ACA Private Plans Financial Barriers Rising

Summary: The Affordable Care Act uses private plan Marketplaces and tax subsidies to try to make insurance affordable for middle class families. New research shows that from 2015-2019, low cost Bronze plans increased in net cost, with combined premiums and deductibles reaching 26.6% of median income. ACA financial protections, already weak, are eroding.

ACA Marketplaces Became Less Affordable Over Time For Many Middle-Class Families, Especially The Near-Elderly
Health Affairs
November 2021
By Paul D. Jacobs and Steven C. Hill

from Abstract:

As a measure of affordability, we calculated potential [Affordable Care Act] Marketplace premiums as a percentage of family income among families with incomes of 401– 600 percent of poverty. In 2015 half of this middle-class population would have paid at least 7.7 percent of their income for the lowest-cost bronze plan; in 2019 they would have paid at least 11.3 percent of their income. By 2019 half of the near-elderly ages 55–64 would have paid at least 18.9 percent of their income for the lowest-cost bronze plan in their area. The American Rescue Plan Act temporarily expanded tax credit eligibility for 2021 and 2022, but our results suggest that families with incomes of 401–600 percent of poverty will again face substantial financial burdens after the temporary subsidies expire.

Comment by: Jim Kahn

A major element of the Affordable Care Act (ACA) was to establish “Marketplaces” or “Exchanges” to facilitate access to regulated private insurance plans for the middle class – those earning too much to qualify for Medicaid, lacking workplace insurance, and not wealthy enough to go it alone.

This strategy has a number of problems. It’s inefficient, just like (even more than) all private health insurance, with administrative and profit costs. It’s a government hand-out to private insurers – after all, the subsidy is really to the insurers, passing through the insured. And the plan designs are flawed, with inconsistent coverage rules and for low-cost plans (Bronze especially) consistently high deductibles.

This new research shows that initially (2015) for families at 400-600% of the Federal Poverty Level (currently $69,680–$104,520 for a family of two), the premium represented 7.7% of income for a Bronze plan, and this reached 18.3% when including the deductible – potentially a significant financial burden and barrier to care. By 2019, these costs rose to 11.3% and 26.6% of income, respectively. For those 55-64 years old, the premium alone is now 18.9% of income.

Sorry for the deluge of geeky percentages. They reflect real financial barriers to insurance and to medical care. The fact that the portion of income is substantial and increasing should add to evidence that the ACA is a flawed overlay patch to our fundamentally dysfunctional health insurance system.

It’s time to end the overlay patches, and adopt a simple, direct, understandable, efficient, and equitable system, one that has been demonstrated to work in dozens of countries around the world. Single payer.


US Ranks 36th Out of 37 Nations on COVID-19 Mortality

Summary: A new study quantifies the loss in life expectancy due to COVID-19 in nations around the world. The US is in the worst tier, with a drop of nearly two years. Blame lays at the feet of mishandling by Trump, but also long-term degradation of public health and primary care access. Both must be rebuilt.

Effects of covid-19 pandemic on life expectancy and premature mortality in 2020: time series analysis in 37 countries.
November 3, 2021
By Nazrul Islam et al.

From abstract:

“Reduction in life expectancy was estimated as the difference between observed and expected life expectancy in 2020 using the Lee-Carter model. . . .

Results: Reduction in life expectancy in men and women was observed in all the countries studied except New Zealand, Taiwan, and Norway, where there was a gain in life expectancy in 2020. No evidence was found of a change in life expectancy in Denmark, Iceland, and South Korea. The highest reduction in life expectancy was observed in Russia (men: −2.33; women: −2.14), the United States (men: −2.27; women: −1.61), Bulgaria (men: −1.96; women: −1.37), Lithuania (men: −1.83; women: −1.25), Chile (men: −1.64; women: −0.88), and Spain (men: −1.35; women: −1.13)”

[Note: All figures are in years; confidence intervals deleted to enhance readability]

Comment and Graph by David Himmelstein and Steffie Woolhandler

These data provide further evidence of the criminal mishandling of the COVID-19 pandemic in the US.  By another measure – years of life lost per 100,000 population – the US was better only than Bulgaria, Russia and Lithuania. Donald Trump’s denialism and malfeasance bear much of the blame for the US’ sorry record on COVID-19. But the gutting of public health capacity, which occurred under both Democrats and Republicans, and our defective health care system, which obstructs access to care and discourages trusting relationships, were and remain major contributors.

6% of health spending should go for public health, double the current proportion. Further, we need to erase access barriers, and build a real and universal primary care infrastructure. 


When will we transform our deadly insurance system?

Summary: New research with vital statistics data finds that since 1990 overall US mortality has increasingly worsened compared with other OECD countries, in poorer and richer geographic areas alike. The differences attenuate after age 65, when Medicare eligibility begins. The toll for Black Americans is worse, despite gains. These findings suggest that insurance shortfalls lead to hundreds of thousands of excess deaths per year.

Inequality In Mortality Between Black and White Americans By Age, Place, and Cause, and In Comparison To Europe, 1990-2018
NBER Working Paper No. 29203
September 2021
Hannes Schwandt et al.

From Abstract:

Inequalities in life expectancy are starker in the U.S. than in Europe. In 1990 White Americans and Europeans in rich areas had similar overall life expectancy, while life expectancy for White Americans in poor areas was lower. But since then even rich White Americans have lost ground relative to Europeans.

Life expectancy for both Black and White Americans plateaued or slightly declined after 2012, but this stalling was most evident among Black Americans even prior to the COVID-19 pandemic.

From Results:

Comment by: Jim Kahn

This excellent comprehensive research on mortality in the US vs European countries since 1990 has several compelling lessons:

1) Black American mortality still greatly exceeds White American mortality, despite a shrinking gap over 30 years.

2) Overall US mortality exceeds European country mortality by increasing margins over the last 30 years. We’re falling further behind.

3) These mortality differences are present across low to high poverty geographic areas (in the US, counties). The differences are larger in poor areas.

4) The US-Europe mortality differences are proportionally much larger age 20-64 than age 65-79 – when Medicare coverage is near universal.

5) I did a calculation. The US excess mortality age 20-64 is about 1.4 per 1000 per year. Some of that is due to non-insurance factors. If 1.0 per 1000 is attributable to insurance, applied to the 190 million in this age range, that’s 190,000 extra deaths per year.

6) However, in 2018 (after the rise of Medicare Advantage with harder to obtain care for the sick) US mortality 64-79 exceeds European levels. This suggests more insurance-related deaths.

Our insurance system is inefficient, inequitable, and deadly. Enough reason yet for radical transformation?


Insurers Avoid Loss Ratio Limits by Shifting Profits to Provider Subsidiaries

Summary: Insurers don’t appreciate limits on their profits. So, to circumvent federal “medical loss ratio” rules, they buy up medical providers and send the excess revenues there. Voila, huge profits retained.

Profits swell when insurers are also your doctors.
July 16, 2021
By Bob Herman.

The big picture: Federal law caps health insurance profits to 15-20% of collected premiums, depending on the type of market. But there are no limits to how much profit a provider can keep. So if an insurer can steer its members toward its own providers, the company is able to keep a lot more of those premium dollars.

The bottom line: Insurers keep more of the premiums they collect when they also own the medical providers that are paid those premium dollars. And no insurer has expanded as aggressively into care delivery over the years as UnitedHealth.

Comment and Graph by: David Himmelstein and Steffie Woolhandler

UnitedHealth and other large health insurance firms have been buying up doctors’ practices and other health providers (e.g. Aetna’s merger with CVS). That lets insurers ship profits to their provider subsidiaries, skirting federal standards for medical loss ratios – the share of premiums they’re allowed to spend on administration and profit. In essence, allowing insurers to own providers is a loophole that makes loss ratio requirements meaningless.

As indicated in the graph below (based on the data Bob Herman reports), over the past decade – and especially since 2019 – UnitedHealth has greatly amped up its payments to itself.

For detail on the mechanics of how insurers’ double dipping is pushing up Medicare’s costs and accelerating its privatization see the September 30, 2021 HJM post on Medicare Advantage and DCEs.


Setting our sights for real health care reform

Summary: Build Back Better is falling short even on modest health reforms. Let’s focus on building the popular movement needed for truly progressive transformation of our health care system.

Locked Out of the Sausage Factory: Will Medicare Expansion Survive the Budget Reconciliation Debates?
Common Dreams
October 27, 2021
By Michael Lighty & Mark Dudzic

The Build Back Better Bill started out as a great, sprawling piece of legislation comprising the most ambitious set of social programs since the Johnson Administration.

But the fact that the Bill appears to be floundering is a reminder of the persistence of the forms of neoliberalism that exercised near hegemonic control over the policies and practices of the Democratic Party from the 1990s through the Obama administration (coupled, of course, with a generous amount of shameless corporate hucksterism.)

A big reason that we are in this fix is because we have not yet built the kind of popular movement strong enough to back up the resolve of our Progressive Caucus stalwarts in the House.  All too often, advocates and organizers get infatuated with the inside game when their real job is to build the kind of mass movement that can hold politicians accountable to real principles and real people.

They say that legislation is like sausage-making. The healthcare profiteers and their army of lobbyists all have their hands in the process together with all of the other monied interests with a stake in the Bill. Meanwhile the people whose lives will be most affected by the legislation have been locked out. And, as any trade unionist will tell you, the only way to break a lockout is to maintain unity, bring in new allies and shine the light of day on those who would deprive people of their livelihoods in order to keep the profits flowing.

Comment by: Don McCanne

Our healthcare system is the most expensive in the world yet fails in achieving the performance goals we should expect. What are some of the goals that would create a system of which we could be proud?

Universal – Everyone should be included

Comprehensive – All reasonable health care should be provided

Affordable – For each individual, and collectively for society

Equitable – Distribution of healthcare resources should be fair regardless of factors such as age, sex, race or ethnicity

Patient-oriented – Designed to serve patients rather than private corporate interests

Publicly funded – Using economic tools such as modern monetary theory and progressive taxes only available to the people’s government

Publicly administered – to provide efficiencies in administration available only through our government and not through the fragmented private corporate sector

Deprivatizing healthcare financing will eliminate the high costs, inefficiencies, and inequities of private corporate greed.

With our current president and current Congress that are debating the Build Back Better Bill, how many of these goals can be attained? Absolutely none. Not even close.

According to Michael Lighty and Mark Dudzic, astute observers of the healthcare political scene, we have not yet built a strong enough popular movement that can hold politicians accountable to real principles and real people. We have been spinning our wheels in excitement over the prospects of passing the Build Back Better Bill, while we are sliding into disappointment over how inadequate the surviving elements of the legislation will be. We are forgetting that at the most optimistic peak of the process we would have gained none of the features of a healthcare system that we should be striving for.

Regardless of the outcome of the current negotiations, we should pull all stops in our efforts to achieve health care justice for all through a single payer, improved Medicare for All program. Anything less will sentence us to an expensive, mediocre system that is designed primarily to serve the interests of the privatizers rather than the interests of the public – the nation’s patients, all of them.


Let the Games End!

Summary: Two unrelated news stories highlight ways that powerful actors in our healthcare system manipulate complex reimbursement rules and procedures, approaching and crossing legal boundaries. Detecting and stopping abuse in our complex profit-focused system is impossible. We need to end this gaming, with a simple fair payment system.

5 things about DOJ’s upcoding allegations against Kaiser
Modern Healthcare
October 26, 2021
By Alex Kacik

Kaiser Permanente allegedly coerced employees to upcode claims for Medicare Advantage beneficiaries, resulting in an estimated 75% error rate, according to a new complaint from the U.S. Justice Department.

The federal government intervened in six related lawsuits in July and filed a complaint Monday, outlining how Kaiser physicians allegedly changed medical records often months after care was provided to boost the Oakland, California-based integrated health system’s Medicare Advantage reimbursement. More than half of Kaiser physicians said they were forced to add diagnoses they did not consider, evaluate or treat, according to one of the whistleblowers and former Kaiser medical coder, Randi Osinek.

5. Some of the diagnoses that Kaiser allegedly added via the chart reviews did not even exist; many allegedly did not require or affect patient care or treatment. These chart reviews were often added months or even a year or more after the visit so that Kaiser could get risk adjusted payments for the newly added diagnoses, according to the complaint.

Wall Street Is Pressing ER Docs To Fleece Patients
Daily Poster
October 27, 2021
By Maureen Tkacik

Robert McNamara, a Temple University medical school professor who has been working for decades to galvanize ER doctors in opposition to the “corporate practice of medicine,” had proposed a resolution that would essentially force all ER staffing companies seeking to do business with ACEP [American College of Emergency Physicians] to periodically furnish their physicians with data on the services and procedures the company had billed for under their license numbers.

… Unsurprisingly, the ACEP Board expressed extreme reluctance to adopting the proposal, noting that four separate attorneys it had consulted believed there was “substantial risk” ….

“ACEP engaged outside counsel to advise on whether securing regular reporting of billing in a physician’s name could inadvertently subject that physician to potential liability under the False Claims Act [emphasis added], since provision of this information could now leave them considered to be ‘knowing,’” they wrote.

In other words: emergency room doctors are better off not knowing what their private equity overlords are billing under their license numbers, because they are less likely to go to jail for Medicare fraud if they didn’t actually know they were committing it. 

Comment by: Jim Kahn

Our health system’s arcane payment rules + big-profit corporate mentality = the perfect medium for intensive gaming, both legal and illegal. These two stories illustrate different manifestations of the problem — albeit just the tip of the iceberg quantitatively, a faint hint of the true scale of abuse.

Kaiser Permanente is considered by many an admirable actor in the HMO world, with a history of innovative care models. Yet, in this article in Modern Healthcare, we learn that the US Department of Justice is taking KP to court for orchestrated efforts to increase physician disease severity coding – even to add false diagnoses – to bump Medicare Advantage revenues by tens of millions of dollars. HJM has covered “risk adjustment” exploitation before. The money at stake with exaggerated coding is astronomical, eliciting the worst behaviors among corporate actors in health.

Organizations like ACEP were founded to represent the interests of doctors, which should include fair and transparent billing. But the Daily Poster describes that ACEP has increasingly focused on preserving ER profit, including for private equity investments. It abets a corporate model that hides potentially fraudulent billing. HJM recently addressed the hazards of private equity. The new article describes deep ties that two former heads of ACEP have to PE. One even dismissed the problem of surprise billing – rampant in ERs staffed by private equity-funded companies which seek to profit from out-of-network charges. The doctors are coerced into being complicit, with plausible deniability.

How can we end this gaming, abuse, and extraction of resources from the health system? Single payer would use simple, fair rules. For example: annual global budgets for hospitals and their ERs. Ambulatory care doctors would typically be paid fee-for-service, with no need for exploitable risk adjustment data. If capitation is permitted (a discussion), it would rely on a standard clinically-focused electronic health record containing legitimate, consistent diagnostic information.

Let the billing games end!


Medicaid Coverage Reduces Pre-Pregnancy Depression

Summary: This study compared perinatal mental health outcomes for low-income women in states that expanded Medicaid with states that did not. They found a substantial drop in pre-pregnancy depression, which they attribute to better diagnosis and treatment and/or reduced financial worry. Health coverage reduces morbidity.

Medicaid Expansion Associated with Some Improvements in Perinatal Mental Health
Health Affairs
October 2021
By CE Margerison et al.


Poor perinatal mental health is a common pregnancy-related morbidity with potentially serious impacts that extend beyond the individual to their family. A possibly contributing factor to poor perinatal mental health is discontinuity in health insurance coverage, which is particularly important among low-income people. We examined impacts of Medicaid expansion on prepregnancy depression screening and self-reported depression and postpartum depressive symptoms and well-being among low-income people giving birth. Medicaid expansion was associated with a 16 percent decline in self-reported prepregnancy depression but was not associated with postpartum depressive symptoms or well-being. Associations between Medicaid expansion and prepregnancy mental health measures increased with time since expansion. Expanding health insurance coverage to low-income people before pregnancy may improve perinatal mental health.

From Methods:

We used a difference-in-differences study design, which estimates the change in outcomes post–Medicaid expansion compared with preexpansion among pregnant people in expansion states compared with those in nonexpansion states. … data from the Pregnancy Risk Assessment Monitoring System (PRAMS) phases 7 (2012–15) and 8 (2016–18).

From Discussion:

Potential mechanisms by which health insurance may improve mental health include increased diagnosis and treatment (whether pharmaceutical or behavioral) or reduced financial distress.

Comment by: Isabel Ostrer

Poor perinatal mental health affects between 13 and 25 percent of people who have recently given birth. The number is even high among those with lower incomes. Unfortunately, it is precisely this group that is at greatest risk of lacking health insurance coverage because of our convoluted, multi-payer health care system.

Although all low-income (defined as those earning < 133% of the federal poverty line) pregnant Americans are required to have access to health insurance, this same benefit doesn’t apply pre-conception in states that did not expand Medicaid. In fact, in the remaining 12 Medicaid non-expansion states, nonnpregnant, nondisabled adults without dependents must earn exactly $0 to qualify for Medicaid coverage. In many cases, the insurance that applies during pregnancy expires 60 days postpartum.

This study found, unsurprisingly, that Medicaid expansion was associated with a 22% increase in prepregnancy Medicaid insurance. But moreover, it found a significant decrease – 16% – in self-reported prepregnancy depression.

Health insurance coverage leads to improved mental health. This is particularly important for new parents. But all Americans deserve health insurance and the positive physical and mental health benefits that come with it. Single payer is the most straightforward way to achieve universal coverage.


VA Privatization Worsens Care

Summary: A new study finds that knee replacement done at Veterans Affairs hospitals has better clinical outcomes than surgery farmed out by the VA to private providers in the community. The VA – socialized medicine – works well.

Comparing Complication Rates After Elective Total Knee Arthroplasty Delivered Or Purchased By The VA.
Health Affairs
Aug 1, 2021
By AH Harris et al.

From Abstract:

The Department of Veterans Affairs (VA) both delivers health care in its own facilities and, increasingly, purchases care for veterans in the community. . .  We compared risk-adjusted major postoperative complication rates for total knee arthroplasties that were delivered in VA facilities versus purchased from community providers. Overall, adjusted complication rates were significantly lower for arthroplasties delivered by the VA compared with those that were purchased.

From the article:

Since the passage of the Choice Act [in 2014] the VA has evolved from a health care delivery system – with 90% of its budget allocated to providing care – into a deliverer and purchaser of care in the community. . . . the VA has devoted 22% of its fiscal year 2021 health care funds to purchasing community care. This percentage may increase even further with the VA Maintaining Internal Systems and Strengthening Integrated Outside Networks Act of 2018 (also known as the MISSION Act).

Comment and Graph by: David Himmelstein and Steffie Woolhandler

Private hospitals and medical groups itching to get their hands on VA funds have used complaints about VA wait times to push Congress to ship VA dollars to private sector care, despite the fact that wait times are generally shorter at the VA’s own facilities.

Previous studies have found that VA care is generally better than care in the civilian sector. (see:,, and As shown in the chart below, this new study indicates that the outsourcing of knee replacement substantially increases patients’ complications.

The right way to address VA waits is to assure adequate funding, not to divert funds from superior VA facilities to inferior nearby community hospitals.  


How Private Equity Harms Health Care, Especially in Physician Practices

Summary: A far-reaching new review of private equity investment in physician practices makes clear that PE tactics – aggressive and sometimes illegal – extract money from the health care system, often without delivering quality in return. Concerns exist regardless of payment model.

Private Equity Investment As A Divining Rod For Market Failure: Policy Responses To Harmful Physician Practice Acquisitions
USC-Brookings Schaffer Initiative for Health Policy Report
October 2021
By Erin Fuse Brown et al

Private Equity and Health Care Delivery: Value-Based Payment as a Guardrail?
August 11, 2021
By Brian W. Powers et al

How Private Equity is Ruining American Health Care
May 20, 2020
By Heather Perlberg

Comment by: Allison K. Hoffman and Hannah Leibson

For the past few years, private equity investment in health care has been surging. To put numbers on this explosive growth, from 2000 to 2018, the valuation of private equity deals in the health care sector rose from $5 billion to over $100 billion.

This sharp rise has raised alarm bells among health policy researchers and policy makers concerned about the negative impact this investment may have on health care spending (especially for public programs like Medicare), quality outcomes, and patient care.

A recent JAMA article by Powers and co-authors seeks to quell blanket concerns with private equity investment, arguing that “context matters” and suggesting that value-based payment models might counterbalance the profit-seeking nature of outside investors. This piece draws attention to two health care delivery organizations, CareMore Health and Oak Street Health, operating under value-based payment systems. Both systems saw positive patient outcomes after private equity investments were secured.

The authors contrast these examples to fee-for-service payment systems, where they argue the impact of private equity investments is “likely to be unfavorable” because this investment only “amplifies” the negative incentives created when financial performance is not tied to quality of care. 

Drawing from these two case studies and based, they say, on the lack of evidence otherwise, the authors argue that “private equity could have an important role in acceleration of value-based transformation in the health care system, as well as access to new models of care delivery.” The article’s optimism, based on these two case studies, is borne of simplistic thinking of what payment systems can actually produce—or, in this case, resist.

A thorough report on private equity and health care delivery issued this month by Erin Fuse Brown and others through the USC-Brookings Schaffer Initiative for Health Policy makes abundantly clear why. The report is cautious in its tone yet chronicles the many ways in which private equity investment produces or capitalizes on unattractive aspects of the payment and delivery systems, from surprise billing, to upcoding in the Medicare Advantage program, to outright fraud. The report describes that value-based models, in particular, can create incentives “to stint on care.”

Likewise, a Bloomberg article by Heather Perlberg notes that to get the quick results private equity investment demands cost-cutting becomes a major focus, telling stories of physicians struggling to obtain the bare minimum materials necessary to safely carry out their practice. In the worst case scenarios, private equity investors unsophisticated in the nuances of the businesses they enter can sink the very ships they try to buoy.

Unless outcome parameters in value-based models are precise and comprehensive—and maybe even then—sophisticated private equity players will find sweet spots where they can cut corners, while still checking all the value-based boxes. Years of evidence from these models that purport to drive value, from Medicare Advantage to ACOs to direct contracting, have largely not saved money or improved care as promised. But they have made it abundantly clear that developing good quality metrics is hard, and metrics can be gamed.

The USC-Brookings report recounts a historical example that provides just the kind of evidence from private equity investing that the JAMA article suggests does not exist. They recount the physician practice management companies, where investors, including private equity, bought up physician practices in the 1990s to take advantage of the rise of managed care. Attempting to generate economies of scale through rapid growth, they proved to be little more than a shell game of short-term revenue growth to increase the value of equity shares—value that deflated as quickly as it grew.

Even if there were zero empirical evidence, there is a fundamental structural problem with outside profit seeking investors in healthcare that should produce skepticism. The authors of the JAMA article note this problem in their intro and then too quickly set it aside. Private equity’s whole game is invest, profit, exit—typically in less than five years. And the profit potential must be quite rich to entice them to invest in the first place. Unless private equity radically transforms the quality of care, which seems unlikely, these companies become just another party looking to extract money from the health care system, including from public programs like Medicare, driving up costs without producing concomitant value.

The rising influence of private equity investments, especially in primary care, leave the American health care system increasingly beholden to parties who are ultimately not concerned with boosting patient care. One must have great, unwarranted, and blind faith in incentives to think that they can sufficiently counterbalance the motive to extract all possible profit before jumping ship.


Heart Attack Care Better in Canada than the US

Summary: This study compared quality of care (eg, best clinical practices like prescribing the right medicines) for young adults (≤55) with an acute myocardial infarction. A low quality of care score was nearly 3 times more likely in the US than in Canada. So Canada, with inexpensive single payer, provides better care.

Variations in Quality of Care by Sex and Social Determinants of Health Among Younger Adults With Acute Myocardial Infarction in the US and Canada
JAMA Netw Open
October 20, 2021
By V. Raparelli et al.

From Abstract:

Design, Setting, and Participants  This retrospective cohort analysis used data from 4048 young adults (aged ≤55 years) receiving in-hospital and outpatient care for AMI at 127 centers in the US and Canada. Analyses were adjusted for biological sex and social determinants of health.

Results: … [B]eing treated in the US was associated with a low Quality of Care Score both in-hospital (OR = 2.93) and post-AMI (OR = 2.67).

Comment by: Jim Kahn

Today’s reflection is concise: Canada’s single payer system delivers higher quality of care, while saving money, compared with the U.S. Better care processes help explain this astounding graph from OECD countries, which shows the US diverging on costs and longevity from other wealthy countries.

Costs less, works better. “Dominant”, in cost-effectiveness jargon. “Tastes great, less filling”, to quote the famous 1973 beer commercial. How many ways do we need to say it and show it?