hit, nearly four dozen deaths are associated with the storm. But the true toll on Puerto Rico’s 3.4 million residents is likely to involve sickness and loss of life that will only become apparent in the coming months and in indirect ways.

As victims continue to be found and stranded people reached, it will take time to assess the consequences of their missed care or undertreatment.

The situation in Puerto Rico’s health system is far more vulnerable than those in Texas or Florida, which also weathered hurricanes this fall — medically, economically and politically. A month after Hurricane Katrina in 2005, only about half of the final official fatalities had been tallied.

Puerto Rico has a higher rate of diabetes than any state, according to 2015 data from the U.S. Centers for Disease Control and Prevention. About half of the island’s population depends on Medicaid. And, unlike in the States, Puerto Rico’s Medicaid system receives a fixed amount to meet residents’ needs, a pot of money that could run dry next month, said Jenniffer González-Colón, Puerto Rico’s delegate to Congress.

“We’ve had a fiscal crisis, a Medicaid funding cliff, Hurricane Irma and Hurricane Maria —we are being hit from every angle,” she said.

Orlando Gutiérrez, an associate professor of nephrology at the University of Alabama-Birmingham and a board member of the American Kidney Fund, said Puerto Rico is the “perfect storm” for a disaster.

The Federal Emergency Management Agency has distributed food and water to help stave off disease or dehydration, relief workers have prioritized efforts to get hospitals and other health facilities operating again, and the Navy dispatched the hospital ship USNS Comfort, which has 250 beds.

Coordinated efforts to deliver fuel, water and medications to health facilities have allowed some to reopen. As of Oct. 12, federal emergency officials said nearly all Puerto Rican hospitals were open, although some are still dependent on generators. The Puerto Rican government said electricity has been restored to more than half of the hospitals. Nearly all of the dialysis centers are operating now, though many patients have missed treatments.

But Katia León, deputy director of primary care for the Association of Primary Care in Puerto Rico, said she believes the population’s health has worsened since the storm hit. Cases of diarrhea, pink eye and skin rashes are appearing in larger numbers, she said, and health officials are concerned about infections from contaminated water.

The potential for outbreaks means it is now more important than ever to keep clinics open, León said, even though the operating costs are likely to be high.

“We are talking about a situation that is going to continue in the long term … because this is a crisis without precedent,” she said.

Many residents are still unable to get to clinics or health centers for their chronic health conditions, such as diabetes or heart disease. Diabetes test strips and dialysis equipment have been in short supply since the storm. Patients went days or weeks without medication and treatment. Nutritious food and working refrigerators to store it in are scarce.

Some medicines are in tight supply or require arduous travel to secure.

Slow gains to provide electricity threaten patients on dialysis, who rely on power to filter their blood and survive. And mental trauma caused by the storm will linger long after buildings are reconstructed.

In addition, Puerto Rico was already facing a significant “brain drain,” as many young professionals, including doctors, moved to the U.S. mainland, said Andrew Schroeder, who works for DirectRelief, a private charity that has been coordinating shipments of medical supplies to the island. It will be an uphill battle to persuade these doctors and other health specialists to stay on the island now.

Hospitals and health clinics are working hard to get back to speed. Eddie Perez-Caban, the executive director of the Camuy Health Services clinic on the western side of Puerto Rico, said he was astonished after making the 25-minute commute through downed wires and fallen electric poles the day after Maria hit. He found a damaged roof, a broken air conditioning system and no electricity or running water — and about 75 of his employees ready to work. Five days later, the clinic opened with running water and AC and light powered by a generator.

“For so many people to show up — truthfully, it filled me with a lot of satisfaction to work with a group of people that have that commitment to the community and the patients we serve,” he said.

Republican leaders in the House of Representatives have proposed allotting an additional $1 billion for Puerto Rico’s Medicaid program to resupply its coffers as part of a bill that would extend the Children’s Health Insurance Program. But the legislation has been stalled in committee.

Puerto Rico’s program is different than those in the States. While states receive open-ended federal funding, Puerto Rico’s annual funding amount is capped — typically at more than $300 million. Nearly half of the island’s residents rely on the program for coverage. If the money runs out, as many as 900,000 beneficiaries could lose their health coverage, according to estimates from the Department of Health and Human Services under the Obama administration.

Another bill under consideration in Congress could offer Puerto Rico millions of dollars in disaster relief, an effort that has broad support. More than 6 in 10 Americans said Puerto Rico isn’t getting all the help it needs yet, and more than half said the emergency response has been too slow, with the federal government not doing enough to restore electricity and access to food and water, according to a poll released Thursday by the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)

In Puerto Rico, most of the roughly four dozen dialysis centers are now seeing patients, though that service is dependent on getting shipments of fuel to power generators and water and dialysis solution for the treatments. Some clinics are shortening their hours and the time of treatment. Instead of four-hour treatments, patients are receiving only three hours of dialysis, which saves on staffing time, supplies and use of generators.

Mike Spigler, an official with the American Kidney Fund, who is handling some of the emergency response for kidney patients on the island, describes the situation as “tenuous.”

In the short term, patients can function without dialysis, or with limited treatments. But as time goes on, the risk of heart failure and stroke begins to climb.

Schroeder also said he is worried about mental health services, which often get lower priority than food and shelter after a storm. He said people are traumatized and, without counseling, anxiety and depression could become major public problems. Multiple news outlets report that two of the island’s 34 total deaths attributed to the hurricane were suicides.

Older residents of the island are particularly vulnerable to mental trauma in the aftermath of the storm, said José Acarón, the director of the Puerto Rican branch of AARP. Approximately 1.2 million people in Puerto Rico are 50 or older, Acarón said. Many of them live outside of traditional nursing homes or independent living facilities, making them harder to reach.

“We still have a lot of challenges to overcome before things can go back to normal,” said Acarón. “But a return to normal is not going back to where we were before the hurricane. It’s a new normal.”

Staff writer Phil Galewitz contributed to this article.

Cascade of Costs Could Push New Gene Therapy Above $1 Million Per Patient

KFF Health News, October 17, 2017

The sticker shock associated with new cancer treatments is 'just the starting point.'

Dr. Keith Eaton, who survived leukemia, poses for a photo with his parents following his bone marrow transplant. He says he ran up medical bills of $500,000 when he participated in a clinical trial of CAR T cells in 2013, despite receiving the medication for free. (Courtesy of Dr. Keith Eaton)

This article first appeared October 17, 2017 on Kaiser Health News.

By Liz Szabo

Outrage over the high cost of cancer care has focused on skyrocketing drug prices, including the $475,000 price tag for the country’s first gene therapy, Novartis’ Kymriah, a leukemia treatment approved in August.

But the total costs of Kymriah and the 21 similar drugs in development — known as CAR T-cell therapies — will be far higher than many have imagined, reaching $1 million or more per patient, according to leading cancer experts. The next CAR T-cell drug could be approved as soon as November.

Although Kymriah’s price tag has “shattered oncology drug pricing norms,” said Leonard Saltz, chief of gastrointestinal oncology at Memorial Sloan Kettering Cancer Center in New York, “the sticker price is just the starting point.”

These therapies lead to a cascade of costs, propelled by serious side effects that require sophisticated management, Saltz said. For this class of drugs, Saltz advised consumers to “think of the $475,000 as parts, not labor.”

Dr. Hagop Kantarjian, a leukemia specialist and professor at the University of Texas MD Anderson Cancer Center, estimates Kymriah’s total cost could reach $1.5 million.

CAR T-cell therapy is expensive because of the unique way that it works. Doctors harvest patients’ immune cells, genetically alter them to rev up their ability to fight cancer, then reinfuse them into patients.

Taking the brakes off the immune system, Kantarjian said, can lead to life-threatening complications that require lengthy hospitalizations and expensive medications, which are prescribed in addition to conventional cancer therapy, rather than in place of it.

Dr. Keith Eaton, like nearly half of patients who receive CAR T-cell therapy, developed a life-threatening complication in which his immune system overreacted. He says he feels fortunate to be healthy today. (Courtesy of Dr. Keith Eaton)

Dr. Keith Eaton, a Seattle oncologist, said he ran up medical bills of $500,000 when he participated in a clinical trial of CAR T cells in 2013, even though all patients in the study received the medication for free. Eaton, who suffered from leukemia, spent nearly two months in the hospital.

Like Eaton, nearly half of patients who receive CAR T cells develop a severe or life-threatening complication called “cytokine storm,” in which the immune system overreacts, causing dangerously high fevers and sudden drops in blood pressure. These patients are typically treated in the intensive care unit. Other serious side effects include stroke-like symptoms and coma.

The cytokine storm felt like “the worst flu of your life,” said Eaton, now 51. His fever spiked so high that a hospital nurse assumed the thermometer was broken. Eaton replied, “It’s not broken. My temperature is too high to register on the thermometer.”

Although Eaton recovered, he wasn’t done with treatment. His doctors recommended a bone-marrow transplant, another harrowing procedure, at a cost of hundreds of thousands of dollars.

Eaton said he feels fortunate to be healthy today, with tests showing no evidence of leukemia. His insurer paid for almost everything.

Kymriah’s sticker price is especially “outrageous” given its relatively low manufacturing costs, said Dr. Walid Gellad, co-director of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh.

The gene therapy process used to create Kymriah costs about $15,000, according to a 2012 presentation by Dr. Carl June, who pioneered CAR T-cell research at the University of Pennsylvania. June could not be reached for comment.

To quell unrest about price, Novartis has offered patients and insurers a new twist on the money-back guarantee.

Novartis will charge for the drug only if patients go into remission within one month of treatment. In a key clinical trial, 83 percent of the children and young adults treated with Kymriah went into remission within three months. Novartis calls the plan “outcomes-based pricing.”

Novartis is “working through the specific details” of how the pricing plan will affect the Centers for Medicare & Medicaid Services, which pays for care for many cancer patients, company spokeswoman Julie Masow said. “There are many hurdles” to this type of pricing plan but, Masow said, “Novartis is committed to making this happen.”

Masow said that Kymriah’s manufacturing costs are much higher than $15,000, although she didn’t cite a specific dollar amount. She noted that Novartis has invested heavily in the technology, designing “an innovative manufacturing facility and process specifically for cellular therapies.”

As for Kymriah-related hospital and medication charges, “costs will vary from patient to patient and treatment center to treatment center, based on the level of care each patient requires,” Masow said. “Kymriah is a one-time treatment that has shown remarkable early, deep and durable responses in these children who are very sick and often out of options.”

Some doctors said Kymriah, which could be used by about 600 patients a year, offers an incalculable benefit for desperately ill young people. Kymriah is approved for children and young adults with a type of acute lymphoblastic leukemia and already have been treated with at least two other cancer therapies.

“A kid’s life is priceless,” said Dr. Michelle Hermiston, director of pediatric immunotherapy at UCSF Benioff Children’s Hospital San Francisco. “Any given kid has the potential to make financial impacts over a lifetime that far outweigh the cost of their cure. From this perspective, every child in my mind deserves the best curative therapy we can offer.”

Other cancer doctors say the Novartis plan is no bargain.

About 36 percent of patients who go into remission with Kymriah relapse within one year, said Dr. Vinay Prasad, an assistant professor of medicine at Oregon Health & Science University. Many of these patients will need additional treatment, said Prasad, who wrote an editorial about Kymriah’s price Oct. 4 in Nature.

“If you’ve paid half a million dollars for drugs and half a million dollars for care, and a year later your cancer is back, is that a good deal?” asked Saltz, who co-wrote a recent editorial on Kymriah’s price in JAMA.

Dr. Steve Miller, chief medical officer for Express Scripts, a pharmacy benefit manager, said it would be more fair to judge Kymriah’s success after six months of treatment, rather than one month. Prasad goes even further. He said Novartis should issue refunds for any patient whose leukemia relapses within three years.

A consumer advocate group called Patients for Affordable Drugs also has said that Kymriah costs too much, given that the federal government spent more than $200 million over two decades to support the basic research into CAR T-cell therapy, long before Novartis bought the rights.

Rep. Lloyd Doggett, D-Texas, wrote a letter to the Medicare program’s director last month asking for details on how the Novartis payment deal will work.

“As Big Pharma continues to put price gouging before patient access, companies will point more and more proudly at their pricing agreements,” Doggett wrote. “But taxpayers deserve to know more about how these agreements will work — whether they will actually save the government money, defray these massive costs, and ensure that they can access life-saving medications.”

Tending To Patients As Her New Home Burns

KFF Health News, October 16, 2017

Wildfires threatened homes and workplaces alike for California health care providers.

This article first appeared October 16, 2017 on Kaiser Health News.

By April Dembosky, KQED

Julayne Smithson was working an overnight shift in the Intensive Care Unit at the Kaiser Permanente hospital in Santa Rosa, Calif., when massive wildfires started racing through the city. Smithson had no idea how close they were. She was too busy taking care of her patient.

“One of the nurses came up to me and she said, ‘Julayne, I’m sorry, but your house is not going to make it,’” she said.

Smithson, 55, recently moved from Indiana and had just bought the house a few weeks ago. From the hospital window, she could see the flames moving through her neighborhood a block away.

“I was so busy working the last couple of weeks that I didn’t get my insurance, which I never do. I never ever, ever go uninsured,” she said. “I kept saying, ‘Tomorrow, I’m going to do that. Tomorrow, I’m going to do that.’”

Smithson asked a colleague to watch her patient and raced home to try to save a few things.

“I knew I didn’t have much time,” she said. “So I ran inside and I thought, ‘I have to get my nursing documents, because if I’m going to lose everything I own, I have to be able to work, to care for patients.’”

She grabbed the papers, a pair of scrubs and a nightgown, and raced back to the ICU. Over the next two hours, smoke filled the hospital.

“All of a sudden the police busted in the door and they said, ‘Everybody out,’” she said. “’Grab what you can carry, get your patients, and go now.’”

One of Kaiser’s emergency room doctors took charge as the fire approached, making the call to evacuate the hospital’s 130 patients. (Kaiser Permanente is not affiliated with Kaiser Health News.)

“It’s a really challenging decision to make, one you don’t make lightly,” said Joshua Weil, Kaiser’s ER doctor in charge that night. “You have to weigh the potential risk of moving hospitalized patients and patients from the emergency department, versus the risk of keeping them where they are.”

But the fire had moved suddenly toward the hospital. Firefighters told him the blaze was 100 to 200 yards away.

“They literally used the words, ‘We’re making the last stand,’” Weil said.

Staffers immediately started assessing and triaging patients.

Patients who could walk got on a bus provided by the city. Patients who couldn’t, like Smithson’s, had to wait for ambulances.

But Sutter Santa Rosa Regional Hospital was also evacuating its 80 or so patients, so ambulances were in high demand.

“A lot of nurses and staff were putting patients in their cars and driving them to the [other] hospital,” she said. “And then other people were carrying people on blankets, people who couldn’t walk, and putting them in cars.”

In the end, Smithson said they waited about 15 minutes for an ambulance — a very stressful 15 minutes. Her team was manually pumping air into her patient’s mouth with an air bag. A team of five had to push him, in his bed with all the monitors, through the parking lot several times to get away from fast-moving smoke and flames. His medication was running low and he was getting agitated.

“The pharmacy pre-mixes those medicines for us, but we didn’t have time to prepare extra medication for a trip like that because it just came up so fast,” she said.

Three hours passed from the moment the evacuation was called to the moment the last patient was out of the hospital, Weil said.

Smithson’s patient, and several others in critical condition, made it safely to Santa Rosa Memorial Hospital, about four miles away. About a hundred less critical patients were transferred to Kaiser’s hospital in San Rafael, about 40 miles away.

Beatrice Immoos was one of the nurses in San Rafael getting prepped to receive the influx.

“We were essentially told that we were in a disaster situation and all ratios were out the window,” she said, meaning nurses would be assigned more patients than usually allowed under California law. “They were going to start triaging people through the ER.”

She said patients were arriving wearing colored armbands, indicating the severity of their condition. “This level of disaster is a new one for us,” said Immoos. “It was very emotional, but there was a lot of resolve. The hospital put out calls for volunteer nurses to come help in San Rafael. Many responded, including Julayne Smithson. Her husband was supposed to fly in from Indiana in two days, but with their new home gone, she told him to wait.

“I said, ‘Well, I don’t have anywhere to go right now. And we don’t know what’s going on,’” she said. “So I said ‘I’ll go to San Rafael and help there.’”

Another nurse offered Smithson a pullout couch in a spare room. She’s been sleeping there during the day, and working 7 p.m. to 7 a.m. every night since the fire. She says all she wants to do right now is help patients, so she doesn’t have to think about what she’s lost.

Stunner On Birth Control: Trump's Moral Exemption Is Geared To Just 2 Groups

KFF Health News, October 16, 2017

Hundreds of organizations sued the Obama administration over the contraceptive mandate. Two are anti-abortion groups that do not qualify for religious exemptions.

This article first appeared October 16, 2017 on Kaiser Health News.

By Julie Rovner

Few people were surprised last week when the Trump administration issued a rule to make it easier for some religious employers to opt out of offering no-cost prescription birth control to their female employees under the Affordable Care Act.

But a separate regulation issued at the same time raised eyebrows. It creates a new exemption from the requirement that most employers offer contraceptive coverage. This one is for “non-religious organizations with sincerely held moral convictions inconsistent with providing coverage for some or all contraceptive services.”

So what’s the difference between religious beliefs and moral convictions?

“Theoretically, it would be someone who says ‘I don’t have a belief in God,’ but ‘I oppose contraception for reasons that have nothing to do with religion or God,’ ” said Mark Rienzi, a senior counsel for the Becket Fund for Religious Liberty, which represented many of the organizations that sued the Obama administration over the contraceptive mandate.

Nicholas Bagley, a law professor at the University of Michigan, said it would apply to “an organization that has strong moral convictions but does not associate itself with any particular religion.”

What kind of an organization would that be? It turns out not to be such a mystery, Rienzi and Bagley agreed.

Among the hundreds of organizations that sued over the mandate, two — the Washington, D.C.-based March for Life and the Pennsylvania-based Real Alternatives — are anti-abortion groups that do not qualify for religious exemptions. While their employees may be religious, the groups themselves are not.

March for Life argued that the ACA requirement to cover all contraceptives approved by the Food and Drug Administration includes methods that prevent a fertilized egg from implanting in a woman’s uterus and therefore are a type of abortion. Real Alternatives opposes the use of all contraceptives.

March for Life, which coordinates an annual abortion protest each year, won its suit before a federal district court judge in Washington, D.C.

But a federal appeals court ruled in August that Real Alternatives, which offers counseling services designed to help women choose not to have an abortion, does not qualify as a religious entity and thus cannot claim the exemption. That decision cited a lower-court ruling that “finding a singular moral objection to law on par with a religious objection could very well lead to a flood of similar objections.”

The departments of Treasury, Labor and Health and Human Services, however, suggest that, at least in this case, that will not happen. The regulation issued by those departments says officials “assume the exemption will be used by nine nonprofit entities” and “nine for-profit entities.” Among the latter, it said, “we estimate that 15 women may incur contraceptive costs due to for-profit entities using the expanded exemption provided” in the rules.

The regulation also seeks comments on whether the moral exemption should be extended to publicly traded firms.

Rienzi agrees that the universe for the moral exemption is likely to be small. “The odds that anyone new is going to come up and say ‘Aha, I finally have my way out,’ ” he said, “is crazy.”

Women’s health advocates, however, are not so sure.

“The parameters of what constitutes a moral objection is unclear,” said Mara Gandal-Powers, senior counsel at the National Women’s Law Center, which is preparing to sue to stop both rules. “There is nothing in the regulatory language itself that says what a moral belief is that would rise to the level of making an organization eligible for the exemption.”

Louise Melling, deputy legal director at the ACLU, which has already filed a lawsuit, agreed. “We don’t know how many other entities are out there that would assert a moral objection,” she said. “Not everybody wanted to file a suit,” particularly smaller organizations.

All of that, however, presupposes that the rule laying out the moral objection exemption will stand up in court.

Bagley said he’s doubtful. The legal arguments making the case for the exemption, he said, are “the kind of things that would be laughed out of a [first-year] class on statutory interpretation.”

Specifically, he said, the rule lays out all the times Congress has included provisions in laws for moral objections. But rather than justifying the case, “it suggests that Congress knew a lot about how to craft a moral objection if it wanted to,” and it did not in the health law, he noted.

Bagley said the fact that the moral exemption was laid out in a separate rule from the religious one demonstrates that the administration is concerned the former might not stand up to court proceedings. “The administration must sense this rule is on thin legal ice,” he said.

Which leads to the question of why Trump officials even bothered doing a separate rule. Bagley said he thinks the act was more political than substantive. “The administration is doing something that signals to religious employers … that they are on their sides, that they have their backs.”

Anthem Eases Up On Premium Hikes After State Scrutiny

KFF Health News, October 13, 2017

Even after reducing its 2018 rate increase, Anthem's hike ranks second-highest among the 11 insurers that sell coverage in California's exchange.

This article first appeared October 12, 2017 on Kaiser Health News.

By Chad Terhune

Insurance giant Anthem Blue Cross agreed to reduce two planned premium increases for 2018 after California regulators questioned the company’s rationale for raising rates by as much as it had initially proposed.

The scaled-back rate hikes, in the individual and small-employer markets, will reduce premiums by $114 million, state officials said.

The California Department of Managed Health Care challenged Anthem’s estimates for future medical costs, in particular its prediction of a 30 percent jump in pharmacy expenses for the individual market — nearly double the estimates of two other big insurers and out of line with industry trends nationally.

As a result of the department’s intervention, the nation’s second-largest health insurer shaved 3 percentage points off its 2018 rate increase for individuals and families, still leaving a hike of 37.3 percent. That increase is the second-highest — after Molina Healthcare — among the 11 insurers that sell in the Covered California exchange. Anthem also cut its rate hike on small businesses by more than half, to 2.5 percent.

The smaller premium hikes are expected to save individuals about $21 million and small-business customers an estimated $93 million.

California’s two insurance regulators, the Department of Managed Health Care and an elected insurance commissioner, can pressure companies to reduce their rates, but neither has the authority to block rate hikes.

Shelley Rouillard, director of the managed care agency, said her department carefully scrutinizes rate filings to ensure “consumers are receiving value for their premium dollar. … Rate review is an important consumer protection and holds plans accountable to justify their rate increases.”

Anthem said in a statement that it works with regulators routinely "to revisit our assumptions and rates as more data becomes available...We are pleased that the emerging data allowed us to provide some rate relief to California individuals and small businesses versus what was originally filed."

Regulators said that during their review of Anthem’s small-group rates, the company updated its projection for medical spending, which resulted in a lower premium increase than originally proposed.

For the individual market, regulators at the managed care department dug deeper into Anthem’s forecast for prescription drug use and spending. “This is a much higher pharmacy trend than we have seen with other carriers and we will need sufficient documentation to consider it reasonable,” they wrote to Anthem.

In response to the state’s questions, Anthem lowered its estimate of the rise in pharmacy costs by 7 percentage points, to 23 percent. That led, in part, to the reduced rate increase.

Like all California insurers, Anthem had been asked by state officials to submit two rate filings for the individual market. The lower set of rates assumed that the Trump administration would continue to pay so-called cost-sharing subsidies that help low-income consumers with out-of-pocket costs. The higher rate increases, which state officials adopted on Wednesday, assume President Donald Trump might make good on his threats to end those payments.

Anthem had sought a 35.4 percent increase under the lower rate scenario and a 40.6 percent hike with a surcharge tacked on to reflect the possible loss of subsidies. That higher rate proposal was the one Anthem reduced by 3 percentage points.

The state’s examination of Anthem echoed concerns raised by the advocacy group Consumers Union in a letter to regulators on Sept. 7. The group questioned why Anthem’s projections were so much higher than its competitors’ and asked the state to demand additional documentation from the company.

Dena Mendelsohn, a staff attorney for Consumers Union in San Francisco, said she welcomed any reduction of the rate increase. “We're glad to see the pharmacy trend was brought down during the rate review process. That is exactly why we need such a rigorous rate review process,” she said.

However, the 37.3 percent average rate increase from Anthem still “poses a real concern for consumers,” especially those who do not qualify for federal tax credits that help pay for premiums, Mendelsohn said.

Some of the follow-up information Anthem submitted to regulators about its drug costs is under seal. The insurer claimed it contained confidential trade secrets that are protected from disclosure under state law.

The Department of Managed Health Care said it was looking into whether that information can be released publicly.

Another insurer, L.A. Care Health Plan, also faced questions from the managed care department. In response, the health plan dropped its proposed rate increase in the individual market by nearly 9 percentage points, to 21.7 percent. That would generate savings of $9 million, according to the state.

L.A. Care told regulators it was able to lower its rates after getting new information about the amount of federal cost-sharing subsidies it receives.

Health Net, whose rates for some plans were reviewed by the California Department of Insurance rather than the managed care agency, cut a proposed premium increase of 23 percent for individual policies nearly in half, to 12.1 percent. That yielded an estimated savings of $15.1 million, according to the insurance department.

Overall, Molina Healthcare has the highest rate increase for 2018 among insurers selling on the Covered California exchange, at 44.7 percent. Valley Health Plan comes in lowest at 9.8 percent.

Blue Shield of California, the largest insurer in the state exchange by enrollment, fell in between at 22.8 percent. HMO giant Kaiser Permanente will charge 11.6 percent more, on average, next year. (Kaiser Health News is not affiliated with Kaiser Permanente.)

California Slaps Surcharge On ACA Plans As Trump Remains Coy On Subsidies

KFF Health News, October 12, 2017

With the future of ACA subsidies unclear, Covered California decided to tack a 12.4 percent surcharge on certain health plans in 2018, with taxpayers expected to cover most of the added cost.

This article first appeared October 11, 2017 on Kaiser Health News.

By Chad Terhune

California’s health exchange said Wednesday it has ordered insurers to add a surcharge to certain policies next year because the Trump administration has yet to commit to paying a key set of consumer subsidies under the Affordable Care Act.

The decision to impose a 12.4 percent surcharge on silver-level health plans in 2018 means the total premium increase for them will average nearly 25 percent, according to Covered California. Taxpayers, not consumers, will bear the brunt of the extra rate hike because federal premium assistance for policyholders, which is pegged to the cost of coverage, will also increase.

Statewide, rate increases will vary by insurer and region. What consumers pay depends on where they live, their income, what level of coverage they want and which insurer they choose.

Californians can get their first look at next year’s health plan prices and options on the state’s rate calculator, released Wednesday.

The state’s open enrollment period, which is longer than that for the federal exchange, runs from Nov. 1 to Jan. 31. About 1.4 million Californians buy their own coverage through the state marketplace and nearly 90 percent receive financial assistance that reduces what they pay.

In August, Covered California announced that 2018 premiums would rise by 12.5 percent, on average, statewide. That ticked down slightly to 12.3 percent during regulatory review. But the exchange also warned that the additional increase, averaging 12.4 percent, would be added to the silver-tier plans if President Donald Trump failed to commit to continued funding for the so-called cost-sharing subsidies that help reduce some consumers’ out-of-pocket expenses. Those payouts total about $7 billion this year nationwide.

Trump has continued paying them on a month-to-month basis while repeatedly threatening to cut them off and repeal the entire health law. He has referred to the payments as “bailouts” for insurance companies.

Peter Lee, executive director of Covered California, said the surcharge is far from ideal but that the uncertainty in the nation’s capital left the state with no other option.

“Covered California worked hard to come up with a plan that ensures a stable market and protects as many consumers as possible from an unnecessary price hike,” Lee said in a statement Wednesday.

The exchange took several measures in an attempt to shield consumers from the effects of the surcharge. One of them was to create a new silver plan to be sold outside the exchange to individuals and families who make too much money to qualify for federal subsidies. The surcharge will not be applied to those plans, sparing unsubsidized consumers that extra cost.

The surcharge will apply only to the silver-level plans, the second-least expensive option among the exchange’s four tiers of coverage. That’s because only people enrolled in silver plans benefit from the cost-sharing subsidies that Trump has threatened to terminate.

Covered California said that 78 percent of subsidized consumers will see no change in what they pay or may pay even less despite the surcharge being imposed. The remaining 22 percent of consumers will see higher net premiums. About half of those consumers will get increases of less than $25 per month, according to the exchange.

John Baackes, chief executive of L.A. Care Health Plan, said his 2018 rates will be 11 percentage points higher because of the added surcharge — a 23 percent average increase instead of 12 percent. His health plan has about 26,000 exchange enrollees. He said the higher premiums would be “totally avoidable” if the Trump administration implemented the ACA.

“We have to lay the blame for this at the foot of the Trump administration for being so irresponsible about this major portion of the law,” Baackes said. “This will not be a burden on most consumers, but it will be a higher cost to the U.S. Treasury. It all seems so ridiculous."

Anthony Wright, executive director of the advocacy group Health Access California, criticized the Trump administration for playing "political games" with people's health coverage and forcing Covered California's hand.

"Even with Covered California's workaround, consumers are facing additional complexity and confusion, if not costs, all because of the Trump administration's contemptuous actions," Wright said.

The last-minute changes, less than three weeks before the start of open enrollment, are likely to confuse some consumers.

In addition to higher rates, Covered California faces the loss of a major insurer across much of the state. In August, Anthem Blue Cross said it was pulling out from about half of California’s counties, forcing 153,000 customers to find new coverage.

The state has boosted its marketing budget by $5.3 million for the coming year to help Anthem customers research their options and to deal with questions stemming from the surcharge.

California’s Obamacare rates have been a key barometer of how the Affordable Care Act is working since coverage began in 2014. The state held rate increases to 4 percent the first two years and then premiums jumped 13.2 percent, on average, for 2017.

These rate increases apply to people who purchase their own coverage in the individual market, not the majority of Americans who get their health insurance through work or government programs such as Medicare and Medicaid.

Some members of the U.S. Senate have attempted to craft a bipartisan deal to fund the cost-sharing subsidies for up to two years in a bid to stabilize the exchange markets nationwide. But those negotiations stalled last month when Senate Republicans pursued the Graham-Cassidy legislation, the latest GOP attempt to roll back President Barack Obama’s signature law. Like previous repeal attempts, it failed to muster enough support in the Senate.

State officials and health insurers across the U.S. have faced tough decisions on whether to proceed with higher rates to compensate for the uncertainty swirling around the Affordable Care Act. Deadlines were pushed back repeatedly as insurance commissioners and exchange directors pleaded with Trump and Congress to shore up the existing market so insurers would stick around and rate increases could be minimized.

“Carriers across the country need certainty, and a federal commitment to funding [cost-sharing reduction] payments would lower rates in many states,” Lee said Wednesday.

In Idaho, for example, the average rate for silver plans will increase 40 percent in 2018, double what the rate hike would have been had the Trump administration committed to funding the cost-sharing subsidies, according to Dean Cameron, director of the state’s Department of Insurance.

If the cost-sharing subsidies are continued into next year, the added surcharges could mean insurers will end up collecting too much in premiums, and some arrangement will have to be made to return the excess money.

Trump has continued to rail against Obamacare, pointing to huge rate increases around the country and insurance companies fleeing the market. Rather than amending the Affordable Care Act, Trump favors other proposals to help make health insurance more affordable for individuals and families.

This week, he is expected to issue an executive order that would allow people and small businesses to join together and buy health insurance through what are known as association health plans.

Details haven’t been released yet, but some health-policy experts say these new health plans could further destabilize the ACA’s insurance markets if they aren’t subject to the health law’s regulations.

On Tuesday, Trump tweeted that “since Congress can’t get its act together on HealthCare I will be using the power of the pen to give great HealthCare to many people — FAST.”

Kaiser Health News reporter Rachel Bluth in Washington, D.C., contributed to this story.

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