Tag: health insurance

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Stressed test: Life with the highest health insurance premiums in country

Massage therapist Jane Neldon has been unable to relax about being able to pay for her health insurance. eze amos

A year ago, Jane Neldon thought she was doing well enough as a massage therapist to start working on her own. Then she saw her health insurance premium spike from $280 a month to more than $700.

“My health insurance costs more than the rent for my office,” she says. “In a year that I thought I’d finally be making strides, I was knocked back down.”

Emily Bardeen retired two years ago at 62 years old and in budgeting, she anticipated the $500 a month she was paying for health insurance could double. Instead, she’s paying more than $2,000 a month for coverage with Optima, the only carrier available for individual coverage in Charlottesville. Its rates here for 2018 jumped 300 percent, the highest in the country.

“It’s crushing as a retired person,” she says. “I pay $2,336 for the right to have a $4,600 deductible on my silver plan.”

When she spoke with C-VILLE, Bardeen had just gotten home from the hospital. “I knew going to the hospital was going to cost me $4,600,” she says. “I nearly didn’t go, but I really needed to.”

Neldon and Bardeen are two of the many locals who were gobsmacked by the rates Optima offered here. And they’ve joined Charlottesville for Reasonable Health Insurance, an 810-member group that doesn’t believe Optima’s rates are justified.

Sara Stovall, one of the group’s organizers, raised an outcry last year when she found out insurance for her family of four would cost nearly $3,000 a month. The group filed a complaint May 30 with the State Corporation Commission about the Bureau of Insurance, which okayed Optima’s 300 percent premium increase.

“We have extremely compelling information that the Bureau of Insurance acted irresponsibly,” says Stovall. Optima’s preliminary rates for 2019 are 30 percent lower than 2018, further proof, she says, that the current rates are “unjustifiable.”

The SCC responded that the group’s letter wasn’t enough and it needed an attorney and actuary to file a formal complaint, says Stovall. “They’re sort of circling the wagons,” she says. The group is determined to push the issue and already has an attorney—and Stovall has talked to an actuary.

For Neldon, 31, skyrocketing premiums have been “a huge heavy weight on me,” she says. “It’s a factor in every decision I make. Do I go to the doctor or wait it out? That used to be an easy decision for me.”

She adds, “It’s a new stress about something I haven’t had before.”

“It affects our life in every way,” echoes Bardeen. She and her husband were about $200 above the Affordable Care Act’s cutoff for subsidies. “There’s no sliding scale. You either get help or you don’t.”

Bardeen’s husband is eligible for Medicare, but for her health insurance, they’re paying $30,000 a year—twice as much as their mortgage. “It’s unthinkable,” she says. The couple is considering a move to Waynesboro, and while insurance isn’t the main reason, “it is a factor,” she says.

Bardeen stresses that during her visit to Sentara Martha Jefferson’s ER, her caregivers “were very conscious” about her health insurance concerns. Sentara also owns Optima.

On July 1, a Senator Creigh Deeds bill goes into effect that allows self-employed people like Neldon to get the coverage available for small businesses. And Deeds and Delegate David Toscano are working on other bills, such as one that would require more transparency in hospital pricing, says Stovall.

For Neldon, the new law means “some light” at the end of the health insurance tunnel.

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Morbidity rates: Optima’s health insurance premium calculations challenged

Sara Stovall and Ian Dixon met with Senator Tim Kaine, far right, and Kristen Molloy, his senior health policy advisor, and legislative correspondent Nicholas Widmyer. Photo courtesy Senator Kaine's office.

 

In November, Sara Stovall was grappling with a health insurance premium that had skyrocketed from $940 a month to $3,000 for her family of four in the Charlottesville market, which found itself with the highest rates in the country.

Now Stovall says she has a better idea of why this area’s rates are so high. She believes Optima Health—the area’s only individual policy provider—used a factor in calculating health insurance premiums that the U.S. Department of Health and Human Services forbids—and she says its incoming CEO admitted as much in a December 14 meeting.

Stovall and fellow Charlottesville resident Ian Dixon met with Optima CEO Michael Dudley and his successor, Dennis Mathias. It was there that in explaining why Charlottesville’s rates are so high, according to Stovall and Dixon, Mathias said, “The morbidity of the people buying in this marketplace is higher than other parts of the state.”

The two say Dudley further explained that morbidity is “how sick people are.”

And that’s a big no-no in HHS’ 2018 Unified Rate Review Instructions: “Geographic factors may not reflect differences in morbidity by region.”

To Dixon and Stovall, inclusion of morbidity as a factor would explain why a Charlottesvillian would pay 68 percent more for a bronze health plan than someone in the Hampton Roads area.

They point out that Optima’s filings use an area rating factor for Charlottesville that’s 58 percent higher than Hampton Roads—but they say Anthem’s area rating for Charlottesville was lower than Hampton Roads. “There’s no history of our area being rated this high,” says Dixon.

Another factor they question is the difference between Optima’s individual policy rates and the small group rates it offers businesses. In Charlottesville, the small group rate is significantly lower than an individual plan, despite both using the same providers and the same provider reimbursement rates, says Dixon.

“We don’t see any justification for the 58 percent difference from small group and individual rates,” says Stovall.

“They said small groups are healthier,” says Dixon. “The health of the population and morbidity cannot be used in setting the rates.”

In a statement from Optima’s Dudley, he does not address the question of whether morbidity was used in how the company calculated its Charlottesville premiums.

“We have carefully revisited our 2018 premium calculations,” and determined the calculations were accurate, reviewed by third-party actuarial experts and approved by the Virginia Bureau of Insurance and the Centers for Medicaid and Medicare Services, he says.

Optima did not respond to a question about the statements allegedly made by Dudley and Mathias on morbidity, but says, “This is a very complex issue, and we correctly addressed all appropriate adjustments in accordance with state and federal laws, and, as required by the regulations, the geographic factors did not reflect differences in morbidity by region.

Stovall and Dixon met with people from Virginia’s Bureau of Insurance, and say that while those in the meeting initially were skeptical about their concerns, “by the end of the meeting they felt our concerns were valid,” says Stovall.

“You’ll have to rely on what they’re telling you as far as the meeting goes,” says Ken Schrad, spokesperson for the State Corporation Commission, under which the Bureau of Insurance resides.

“The bureau can always seek further information to be responsive to an inquiry or complaint from an already accepted filing,” he says.

Would Optima’s request for premium rates that are the highest in the country raise any red flags at the Bureau of Insurance? Says Schrad, “There’s so many factors that go into filing for insurance plans. To point out one factor alone as driving something would be hard to do.”

Optima maintains that when Anthem pulled out of the Charlottesville market, leaving zero insurance providers, despite business advisors telling the insurer to steer clear, it was asked by the commonwealth to come in and cover as many people as it could.

Optima Health is owned by Sentara, which also owns Sentara Martha Jefferson Hospital here. Optima did not respond to a question about whether that also was a factor in its decision to offer coverage here.

The company did say it had lost more than $30 million in the past three years in Virginia under the Affordable Care Act and this “is not sustainable.”

And Dudley’s response to Stovall and Dixon suggests they move on. “The reality is that premium rates are locked in for 2018,” he says. He adds the wish that “Washington would establish an environment that allows for affordable health plans.”

While Dixon considers the response “evasive” in not addressing “the crux of our complaint about morbidity,” he and Stovall are with Dudley on one point. They plan to escalate with the Bureau of Insurance and go back to their senators and congressman to figure out why Charlottesville can’t get affordable care.

Updated December 27 with Optima’s denial that morbidity was used to calculate Charlottesville’s health insurance premiums.

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Radical care: Doctors ditch health insurance

Dr. Maura McLaughlin believes that by not taking health insurance, she’s found a better way to practice medicine. EZE AMOS

Maura McLaughlin still remembers the day in January 2015 she heard about a revolutionary way to practice medicine—like doctors used to do decades ago. Now she spends as much time as she needs with patients, who can come see her as often as they like at a reasonable cost.

A key component: She doesn’t take health insurance at her two-year-old medical practice in Crozet. The model is called direct primary care, and it’s spreading across the country, with four such practices now in Charlottesville and Albemarle, where, incidentally, people who don’t qualify for Affordable Care Act subsidies are facing the highest premiums in the country.

McLaughlin compares it to a gym membership. Patients sign up and pay between $15 and $60 a month, and use it as often as they like.

What it’s not, she stresses, is health insurance. “We don’t consider ourselves substitutes for insurance,” she says. But for those who have high-deductible health insurance that makes them balk at doctors’ visits they’ll have to pay for out-of-pocket, direct primary care can be a more affordable alternative, she says.

And by not having to spend 40 cents of every dollar she takes in to cover overhead for dealing with health insurance companies, “I’m able to keep costs low,” she says. “From a physician standpoint, it allows doctors to be doctors and focus on patients.”

Her Blue Ridge Family Medical Practice offers lower rates for lab tests, and “I can help people navigate the [prescription drug] system” to find generics or the best local pharmacy prices, she says.

One of her patients has diabetes and comes in every three months for a follow-up visit. Young families like the convenience of being able to come in without a long wait, she says, and some employers and school systems add direct primary care as part of employee benefits.

“Even if you don’t have insurance, it’s a way to get health care,” says Delegate Steve Landes, who carried a bill the past two years in the General Assembly that specifies direct primary care is not insurance—after insurers complained the doctor-patient agreements should be regulated like insurance.

Carolyn Engelhard is a health policy expert at UVA, and she has a few concerns about the direct primary care model. “I worry that people think it’s insurance and it isn’t,” she says. “If they end up in the hospital with a major illness, they wouldn’t be covered.”

She also worries about accountability for solo practices not connected to a larger health care system. Doctors within a system must show they’re meeting quality-care metrics and best practices, and insurers attach payment to guidelines being followed, she says.

“Dr. McLaughlin is a wonderful doctor,” says Engelhard. “She’s connected to other doctors in the community.” But for other standalone direct primary care practices, there’s “no oversight,” she says.

And when it’s necessary to refer a patient to a specialist, a doctor who is affiliated with Sentara or UVA talks to the specialist, she says. Direct primary care “fragments an already fragmented health care system.”

McLaughlin, who worked for UVA for nine years before venturing on to her own practice, says making referrals works much the same as it did when she worked in a traditional practice, only now she has more time to research specialists and costs, and to discuss patients with the specialists.

For the solo practitioner, there’s been no looking back. “This model of care,” she says, “allows me to be the kind of family doctor I always wanted to be.”

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Sticker shock: Charlottesville health insurance premiums spike to highest in nation

Sara Stovall and her husband, Stephen Barling, are looking at health insurance premiums pushing $3,000 a month for their family of four. Bethany Snyder

For many families, an income of $100,000 pretty much means they’re living the American dream. And for many families, that dream came crashing down when they saw what their health care premiums are going to be for 2018.

For Sara Stovall, premiums for her family of four will go from $940 a month to nearly $3,000 a month—$36,000 for the year.

Eden Henderson’s premiums for her family of three jumped 225 percent to $2,600 a month.

And John Harris, former Carlyle Group CFO, says the $1,629 a month silver plan he’s currently paying for his family of four with Anthem will cost $5,395 a month—nearly $65,000 for the year—for the same plan next year with Optima. For laughs he calculated a gold plan. That totals nearly $97,000 a year.

It’s difficult to pin down why Charlottesville and Albemarle, Fluvanna and Greene counties have seen the largest jumps in the country—234 percent for a 40-year-old ineligible for subsidies, compared to a 17 percent to 35 percent increase nationally, according to the Kaiser Family Foundation.

JABA insurance counselor Heather Rowland puts the blame squarely on the Trump administration for destabilizing the market by stopping federal cost-sharing reduction payments, which subsidize lower deductibles, copays and out-of-pocket maximums, and for threatening to end the individual mandate that requires everyone to have insurance, which caused insurers to fear they’d be stuck with older and sicker buyers.

As a result, companies like Anthem and Aetna, which used to be in Albemarle, pulled out, while the sole remaining insurer, Optima, sharply raised its premiums to cover the riskier pool.

Rowland also believes the constant refrain of “repeal and replace” further destabilized the market. Fifth District Congressman Tom Garrett ran on a platform last year of repealing the Affordable Care Act because insurance premiums were too expensive, and he says President Barrack Obama acknowledged “real problems” with the ACA.

The second American Health Care Act would have reduced premiums—if it had passed in the Senate, says Garrett. Premiums of $36,000 a year are “ridiculous,” he says. “We need to keep doing our job.”

House Minority Leader David Toscano says he’s heard from many constituents faced with unaffordable health care. “Some people are under the misguided viewpoint that the Affordable Care Act is responsible,” he says. “In fact, it’s the Trump administration undermining the market.”

Optima decided to stay so that Charlottesville residents would not be left without an option, and “to provide plans knowing they might be out of reach for some residents but give an option to an estimated 70 percent who would qualify for subsidies,” says Optima spokesperson Kelsea Smith in an email. “We chose to cover as many people as we could.”

As for why Charlottesville and Albemarle premiums skyrocketed to the highest in the country, says Smith, “First and foremost, we understand residents’ frustration. We knew these rates would be difficult for some. We wish the circumstances were different, but to leave everyone without an option was not acceptable and goes against our not-for-profit mission.”

Among the factors she lists: The health insurance exchange has not worked as originally envisioned. Younger, healthier patients have not gotten insurance to offset the costs of older, sicker citizens. And without other insurance companies here, “all the risk of covering this more expensive patient base was left on the shoulders of Optima,” she says.

Sentara owns both Optima and the former Martha Jefferson Hospital. Despite having two hospitals, Smith says an academic medical center like UVA is more expensive than other hospitals.

When Stovall logged onto healthcare.gov November 1 and saw the lowest rate she could get was nearly $3K a month, “It was so absurd my husband and I laughed,” she says. “This is a $36,000 a year plan with a $12,000 deductible. How can anyone see that as remotely reasonable?”

She and her husband talked about moving, or she may look for a job that pays less. “In past years we’ve always tried to make as much money as we can,” she says. The one option she’s not considering with two young children is going without insurance.

“People say if you make more, you should pay more,” she says. “I agree. But you assume it’s reasonable. It doesn’t mean we can pay one-third of our income. That’s double our mortgage.”

The good news is for people who are single and make under $48,000 or a family of four earning less than $98,400. Those earners still qualify for subsidies under the Affordable Care Act, at least for 2018, according to Rowland.

Stovall found that if her family made under $98,000, she could get an insurance plan for $10 a month.

But she warns of a caveat with the non-sliding scale. If you earn $1 over those subsidy-eligible limits of $98K, you owe the full $36,000 cost.

“A lot of people could get stuck by not knowing that,” she says. “That could be devastating.”

What you should know

  • Sign-up in the health marketplace lasts 45 days—half of previous years—and ends December 15.
  • Advertising has been eliminated, and healthcare.gov is seeing 12-hour maintenance shutdowns every Sunday during the open enrollment period, says insurance counselor Heather Rowland.
  • In Charlottesville, where the median household income was around $64,000 and the median per capita income is $34,000, according to a U.S. Census 2016 survey, many people will be eligible for affordable health care insurance, at least for 2018.
  • The self-employed have been hardest hit. Some are looking at hiring employees to qualify for group insurance. Other options include short-term insurance, which does not cover pre-existing conditions, and the Christian cost-sharing ministry Medi-Share, which is not insurance but is exempt under the ACA’s individual mandate.