Opinion: UPMC’s costly divorce from Highmark - Pittsburgh Post-Gazette

On Jan. 1, UPMC will achieve its long-sought divorce from Highmark. The separation will undoubtedly disrupt care, add untold stress and potentially harm thousands. UPMC, in refusing even to negotiate a renewed contract, has plainly driven the breakup.
UPMC’s grounds for divorcing Highmark are tenuous. In testimony to the Legislature, UPMC complained that Highmark threatens to injure UPMC by “steering” patients to the “now-struggling” Allegheny Health Network, which Highmark has supported to serve as competitive foil to UPMC.
UPMC further explained, “Western Pennsylvania simply has too many hospital beds, and any gain in admissions at one hospital must come at the expense of other hospitals.”
In brief, UPMC believes competition against Highmark is good, but competition against UPMC is bad. UPMC touts creation of the UPMC Health Plan as “a competitive thorn in Highmark’s side,” but derides its own competitors as malevolent meddlers. As once explained by its CEO, UPMC’s goal is to create a “benevolent monopoly.” Unfortunately, monopolies are rarely benevolent, and there is nothing suggesting that UPMC would forgo (untaxed) profits for the public good.

Op Ed Columns - Pittsburgh Post-Gazette

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What Do PPACA Standards Mean for Employers’ Health Plans? | Towers Watson - Towers Watson

 

Large employer and self-insured plans

Employers with 101 or more employees may not purchase coverage for their employees through the state insurance exchanges, at least until 2017.⁶ Employer plans need not cover all 10 essential benefits or classify their plans into actuarial value tiers. Nevertheless, the PPACA requires large-employer-insured plans and all self-insured plans, whether offered by large or small employers, to meet similar standards for benefit generosity and plan affordability:

1. Actuarial value: Under the PPACA’s employer pay-or-play mandate, employers with 51 or more full-time employees must offer at least one plan with an actuarial value of at least 60% or face potential penalties. Employees of large firms that fail this “minimum value” standard may become eligible for federal premium assistance tax credits to buy coverage in the exchanges. When employees qualify for these credits, the employer must pay a penalty of $2,000 per full-time employee or $3,000 per full-time employee receiving a premium assistance tax credit, whichever is less. Large firms that do not offer a health plan to all full-time employees also face a penalty of $2,000 per full-time employee.⁷
2. “Core” benefits: Most plans offered by large employers already include benefits similar in scope to the 10 statutory essential health benefits, but the law does not require large-employer-insured plans or any self-insured plans to satisfy this standard. The Internal Revenue Service (IRS) has proposed basing actuarial value calculations for these plans on four “core” categories of health services: physician and midlevel practitioner care, hospital and emergency room services, pharmacy benefits, and laboratory and imaging services.⁸ The four core categories include 95% of the charges covered by a benchmark plan with broad coverage.⁹ In practical terms, this difference is likely to have little material impact on actuarial value estimates.
3. Employer premium contributions: Employees of large firms that offer coverage meeting the minimum value standard are not eligible for premium assistance tax credits or cost-sharing subsidies in an exchange unless their share of the employee-only premium in the employer’s lowest-cost plan exceeds 9.5% of family income. Employers whose coverage does not meet this affordability standard must pay the same financial penalty as firms that fail the minimum value requirement. The IRS proposed regulation applied the affordability standard only to single coverage, but the final regulation suggested that future guidance will address family affordability. The regulation could make nonemployee family members eligible for premium tax credits where the self-only coverage is affordable but the family coverage is not.

How do current employer plans compare with exchange standards?

Figure 1 depicts key cost-sharing provisions for prototypical plans that might be offered in the four exchange tiers in the individual market. These plan designs are largely similar to plans that employers currently offer with the exception of the bronze plan, which has considerably higher cost sharing than most current employer plans. The $3,000 deductible is about $1,100 higher than the average deductible for an account-based health plan (ABHP) in 2010.¹⁰ The PPACA might cap deductibles for all employer-sponsored plans at $2,000 (see sidebar), potentially making it difficult for employers to design a plan with a 60% actuarial value.¹¹

Figure 1. Prototypical health plans in each exchange tier

What Do PPACA Standards Mean for Employers’ Health Plans? | Towers Watson - Towers Watson

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Diagnosis - Insufficient Outrage - NYTimes.com

You don’t often see a good rant of moral outrage regarding health care in the Times, so here you go!

RECENT revelations should lead those of us involved in America’s health care system to ask a hard question about our business: At what point does it become a crime?

Diagnosis - Insufficient Outrage - NYTimes.com

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Obamacare Is Not Causing Small Businesses To Drop Their Employees' Coverage | ThinkProgress

Obamacare Is Not Causing Small Businesses To Drop Their Employees' Coverage | ThinkProgress

And a new study assuages similar fears that small business owners might drop coverage for their employees before Obamacare takes effect in order to avoid being hit with crippling expenses. The Midwest Business Group on Health surveyed businesses across 16 states, ranging in size from small companies with fewer than 1,000 employees to larger corporations that employ more than 5,000, and found “little indication that employers plan to drop health care coverage.”

As Forbes reports, while employers understand that they may want to adjust the scope of their health benefits plans, they are not anticipating the need to drop coverage for their employees because of the health reform law’s implementation...

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Small Business Majority | Small Business Owners’ Views on Implementing the Affordable Care Act

Small Business Majority | Small Business Owners’ Views on Implementing the Affordable Care Act

Key findings:

• Only a third of small business owners want the Supreme Court to overturn the Affordable Care Act; a plurality of 50% would like it upheld, with minor or no changes. This support grows after learning more details about the law’s key provisions:
  Only 34% of small businesses want to see the healthcare law overturned, while 50% want it to remain intact with, at most, minor changes. After learning more about its specifics, only 28% want to see it repealed and a 56% majority want it to be kept, as is or with minor changes. A 55% majority say they want it upheld because we need to make sure everyone has health coverage.
  
  Figure 1: After learning about the law, support for the Affordable Care Act grows
  

  There has been a lot of talk about the nation's health care reform law, the Patient Protection and Affordable Care Act. Which one of the following statements comes closest to your point of view when it comes to this law.

  
  
  
  

  After everything you read, which one of the following statements comes closest to your point of view when it comes to the nation's healthcare reform law, the Patient Protection and Affordable Care Act.

  
  
  
• By an 8:1 margin, entrepreneurs say they’d consider using a state health insurance exchange, and they favorably view many possible features of the exchange:
  A 66% majority of small business owners say they would use their state exchange or at least consider using it, compared to 8% who say they would not consider using it when they provide benefits. By wide margins, entrepreneurs find a host of possible features of the exchange very appealing. By a 2:1 ratio, small business owners support their state applying for federal funds to set one up.
  

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NEJM -- Primum Non Nocere -- The McCain Plan for Health Insecurity

NEJM -- Primum Non Nocere -- The McCain Plan for Health Insecurity:

"By this standard, John McCain emerges not as a maverick or centrist but as a radical social conservative firmly in the grip of the ideology that animates the domestic policies of President George W. Bush. The central purpose of President Bush's health policy, and John McCain's, is to reduce the role of insurance and make Americans pay a larger part of their health care bills out of pocket. Their embrace of market forces, fierce antagonism toward government, and determination to force individuals to have more 'skin in the game' are overriding — all other goals are subsidiary. Indeed, the Republican commitment to market-oriented reforms is so strong that, to attain their vision, Bush and McCain seem willing to take huge risks with the efficiency, equity, and stability of our health care system. Specifically, the McCain plan would profoundly threaten the current system of employer-sponsored insurance on which more than three fifths of Americans depend, increase reliance on unregulated individual insurance markets (which are notoriously inefficient), and leave the number of uninsured Americans virtually unchanged. A side effect of the McCain plan would be to threaten access to adequate insurance for millions of America's sickest citizens."

As I've said elsewhere, I believe McCain's plan would blow up the current system fairly quickly and lead us to our much needed national debate on how we really want to do this, but the cost in every other way is too high to risk.

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S.E.C. Backs Health Care Balloting - NYTimes.com

S.E.C. Backs Health Care Balloting - NYTimes.com:

"WASHINGTON — The Securities and Exchange Commission, shifting its position, has told companies they must allow shareholders to vote on a proposal for universal health insurance coverage.

Shareholders, including religious groups and labor unions, have offered the proposal in an effort to draw the nation’s largest corporations deeper into a debate over the future of health care, fast emerging as one of the most important issue in domestic policy.

The S.E.C. has told Boeing, General Motors, United Technologies, Wendy’s International and Xcel Energy over the last several months that they may not omit the health care proposal from their proxy materials."

An interesting approach. I am not surprised to hear many companies' officers arguing that this is neither related to their business nor useful, but they are wrong on both counts. As the article points out, some major companies are already finally coming to grips with the fact that health care in the US is hurting their competitiveness and profitablilty, so it does matter to every business, no matter what your core business is. And it will become extrememly useful when companies' managers finally get around to rejecting their juvenile, knee-jerk response that health care system reform is always bad, and that when the Fortune 1000 push an issue, the government listens. Of course, quite a bit of the Fortune 1000 have vested stakes in the status quo, but the vast majority of us have an interest in serious reform.

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