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RubinHealth Blog


Medicare Donut Hole PDF Print E-mail
Monday, 31 October 2011 17:45

The Medicare donut hole is the coverage gap in Medicare Part D Drug Coverage, where you are not insured for the cost of drugs

• The gap amount, or dollar threshold where you lose coverage for 2012 is $2930.

This number is calculated on retail costs of the drugs, not what you personally spend, i.e. co-pay or co-insurance.

• You exit the Donut Hole when your total out of pocket expenses reaches $4,700.

This number was calculated in a new way beginning in 2011

• In 2011, and continuing in 2012 when you are in the Donut Hole you will receive discounts of 50% on Brand drugs and 7% on Generic drugs, this will keep you in the hole longer though.

For exiting the donut hole, calculations include not only what you have paid toward your prescriptions, but also what specific extra help programs have paid toward your medication costs.

• After you have spent $4,700 (left the donut hole) catastrophic coverage kicks in and you will have to spend $2.60 per month for generics / $6.50 per month for name brand medications or 5% of the medication's retail cost, whichever cost is higher.

• Healthcare reform plans on eliminating the Donut Hole in 2020

Last Updated on Friday, 23 December 2011 14:55
 
Why are insurance premiums going up? PDF Print E-mail
Thursday, 29 September 2011 15:19

I spoke to so many people today who were wondering why health insurance premiums were going up so much next year.  Almost everyone thought it was because of healthcare reform.  No one was being negative, they were merely trying to understand why it's going to cost so much more next year.  It is important to make sure people understand healthcare premiums have been going up year after year -- long before healthcare reform was passed.  While last year the increases were lower than this year, for a whole host of reasons, the harsh reality is our healthcare costs will continue to rise until we are all willing to truly tackle the many reasons behind the explosive growth.  To name a few, an aging population, new drugs and technologies to treat an ever increasing number of diseases, and finally, if not most importantly, our insatiable demand for healthcare services when we want them, regardless of the costs.

I have written about this before but I feel it is important to remind everyone when insurance companies raise their rates year after year.  It would be easy to blame healthcare reform, but it is also wrong.  We need to give healthcare reform a chance to work.  It really starts in 2014.  Until then, we are going to have to deal with what we have and hope that as more and more reforms are implemented, we may finally see some relief.  Even then, I am not optimistic that we will have done enough to control costs.  Congress will need to make some hard decisions.  We all will have to make some hard decisions about how to pay for healthcare in the future.  In the interim, do not blame healthcare reform for the high costs.   If you are really looking for someone to blame, call your congressman.

Last Updated on Saturday, 29 October 2011 03:21
 
The Truth About the Texas High Risk Pool PDF Print E-mail
Friday, 16 September 2011 20:33

Great information came in from a Dr. Radio listener about The Texas High Risk Pool (for those who cannot get health insurance because of preexisting conditions).

For those who were listening to the show on Thursday, Sept.15th we had a caller who said the pool was easy to access and open to anyone who is denied insurance for a preexisting condition.  Thus the only reason 24% of Texans lack health insurance (the highest rate in the nation) is by personal choice. 

Our listener told us the following: the enrollment is not even 40,000 it is 26-27,000.

Premiums for a 50-year old female, non-smoker are $907 per month with a $2500 deductible, a $250 prescription deductible, 20% coinsurance and a $4000 annual out-of-pocket (additional to the deductible - not including it) making this an approximately $15,000 policy.  Also, the premiums rise every 6 months.  In Dec 2008, premiums for her started at $634 per month. In less than 3 years, there's been a 43% increase in premiums.  Most people who enter the risk pool cannot stay in for very long.  It is simply unaffordable not because they chose to stay out of it.

The key in healthcare is to make sure you know the facts.  It’s ok for Governor Perry from Texas to want to repeal healthcare reform – as all the Republican candidates are saying – but we should be demanding them to explain to us their proposals as an alternative.  Simply maintaining the status quo seems high dangerous for all of us who will someday rely on the healthcare system and Medicare and for the United States financial health in general.


Last Updated on Thursday, 29 September 2011 15:21
 
Time for an Intervention on Medicare and Medicaid Costs PDF Print E-mail
Tuesday, 16 August 2011 18:23

The Bureau of Economic Analysis recently released data showing Medicare and Medicaid costs jumped 10% in the second quarter of this year. This puts the two healthcare entitlement programs on course to reach spending levels of almost $992 billion. Yes, that is almost $1 trillion. And guess what, it is not going to stop rising unless something is done soon.

The recent debt ceiling compromise in Washington did not touch or modify the programs but it does leave them open for restructuring in future negotiations. And as much as I love and value these entitlement programs, a massive restructuring is exactly what is needed. When Medicare was first enacted in 1965, approximately 19 million Americans enrolled. By the year 2030, an estimated 80 million Americans will be enrolled. The bad economy only adds to the burden as more and more Americans wind up in the Medicaid program. Medicare and Medicaid currently pay 57.5% of all provider bills for doctors and hospitals, and pharmaceuticals. That is up from 49.3% in 2005. Life expectancy when Medicare was created was 70. Today, it is 78. People are living longer and they are using more and more healthcare services. Each day, there are new and amazing discoveries, many of which will extend our life expectancy adding even more cost to an under financed system.

It would be a wonderful blessing if our country could fund all of our healthcare expenses indefinitely. But simply put, the math just does not add up. We must fix the funding of the program now so that we all benefit from it in the future; our children and grandchildren included. I believe there is a way if only we all listen and understand the facts on the ground.

Last Updated on Friday, 16 September 2011 20:39
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NY Daily News editorial & my letter to the editor PDF Print E-mail
Thursday, 28 July 2011 13:26

From the Daily News:

You think the debt crisis is bad now? Wait until Obamacare takes its toll, By Andrea Tantaros

One of the main reasons for enacting Obamacare was to bring down health care costs - so said the President, then-House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid. But since its passage, the sweeping overhaul of one-sixth of our economy has done just the opposite. If you think the debt debate on Capitol Hill has revealed that this nation is on the road to fiscal ruin, just wait until health care reform really kicks in.

The Congressional Budget Office will tell you that we will save $143 billion between 2010 and 2019, but its assumptions were flawed from the start. Doing a close analysis of the budget office scoring, Kathryn Nix of the Heritage Foundation concludes that Obamacare "indisputably represents a massive new burden on current taxpayers and future generations."

Those costs are evident already. "Health care costs are expected to increase by 8.5% in 2012 - slightly up from this year's increase of 8%, according to the annual 'Behind the Numbers' report on medical costs recently released by [PricewaterhouseCoopers'] Health Research Institute," says the online publication Small Business Trends.

Part of that increase has to do with the fact that many of the nation's hospitals are buying up physician practices or consolidating with other hospitals to form conglomerates that are able to muscle insurers more than ever before for higher fees for service.
 
But the other factors that have contributed to the spike are the provisions in Obamacare that took effect immediately.

Insurers are now forced to cover patients despite any preexisting conditions. They are also required to provide preventive services and cover children as their parents' dependents up to the age of 26. The health care bill also scrapped annual and lifetime cap provisions, so if you get a rare form of cancer, you'll have unlimited coverage regardless of the cost. According to news website The Daily Caller, "the day Obamacare hit the books one year ago, 150 new regulations immediately went into effect. Since then, 125 more regulations have gone into effect."

All of this sounds wonderful, but someone has to pay. Every American who currently has health insurance in the U.S. will be forced to shell out higher premiums.

The danger to insurance companies, and thus to patients, is similar to what happened with Romneycare (a blueprint for Obamacare) in Massachusetts, where the new health mandates ruined the few efficiencies of managed care. Sicker (and, hence, costlier) patients sign up for coverage, which weighs down on the healthy population, whose premiums rise so drastically that they cannot afford coverage anymore. They figure, why pay expensive premiums when I can instead sign up for insurance when and if I do get sick and pay the penalty for not being covered (which is much less, anyway)?

It's just like car insurance: You need safe drivers paying their insurance to balance out the reckless drivers with shoddy driving records. Without just about all responsible drivers purchasing coverage, the system doesn't work.

That is why Obamacare is so poorly crafted. There is no incentive for healthy people to sign up. However, had the bill included a provision that opened up insurance markets over state lines, the competition among insurers for customers would have naturally kept costs in check.

In fact, if Obamacare isn't repealed, today's national debt will be far worse tomorrow because of exploding costs.

The National Federation of Independent Businesses released a report this week that revealed that "one in eight small businesses have had or expect to have their health insurance plans terminated since the passage of President Obama's health care reform," according to The Daily Caller. The findings echoed a report from consultants McKinsey & Co. last month that stated that 30% of employers will "definitely or probably" stop offering health insurance coverage to employees after 2014.

Think about it: If you own a business that has fewer than 50 employees, why would you continue to pay for their insurance when you can force them into the government exchanges? Not only does that mean you won't get to keep your doctor, as Democrats promised you would, it also means that Obamacare could drive us into fiscal ruin.

According to a Washington Post Op-Ed by Sen. Ron Johnson (R-Wis.) and former Congressional Budget Office Director Douglas Holtz-Eakin, "If half of the 180 million workers who enjoy employer-provided care wind up in the exchanges, the annual cost of Obamacare would increase by $400 billion by 2021. If the other half eventually follows suit, and all American employees wind up in the exchanges - which we believe is a goal of Obamacare - then the annual cost of the exchanges would increase by more than $800 billion."

That means that far too much of the private-sector health care balance sheet would be transferred over to taxpayers to foot the tab. Over 10 years, the costs would be in the trillions.

Wasn't the whole point of Obamacare to bring costs down - and not break the back of the federal budget?

That's why it must be repealed. The debt fight in Washington will be small potatoes today when you think about what it will be after health care reform goes into full effect. But by then, Obama will conveniently be out of office, and we'll be stuck with the bill.

--

To the Editor:

I am writing in response to the opinion piece written by Andrea Tantaros  on healthcare reform entitled “You think the debt crisis is bad now? Wait until Obamacare takes its toll.”  I have no problem with those who object to the many provisions included in the Patient Protection and Affordable Care Act (healthcare reform law) and I also agree it will end up being more expensive to implement than planned.  However, virtually every issue raised by Ms. Tantaros was faulty in its conclusion as to why healthcare reform will be more expensive than the Congressional Budget Office predicted.  I think it’s irresponsible to use incorrect facts when you are trying to make a point.  That is exactly what happened in this piece and let me explain why:

1.       It is true healthcare costs continue to rise at alarmingly high rates (8% predicted for 2012).  What is untrue is this growth is related to “Obamacare.”   Healthcare costs were rising well before healthcare reform was presented to the American public.  In fact, some of the very reasons behind the reform legislation originate with the concerns over the explosive growth in costs over the past decade.  Healthcare reform, while imperfect, is designed to bring those costs down.  It is true that hospital systems are buying medical practices and it is also true these organizations will use their newly found market clout to negotiate better reimbursement rates.  However, Medicare does not negotiate.  So these networks will not increase the federal burden on healthcare costs.  Secondly, the primary purpose of forming these hospital/physician networks is to better integrate care for the patient, and thereby, the healthcare system in general.  There is no question, when you better organize and manage a patient’s healthcare, you will save the healthcare system money by keeping people out of the hospital and lowering readmission rates.

2.       The healthcare reform provisions that have kicked in so far, such as requiring health insurers to cover dependent age children up to age 26, are estimated to increase the costs to the healthcare system by approximately 1%.  A fraction of the overall spending growth projected for 2012.  To suggest these few immediate provisions, intended provide instant relief for many and generate public support behind healthcare reform  are breaking the bank, is simply not true.  Neither is the claim that insurers are currently not allowed to deny applicants because they have preexisting medical conditions.  That provision does not start until 2014.

3.       I am truly dumfounded by Ms. Tantaros suggestion that only sick people  would sign up for healthcare insurance.  Perhaps the single most controversial component of the legislation requires all Americans to sign up for healthcare insurance.  Sick and healthy alike.  Everyone is in – plain and simple.  While unpopular to many, it is the underpinning of balancing the healthcare insurance markets. Without it, healthcare reform as written will fail.  However, as of today, the individual mandate is included, so Ms. Tantaros’ argument is not only irrelevant, but makes no sense. 

4.       Finally, and I could go on with more, it is still very unclear whether large group employers will stop providing healthcare insurance to their employees.  Healthcare insurance is a benefit that is not currently required to be offered today yet approximately 180 million Americans get their healthcare insurance this way.  It is true some employers will stop offering insurance and force employees into buying insurance on the state exchanges and the penalty the employer pays the government will be less than the cost for providing the insurance.  However, the impact and magnitude is still very unknown.  While this issue is complex and there is no data to accurately project the ultimate outcome, I think it is inappropriate to suggest employers will stop providing this benefit. Further, this has nothing to do with whether you would be able to see your existing physician. 

You may find this hard to believe, but I actually have concerns over the ultimate costs of healthcare reform on the government and society in general.  While there are new payment mechanisms in place to hopefully lower costs,  I do not believe the American public fully understands the real reasons behind the explosive growth in healthcare costs.  We are living longer and using more expensive healthcare every day.  Drugs, technology, multiple doctor visits, home care, etc.  One needs to look no further than the new late stage prostate cancer treatment drugs that prolong life for patients on average between 4-6 months at an estimated cost of $90,000.  While there may be no limit to the price we want to pay when we get sick and want to fight for survival, you cannot ignore the costs associated with these new treatments.  And since it is the insurance company or the government that pays the bill, we are not even aware of how much it costs.  Until we are all willing to accept the actual facts, the more we will let people like Ms. Tantaros distort the truth about why healthcare in this country is so expensive.

Andrew Rubin

Host, Healthcare Connect on Sirius/XM Doctor Radio

 

Last Updated on Tuesday, 16 August 2011 18:26
 
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