Posts Tagged - ‘medicare’

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Higher Co-Pays Save Money Now, Cost More Later?

Tuesday, February 2nd, 2010

Nowadays, more companies are moving towards offering group health insurance plans with higher co-payments and deductibles. The idea behind such a move is that it saves the firm money by encouraging its employees to take better care of their health. Passing a higher percentage of health insurance costs onto the consumer should make him or her think twice before neglecting their health and waiting for their health insurance plan to deal with it. Unfortunately, evidence from Medicare patients seems to suggest that this strategy can backfire.

It turns out that the patients who saw their co-payments rise actually cost their health insurance plans more in the long run. How is that possible? While they did make fewer outpatient visits, that savings was offset by the increase in hospitalizations and in-patient treatment days. Hospital stays cost health insurance companies more than healthy patients who use regular preventative care services. Higher co-payments discourage patients from visiting doctors and having any illnesses treated earlier and cheaper. It is possible that these findings may also apply to individual health insurance plans.

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State Medicaid Boost In Fed Budget

Tuesday, February 2nd, 2010

Call it the Nebraska affect.

After the Cornhusker State landed a pot of previously unavailable money in exchange for its “Yes” vote on the now fumbled Senate healthcare reform bill, the Obama Administration is expected to announce on Friday a proposal that would add another $25 billion worth of funds to states to use for Medicaid, according to the AP.

The Medicaid windfall is expected to mirror the economic stimulus program that took effect last year, where non-recurring Medicare funds were divvied up among states with the highest unemployment rates. Under the new initiative, the Feds will take on a higher stake of state Medicaid funds for a period of six months (or until July, as proposed) with every state in the U.S. getting an additional 6.2 percent of its current Medicaid budget paid for by federal dollars. Again, those states with higher unemployment are slated to get more.

The proposal is the centerpiece of President Obama’s 2011 budget. It is unclear whether the measure will be wrapped up in the Administration’s $174 billion “Jobs Bill” that Obama unveiled at his State of the Union address last week, or if it would be presented to Congress as part of a special line item. Regardless, if the Medicaid measure passes both houses of Congress, the money would not be made available to states until next year. Obama already has a bit of a head start on getting the measure passed since the House already passed the Medicare extension in a previous session.

Although his budget is highly unlikely to be passed without some significant cuts by Congress, the Obama Administration is stemming the tide of requests from state and local leaders with large populations of unemployed workers who are facing the end of federally-subsidized COBRA health insurance plans. Coupled with a growing pool of retired and elderly citizens who are living on fixed incomes during the nation’s second worst economic recession, the coming Senatorial elections this November and Congress is expected to rubber stamp Obama’s proposed boost in Medicare spending. Aside from the usual partisan bickering about budgets and deficits, we can also expect some debate about the disparity of Medicare funds available to large states like California and Texas, both of which also have a large unemployed population.

Reuters is reporting today that about $645 billion total of the Obama budget is specifically earmarked as money for various state economic and emergency funding programs. One half of that money is dedicated to various reforms for health insurance companies designed to extend affordable health insurance to to the unemployed and economically disadvantaged.

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Decreased Hospital Infections = Lower Health Insurance Costs

Friday, January 22nd, 2010

Hospital-acquired infections make up a significant portion of health insurance costs in America. They add up to over $28 billion to healthcare expenses each year. More importantly, 99,000 Americans die each year from sicknesses they got in the very places that are supposed to make them feel better. Meanwhile, 1.7 million people fall ill annually. It costs health insurance companies millions of dollars to nurse all of these patients back to health. The saddest part is that the vast majority of these illnesses and deaths are preventable.

Doctors, nurses, and other hospital employees try their best to keep their patients from acquiring devastating bugs like MRSA. Some hospitals are placing a greater focus on hygiene, and using technology that allows less room for contamination. This is a change from the previous goal of eliminating all bacteria from the hospital environment, which just made things worse for patients. It seems counter-intuitive, but allowing sick patients to be exposed to naturally occurring, healthy bacteria (by limiting the unnecessary use of antibiotics and feeding them yogurt containing probiotics) may give them a better chance of survival.

Simple accountability has also helped. States such as Pennsylvania and Michigan have seen infection rates decrease after the establishment of strict reporting standards. A hospital group in the latter state created a checklist that decreased central line infections and saved health insurance plans and patients $246 million!

In 2008, Medicare stopped paying for the treatment of infections related to surgery or catheters. Many private medical insurance companies may follow suit in the future.

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