Mass. report on insurers' financial health provides mixed portrait

The Boston Globe reports: "A long-awaited state report to be released today will probably add fuel to the debate about surging health costs by portraying a mixed financial picture of Massachusetts health insurers. The state's eight health insurers finished 2008 with a total surplus of $2.5 billion, a more than four-fold increase from 1999 when the study period began, according to a 17-page executive summary of the report from the Division of Health Care Finance and Policy that was obtained by the Globe." However, when using a different accounting tool, the companies are not doing as well, the paper reported. "The summary of the report did not address the key concern of consumers: whether or how the significant increases in premiums they paid over the past decade contributed to the companies' surpluses" (Weisman and Lazar, 5/2).

The Wall Street Journal reports that in the health law, "lawmakers overlooked a big and growing problem:" how college students get health care. "Not only do colleges sometimes overcharge students for health services, but school health plans are so confusing that students often don't know they owe money until they are hit with late fees. The result: spiraling medical bills for young people. … The college health system is a crazy quilt of private coverage and student plans, with few rules governing how schools charge for coverage or on-campus services. More than half of U.S. colleges offer a school-sponsored plan in which students pay premiums for coverage. Some automatically enroll students in their plans unless the students sign a waiver proving that they are covered by an outside policy. Other schools require students to use their plans no matter what. Still others require students to have outside coverage. Whether or not schools offer coverage, they frequently charge students who are covered on a parent's plan more for basic services like a check-up with a doctor, prescriptions or X-rays. All told, colleges overcharge students and families by $2.3 billion to $2.9 billion a year on health-center fees, premiums for student plans and fees for specific services, according to research from consulting firm Keybridge Research LLC commissioned by Highland Campus Health Group, a company that provides billing services to schools" (Pilon, 5/1).

The New York Daily News reports that New York state officials are weighing options to help consumers with high health insurance costs. "Consider these stats: Since 2000, health care premiums in New York have risen an average of 97%, or six times faster than incomes, state Insurance Department data show. Empire State families now pay upwards of $24,000 per year for insurance on the open market -- the highest in the U.S. -- with little sign of relief. … It's a gap that Gov. Paterson actually hopes to close a bit with new legislation -- vehemently opposed by the powerful insurance lobby -- that would require insurers to submit proposed premium hikes to the state for prior approval. … New York had a similar 'prior approval' law in the early '90s, and nearly a quarter of proposed rate increases were rejected by the state as too high. But since 2000, insurers have effectively set their own rates -- often resulting in annual, double-digit increases - provided they can attest to devoting 75% to 80% of their premium dollars to health care, state officials say" (Saltonstall, 5/2).

The Milwaukee Journal Sentinel examines one of the provisions of the new health law: "In a health care system that spends $2.5 trillion a year, less than one-tenth of 1% is spent on research to determine what treatment options work best -- and, in some cases, whether they work at all. … The result is tens of billions of dollars -- and maybe much more -- spent each year on treatments that are of marginal or questionable value. In recent years, doctors, economists, health plans, business groups and others have called for increased research on comparative effectiveness -- research that compares different treatment options. That's about to happen. The American Recovery and Reinvestment Act passed by Congress last year allocated $1.1 billion for the research. And the new health care reform legislation will create a nonprofit institute to fund research on the effectiveness of medical treatments. The new Patient-Centered Outcomes Research Institute is to receive more than $200 million a year on research starting in 2013 to learn more about which treatments work best for which patients" (Boulton, 5/2).

The New York Times reports on "the phenomenon known as balance billing. It is a controversial and sometimes illegal practice: doctors and other health care providers receive a discounted payment from the insurance company — an amount less than the fee they want to be paid — and then they bill the patient for the rest. Most states, including Illinois, have passed laws making balance billing illegal within an insurer's medical network. And federal law prohibits balance billing by providers paid under Medicare. But balance billing in these cases can still happen. If you receive a bill from an in-network provider that you are not expecting, call your insurer immediately. … Most cases occur when patients who are part of H.M.O.'s, P.P.O.'s and other network health care plans use an out-of-network doctor, lab hospital or other provider. … When an H.M.O. or a P.P.O. does agree to pay an out-of-network surgeon, say, it is easy to be lulled into a false sense of security: Pre-approval means the entire bill will be paid, right? Maybe not. Instead, through the dark art of balance billing, you may discover — usually only when the bill arrives — that the provider is looking to collect more than the insurance company has agreed to pay. The recent federal overhaul of health insurance laws does not directly address the balance billing issue" (Konrad, 4/30).

The Associated Press/The Washington Post report: "Moved by a huge tide of troops returning from Iraq and Afghanistan with post-traumatic stress, Congress has pressured the Department of Veterans Affairs to settle their disability claims -- quickly, humanely, and mostly in the vets' favor. The problem: The system is dysfunctional, an open invitation to fraud. And the VA has proposed changes that could make deception even easier. PTSD's real but invisible scars can mark clerks and cooks just as easily as they can infantrymen fighting a faceless enemy in these wars without front lines. The VA is seeking to ease the burden of proof to ensure that their claims are processed swiftly. But at the same time, some undeserving vets have learned how to game the system, profitably working the levers of sympathy for the wounded and obligation to the troops, and exploiting the sheer difficulty of nailing a surefire diagnosis of a condition that is notoriously hard to define" (Breed, 5/2).

The Associated Press reports in another article: "Liberals who vowed to take revenge against conservative Democrats who opposed President Barack Obama's health care law have little to show for their anger six months before the midterm elections. Most of the 34 Democrats who opposed the overhaul legislation that squeaked through Congress in March are facing only token opposition — if any — from the left. Some labor unions and party activists have turned to long-shot, third-party candidates as they try to send a message to the wayward Democrats. The impact of such efforts is dubious, however, and could help the incumbents, many of whom represent conservative Southern districts. One exception is the Arkansas Senate race, where liberals are putting cash and muscle behind a bid to unseat conservative Democratic Sen. Blanche Lincoln, who had a mixed record on the health care bill" (Evans, 5/1).

---

This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.