By Michelle Andrews

The 2010 health-care overhaul creates state-based health plans for those who have medical conditions that make them uninsurable in the private market.

These “preexisting-condition insurance plans” (PCIPs) are intended to act as a bridge until 2014, when insurers will no longer be able to refuse to cover people with medical problems or charge them more than other consumers.

As of November, about 45,000 people had signed up for those plans, far fewer than the up to 400,000 that was originally projected.

However, there is a much larger group, more than 220,000 people, who have coverage through 35 state high-risk pools that were in existence before the overhaul was passed.

Because of restrictions in the new law, they can’t sign up for the PCIP plans, even though the coverage is often cheaper (thanks in part to federal funding) and more comprehensive. For these people, 2014 can’t come soon enough..

Together they pay $1,304 a month for coverage. Chris’s plan has a $2,500 deductible while Kristi’s is $1,000. The plans generally cover 80 percent of their medical bills.

Chris Petersen, who supported the health-care overhaul, nevertheless thinks the law failed him and his wife. “This is the biggest check I write out every month,” he says. “The new federal plan would have been a lot cheaper.”

If the Petersens had been allowed to sign up with the PCIP in Iowa, their combined premium would have been $958 for policies with $1,000 deductibles.

More From This Series: Insuring Your Health

People such as the Petersens, however, are stuck between a rock and a hard place: To qualify for a PCIP, they must first be uninsured for six months.

Experts say this requirement was included in the law to discourage people in the existing state high-risk pools and other private insurance plans from doing exactly what they would do if better, cheaper coverage became available: switch plans.

It’s clear why they might be tempted. Premiums in the new pools can’t exceed rates for standard individual coverage in the state, while the high-risk pools in some states charge twice that. The new plans must also cover preexisting conditions immediately, in contrast to the older state pools, some of which exclude such coverage for up to a year.

“Much as everybody would like to drop [the six-month requirement], if you did you’d have to increase expenditures,” says Sandy Praeger, the Kansas insurance commissioner, who chairs the health insurance and managed-care committee of the National Association of Insurance Commissioners. Federal funding for the program through 2013 is $5 billion.

Learn about Washington State’s Pre-existing Condition Insurance here.

Although enrollment in the PCIPs has been far lower than originally projected, health-care spending by the individuals who have signed up for coverage has been much higher than anticipated, say experts.

“The people coming into the PCIPs act more like the long-term uninsured,” says Jean Hall, an associate research professor at the University of Kansas who co-authored a report about the PCIPs for the Commonwealth Fund. “They’re not accustomed to managing on a day-to-day basis; they’re accustomed to going to the emergency department when things get bad.”

Nine states have asked the Department of Health and Human Services for more money to fund their PCIPs in 2012. However, it appears the program won’t run out of money soon. Through the end of September 2011, just $386 million of the $5 billion allocated had been spent, according to HHS figures.

(Some experts caution against relying too much on September spending figures, since enrollment has increased since then and claims may take months to clear.)

“As you would expect, some states have exceeded projections and others have not,” says an HHS spokesman. “We have the capacity to accommodate the needs of the program.”

For people who can’t get into the new plans, however, that’s small comfort.

Jill Judy and Mark Brown signed up for the Arkansas high-risk pool a few years ago when Mark’s benefits ran out after his retirement from a management job at a company that repossesses boats. Judy, 49, has mild cerebral palsy, which she hasn’t been treated for since she was a child, and Brown, 62, had an angioplasty 15 years ago and still sees a cardiologist.

Individual insurers wouldn’t cover them, so they ended up in the state’s high-risk pool. Although Judy says she’s grateful that she has coverage, it’s hardly ideal.

The premiums for the two of them come to just under $1,000 a month. But the plan has a $10,000 deductible and a $1 million cap on lifetime benefits. “People like my husband and myself are paying $12,000 a year for nothing,” she says.

She estimates they could get better coverage and save 30 percent in the Arkansas PCIP. “But we don’t qualify because we’re not willing to be uninsured for six months,” she says. “It’s screwy.”

Please send comments or ideas for future topics for the Insuring Your Health column to questions@kaiserhealthnews.org.

Local Resources:

• Statewide Health Insurance Benifits Advisors (SHIBA) provides free, unbiased advice from volunteers: www.oic.wa.gov/shiba/
• Benefits.gov: www.benefits.gov
• King County Project Access: www.kcprojectaccess.org
• Washington Basic Health (insurance assistance): www.basichealth.hca.wa.gov/understanding.shtml
• Washington Health Plan: www.washingtonhealth.hca.wa.gov
• Washington State Office of the Insurance Commissioner: www.insurance.wa.gov
• To search for a community clinic near you go to: http://findahealthcenter.hrsa.gov

This article was reprinted from kaiserhealthnews.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.

Photo by Sanja Gjenero

Imagine if finding out the cost of a particular treatment or procedure at a doctors’ office was as easy as locating the prices of entrees at a restaurant. The menu might read: school physicals – $40; office visit for a cold – $80; diabetes screening – $200.

But to the dismay of some consumer advocates, this push for health care pricing transparency never made it out of the kitchen.

While a Florida state House committee approved legislation that would expand the state’s requirement that certain providers post the out-of-pocket prices of common health care services, a state Senate committee shot down a similar measure after an aggressive lobbying push by health care provider groups.

Organizations representing the state’s doctors weren’t wild about the idea that certain facilities would have to display bulletin-board sized postings of their prices.

Jeff Scott, general counsel for the Florida Medical Association, said that providers are all for transparency, but they don’t need the government telling them exactly how they should do it.

“Next thing you know they’re going to say it has to be neon or include pictures,” he said.

But providers’ most strenuous objections were to provisions in the legislation that would require providers to disclose prices to out-of-network patients and limit so-called balance billing, which happens in health care settings when providers bill patients the difference between what they charge for a service and what insurers pay it.

Meanwhile, the state already requires urgent care centers to post in their reception area the prices of their 50 most frequently used services, and the posting must be at least 15 square feet.  Physicians are not required to do so, but they must follow the same rules if they post prices voluntarily.

Under the proposed legislation, ambulatory care centers and diagnostic-imaging centers would have had to follow the same rules as urgent care centers, and the original bills also would have expanded the requirement to physicians.

The House committee-approved bill softened this language to maintain the voluntary status quo for doctors. Both bills would have required physicians to provide patients with a written statement of prices at each visit.

Richard Polangin, health care policy coordinator for the Florida Public Interest Research Group, said the legislation would have been a boon for consumers, many of whom are unaware that prices can vary among doctors and facilities.

The bills would “enable persons who must pay for doctor visits, diagnostic images such as CT scans and MRIs, and for care at ambulatory surgery centers, to know the cost in advance,” he said. “The uninsured and persons with insurance deductibles would be able to make more informed health care decisions.”

Insurers and business groups also supported the legislation. And, though the measure’s future is uncertain, at least one person involved in the lobbying effort said work would continue.

This article was reprinted from kaiserhealthnews.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.

The latest casualty of the Great Recession may soon be the nation’s elderly. Cuts in government payments for patient care and less construction of new nursing homes are already taking a toll.

Add to this the aging baby boom generation and you have a worst-case scenario in which older people who need full-time care won’t be able to get it.

“We believe we’re at a tipping point,” says Mark Parkinson, head of the American Health Care Association (AHCA), which represents nursing homes.

If so, the timing couldn’t be worse. The first baby boomers hit age 65 last year. By 2030, 20 percent of the U.S. population will be at least 65, up from 13 percent today.

Number of Persons 65+ in the U.S. 1900 - 2030 (numbers in millions) - U.S. Administration on Aging

In that same period, the number of 85-year-olds will increase more than 50 percent and the number of 100-year-olds nearly triple. But the number of nursing homes dropped almost 9 percent from 2000 to 2009.

Nursing homes and hospitals are places that everyone wants to avoid … until they can’t. Most people say they want to age at home, but as retiring boomers get older, more will need the type of 24-hour care that only a nursing home or hospital can offer.

That’s because the prevalence of chronic illnesses like Alzheimer’s disease, cancer and diabetes increases with age. Fifty-five percent of all cancers are diagnosed in individuals 65 and older, and by 2030, 7.7 million of those 65 and older will suffer from Alzheimer’s, 50 percent more than today according to the Alzheimer’s Association.

Several trends are cutting into the number of nursing homes. Many homes were constructed during the 1960s under Lyndon Johnson’s Great Society programs. Often those homes are closed because they are old or, with their long hallways and large, multi-resident rooms, don’t fit what current residents want, says Robert Kramer of the National Investment Center for the Seniors Housing and Care Industry.

But the recession has made getting private financing for new nursing home construction tougher. From 2007 to 2011, the number of under-construction nursing home units (the sections of a facility that provide only nursing care) declined by a third.

“I cannot tell you of anyone who has actually developed a new skilled nursing facility in at least the last five years in California,” says Edward Steinfeldt, a consultant to developers of retirement housing and health care.

And existing nursing homes are struggling. They long have lost money on patients whose stays are covered by state-run Medicaid programs, which pay for long-term care for chronically or terminally ill patients who have run out of money.

According to a report this month by the AHCA, in 2011 nursing homes lost at least $20 per Medicaid resident per day nationwide. Total losses came to $6.3 billion nationally, the highest yearly total ever, with higher deficits to come next year, according to the report.

That’s a huge hit since Medicare payments are responsible for more than 20 percent of nursing home revenues. (Medicaid provides about 50 percent of revenues, and most of the rest comes from private long-term care insurance and people who pay out of pocket.)

For the 187-bed nonprofit Lutheran Home in Milwaukee, which has gross receipts of about $20 million, the Medicare slash will take $700,000 to $750,000 straight off the organization’s bottom line this year says CEO Scott McFadden.

The real estate crash has added to nursing homes’ budget crunch. Many clients sell their homes and use the money to pay out of pocket for long-term care services from a nursing home.

Related Article: Tools to help you choose a good nursing home.

By obliterating more than $8 trillion in home equity, the collapse cut the number of patients who can pay their own way. McFadden says that the private-paying clients his home serves used to run out of money in two or three years. Now they’re broke much more quickly.

Once they can’t pay, Medicaid picks up only some of the tab, and the Lutheran Home then starts losing money on them. It’s illegal for a Medicaid-certified nursing home to ask a patient to leave just because they run out of money.

Residing at a nursing home is not cheap. The median annual cost of a private U.S. nursing home room rose to $77,745 in 2011—up almost 30 percent from 2005.

People without chronic conditions have less costly options—it takes about $43,500 yearly to pay for a home health care aide who doesn’t have specialized medical skills, and $39,000 to live in an assisted living facility that provides help with activities of daily life like cooking, but doesn’t necessarily offer health care services.

If nursing homes continue to be squeezed, they may need to cut more staff. A November 2011 report by the University of California-San Francisco concluded that poor quality of care is already endemic in many nursing homes, especially the largest for-profit chains where staffing levels have been cut the deepest to save money.

Local Resources for nursing homes and senior care

• Aging & Disability Services – Seattle/King County: www.agingkingcounty.org
• Aging & Disability Services Administration – Washington State: www.aasa.dshs.wa.gov
• Commission on Accreditation of Nursing Home Facilities: www.carf.org
• Eldercare Locator: www.eldercare.gov/Eldercare.NET/Public/Home.aspx
• Long-term Care Information: www.longtermcare.gov
• Medicare’s Nursing Home Compare service.
• Medicare: Alternatives to Nursing Home Care

Parkinson maintains that so far, homes in his association are keeping up their level of service with less money by eliminating managers, freezing wages, and cutting capital improvements like painting walls and replacing carpets—anything to avoid laying off caregiver staff.

Bill Mulligan, a managing director at Ziegler Capital Management, which provides low-cost financing for nursing home developments, argues that given the decreasing supply and rising demand, nursing homes are still a good investment.

“The demographics are going to level off the number [of homes], maybe even increase it at some point,” he says. But Steinfeldt, who also works with developers, has little confidence in their profitability: “Why would you go into a business that can’t cover its costs?”

If major shortages of nursing home space do surface, they’ll likely show up in urban and high-poverty areas first. Widespread waiting lists have already been reported in Tallahassee in Florida, Rapid City in South Dakota, and San Francisco. Homes also have been closing in poor neighborhoods—a study published last year in the Archives of Internal Medicine showed that nursing homes shut down there more often than elsewhere (the hardest hit cities were New Orleans, Oklahoma City, San Francisco, and Dallas).

And Medicaid patients may have an increasingly hard time finding nursing homes that will take them–Kramer says when homes replace their old buildings, they often cut the number of beds to make space for more private rooms and sophisticated medical facilities that can attract the higher paying Medicare and private-pay clients.

“Every adult is going to face this nursing home crisis in some way, whether it’s through their own care or the care of loved ones,” says McFadden. “Ignoring it is not going to make it better.”

This article was reprinted from kaiserhealthnews.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.

(Kaiser Health News in an editorially-independent program of the foundation.)

Majority Of Americans Think Ideology Will Affect High Court’s Ruling On Health Law 

By Mary Agnes Carey
KHN Staff Writer

With the Supreme Court just two months away from hearing a historic legal challenge to the 2010 health law, nearly 60 percent of the public expects the justices to depend more on personal ideology than a legal analysis of the individual mandate, according to the Kaiser Family Foundation’s January health tracking poll.

Just 28 percent of those surveyed believe the justices will base their decision on the mandate without regard to politics and ideology, according to the survey.

The poll also asked about general views of the Supreme Court and found three quarters of the public believe that justices sometimes let their ideological views influence their decisions.

Seventeen percent of those surveyed say justices usually decide cases based on legal analysis.

The court will hear oral arguments in March in a case brought by 26 states and others.

As the Republican presidential nomination fight continues, the poll also found that most Republicans are not swayed by charges from GOP contenders that former Massachusetts Gov. Mitt Romney holds health policy views similar to those of President Barack Obama.

Romney’s opponents have repeatedly criticized him for signing a 2006 Massachusetts law that is similar in some aspects to the federal health law.

But the poll found that 49 percent of Republicans say the two men’s views are different, while three in 10 say they are similar. Twenty-two percent had no opinion.

However, when asked specifically for their opinions about the 2006 Massachusetts health law, 69 percent of likely GOP primary voters responded that they didn’t know enough to say whether they viewed the law favorably or unfavorably.

Furthermore, 64 percent of these voters said they don’t know enough to judge whether the Massachusetts law is similar to or different from the 2010 federal health law.

The poll also found that the individual mandate, a requirement that most Americans purchase health insurance by 2014 or pay a fine, remains unpopular, with 67 percent of Americans having an unfavorable view of the provision and 30 percent supporting it.

The January poll found that 37 percent of Americans have a favorable view of the health law while 44 percent have an unfavorable view.

In the foundation’s December tracking poll, 41 percent of Americans had a favorable view of the law while 43 percent had an unfavorable view.

The Kaiser poll surveyed 1,206 adults from Jan. 12 to 17. It has a margin of error of +/- 3 percentage points.

This article was reprinted from kaiserhealthnews.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.

By Merrill Goozner, The Fiscal Times
This story comes from our partner 

Julie Grabow, an oncologist at the Fred Hutchinson Cancer Center in Seattle, recently prescribed an exciting new therapy for a 60-year-old woman with metastatic breast cancer.

Three-and-a-half years into her battle against the disease, the patient had already exhausted three different anti-estrogen therapies, each of which only put a temporary check on the spreading tumors.

The newly prescribed drug, Novartis’ Afinitor, is one of the recently approved targeted therapies that have generated a lot of excitement among cancer patients and oncologists in recent years.

Drugs that target just the cancer cells promise the same or better results as toxic chemotherapy, but with far fewer side effects.

There was a catch, though. Like many of the latest cancer drugs, Novartis is charging exorbitant amounts for the treatment – in this case, $10,000 per month.

That quickly put an end to that possibility for Grabow’s patient. Her monthly co-payment, even after her insurance company agreed to pay its share of the off-label use the drug (the Food and Drug Administration has only approved Afinitor for kidney and pancreatic cancer, not breast cancer), was $2,900.

“She can’t afford this, even though it’s potentially a less toxic and potentially equally effective regimen,” Grabow said. “Chemo will help her, and it’s a reasonable choice. But that choice is 100 percent driven by economics.”

Over the past year, official Washington and candidates on the campaign trail have locked horns over the best way to curb rising health insurance costs. The public has been bombarded with dueling slogans – Republicans vowing to fight the “death panels” and “rationing” of Obamacare while Democrats promise “guaranteed access” and “affordability” with the Affordable Care Act.

But an economic drama that neither side wants to confront is playing itself out in cancer wards and oncologists’ offices across the country.

Unaffordable new drugs, even when they’re covered by insurance, are being rationed by price as patients, doctors and hospital officials struggle with what is likely to be the most pressing problem for the nation’s health care system over the next decade: how to pay for the spectacular rise in the cost of cancer care, especially drugs and diagnostic tests.

“In the real world of private practice where most care is delivered, it would be a mistake to say rising costs haven’t affected care,” said Eric Nadler, a head, neck and lung cancer specialist at Baylor University Medical Center.

The growing cost of cancer care will impose its greatest burden on the nation’s Medicare system, since 55 percent of all cancers are diagnosed in individuals 65 or older.

A recent study by the National Cancer Institute projected the cost of treating the 29 most common cancers in men and women will rise 27 percent by 2020, even though incidence of the disease is going down due to successful public health campaigns like the war on smoking.

The study pointed out that its projections were based on 2006 Medicare claims data, which predated the development of most of the latest targeted therapies.

There’s no doubt that there will be many new therapies for cancer coming to market in the years ahead. The nation’s $150 billion public investment in understanding the biology of cancer – the science side of the War on Cancer launched by President Richard Nixon in 1971 – is beginning to bear fruit.

The pharmaceutical industry, which draws on that publicly funded science to develop drug candidates, now has 887 new cancer drugs in development, over 30 percent of its total portfolio of new drug candidates, according to the Pharmaceutical Research and Manufacturers of America, the industry trade group. That’s up from 646 or 26 percent of the total devoted to cancer in 2006.

The industry is pouring increased research and development resources in cancer therapeutics in hopes that it will replace the revenue being lost from the expiration of patents on blockbusters like Lipitor.

However, since there are fewer cancer patients than there are people with chronic conditions like elevated cholesterol, and many don’t live very long, the prices needed to support the industry’s current size and structure, and profits must be substantially higher.

“They’re trying to maximize profits given their incentives,” said Peter Neumann, director of the Center for the Evaluation of Value and Risk in Health at Tufts Medical Center, which receives funding from the drug industry.

Possible solutions, he said, include letting Medicare set prices based on the medical value of adding extra months to life. That’s a variation on Great Britain’s cost-effectiveness model, which has been roundly condemned by most U.S. politicians and the press.

The other path is to turn to a bundled payment for every for every episode of cancer care and let the health care delivery organizations and private insurers sort it out. (Bundled payments account for all medical services associated with a given episode of care—doctors, nurses, technicians, etc.) That approach, in essence, would force the marketplace to execute the rationing.

“Bundled payment isn’t a panacea, but it does create incentives,” Neumann said. Some private insurers are experimenting with bundled payments for cancer care.

A quick review of the new cancer drugs approved by the Food and Drug Administration last year reveals how fast drug prices are rising.

Most of the older chemotherapy regimens for cancer, some of which have been around since the 1950s, are generic and relatively inexpensive.

But among the six new drugs approved in 2011, the cheapest – Johnson & Johnson’s Zytiga for advanced prostate cancer – cost $44,000 a year. The drug extended life by an average of less than 5 months to 16 months, according to a company spokesperson.

At the high end of the spectrum was Adcetris, a biotech product from Seattle Genetics that treats recurrences of Hodgkin’s lymphoma. A highly curable disease when initially treated in the 8,830 mostly middle-aged patients who get the disease every year, it is usually fatal if a drug-resistant strain emerges later in life.

Adcetris, the first new treatment to come along since 1977, kept the cancer in check for nearly 7 months in the single small trial that led to its quick FDA approval. It’s price tag: $216,000 for a full course of treatment.

Skin cancer specialists had a lot to cheer about in 2011 with two new therapies coming on the market for metastatic melanoma, which is fatal within one year for about 75 percent of the 10,000 people stricken each year.

But Roche/Genentech’s Zelboraf cost $61,400 a year and Bristol-Myers Squibb’s Yervoy, which nearly doubled the one-year survival rate from 25 percent to 46 percent, cost $120,000 for a four-month course of treatment.

“We price our medicines based on a number of factors including the value they deliver to patients and the scientific innovation they represent,” said Sarah Koenig, a spokeswoman for Bristol-Myers. “We have one of the most robust patient assistance programs for cancer patients in the industry.”

Most drug companies have patient assistance programs for poor or struggling patients, but many only come into play if patients are poor or families have exhausted their savings.

And since many of the latest therapies, like the older chemotherapies they are replacing or supplementing, extend life for brief periods of time, patients wind up weighing whether they want to deplete their children’s inheritances for a couple extra months of being very, very sick.

A study released at last June’s annual conference of the American Society of Clinical Oncology, which represents the nation’s 25,000 oncologists, revealed that patients with co-payments over $500 a month were four times more likely to refuse treatment than those whose co-payments were under $100 a month.

“The price of drugs can’t be set so outrageously high,” study author Lee Schwartzberg told Reuters. Schwartzberg is the chief medical officer at Acorn Research, which conducted the study.

“All stake holders have to get together and compromise to translate this great science into great patient care without breaking the bank.

This article was reprinted from kaiserhealthnews.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.