Report shows more options and savings for consumers who shop in the Health Insurance Marketplace in 2015

Thirty-four-year-old Karim works long days as an investment adviser, and when he doesn’t burn the midnight oil, he plays basketball or goes to the gym, hangs out with friends, or heads to coffee shops. You wouldn’t know he has an especially tough-to-treat illness.

“I have multiple-drug-resistant tuberculosis,” he explains.

It’s called that, because at least two of the most potent drugs conventionally used to squelch the tuberculosis bacterium don’t work on the strain of the illness that Karim has. So he needs to take a combination of drugs, with harsher side effects, for 18 months. That’s two to three times longer than the traditional treatment for tuberculosis.

“It has been a very stressful treatment process and a lot to deal with, but, thank God, it’s all going really, really well,” says Karim, who requested that NPR not use his full name out of concern he could be stigmatized for being a carrier of a disease that many people don’t understand.

While Americans debate whether we should quarantine people who might have Ebola but clearly aren’t contagious, others wander among us who are infected with tuberculosis — another disease that’s highly communicable in some forms. Close to 10,000 people in the United States have TB.

Karim doesn’t know how he became infected with TB bacteria, though there’s a good chance it was from someone in Pakistan, where he lived until age 4. Millions of people worldwide harbor a latent (noninfectious) form of TB for decades — it only shifts to an active form in some of them when, for one reason or another their immune system can no longer keep the bacteria in check.

After Karim was diagnosed with infectious TB in Aug. 2013, New York City’s health department took over his treatment — giving him powerful medications and mandating two weeks of home isolation.

Once tests confirmed that the drugs had beaten back the bacteria in his lungs to a noncontagious level, he got the “all clear” to move around the city freely again.

Today, he continues to take three very powerful antibiotics every morning, while an official from the health department watches him take the pills, via a smartphone. It’s the city’s standard practice for all TB patients.

“In the beginning, I was kind of frustrated with having to report or show that I’m taking my treatment all the time,” Karim says, “but at the end of the day this is something that could get out of hand. You just don’t want to risk it. It is a highly contagious disease, and if you’re not taking your meds, you’re just putting other people at risk.”

The state of New York allows the city to impose a strict quarantine on TB patients; some can even be detained in a lockup at Bellevue Hospital. But those drastic steps are only taken with highly infectious people who repeatedly don’t take their medications — a small handful of people each year, according to Dr. Joseph Burzynski, head of the New York City Health Department’s bureau of tuberculosis control.

“Most of our patients that get to that point have had significant substance abuse issues or mental health problems that are not being addressed,” Burzynski says. “Those are the reasons they’re being nonadherent.”

But most of the city’s 650 or so residents each year who have active TB manage their treatment like Karim. Only a small number of people very close to him know he carries the disease. He thinks even if he explained to friends and colleagues that he isn’t contagious anymore, they’d still treat him differently. He worries it could affect his business relationships.

“I don’t blame people,” Karim says. “I don’t get angry. I understand. There are parts of my family — when they found out, there was kind of a stigma there. I don’t think there’s enough information about it.”

All the news about the Ebola virus has made both Burzynski and Karim think about how people understand infectious diseases. Burzynski says it makes sense that people are afraid of Ebola — it’s frequently lethal. But looking more closely at the TB experience could ease some of those fears.

“We know that patients with tuberculosis are not infectious, except when they have a high degree of disease that’s not being treated and they’re coughing,” Burzynski says. “We know that persons with Ebola disease are only infectious once they develop symptoms and transmit the disease through the spread of bodily fluids. So there’s really no reason to quarantine somebody who’s not a high risk to the public.”

Meanwhile, Karim is looking forward to a day, he hopes early next spring, when his 18-month drug regimen will be finished, and he’ll be free of TB. He says at that point he’ll tell more people about his ordeal — and do more for an organization he’s started working with that’s trying to find better, shorter treatments for the disease.

This story is part of a reporting partnership with NPR, WNYC and Kaiser Health News.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

National health spending grew 3.6 percent in 2013, the lowest annual increase since the Centers for Medicare and Medicaid Services (CMS) began tracking the statistic in 1960, officials said Wednesday.

Spending slowed for private health insurance, Medicare, hospitals, physicians and clinical services and out-of-pocket spending by consumers.  However, it accelerated for Medicaid and for prescription drugs, according to the report, published online by the journal Health Affairs.

Health care spending has grown at historically low rates for the past five years, which is consistent with declines generally seen during economic downturns, such as the Great Recession that crippled the U.S. economy at the end of 2007.  Looking ahead, “the key question is whether health spending growth will accelerate once economic conditions improve significantly; historical evidence suggest that it will,” noted the authors, who are from the CMS Office of the Actuary.

They also pointed out, however, that in the near term, the health sector will “undergo major changes that will have a substantial impact” on consumers, providers, insurers and sponsors of health care. These are the result of the health law’s creation of online marketplaces, its expansion of Medicaid, a shared federal-state health care program for the poor and disabled, and restraints the law made to the Medicare program, the analysts found.

“The balance of these and many other factors over the next few years will determine how the historically low health spending growth from 2009 to 2013 is viewed: as the temporary aftermath of the great recession or the beginning of a new era,” the authors wrote.

The study found that health care spending rose to $2.9 trillion, or $9,255 per person, in 2013. As a share of gross domestic product, health care remained at 17.4 percent, the same share since 2009, the CMS researchers found.

The 3.6 percent spending growth for 2013 tracks a CMS estimate from September and is 0.5 percentage point lower than 2012.

Spending on Medicare grew 3.4 percent in 2013, down from the 4 percent growth in 2012. The difference was due mostly to slower growth in enrollment and spending changes included in the health care law, including reductions in federal payments to the private Medicare Advantage plans that offer an alternative to traditional Medicare. The automatic 2 percent federal budget payment cuts, known as sequestration, also played a role in reducing Medicare spending, which was nearly $586 billion in 2013. The program accounted for 20 percent of national health spending, according to the report. Fee-for-service expenditures, which account for 72 percent of total Medicare spending, were up 1.7 percent in 2013. Medicare Advantage spending increased 7.8 percent in 2013, a slower growth rate that the 10.6 percent increase in 2012.

The growth in Medicare per-enrollee spending was relatively flat, increasing 0.2 percent after a growth rate of less than 0.1 percent in 2012. The authors credited younger and healthier baby boomers entering the program.

Medicaid spending increased 6.1 percent in 2013, following growth rates of 2.5 and 4 percent, respectively, in 2011 and 2012.  A variety of factors, including increases in hospital care – which accounts for 36 percent of Medicaid spending — contributed to the cost increase.  The federal government and state and local governments spent $449.4 billion in 2013 on Medicaid, accounting for 15 percent of total national health expenditures.

Medicaid enrollment grew 2.7 percent during that time frame, the first acceleration since 2009.  Some of the 2013 increase was due to new beneficiaries who enrolled as part of the health law’s provision that allowed states to expand their Medicaid programs ahead of the 2014 expansion.

Other key takeaways from the report include:

– Nearly 190 million people – or 60 percent of the population – were covered by private health insurance in 2013.  Premiums grew 2.8 percent, compared to an increase of 4 percent in 2012. Low overall enrollment growth, greater usage of high deductible plans and other benefit design changes and the health law’s medical loss ratio and rate review provisions contributed to the decline, CMS found. Private health insurance enrollment increased 0.7 percent last year, the third straight year of growth.

– Consumer out-of-pocket spending, including co-payments and deductibles or payments for services not covered by a consumer’s health insurance, was $339.4 billion in 2013, or 12 percent of national health expenditures.  The 2013 growth was down from the 3.6 percent growth in both 2011 and 2012.

– Spending for physician and clinical services grew 3.8 percent in 2013 to $586.7 billion, a slowdown from 2012 when spending grew 4.5 percent. Expenditures for hospital care increased 4.3 percent in 2013, slower than the 5.7 percent rate of growth in 2012. Total spending growth for retail prescription drugs rose 2.5 percent last year, compared to 0.5 percent in 2012.  Drug spending growth increased in 2013 for several reasons, among them higher prices for brand-name and specialty drugs.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

Chicago health officials had a serious problem. The city had long been trying to attack breast cancer among minorities with a program offering uninsured women free mammograms at Roseland Hospital in the predominantly black South Side. But black women – who are far more likely than white women to die of breast cancer – weren’t getting screened.

Because traditional public health outreach didn’t seem to be working, the city’s Department of Public Health decided to do something new: It turned to a Chicago-based data mining company, Civis Analytics, for help.

Data mining, often employed by political teams and mass marketers, uses statistical analysis to find patterns within large data sets to project trends about individual behavior and demographics.

Civis, a private company with offices in Chicago and Washington, D.C., was formed by members of the data analytics team from President Barack Obama’s re-election campaign. Back then, as campaign staffers, they used their skills to identify Obama voters for a get-out-the-vote effort. Later, after the company was formed, Civis employees worked with Enroll America, a nonprofit group, to find people to sign up for health insurance under the Affordable Care Act.

When Civis teamed up with Chicago’s health department, it moved on to another health-related mission: to help the city refine its outreach for the breast cancer screening program by using its big-data tool box to identify uninsured women aged 40 and older living in the South Side.

This project represents a distinctive step in public health outreach, said Jonathan Weiner, professor and director of the Johns Hopkins Center for Population Health IT in Baltimore. But Chicago is not the only city investigating how population data can be used in health programs, he added, citing New York City, Baltimore and San Diego as other examples.

“It’s a growing trend that some of the techniques first developed for commercial applications are now spinning off for health applications,” he said. So far, he said, “these techniques have not been as widely applied for social good and public health,” but that appears to be changing.

As it happens, in this case, the company didn’t have to start from scratch.

“There’s pretty rich data” out there, said Kate Jordan, an engagement manager at Civis who leads the company’s health practice. The U.S. Census Bureau tracks demographic factors such as gender, race, income, location and insurance status – data, Jordan said, that with the right analysis, “can tell us a lot about the statistical mathematic pattern between various characteristics and whether or not a person might be uninsured.”

Civis’ side of the project, which it did as a pro bono initiative, began after the city reached out in July. It took about two months, Jordan said, enlisting between two and five Civis employees – analysts, statisticians and data experts – at any given time, though she and another senior analyst did the bulk of the work.

The Civis team sorted through material from the Census Bureau’s American Community Survey to uncover how characteristics such as gender, race and income correlate to insurance status. (The survey is an annual project that collects responses to questions varying from age to income to education from a small but representative group of people.)

Civis then used its own survey findings to build an algorithm to predict, with confidence, where, by neighborhood, the uninsured are most likely to cluster. It’s “a proprietary way of walking public data onto our own data,” Jordan said.

“Neighborhoods have a high rate of uninsurance or a low rate of uninsurance, which makes a lot of sense,” she said, since the traits that correlate to whether people purchase insurance often also seem to influence where they live.

From that point, the team was also able to locate women who were likely to lack insurance and who fell into the appropriate age range. The city then used this information to mail fliers to about 5,000 women, according to Jay Bhatt, chief innovation officer and managing deputy commissioner at the health department.

Meanwhile, at Roseland Hospital, staffers were eager for assistance. The mailings “generated quite a bit of buzz,” said Nikisha Coleman, a Roseland spokeswoman. For instance, she said, the hospital usually provides fewer than 10 free mammograms per month. But in October, the month the city sent out the mailers, 31 women came in for the free service. She expects that, for months, they will continue to receive telephone inquiries and do more screenings.

“To send out that sort of mailing, it creates awareness,” Coleman said. That’s important, said Rhonda Perdue, a Roseland staff member who does outreach for the hospital’s mammography program. “Most of us who have insurance, who go to the doctor,” are reminded about getting mammograms, but that’s not true for the uninsured, she said.

The city intends to “continue its approach in leveraging open data and predictive analytics” to address public health issues, a department spokeswoman said. Civis, for its part, “absolutely” sees potential for doing more such public health projects, and not just in Chicago, according to Jordan.

But population modeling isn’t a silver bullet, said Weiner, the Johns Hopkins professor.

“Identifying the problem, looking at both community and individuals who are in need of services, that’s definitely part of what’s needed,” Weiner said. “But having solutions once you identify the problem … that’s far more challenging, and the data alone will not solve the issue.”

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

When the Affordable Care Act rolled out last year, Californians enrolled in both Covered California and expanded Medi-Cal in high numbers. But there are still millions without insurance. Undocumented people don’t qualify for Obamacare benefits. Many others still find coverage too expensive or face other obstacles to enrolling.

One of those people is Leaburn Alexander. I meet up with him at 6 a.m. as he is finishing his shift as the night janitor at a hotel near the San Francisco Airport. He clocks out just in time to catch the hotel’s shuttle back to SFO, where he will catch a bus.

“Right now, I’m on the beginning of my commute,” he tells me. “After an eight-hour shift, my commute is like two-and-a-half hours.”

I accompany Alexander on his commute to East Palo Alto, about 20 miles south. It actually takes us three hours, on the hotel shuttle plus three more buses. He does this commute five days a week because he doesn’t have a car. The train would be faster, but it costs three times as much. Alexander has no wiggle room in his budget.

He says he makes just under $11 an hour, and after taxes, child support and other expenses, he brings home just enough to cover rent. And all the other bills? He has a second job to cover those. His wife has been looking for work for over a year, and his oldest daughter is in college. There’s no room in the budget for health insurance.

“When I first got this job,” he says, of his night janitor position, “they informed me about different employee packages, different benefits and all that.”

But Alexander says he can’t afford the employee portion of the premium. Many people who are working lower-wage jobs may qualify for Medi-Cal, California’s version of Medicaid, if their incomes are low enough. But because Alexander had been turned down for Medi-Cal in the past, he presumed he still wouldn’t qualify, despite the broader eligibility under Obamacare. He hasn’t had time to check.

Earlier this year, he went to get a physical at a community clinic, and they tried to sign him up for a county program. But even the $20 a month payment was too steep for his budget.

While he’d like to be insured, Alexander, 53, says he feels pretty healthy.

“I mean, there’s times where I’d be tired from fatigue and my age, a little arthritis, but I still feel pretty good,” he says. “But what might be going on inside of me is a different story.”

Alexander’s blood pressure is high. He got free pills free from a clinic and plans to return when he runs out.

The only time in his adult life when he had health care was when he was incarcerated. He had substance abuse issues and was involved in a bank robbery. He says he had tried recovery programs, but didn’t succeed, until he became a born-again Christian.

“That was divine intervention. It really happened,” he says. “I’ve been clean and sober since July, 2011.”

The Remaining Uninsured

Uninsured Californians fall into a few categories, says Laurel Lucia with the U.C. Berkeley Labor Center. One is called the “family glitch.”

“Basically spouses and children who can get coverage through a family member’s employer but it’s too expensive,” she says.

Sometimes the employee part of the premium is affordable, but the family coverage is much higher. But because the employer made an offer of insurance to family members, “(w)hen they go to Covered California they’re told they’re ineligible for subsidies,” Lucia says. It’s part of federal policy.

A second uninsured group is people who are eligible for subsidies through the ACA marketplace — but they still find the premiums unaffordable.

Finally, Lucia says there may be nearly 1 million Californians who are eligible for Medi-Cal but don’t know it, or have had difficulties enrolling.

It’s unclear exactly which category Alexander may fit into.

The Enrollment Counselor’s Perspective

Over in East Palo Alto, Irais Bazan is an enrollment and eligibility manager at the Ravenswood Family Health Clinic. Bazan has met people in all of those uninsured categories — and more.

“Situations can change at any minute,” she said. “So we’re adamant with clients, any changes, as little as you may think” must be reported right away.  “Sometimes these rules for these programs change.”

And someone who thought he wasn’t eligible for Medi-Cal or subsidies before may be eligible now. That may describe Leaburn Alexander. But while coming back to the clinic sounds like a minor hassle to most people, for Alexander, it’s a big barrier.

“Scheduling time to do that, an appointment. It’s kind of rough, kind of hard right now,” Alexander says.

Just as Alexander has no wiggle room in his budget, he has precious little extra time in his schedule. After he wraps up his overnight janitor job, he heads to a second job, washing dishes at a Stanford dining hall. He has one full morning off each week, but that time is taken up with other needs of daily life.

“Come Wednesday,” he says, about his morning off, “that’s when my pastor comes and gets us and takes us grocery shopping.”

Alexander remains optimistic that his situation will improve.

“I’m hopeful that through prayer that God will bless me with a better paying job,” he told me.

Lisa Morehouse produced this story while participating in The California Endowment Health Journalism Fellowships, a program of USC’s Annenberg School of Journalism.

This story is part of a reporting partnership that includes KQED, NPR and Kaiser Health News.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

People with health coverage – including those who buy it through government insurance exchanges and Medicare beneficiaries – are likely to pay more out-of-pocket next year for so-called “specialty drugs,” which treat complex conditions, according to two studies from consulting firm Avalere Health.

More than half of the “bronze” plans now being sold to individuals through federal and state marketplaces for coverage that begins in January, for example, require payments of 30 percent or more of the cost of such drugs, Avalere said in a report out Tuesday. That’s up from 38 percent of bronze plans this year.

In “silver” level plans, the most commonly purchased exchange plans, 41 percent will require payments of 30 percent or more for specialty drugs, up from 27 percent in 2014.

As the cost of prescription medications rise, insurers are responding by requiring patients to pay a percentage of specialty drug costs, rather than a flat dollar amount, which is often far less. Insurers say the move helps slow premium increases.

But “in some cases this could make it difficult for patients to afford and stay on medications,” Avalere CEO Dan Mendelson said in a written statement.

While there is no standard definition of such drugs outside of the Medicare program, they are often expensive medications used to treat serious, chronic illnesses, such as multiple sclerosis, rheumatoid arthritis, hemophilia, some cancers and hepatitis C. While lists of specialty drugs can differ by insurer and by policy type, drugs can include arthritis treatments Enbrel and Humira, cancer drugs Gleevec and Tarceva, hepatitis C treatment Sovaldi and MS drugs, Betaseron and Copaxone.

While they add up to only about 1 percent of all prescriptions written, specialty drugs account for 25 percent of spending on all drugs – an amount expected to rise rapidly, according to various studies.

An earlier Avalere analysis found that for the first time since Medicare’s drug program began in 2006, all of the stand-alone drug insurance plans place some drugs into specialty “tiers.” Two thirds of those plans require patients to pay a percentage of the costs of drugs in those tiers, rather than a flat dollar payment.  Medicare plans can place a product into a specialty category only if the price negotiated with the drugmaker exceeds $600 a month.

Increasingly, health plans –including those offered to people with job-based coverage – require hefty payments, sometimes 20 to 40 percent or more of the total cost of medications that insurers classify as specialty drugs.  That’s a change from the flat dollar payments of $10 to $30 or $50 that many patients have become accustomed to for other types of drugs.

There is a limit to how much patients must pay, but it’s often high: Most policies have an annual out of pocket maximum, which is often several thousand dollars.

The new Avalere study looked at plans sold in the federal exchange and in New York and California, which run their own marketplaces.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

Exactly what would happen to the Affordable Care Act if the Supreme Court invalidates tax credits in the three dozen states where the federal government runs the program?

Legal scholars say a decision like that would deal a potentially lethal blow to the law because it would undermine the government-run insurance marketplaces that are its backbone, as well as the mandate requiring most Americans to carry coverage.

In King v. Burwell, the law’s challengers argue that Congress intended to limit federal tax credits to residents of states running their own insurance exchanges. Currently only 13 states and the District of Columbia operate exchanges on their own; another 10 are in some sort of partnership with the federal government. Federal officials run the rest.

The court is slated to hear the case in early 2015. Should it find that subsidies in federally run exchanges are not allowed, “I don’t think there are any rosy scenarios,” said Timothy Jost, a law professor at Washington and Lee University and a supporter of the law. “It’s a complete disaster.”

The immediate impact is that the Internal Revenue Service would stop paying subsidies to those in federally run exchanges. In 2014, more than 4.6 million people were getting those subsidies but the number may grow to as many as 13.4 million by 2016, according to the Kaiser Family Foundation, (Kaiser Health News is an editorially independent program of the foundation.)

Most of those who lose subsidies would no longer be required by the “individual mandate” to have insurance, because they would fall into an exemption in the law for those who have to pay more than 8 percent of family income for health insurance premiums.

“Since a lot of people can’t afford insurance without the tax credits, you’re looking at a lot of people shedding coverage,” says Nicholas Bagley, a law professor at the University of Michigan.

Those who hang onto their coverage and pay the entire premium without help “are likely to be sicker on average than the people who shed their coverage because they’re the ones who need insurance the most,” he said.

Indeed, the insurance industry, through its trade group America’s Health Insurance Plans, argued in a legal brief for a related case that the elimination of the federal exchange subsidies could seriously undermine those markets, creating an insurance death spiral.

“When healthy individuals opt out of the individual insurance market, those who are left are, on average, less healthy (and therefore prone to higher-than-average medical expenses),” AHIP said in its brief. “A sicker pool of consumers results in higher premiums, which causes an additional relatively healthy subset of participants to drop out, which in turn results in a further increase in premiums.”

Eliminating subsidies for individuals also would eliminate the so-called “employer mandate” that seeks to require larger firms to provide coverage. That’s because the employer mandate merely requires employers to pay a fine if their employees obtain subsidies on the exchange. If there are no subsidies, there are no employer fines and thus effectively, no mandate.

Meanwhile, says Jost, “hospitals that have started to have some real relief from uncompensated care are right back taking care of uninsured people.” That problem could get worse because some people who had coverage in the old, unreformed individual market might have to drop it due to cost.

So what could be done? Some argue that states that rely on the federal government to run their health exchanges could establish their own marketplaces. But legal experts say that’s problematic as well.

“The practical obstacle is that creating an exchange is not child’s play,” says Bagley. “An exchange has to be a governmental entity or a nonprofit entity. They’ve got to be able to carry out a variety of functions,” including working with consumer assistance groups and overseeing compliance with the law’s requirements.

While some have suggested that states could create a “virtual” exchange on paper and contract with the federal government to run it, Bagley says the law on the subject is pretty explicit. “States would have to do more than just the bare minimum,” he said.

Timing and financing would also pose practical problems. The final deadline for states to apply for federal funding to establish an exchange has passed. And a decision from the Supreme Court is likely to come in late June of next year, which is after another deadline (June 15) for states to use their own funds to establish an exchange in time for the 2015-16 open enrollment season.

The political obstacles are potentially even bigger. In six states, even if a governor wanted to establish an exchange for his or her state, the state legislature has specifically taken that authority away, according to the National Conference of State Legislatures. Georgia became the seventh state earlier this year.

“What that means is that in many of these states that don’t have exchanges, state legislatures will have to get involved,” said Bagley. And many of those legislatures “are full of new members after the mid-term elections who specifically campaigned against the ACA.”

Still, some say the predictions of doom are overblown.

The main thing an anti-subsidy ruling would do is force Congress back onto the playing field to reopen the law, said health economist Tom Miller of the American Enterprise Institute.

“Congress will step in,” he predicts. “We’re going to have the kind of political give and take which was abbreviated and artificially truncated when the law was passed. It’s not a pretty process, but that’s why we have a government and we elect people.”

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.