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Many Medicare Outpatients Pay More at Rural Hospitals, Federal Report Says


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By Jordan Rau

Kaiser Health News

Many Medicare beneficiaries treated at primarily rural “critical access” hospitals end up paying between two and six times more for outpatient services than do patients at other hospitals, according to a report released Wednesday by the inspector general at the federal Department of Health and Human Services.

There are more than 1,200 critical access hospitals, which are generally the sole hospital in rural areas and can have no more than 25 beds. Medicare pays them more generously so they won’t go out of business. In Illinois, 50 hospitals, more than a quarter, hold this designation.

rural barns

Image courtesy Donald Lee Pardue, flickr creative commons

Medicare requires patients to pay 20 percent of the amount a critical access hospital charges. At other hospitals, patients also pay 20 percent coinsurance, but it is based on the amount Medicare decides to reimburse the hospital, which is almost always significantly below what the hospital charges.

As a result, Medicare patients in 2012 receiving an electrocardiogram at a critical access hospital owed an average of $33, while patients at other hospitals had to pay $5, according to the report. Patients getting an initial infusion into a vein had to pay $56 on average at a critical access hospital, while patients at other hospitals paid $25.

Many supplemental insurance policies for the elderly pick up the tab, but one in seven Medicare recipients lacks such a policy. In addition, these higher medical costs are ultimately factored into the premiums insurers set.

The inspector general’s office recommended Congress change the law so that a Medicare beneficiary’s financial responsibility better reflects the cost of the service.

Brock Slabach, a senior vice president at the National Rural Health Association, said this issue has been raised before by the Medicare Payment Advisory Commission, or MedPAC, which counsels Congress. He said that because the law requires that critical access hospitals be paid their “reasonable” costs plus 1 percent, Congress would either have to change the law or Medicare would need to pay more to make up for the lower patient portions.

Map courtesy NC Hospital Association

Map courtesy NC Hospital Association

“The reason this hasn’t been solved is it would require the Medicare program to subsidize more,” Slabach said.

Since the MedPAC report in 2011, which offered a number of ways to fix the system, the share of medical costs picked up by patients has risen further, the inspector general found. The patients’ portions of critical access hospital bills in 2012 were 47 percent of Medicare’s estimate of the cost of the treatment, with Medicare paying the remainder, the report said. Medicare beneficiaries paid about $1.5 billion of the $3.2 billion in outpatient services at critical access hospitals.

Medicare offered a short response to a draft version of the report in August, saying it “thanks the OIG [inspector general’s office] for its efforts and looks forward to working with OIG on this and other issues in the future.”

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

Turning 65? Nine Tips for Signing Up for Medicare


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By Caroline Mayer

Kaiser Health News

“Welcome to America’s hottest talk line. Ladies, to talk to interesting and exciting guys free, press 1 now. Guys, hot ladies are waiting to talk to you …”

Wait! I thought I was calling Social Security to ask a question about enrolling in Medicare.

It’s the first hour of my mission to sign up for Medicare and already I’m making mistakes. In this case, it’s minor (and amusing), misdialing the toll-free number by one digit. But it serves as a warning: There are many missteps I can make, some of them serious, if I’m not careful.

Even for me, a consumer reporter who has written about health-insurance issues, enrolling in Medicare is a daunting task. The terminology is confusing and the options are seemingly infinite, based on the amount of promotional material that’s begun arriving in my mailbox. The letters from various insurance carriers began appearing exactly six months before my 65th birthday, and after three months they weighed 1.5 pounds. More packets arrive daily. Medicare experts tell me I can thank the data brokers for the onslaught: Names and birth dates are for sale to anyone.

Enrolling is a task I’d like to put off, but I can’t. I no longer have job-based insurance, and my current health insurer has notified me that my policy will soon expire, on the first of the month in which I turn 65.

I know that the decisions I make may differ from those made by friends, relatives and even my husband. Yet we share many of the same frustrations in the sign-up process. For anyone in a similar situation, here are some of the lessons I’ve learned since I embarked on my Medicare sign-up mission.

Just do it!

Yes, Medicare is complicated, but turning 65 is the time to deal with this. The government will not automatically enroll you unless you are already drawing Social Security benefits.

logo for Seniors' Health Insurance Information ProgramYou may be like many people who have chosen to delay receiving Social Security payments until at least age 66 to ensure the full monthly payout. But you’ll be sorry if you do the same for Medicare, because there’s a very strict enrollment period that runs from three months before your birthday to three months after you turn 65. If you miss that, you will be penalized unless you have health insurance through your job or your spouse’s job.

First stop: Medicare, with its helpful Medicare.gov website and its “Medicare and You” booklet, available through the mail or online. Medicare is also easy to reach by phone (as long as you dial correctly) at 800-MEDICARE. If there’s a long wait to talk to a representative, you can leave your number and someone will call you back. Really. It worked for me.

More information – and even one-on-one guidance – is available from your State Health Insurance Assistance Program (SHIP), a federally funded, free counseling service.

Some North Carolina Medicare resources:

NC State Health Insurance Information Program:

Call: 855 408 1212

The NC Department of Insurance has a good website with lots of Medicare information: http://www.ncdoi.com/shiip/

Every county has certified SHIIP counselors; find yours here: http://www.ncdoi.com/shiip/shiip_county_sites.aspx

You should also ask at your local senior center; a listing of DHHS funded senior centers is here: http://www.ncdhhs.gov/aging/scenters/srcenter.pdf

Get to know the lingo

Unless you understand how Medicare is structured, you may not be able to make good decisions about what you’re buying. These are some of the terms you might see:

Part A of traditional Medicare covers inpatient hospital services, skilled nursing home care and hospice, among other things.

Part B of traditional Medicare helps cover preventive care and physician and outpatient services, among other things.

Part D plans are private insurance plans covering prescription drug costs.

Medicare Advantage is an alternative to traditional Medicare. In this program, private insurance plans are paid by the federal government to provide coverage that is equivalent to original Medicare.

– Private Medigap plans supplement traditional Medicare and help pay some out-of-pocket costs, such as co-payments and deductibles and sometimes emergency medical expenses overseas. These policies are optional, but if you want one, you’re best buying it when you sign up for traditional Medicare. Otherwise, you won’t be guaranteed coverage and may be subject to medical underwriting, through which you could be denied coverage or charged a higher rate for preexisting conditions.

Failing to sign up can be costly

You may be in for a surprise if you’re among the many baby boomers I’ve encountered who believe Medicare is free. It’s not. Not only is there an annual deductible ($147 for Part B in 2014), but there are also monthly premiums, ranging from $104.90 to $335.70 for individuals. (The exact premium is pegged to your income, generally based on the tax return you filed two years earlier.)

If you don’t sign up in your initial enrollment period or when your job-based coverage ends, you will pay a penalty that will raise your premiums for Medicare Part B and Part D for the rest of your life. Every year you delay signing up for Part B, your monthly premium rises by 10 percent – and missing the deadline by just one month is considered a one-year delay. There is also a waiting period for the coverage to kick in, so you could be without any insurance for several months, perhaps even a year, if you miss the deadline. For Part D, the penalty is 1 percent for every month’s delay. So a year’s delay would add 12 percent to the monthly drug premium base, currently set at $32.42.

Don’t make assumptions

Perhaps the biggest mistake you can make is assuming that your health insurance will stay the same when you turn 65. Retiree plans can end, and even coverage from some workplace plans ends, especially if you or your spouse is employed by a firm with fewer than 20 employees. You also need to apply for Medicare at 65 if you are on COBRA, the program that allows you to purchase health coverage offered by your employer if you’ve been laid off. You also need to apply even if you are entitled to the military’s Tricare coverage for life.

Don’t rely solely on advice from your spouse or close friends. “You need to look at your own medical needs: doctors, hospitals, drugs,” advises Jennifer Whittaker, operations supervisor for Allsup Medicare Advisor of Belleville, Ill., a company that provides enrollment advice for a fee.

‘Open enrollment’ may be a misnomer

Once you’ve signed up for Medicare, you should be notified each fall about an open season that allows you to switch plans. But the open enrollment period allows easy switching only for certain plans, not all of them – and that may affect what you do when you turn 65.

Open enrollment does not give you a free pass to move from one Medigap plan to another, for instance. Although some plans (and some states, like New York) do guarantee the ability to make a change, Medicare allows plans to evaluate your health if you try to switch. So if you’ve developed an illness, you may be rejected or face a sharp rate increase. (If you stay with your existing plan, your rates can always rise – but only if they are rising for the plan or group as a whole.)

“If you didn’t pick a benefit you wanted initially, you may not be able to get it in the future,” said Diane Omdahl, co-founder of 65 Incorporated, another for-fee consulting firm based outside Milwaukee.

That’s also the situation you could face if you want to change from a Medicare Advantage plan to traditional Medicare with a Medigap plan. One of Omdahl’s clients who was on a Medicare Advantage plan recently developed diabetes, and he concluded that switching to traditional Medicare with Medigap would work better financially. But his diabetes kept him from finding an affordable Medigap plan. If he had signed up for traditional Medicare with a Medigap plan, he would not have been charged extra when he subsequently developed diabetes.

So what does open enrollment really mean? If you’re on a Medicare Advantage plan, you can switch to another plan. You can also switch Part D drug plans annually. And since both Medicare Advantage and the drug plans change premiums, benefits and providers regularly, it’s important to review your plans yearly.

Consider your health over the long term, not just how you feel now

Since it may not be easy to switch Medigap plans in the future, many Medicare advisers suggest that if you are choosing a Medigap policy, buy the best coverage you can afford when you sign up.

The cheapest price is not necessarily better

Consider more than the cost of the premium when you sign up for a Medicare Advantage or Medigap plan. Look at co-payments and deductibles too. The cheapest premium might not provide you with the cheapest overall plan. Also, review a company’s complaint records as well as its financial stability to hopefully ensure that it will be around as long as you plan to be.

For Medicare Advantage plans and drug plans, the Centers for Medicare & Medicare Services (the agency that runs Medicare) provides a helpful five-star rating system based, in part, on member satisfaction surveys.

Customer satisfaction ratings for Medigap plans are harder to find, but one valuable site for me was Missouri’s Complaint Index for Medigap issuers. (Many of the companies on this list operate nationwide.)

Several companies rate the financial strength of insurance carriers, although you may have to pay to get information. Two of the most frequently cited rating firms are Weiss Ratings and A.M. Best, neither of which charges for basic information.

Make calls and ask questions; you’d be surprised by what you learn

Once you pick a plan, call and confirm its different points, such as the premium and out-of-pocket limits,” Omdahl advises. “It’s rare, but sometimes the information online isn’t accurate.”

You may also discover added discounts. After I narrowed my search to two Medigap companies, I learned that if I went with the plan that my husband used, we’d both get a 5 percent discount on premiums. None of my research mentioned a “household discount.”

Don’t be afraid to seek help

In addition to advice from Medicare and your state’s health-insurance assistance program, tools that helped me included the National Council on Aging’s MyMedicareMatters, AARP’s Medicare Question and Answer Tool and the Medicare Rights Center fact sheets. Consumer Reports “Managing Medicare” article also is a valuable primer.

You might also consider seeking advice from an independent insurance agent. But remember, these agents typically talk only about the plans they offer – and they usually receive a commission on the policies they sell.

There’s also a growing list of firms that will help you for a fee. These include:

65Incorporated.com, with a fee of $299 for an initial enrollment consultation, $499 for a couple.

Allsup Medicare Advisor, charging $500 to $850 for a complete initial assessment.

Goodcare.com, with a $585 initial consultation, $195 more for each additional hour.

Healthcare Navigation, with consultation fees ranging from $750 to $1,250.

This article was produced by Kaiser Health News with support from The SCAN Foundation.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

The Ebola Outbreak’s Cyber Connections to North Carolina


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UNC-Chapel Hill Associate Professor Steven King and Ken Harper, a professor from Syracuse University, launch a website to do real-time tracking of the Ebola virus in Liberia.

By Hyun Namkoong

The Ebola outbreak in West Africa has dominated headlines for several months, and North Carolina became the first state in the U.S. to have a direct connection to the outbreak when an employee of a missionary organization based in the state contracted Ebola in Liberia.

Now the Ebola outbreak has hit home, but in a starkly different way.

The Ebola in Liberia website developed at UNC-Chapel Hill to help the Liberian government track the spread of the epidemic currently raging in West Africa.

The Ebola in Liberia website developed at UNC-Chapel Hill to help the Liberian government track the spread of the epidemic currently raging in West Africa. Click photo to visit site.

UNC-Chapel Hill’s School of Journalism and Mass Communication Associate Professor Steven King, a team of students and Ken Harper, a professor from Syracuse University, have launched a website, Ebolainliberia.org, to track new cases and deaths of Ebola in Liberia.

The website was unveiled in a news conference by the Liberian Ministry of Health on Sept. 8.

Ebolainliberia.org uses the most current data on new cases and deaths, and tracks them geographically. Scroll on the map, and a user can easily see which regions of the country have been hit hardest by the virus.

King got involved when Harper asked him to work on the project. “[Ken] called me, and together we started assembling a team,” he said.

The team consists of current and former journalism, library science and computer science students from UNC.

King said the Liberia Ministry of Health and Ministry of Information work together to collect data on the ground to send to the team.

“We take that [data] and adjust that into a database and do lots of other things with it,” he said.

King said they run an analysis and generate the data views to the website. The site displays how many cases are probable or suspected, based on the data provided from the ground.

The website is the primary means of briefing decision-makers, including the president of Liberia, Ellen Johnson Sirleaf.

“Her daily Ebola briefing comes from our statistics, and they’re using it to keep people updated,” King said.

He said that the project is in the process of getting funding to scale-up the site to other countries that have been affected by Ebola.

But the trickiest part of launching the project, King said, is the data collection. Health care workers are most at risk for contracting the virus, but they are needed to collect and send the data to King and his team.

The site splices the data to show how many cases and deaths have been caused by Ebola in health care workers alone.

The Ebola virus has killed more than 3,000 people in West Africa, primarily Guinea, Liberia and Sierra Leone, according to the Centers for Disease and Control Prevention.

The first case of Ebola diagnosed in the United States was confirmed in Texas this week by the CDC.

For Autistic Adults, Coverage Options Are Scarce


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By Michelle Andrews

Kaiser Health News

It’s getting easier for parents of young children with autism to get insurers to cover a pricey treatment called applied behavioral analysis. Once kids turn 21, however, it’s a different ballgame entirely.

Advocates looking to convince lawmakers to pass the autism insurance measure roamed the halls of the General Assembly to speak to legislators early in July.

Advocates looking to convince lawmakers to pass the autism insurance measure roamed the halls of the N.C. General Assembly to speak to legislators early in July. Photo credit: Rose Hoban

Many states have mandates that require insurers to cover this therapy, but they typically have age caps ranging from 17 to 21, says Katie Keith, research director at the Trimpa Group, a consulting firm that works with autism advocacy groups. In addition, the federal Centers for Medicare & Medicaid Services recently announced that all Medicaid and Children’s Health Insurance Programs for low-income families must cover comprehensive autism treatment for kids – until they’re 21.

Unfortunately, once someone with autism turns 21, “they fall off a cliff,” says Lorri Unumb, vice president of state government affairs at Autism Speaks, an advocacy organization. “It’s the next big frontier that’s got to be addressed.”

Parents of older children have a few options. Some state autism mandates don’t have age caps, including New York, California, Massachusetts, the District of Columbia, Wisconsin and Indiana, according to Keith.

If an insurer denies  therapy and a parent lives in one of the states that has an age cap on its autism mandate, it’s worth appealing, Unumb believes. The appeal may be bolstered, she said, by the federal mental health parity law, which bars plans from imposing quantitative or qualitative treatment limitations on mental health care that are more restrictive than those on benefits for physical health conditions.

Like dollar caps on benefits, age is a quantitative limit, says Unumb.

Although the courts have yet to address the issue, she says, “In my opinion, all of these age caps are probably invalid under mental health parity.”

Note: North Carolina does not have an insurance mandate requiring that insurers cover applied behavioral analysis therapy. A proposal to create such a requirement passed the N.C. House of Representatives in 2013 but died in the Senate at the end of this year’s legislative session.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

Panel Cites NC Health Benefits of Federal Carbon Plan


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By Gabe Rivin

In a panel discussion last week, state and federal government officials and environmental advocates lauded what they said would be the wide-reaching health benefits of a proposed federal climate-change plan.

The Clean Power Plan, a national proposal released in June, intends to reduce power plants’ emissions of carbon dioxide, a greenhouse gas that scientists say causes climate change. The proposed plan aims, by 2030, to reduce power plants’ carbon emissions 30 percent below their levels from 2005.

Marguerite McLamb, a policy advisor at EPA, said that the agency's Clean Power Plan would lead to reductions in harmful air pollutants, in addition to carbon reductions. Photo credit: Kat Bawden

Marguerite McLamb, a policy advisor at EPA, said that the agency’s Clean Power Plan would lead to reductions in harmful air pollutants in addition to carbon reductions. Photo credit: Kat Bawden

Speakers on the panel at the University of North Carolina at Chapel Hill’s school of law last Friday said the plan would cause reductions in harmful air pollution, a result from a decreased reliance on dirty energy such as coal.

But the optimism of the panelists comes even as a group of U.S. governors – including North Carolina Gov. Pat McCrory – has publicly opposed the plan. In a Sept. 9 letter to President Obama, McCrory, along with 14 other Republican governors, challenged the federal government’s legal power to issue the Clean Power Plan regulations. The regulations, they said, also raise a number of practical issues for their states.

Hoped-for health benefits

The overwhelming scientific consensus is that climate change is a dire threat to human health and that only through a dramatic cut in carbon emissions will humans be able to prevent extreme weather, severe draughts and large sea-level rises, among other environmental and health threats. In the U.S., about 33 percent of carbon emissions come from the power sector, according to U.S. Environmental Protection Agency statistics.

But cutting carbon emissions comes with a number of so-called co-benefits for human health, according to the panelists and the EPA, which is developing the plan.

“Certainly, the EPA analysis shows that there will be some criteria pollutant reductions as a result of implementation of the rule, and that will obviously lead to lower levels of ozone or fine particles,” said Sheila Holman, director of the Division of Air Quality at the N.C. Department of Environment and Natural Resources and a speaker at Friday’s event.

Criteria pollutants are six common air pollutants that the EPA and state governments regulate, and include carbon monoxide and lead. Fine particles, also generated from power plants and car pollution, put humans at a greater risk of heart disease and lung disease, according to research.

“Those lower levels [of pollution] will result in improved air quality for the state and improved health for the citizens,” Holman said.

Panelists discussed both the health effects of EPA's plan and its legal basis, a point of contention among the Obama administration and the plan's opponents. Photo credit: Kat Bawden

Panelists Jonas Monast from Duke University’s School of Law (right) and Jeremy Tarr from Duke’s Nicholas Institute for Environmental Policy Solutions discussed both the health effects of the EPA’s plan and its legal basis, a point of contention among the Obama administration and the plan’s opponents. Photo credit: Kat Bawden

The Clean Power Plan attempts to cut carbon emissions in part by shifting the nation’s energy supply toward cleaner sources, like renewables and natural gas. Coal, by far the largest source of electricity in the U.S., not only releases carbon dioxide when it’s burned for fuel but its smokestacks emit a number of other harmful pollutants, such as sulfur dioxide and mercury.

The EPA estimates that, under its plan, between 12 and 19 percent of the nation’s coal fleet would be uneconomical to keep in service by 2020. By forcing utilities to rely on energy with lower carbon profiles, the EPA’s plan will reduce other, harmful air pollutants, panelists said.

Marguerite McLamb, a policy advisor with the EPA and a speaker on the panel, said the health benefits of the plan would be significant. Reducing carbon emissions, she said, would also reduce emissions of sulfur dioxide, nitrogen oxides and particulate matter, all of which harm respiratory health.

Some of those reductions may be large. According to the agency, by 2030 the Clean Power Plan will reduce emissions of those pollutants by 25 percent. As a result, the rule will prevent 150,000 asthma attacks in children and 6,600 premature deaths nationally, according to agency estimates.

Reducing these secondary air pollutants will offer “human-health benefits like reduced emergency room visits for kids with asthma,” said Greg Andeck, a senior manager at the Environmental Defense Fund and another panelist.

These reductions will save money too, according to the EPA. An EPA analysis says that reducing these air pollutants could produce $62 billion in health benefits.

The agency, however, did not quantify these benefits specifically for North Carolina.

How the plan works

States would retain a large degree of flexibility in their requirement to meet the plan, according to McLamb. States could reduce their power sectors’ carbon emissions by relying on lower-carbon energy sources, such as natural gas or carbon-free renewables, and by promoting energy efficiency.

States could meet the EPA’s requirements on their own or they could band together with other states. Regardless, states must submit their plans to the EPA by June 2016.

Yet that deadline could be an issue in North Carolina.

Holman, the director in DENR’s air-quality division, noted that the EPA has already been sued over the Clean Power Plan, and said the department would like to wait to develop its plans until it knows the fate of the litigation.

Holman said that the state spent several years developing its rules in response to the EPA’s 2005 Clean Air Mercury Rule.

“Shortly thereafter, that Clean Air Mercury rule was vacated,” she said, referring to a 2008 federal court’s decision to strike down the rule.

McLamb said President Obama directed the EPA to develop flexible requirements for carbon reductions, noting that the EPA in recent years has issued a number of regulations affecting the power sector.

“We were directed to stay mindful of the cumulative impact of those different relations,” she said.

New Statistics Show Drops in the Rate of Uninsured

This story was updated at 10:10 am with additional quotes.

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By Rose Hoban

Fewer people nationwide lacked health insurance in the opening months of this year, according to new data from the Centers for Disease Control and Prevention released Tuesday. And in North Carolina, the overall rate of uninsurance fell, according to another survey.

The National Health Interview Survey, conducted during the first three months of 2014, found that nationally the uninsured rate dropped from 14.4 percent in 2012 to 13.1 percent in 2013 for people of all ages. The study, performed every year by the U.S. Census Bureau, showed a steady decline in rates of uninsurance rates from a high of 15.5 percent in 2010.

Nationwide, 41 million people still lacked health insurance; more than 99 percent of those people were younger than 65 years old. Very few people over 65 are uninsured, as most of them have Medicare.

The survey found that for the first part of the year, the most pronounced drop in uninsured rates was among young adults aged 19 to 25. That number dropped from 26.5 percent in 2013 down to 20.9 percent in the beginning of 2014.

As measured by the American Community Survey, the uninsured rate increased from 14.6 percent in 2008 to 15.5 percent in 2010, and then fell again between 2010 and 2013 to 14.5 percent. Figure courtesy U.S. Census Bureau

As measured by the American Community Survey, the uninsured rate increased from 14.6 percent in 2008 to 15.5 percent in 2010, and then fell again between 2010 and 2013 to 14.5 percent. Figure courtesy U.S. Census Bureau

Since passing, the Affordable Care Act has allowed for young people to be retained on their parents’ insurance until age 26, and other surveys have found many families have taken advantage of this provision. Once people reach 27, however, the rate of people lacking insurance jumps back up.

“We know we had a few hundred thousand people get health insurance on the exchange,” said Dr. Adam Zolotor, interim president and CEO of the North Carolina Institute of Medicine. “We don’t know how many of them had health insurance through the private market the previous year, we know that some number of people did not.”

North Carolina statistics

A separate survey also released Tuesday by the U.S. Census Bureau broke down rates of uninsurance by state. That survey found that in North Carolina, about 1.58 million people were uninsured in 2012. But by the time of the 2013 survey, that number had dropped to 1.509 million. That means that the rate of uninsured in North Carolina dropped from 16.5 percent in 2012 to 15.5 percent in 2013.

However, the census numbers do not include the early part of 2014, which was during the enrollment period for health insurance coverage under the Affordable Care Act, nor do those numbers break down ages of people who gained insurance during the enrollment period. But federal statistics show that at least 95,000 young adults under 26 in North Carolina gained insurance through a family member by the end of 2011.

“The problem with the Census data is that it has very little to do w anything substantive on rates under the Affordable Care Act,” Zolotor said. “it’s a small change and it’s a change that preceded implementation of the ACA; it’s probably more related to the economic recovery.”

Zolotor pointed out that in states which expanded Medicaid, the drop in uninsurance was about 3 percent, whereas in non-expansion states, it was a 1 percent, statistically insignificant decrease.

According to a spokesperson for Blue Cross and Blue Shield of North Carolina, 232,000 people in the state signed up for coverage on the health insurance exchange; 70 percent of those people had not been BCBSNC customers the prior year.

Over all, a total of 357,584 North Carolinians signed up for insurance through the health benefits website in early 2014.

 

Small Firms Slow to Embrace ACA Business Exchanges


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As the online health insurance exchange for small businesses comes online, few businesses are signing up.

By Christine Vestal

Stateline

Unhappy with the choices her insurance broker was offering, Denver publishing company owner Rebecca Askew went to Colorado’s small-business health insurance exchange last fall. She found exactly what she’d been hoping for: affordable insurance options tailored to the diverse needs of her 12 employees.

But Askew is in a tiny minority. Only 2 percent of all eligible businesses have checked out so-called SHOP (Small Business Health Options Program) exchanges in the 15 states where they have been available since last October under the Affordable Care Act. Even fewer purchased policies.

Photo credit: StockMonkeys.com

Photo credit: StockMonkeys.com

In November, three more state-run SHOP exchanges are slated to open, and the federal government will unveil exchanges for the 32 states that chose not to run their own.

SHOP exchanges were supposed to open nationwide on Oct. 1, the same day as exchanges offering health insurance for individuals. But the Obama administration postponed the SHOP launch, citing the need to fix serious technical problems with the exchanges for individuals, which it said were a higher priority.

So far, only the District of Columbia and 15 states – California, Colorado, Connecticut, Hawaii, Idaho, Kentucky, Massachusetts, Minnesota, Nevada, New Mexico, New York, Rhode Island, Utah, Vermont and Washington – have launched small-business exchanges. Three more – Maryland, Mississippi and Oregon – will also start their own exchanges.

“It’s easy to explain why [small-business exchanges] have gotten off to a slow start,” said Linda Blumberg, a researcher with the Urban Institute who is tracking their development with support from health care advocates, the Robert Wood Johnson Foundation. The delay of small-business exchanges in most states confused business owners in the few states that actually offered exchanges, she said.

Also, insurance companies encouraged business owners to renew their plans before the October 2013 deadline to avoid having to sign up for a new policy during the first year of the controversial ACA rollout. The Obama administration allowed even noncomplying plans to be renewed, after complaints from individuals and business owners who had received cancellation notices.

As a result, not as many businesses needed to look for new policies for their employees as was originally projected. To be successful, SHOP exchanges must attract a large pool of businesses that can exert market pressure on insurance carriers and ultimately bring down prices. Whether that will happen remains to be seen.

How It Works

The ACA offers businesses with fewer than 50 employees the opportunity to purchase health insurance coverage for their workers through a SHOP, but it does not require them to do so.

These firms comprise 5.8 million of the 6 million firms in the U.S. and employ at least 37 million Americans. More than 96 percent of larger corporations cover their employees, while only 59 percent of very small companies provide insurance for their workers. As a result, nearly half of the nation’s 47 million uninsured people are self-employed or work for a small company, according to 2012 data from the Kaiser Family Foundation.

Under the health law, a federal tax credit that can cover up to half the cost of an employer’s share of premiums is available to businesses that have fewer than 25 employees and average annual wages of less than $50,000. The federal government estimates 4 million small businesses will qualify, resulting in $40 billion in subsidies over the next 10 years.

But so far, not many companies have taken advantage of the offer, according to a report by the Government Accountability Office. In the 2010 tax year, only 170,300 businesses received a credit, amounting to just $428 million, according to the report.

“A lot of folks complained that they needed to hire an accountant to figure it out,” Blumberg said. “You couldn’t even get a rough idea whether you qualified.” Insurance brokers have also complained about how difficult it is to determine eligibility for a credit, and suggest the federal government should create some kind of easy-to-use calculator.

In Colorado, the percentage of people employed by small businesses is even higher than in much of the rest of the country. “There aren’t exactly a lot of corporate headquarters here,” said the state exchange’s chief strategy officer, Marcia Benshoof.  “Colorado is a state of small business. We have some very passionate folks here who care about this market,” she said.

A few other states have entered partnerships with the federal government to use the federal website but plan to provide their own marketing and outreach. All states regulate the insurance companies that offer their policies on and off the exchange.

Over the past decade, insurance premiums for small firms have increased 123 percent. Currently, small businesses pay up to 18 percent more than larger businesses for health insurance, according to the Council of Economic Advisers.

The health law requires SHOP exchanges to include a feature known as “employee choice,” in which individual workers can pick from a variety of policies offered by different insurance companies, similar to the menu of health benefit options larger companies offer employees. 

“When we talk about why they should use the exchange, choice is the meaningful part of that conversation. That’s the moment of truth with employers,” Benshoof said. Besides creating goodwill, studies show that offering employees a choice of health plans often results in lower overall health care costs, because employees tend to choose the lowest-priced plans that offer the most value for their individual needs, according to the National Bureau of Economic Research.

Employee Choice 

In Askew’s case, allowing her employees to choose a health plan resulted in an overall decrease in her monthly premium bill. Two of them had chronic conditions and needed more expensive policies that covered the doctors they had been seeing for years. The rest were relatively young and healthy.

“I set a contribution limit [from the company] based on the cost of the most expensive policy and let the staff choose the policy they wanted,” Askew said.  Out of 47 choices on the exchange, she said 10 of her employees chose a plan that was cheaper than the $300 per month per person limit she set. Overall, she will pay a total of about $400 per month less than she did last year.

Before Colorado opened its exchange, Askew, like most small employers, could qualify only for one insurance policy for all of her employees. That’s because commercial carriers set a threshold number of employees that must sign up to get a plan. As a result, companies with fewer than 50 employees usually qualify for only one plan.

In June, the Obama administration allowed 18 mostly Republican-led states using the federal exchange to temporarily opt out of employee choice, because they argued it could cause overall insurance rates to rise. Alabama, Alaska, Arizona, Delaware, Illinois, Kansas, Louisiana, Maine, Michigan, Montana, New Hampshire, New Jersey, North Carolina, Oklahoma, Pennsylvania, South Carolina, South Dakota and West Virginia will not offer the feature until 2016 at the earliest.

A small-business advocacy group, the liberal-leaning Small Business Majority, criticized the administration for putting off employee choice, which they say is critical to the exchanges’ success. Without it, state and federal small-business exchanges may not offer businesses any distinguishing advantages over self-insuring or purchasing a policy outside of the exchange, said David Chase, the group’s health policy analyst.

With employee choice, he explained, carriers are selling directly to employees, giving small insurance companies a chance to compete with established carriers. That alone, Chase said, could contribute to eventually dragging down prices on the exchange.

Business Opposition

The National Federation of Independent Business (NFIB), one of the groups that sued the administration over the federal health law’s so-called individual mandate requiring nearly everyone to purchase health insurance or pay a tax fine, currently advises its member companies to consider canceling their group health policies and instead help employees apply for insurance subsidies on the individual exchange.  According to the NFIB, the total cost to business owners who are now offering workers’ coverage may be lower if they simply give employees a salary boost to purchase insurance on their own.

If a company’s average wages are low enough to qualify for the small-business tax credit, chances are its workers would have incomes low enough to qualify for substantial subsidies on the individual exchange. If workers have an employer offer of affordable insurance, however, they lose their eligibility for premium tax credits.

When it comes to health insurance, the biggest issue for small businesses is cost, according to a recent survey published in the journal Health Affairs. More than 92 percent of small firms that don’t offer employee coverage said that costs would need to be lower than they are today for them to do so. The catch for SHOP exchanges is that until a large number of businesses start purchasing policies on them, they likely will not create enough new competition to push down prices. Other features and extensive marketing will have to drive businesses there in the meantime.

In general, insurance agents and brokers, who have an equal financial incentive to help businesses purchase policies on the exchange as from the outside market, say exchanges have required nearly twice as much of their time. Colorado exchange officials admitted they were surprised that Askew had successfully navigated the exchange without the help of a broker.

“Granted I’m a lawyer,” Askew said. “But it seemed to me to be a much easier way to manage it all.”

Stateline is a nonpartisan, nonprofit news service of the Pew Charitable Trusts that provides daily reporting and analysis on trends in state policy.

Rural Enrollment Presents Continuing Health Law Challenges


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By Shefall Luthra

Kaiser Health News

Americans living in rural areas will be a key target as states and nonprofit groups strategize how to enroll more people in health law insurance plans this fall.

Though millions of people signed up for private insurance or Medicaid in the first year of the Affordable Care Act, millions of others did not. Many live in rural areas where people “face more barriers,” said Laurie Martin, a RAND Corp. senior policy researcher. Brock Slabach, a senior vice president at the National Rural Health Association, said “the feds are particularly concerned about this.”

Distance is one problem: Residents have to travel farther to get face-to-face assistance from the so-called navigators and assisters hired to help consumers figure out the process. And Internet access is sometimes spotty, discouraging online enrollment.

But the most significant barriers may stem directly from state decisions about whether to expand Medicaid eligibility – more than 20 states chose not to – and whether to operate their own health exchanges. States that embraced those parts of the law generally had more federal resources as well as funds generated by their online marketplaces for outreach efforts to boost enrollment, including those aimed at consumers in less accessible areas, and more coverage options, through Medicaid, for which these consumers might be eligible.

Map of rural and urban counties in NC.

According to the NC Rural Center, 80 of the state’s 100 counties have an average population density of 250 per square mile or less, as of the 2010 Census. Another five rural “transitional” counties have higher population densities but still retain significant rural characteristics. Map courtesy the NC Rural Center

About $2.5 million from the Department of Health and Human Services was specifically directed to rural outreach for the initial open enrollment period. For 2015, a total of $60 million will be available to bolster navigators’ work in states that are using the federal marketplace, but it’s not clear what portion of this amount will be directed to rural enrollment.

An examination of experiences in Minnesota and Virginia shows how state decisions continue to shape these efforts. Both states have significant rural populations: about 13 percent of Virginians and 23 percent of Minnesotans, according to 2013 figures from the U.S. Department of Agriculture. In 2012, both had rural poverty rates in the teens: nearly 18 percent in Virginia versus 12 in Minnesota. And between 2011 and 2012, about 9 percent of Minnesotans were uninsured, compared to 13 percent in Virginia, the Kaiser Family Foundation reported. (KHN is an editorially independent program of KFF.)

“We’re spread thin throughout the state, but that means in rural areas there are additional challenges in terms of finding the people and getting out to groups,” said Jill Hanken, health attorney at the Virginia Poverty Law Center, the state’s principal navigator agency.

In Minnesota, Ralonda Mason, a supervising attorney at St. Cloud’s branch of Mid-MN Legal Aid – which works as a navigator serving rural and urban areas near St. Cloud – echoed Hanken. Reaching people is difficult, and some areas lack strong Internet, frustrating attempts to use the online exchange.

Last time, consumers sometimes traveled as far as 55 miles each way for assistance, said Allan Bakke, a navigator at Minnesota’s Western Community Action.

But as the 2015 enrollment push approaches, the states are gearing up to try again.

Mason said technology problems still plague the state’s troubled marketplace, MNsure. For instance, the site doesn’t let navigators and consumers use computers in different places to simultaneously log into the application and fill it out over the phone. They must review it in person, which adds to the difficulties distance imposes. Site crashes or application failures, which navigators said they hope to see fewer of this year, add burdens for consumers or navigators already traveling far, Mason said.

Bakke, whose organization serves smaller municipalities – usually fewer than 10,000 people – said the state’s online insurance marketplace has improved. But he remains “very much apprehensive” about the potential recurrence of technical issues this fall.

MNsure is developing rural strategies such as focused marketing to reach the farmers and miners who dominate rural Minnesota, said spokesman Joe Campbell. The state plans to advertise on radio stations that appeal to these populations, he said, while sending representatives to events such as county fairs and farmers markets.

Though official data detailing 2014 enrollment by county would help, Mason said, it’s not a top priority.

A private consortium, supported by the Blue Cross and Blue Shield of Minnesota Foundation, has gathered some information examining where outreach worked. Organizations such as Mason’s that received early grants to promote enrollment have pooled data to paint a more complete picture, pinpointing areas in which to focus and refining plans for November.

In Virginia, meanwhile, groups cited state decisions making enrollment more difficult. Virginia is one of 36 states either defaulting to the federal exchange or in a partnership with the federal marketplace.

Problems with healthcare.gov, the federal exchange site that had a near-catastrophic launch last October, initially compounded the challenge, Hanken said, though many exchange issues abated by December.

But the absence of federal enrollment data by county still undermines planning efforts for November.

The Centers for Medicare & Medicaid Services doesn’t know whether or when it might release enrollment breakdowns examining geography or other demographics, meaning identifying where to target outreach remains difficult, said Massey Whorley, a senior policy analyst at the Virginia-based Commonwealth Institute, a nonpartisan center that examines public policy’s consequences for middle-class and low-income people.

“It’s critically important we have this data well in advance of the next open enrollment,” Whorley said.

For now, Virginia navigators rely on anecdotal evidence, he said, assuming “high pockets of uninsured folks” remain in the rural Southside and Southwestern Virginia.

And unlike Minnesota, Virginia did not expand Medicaid, which would have opened the program to people with incomes up to 138 percent of the federal poverty level.

When the Supreme Court ruled in 2012 that states could opt out of expansion, a coverage gap opened for millions of people who could neither qualify for Medicaid nor the subsidies the law provides for purchasing private plans on federal and state exchanges.

Earlier this year, Democratic Gov. Terry McAuliffe vowed to use executive powers to circumvent the state legislature, which in June approved a budget blocking the expansion. Health-law opponents, who currently make up the majority of lawmakers, say a bigger Medicaid program is likely to burden states with extra costs down the road.

But for now, a quarter of uninsured nonelderly adults in Virginia – just under 200,000 people – fall into this coverage gap, according to a 2014 KFF brief. The data doesn’t parse where, specifically, those people live, but Virginia navigators said they noticed rural areas were hit particularly hard. During the last round of rural outreach, “Sometimes, half of the folks [navigators] saw in offices were in [this] gap,” said Deepak Madala, project manager of Enroll Virginia, a subsidiary of the navigator Virginia Poverty Law Center.

When clients can’t get Medicaid or private-insurance subsidies, Marcie Barnes, a navigator at the rural Southwest Virginia Legal Aid Society, said she often redirects them to free clinics.

“I talked to people who [seemed to think] if they told me how bad it was, I had a magic trick to help them,” she said. “And I don’t.”

This story originally appeared in Kaiser Health News, an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

Back to School, and Packing that Lunch: A Few Safety Tips


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By Benjamin Chapman

North Carolina State University

My son Jack started kindergarten a couple of weeks ago and our luxurious summer schedule came to an end. No biggie for me, as I’m in the habit of a 5:30 a.m. wake up. (It’s quiet and it gives me an excuse for going to bed at 9 p.m.) But it does mean packing a lunch everyday that will stand up to no refrigeration.

With traditional schools beginning this week and next, packed-lunch food safety is back on the menu for many. Here are the things I try to do to keep Jack’s lunches safe:

School lunch photo courtesy Melissa, flickr creative commons

School lunch photo courtesy Melissa, flickr creative commons

Refrigerating the lunch components and freezing juice boxes or water

About half the time, I make Jack’s lunch the night before and refrigerate all the components until about 10 minutes before he leaves. I know it’s going to be about four hours until he opens up his lunch, so I want the starting temp to be low enough to curb the growth of any pathogens (especially if he’s taking his lunch on a field trip). The juice/water ice pack helps with this as well.

Using an insulated bag

Living in the South, the summer heat goes well into October. We purchased an insulated bag that’s built to shield the inside from rising temperatures. Conversely, if we were to provide any hot foods (like soup) we’d add an insulated thermos. The hot food packed for lunch makes me nervous; I’d probably test out the thermos before hand by filling it up with hot food (probably above 165F) and using a digital tip-sensitive thermometer after four hours to see whether it has remained at least above 135F.

Cleaning and sanitizing

We use a mix of one-use and reusable containers for Jack’s lunches. We’re in the habit of putting them directly into the dishwasher when he gets home. I rinse his lunchbox out with water (to take care of any leftover food debris) and then spray it down with a sanitizer, rinse and let it dry.

Instilling good hygiene

After the first couple of days of school, Jack came home requesting to go to the store and purchase a small hand sanitizer for his backpack (peer pressure, since a few of his friends had them). I bought the sanitizer but also reinforced the gold standard of good handwashing (including using a paper towel) before squirting the sanitizer.

I’m still a paranoid new parent and a self-proclaimed food-safety nerd. Beyond what I can control with my son’s lunch, I worry about how the school will handle any food that might be used in the classroom and whether handwashing (for kids and teachers) will be valued. I also hope that the teachers and staff recognize risky events (like a norovirus outbreak) and have the tools to manage illness transmission.

Benjamin Chapman is a food-safety specialist and associate professor in the Department of Youth, Family, and Community Sciences at North Carolina State University. He blogs about food safety at barfblog.

Changes to Block Grants in the General Assembly Budget

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We break down the details of this year’s Health and Human Services block grant funding changes.

By Rose Hoban

Every year, many health, human service and social programs are funded by block grants – big pots of money given to state agencies to be used for specific programs.

Large programs such as the Child Care subsidy – with a budget of more than $150 million – are funded in this manner, as well as small ones like the new budget line for mental health crisis initiatives that total about $2 million.

Many block grant dollars come from the federal government, which gives states broad guidelines on how to use the money. Others come with more strings attached.

For the most part, block grant funding stays relatively stable from year to year, but every year, there are changes. Below are the changes contained in this year’s state budget.

 

BLOCK GRANT CHANGES
Temporary Assistance for Needy Families TANF funds moved into Foster Care Services: $1,385,152 (new budget line)
Subsidized Child Care Program Block grant funds reduced from $57,172,097 to $54,054,806
PreK “Swap Out”” $7,195,807 (new budget line)
Total TANF funds increased from $306,234,756 to $313,460,826
TANF Emergency Contingency Funds Subsidized Child Care Funds increased from $6,549,469 to $11,679,394
PreK “Swap Out” $12,646,527 (new budget line)
Total TANF Emergency Contingency Funds increased to $29,932,538 from $12,156,086
Social Services Block Grant
Expenditures for DSS/Division of Aging and Adult Services County DSS funds reduced from $29,422,137 to $27,427,015
UNC Cares Contract reduced from $229,376 to $57,344
Foster Care Services budget line eliminated, moved to TANF above
Total Social Services Block Grant reduced from $62,877,557 to $59,325,251
Low Income Home Energy Assistance Program
Transfers to other state agencies:  Weatherization Program funds reduced from $14,947,789 to $12,473,090 to DENR
Heating Air Repair and Replacement program from $7,193,873 to $6,636,633
Local Residential Energy Efficiency Service providers for two lines above: increased from total $375,609 to $1,005,177
DENR Administration for lines 114, 115: increased from total $375,609 to $1,005,177
Total Low Income Energy Assistance Block Grant: decreased from $114,911,848 to $113,139,044
Child Care and Development Block Grant
Division of Child Development and Early Education Child Care Services increased from $158,328,747 to $168,536,136
Quality and Availability Initiatives increased from $22,500,000 to $24,168,551
Administrative budget increased from $6,000,000 to $7,677,977
Division of Central Admin Central Regional Hospital Maintenance $202,000 (new budget line)
Total Child Care and Development Services Block Grant: increased from $275,651,161 to $289,407,078
Mental Health Services Block Grant
Program expenditures Mental Health Services for adults from $10,717,607 to $0 and for children from $5,121,991 to $3,619,833 – total reduction of $12,219,765
Mental Health Services for Adults/ Children: $12,398,643 (new budget line)
Crisis Solutions Initiative – Critical Time Intervention: $750,000 (new budget line)
Total Mental Health Services Block Grant increased from: $16,039,598 to $16,968,476
Substance Abuse Prevention and Treatment Block Grant
Division of Mental Health, Developmental Disabilities and Substance Abuse Services Elimination of “Adult” Substance Abuse Service, Treatment Alternative for Women, Chlid Substance Abuse Prevention and Services budget lines: $32,338 028 total
Replacement of above with new budget lines:
Substance Abuse Prevention: $8,699,284 (new line item)
Substance Abuse Treatment for Children/ Adults: $29,519,883 (new line item)
New budget lines for Crisis Solutions Initiative Walk-in crisis centers: $420,000 (new line item)
Collegiate Wellness/ Addiction Recovery: $1,085,000 (new line item)
Community Paramedic Mobile Crisis Mgmt: $60,000 (new line item)
Innovative Technologies: $41,000 (new line item)
Veterans Crisis: $250,000 (new line item)
Division of Public Health Elimination of Risk Reduction Projects and Aid to Counties budget lines: $765,949
Replacement of above with new budget line:
HIV Testing for Individuals in Substance Abuse Treatment: $765,949
Total Substance Abuse Prevention and Treatment Block Grant: Increase from $37,527,700 to $45,184,839
Maternal and Child Health Block Grant
Division of Public Health Children’s Health Services decreased from: $8,042,531 to $7,574,703
Women’s Health decreased from $8,532,935 to $8,095,148
Increases Carolina Pregnancy Care Fellowship from $250,000 to $300,000 (only change in individual initiative funding)
DHHS Program Expenditures Children’s Health Services decreased by $926, Maternal Health by $58, State Center for Health Statistics by $8,257, Injury and Violence Prevention by $4,455
Public Health Administration decreased by $20,537
Total Maternal and Child Health Block Grant decreased from $18,854,259 to $17,914,411
Preventive Health Services Block Grant
Program Expenditures Physical Activity and Prevention increased from: $1,186,142 to $2,034,060
Injury and Violence Prevention (Rape Victims Services) increased from: $169,730 to $173,476
Division of Public Health Laboratory Services – Testing, Training and Consultation, increased from $10,980 to $21,012
State Laboratory Services – Testing, Training and Consultation: $199,634 (new line item)
Heart Disease and Stroke Prevention increased from $162,249 to $189,693
Performance Improvement and Accountability increased from $213,971 to $738,784
Physical Activity and Nutrition increased from $38,000 to $68,073
State Center for Health Statistics increased from $61,406 to $107,291
Total Preventive Health Services Block Grant increased from $2,234,233 to $3,921,778
Community Services Block Grant
Office of Economic Opportunity Community Action Agencies increased from $22,402,724 to $24,168,417
Limited purpose agencies increased from $1,244,596 to $1,342,690
Administration Office of Economic Activity increased from $1,244,596 to $1,342,690
Total Community Services Block Grant increased from: $24,891,916 to $26,853,797

 

 

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