Democrats want wider health care coverage. Republicans want privatization of government programs. They’re both getting their way with the Medicaid program for children and the poor.

Medicaid’s expansion under the Affordable Care Act has drawn lots of attention, although some states have resisted. Medicaid, which serves nearly 68 million Americans, is state-run with the majority of its finances coming from Washington.

But Medicaid management has also undergone profound change, with states increasingly outsourcing the care to private insurers such as Aetna, Centene and UnitedHealthcare.

Avalere Health projects that 76 percent of beneficiaries  in Medicaid and the related Children’s Health Insurance Program (CHIP) will be covered by private managed care by 2016, generating billions in profit for insurance-company shareholders. All but a handful of states now contract with private insurers to deliver comprehensive Medicaid care, according to the Kaiser Family Foundation. (KHN is an editorially independent program of the Kaiser Family Foundation.)

In an attempt to have regulation catch up with reality, the Department of Health and Human Services updated its rules for Medicaid managed care this week for the first time in more than a decade. Proposals include quality-rating systems, profit limits and tighter requirements for doctor and hospital networks.

Here’s why HHS acted:

— It’s not just core Medicaid for the poor that is shifting to managed care. So is CHIP, which covers kids in lower-income families that make too much to qualify for Medicaid. So is long-term Medicaid care for the elderly and the disabled, which is where the program touches some middle class families.

Among other goals, HHS wanted to harmonize the rules between the programs and the different populations served.

— Managed care is a huge business. Private insurers booked $115 billion in Medicaid revenue last year, according to data compiled from regulatory filings by Mark Farrah Associates and analyzed by Kaiser Health News.

Operating profit on those premiums came to $2.4 billion. Net profit, after accounting for taxes, depreciation and other expenses not directly connected to health coverage, would have been less.

Even so, HHS decided to limit insurer profits by creating a minimum medical loss ratio, similar to standards put in place for other health coverage by the federal health law. Insurers would have to plan to spend at least 85 percent of their revenue on medical care, not administrative cost or profit.

— Capitalizing on “member churn” between Medicaid plans and commercial coverage is a key insurer strategy.

Fluctuating incomes cause people to cycle in and out of Medicaid. When a member gets a job and loses her Medicaid eligibility, her insurer wants to keep the business by signing her up for a commercial plan sold through the health law’s online exchanges.

HHS’ new rules are supposed to control that process — allowing plans to educate members to promote coverage continuity but still prohibiting cold calls, spam and knocks on the door.

— Doctor networks for Medicaid plans aren’t all they’re supposed to be. In a national survey last year by HHS’ inspector general, half the doctors listed in official plan directories weren’t taking new Medicaid patients.

HHS now wants states to certify at least annually, perhaps based on direct queries to doctors, that enough caregivers are in the managed-care network and close enough to plan members to serve them.

— Health-care quality scores are the future. HHS awards stars to Medicare managed care plans for seniors based on benefits, member satisfaction and management of chronic conditions. Medicare has also started grading hospitals with star scores.

The agency hasn’t said whether Medicaid plans will get stars. But it promises some sort of “quality rating” system based on suggestions from stakeholders.

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

Children in California increasingly are flocking to emergency rooms for treatment of asthma, despite millions of dollars spent on programs to control the disease.

Statewide, the rates of ER visits for asthma symptoms rose by about 18 percent for California children ages 5 to 17 and by 6 percent for children under 5 between 2005 and 2012, according to a Kaiser Health News analysis of the latest available rates by county.

In some parts of the state, especially the Central Valley, the increases were far higher. The rate of emergency room visits for children 5 and older more than doubled in rural Madera County and nearly doubled In Merced. In Sacramento County, they rose by 48 percent and in Los Angeles, the largest county in the nation, by 17 percent.

All told, more than 72,000 California children under 18 visited the ER for asthma in 2012.

“There’s clearly more work to be done if this many kids are going to the emergency department,” said Anne Kelsey Lamb, director of the Regional Asthma Management and Prevention program of the Oakland-based Public Health Institute. “We know a lot about what works. We absolutely should be able to reduce the rates we’re seeing.”

At the national level, asthma-related emergency room visit rates have declined in recent years, according to federal health data through 2010, the latest available.

Although ER visits declined in some counties, including Alameda, San Mateo and Marin, the overall rise in California has frustrated public health experts who have spent millions of dollars and countless hours to improve and expand asthma prevention programs around the state. The state and federal governments alone spend $1.54 million annually on such projects in California, including grants to schools to improve indoor air quality and  training community health workers.

The good news is fewer kids are actually being admitted into hospitals.  Overnight-or-longer stays are declining statewide and nationally. That’s due largely to better medicines and more aggressive treatment in the ER, asthma specialists say.

The reasons for the increase in ER visits are complex, experts say. They include parents not properly administering medications, poverty and inadequate insurance coverage, persistently high levels of indoor and outdoor pollution in some regions and the limited reach of programs that seek to manage symptoms or prevent them.

The rising rates don’t seem to reflect an actual increase in the respiratory disease – about 15 percent of California children have been diagnosed with asthma, a number that has remained fairly steady since 2001.

The rates of ER visits vary widely by county, from a high of 300 visits per 10,000 children under age 5 (Madera County) to a low of 32 (Sutter County) in 2012. Younger children visit the ER at higher rates because they are more likely to have undiagnosed asthma and because their lung function is more difficult to measure, complicating the task of finding the right combination of medicines, Kelsey Lamb said.

Some families  seek treatment in the ER for symptoms that easily could be dealt with in a clinic because they can’t get a timely doctor’s appointment or don’t have a regular doctor – especially those without health insurance. Sometimes, a bad cold and flu season can  aggravate asthma that is usually well-controlled.

Affected children often live in homes with dust, mold or pets, which trigger asthma symptoms. They may need two inhalers – one for school and one for home – but insurance sometimes only pays for one.

In the Central Valley, persistent poverty and outdoor air pollution levels combine to produce the highest rates of ER visits for childhood asthma in the state.

While particulate matter and ozone air pollution levels are declining somewhat in the region, they still can be high enough to trigger asthma attacks, said John Capitman, a California State University-Fresno public health professor and executive director of the Central Valley Health Policy Institute. In Los Angeles, the same holds true, although particulates are slightly lower than in parts of in the Central Valley.

Across California, local and regional asthma programs aim to educate families and doctors to help keep kids out of the hospital. In counties including Orange and Los Angeles, medically equipped vans called “Breathmobiles” provide comprehensive care in community settings and ensure children don’t end up repeatedly in the ER.

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It worked for Daniel Lee, 5, of Buena Park, who was still experiencing severe asthma symptoms after five trips to the ER last year. It turned out the doctors at the hospital had mixed his medications incorrectly — a common mistake when kids are treated in emergency rooms rather than by asthma-trained pediatricians, said Dr. Olga Guijon, associate medical director of the Breathmobile for Children’s Hospital of Orange County.

“All he wants to do is play soccer,” said his mother Young Lee, during a recent visit to the Breathmobile in Anaheim. “But every time he’s running around on the field, he says: ‘I feel weird’. So he has to stop.”

Daniel has improved drastically after being treated at the Breathmobile and having his medication adjusted, his mother said.

Though often effective, these programs are expensive and can’t serve enough children to make a real difference statewide, Capitman said.  And health outreach workers have found it difficult to get reimbursed by insurers, including Medi-Cal, for proven strategies including home visits to minimize risks, Capitman said.

Dr. Amy Harrison, a pediatric pulmonologist at Children’s Hospital Orange County, suggested that the recession had driven some families to her hospital’s ER, because they had lost their insurance or had high-deductible insurance that led them to forgo prescriptions and regular doctor visits.

Because the data don’t extend beyond 2012, it remains unclear how expanded coverage offered since last year under the Affordable Care Act and California’s Medicaid program  will affect emergency room visits. But experts like Capitman hope to see more funding for programs that manage or prevent asthma symptoms through the Affordable Care Act’s Prevention and Public Health Fund.

Asthma care for kids has improved markedly in recent years, in part because of the wider use of steroid inhalers. Influential asthma management guidelines released in 2007 also have helped.

But some families simply don’t know how to manage their child’s condition at home, or know when to seek medical care before an ER visit becomes necessary, said Dr. Rami Keisari, medical director of the Pediatric Asthma Disease Management Program at the county-run Santa Clara Valley Medical Center in San Jose.

“One of the biggest challenges we have is getting parents to use the medications every day,” Keisari said. “We have a really hard time convincing parents that this is a chronic condition.”

Some of the few large counties with declining ER visits have invested heavily in targeting kids who are at risk. Alameda County children who have been treated in ERs are referred to the county’s free Asthma Start program, which offers free home visits during which health workers identify asthma triggers, offer education and provide equipment such as spacers and nebulizers – even vacuum cleaners, said program director Brenda Yamashita of the Alameda County Department of Public Health.

Parents learn to freeze stuffed animals to kill asthma-triggering dust mites, track their children’s symptoms on a calendar, and clean surfaces without bleach, which can aggravate symptoms. Alameda Alliance for Health, the county’s public, nonprofit health insurance plan, reimburses Yamashita’s program for home visits.

For parents in substandard rental housing, staffers call on the county’s Healthy Homes department to press landlords to get rid of vermin, fix leaks and address other code violations.

In Santa Clara County, Keisari’s staff keeps tabs on kids for as long as three years. Every month, a public health nurse calls parents and ask about their children’s symptoms and medications.

The county’s overall child ER visit rates are low compared to other counties. Even so, the number of children the program serves is limited compared to the need. And while the county’s asthma ER visit rates declined by 21 percent for children under 5, they rose 12 percent for children aged 5 to 17.

“We’re doing better with all these programs, but is it adequate? No. Every time a kid winds up in the ER with bad exacerbation of asthma, it’s a failure,” said Stanford University child health policy researcher Dr. Paul Wise.

Heidi de Marco contributed reporting.

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

Douglas White knew high-deductible insurance is supposed to make patients feel the pain of medical prices and turn them into smart shoppers. So he shopped.

He called around for price quotes on the CT scan his doctor ordered. After all, his plan’s $2,000 deductible meant paying the full cost out of pocket. Using information from his insurer, he found a good deal —$473.53 at Coolidge Corner Imaging in Boston, a half hour from his house.

But the bill he got later was for $1,273.02 — more than twice as much — from a hospital he had no idea was connected to the imaging center.

“I was shocked,” said White, a doctor of physical therapy who thought he knew his way around the medical system. “If I get tripped up, the average consumer doesn’t have the slightest chance of effectively managing their health expenses.”

A national study by Consumers Union basically comes to the same conclusion, suggesting that there are millions of Douglas Whites lost in the medical billing maze.

Nearly one American in three with private health insurance surveyed by the research group got a surprise medical bill in the past two years — defined as when a plan paid less than expected and doctors and hospitals tried to recover the balance from the patient.

Of those with surprise bills, nearly a fourth got bills from doctors they had no idea were involved in their care and nearly two-thirds were charged more than they expected.

“When we talk about transparent health care and the need for consumers to shop around, it’s just not possible in many situations,” said Blake Hutson, a senior associate for Consumers Union, the policy arm of Consumer Reports. “Even if you work for a big company and have what you think is a good health insurance plan, you can get a surprise medical bill.”

The deductible is what patients pay before insurance kicks in. The higher the deductible, the more you pay out-of-pocket. Deductibles of $3,000 or $5,000 are not unusual these days, although the health law caps out of pocket costs at $6,600 for individuals and $13,200 for families.

Making plan members pay more in this way is supposed to prompt them to check prices and put competitive pressure on medical providers.

The problem is that you can’t buy medical services the way you buy a phone plan. Doctors, hospitals and other providers generally don’t advertise their prices and often keep them confidential, even when asked by patients about what to expect. Providers charge different amounts for the same service depending on the insurance.

One episode of treatment can generate bills from multiple caregivers, especially in the hospital.

A new study by the Employee Benefit Research Institute shows that members of high-deductible plans have higher incomes and are more educated on average than the typical American. But a post-grad degree from MIT might not be enough to figure out some bills.

The system is so complicated that one patient in three who got a surprise bill in the Consumers Union study didn’t investigate or fight it.

“I didn’t think it would make a difference,” or “I was confused about what to do” were common reasons for inaction.

That’s the wrong response, said Karen Pollitz, a senior fellow at the Kaiser Family Foundation who studies how the health system affects consumers. (Kaiser Health News is an editorially independent project of the foundation.)

“It’s always advisable to ask questions if you receive a surprise bill or if insurance pays less than you expect,” she said. “Mistakes happen and following up can save you money. If it gets too confusing or frustrating, ask for help.”

Consumers Union offers an online tool for finding the relevant agency in your state and its contact information.

White’s billing problems were cleared up — many months and phone calls later and after a reporter started inquiring.

His plan, Harvard Pilgrim Health Care, said it had given him an incorrect quote for the CT scan last fall. The plan eventually paid the imaging center the full $1,273, saying it wasn’t White’s fault that the plan’s quote was wrong.

The bill had come from Brigham and Women’s Hospital, which owned the radiology center, even though White said there was no indication of that when he went to get the scan.

Harvard Pilgrim said it didn’t know Brigham and Women’s was affiliated with the center, either. Hospital-owned facilities are often far more expensive than independently owned doctors’ offices.

So how does he like the transparency revolution in health care, boosting competition and empowering patients?

“There is nothing transparent about most health care billing,” said White.

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

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