Month: April 2018

Skinny Health Insurance — Cheap Plans that Come With a Cost

By Mark A. Kelley, MD |5/1/18
Founder, HealthWeb Navigator

The Affordable Care Act (ACA), widely known as “Obamacare,” has survived several repeal attempts by Congress. Storm clouds, however, are still on the horizon.

The ACA’s “individual mandate” obligates every American to be covered by comprehensive health insurance. This requirement has been the most unpopular feature of the law. That’s because healthy people, especially those who are self-employed or between jobs, have found the ACA premiums too expensive.

They are not alone. Health insurance premiums continue to rise at a rate of 5% per year. Meanwhile, the average American makes about $55,000 per year and has seen little increase in wages.

The ACA suffered a blow last December when Congress passed the recent tax bill, which eliminates the penalty for the individual mandate in 2019. Some health experts think this will encourage as many as 13 million individuals to forgo health insurance. Without healthy people paying into the insurance pool, insured patients will end up paying higher premiums to cover the loss. Fearing this, some states may impose their own penalties for non-enrollees.

The individual mandate makes economic sense to policy-makers, but not to the average voter. The fines for refusing to buy ACA health insurance have been much lower than the cost of premiums. Over 8 million Americans chose to pay the fine rather than buy insurance in 2016. The federal government had planned to implement higher penalties, but the new law closes that option.

Many healthy Americans still want health insurance — but only on their own terms. That may happen through an emerging option called “skinny” health insurance.

With this type of insurance, the premium price is based on likelihood and size of the loss. If you have an expensive house or fancy car, you will pay more for insurance. If you want to lower the premium, you can take more risk and pay a greater portion of any losses. The lender for a car or home will also make you buy enough insurance to cover a car loan or a mortgage. These are all factors that go into your decision about purchasing insurance.

Skinny health plans work the same way. Unlike ACA insurance which offers only full coverage, you can use skinny plans to buy what you think you need. The benefits can vary and may depend on how individual states regulate the plans. Major insurance companies are beginning to offer these plans, which suggests that they see a market opportunity. Here are some features of these policies:

• They are often marketed as supplemental coverage for consumers who already have traditional, comprehensive health insurance.

• Skinny plans may help patients cover the costs of deductibles, or co-insurance.

• Most skinny plans have strict caps on total expenditures per year.

• Some plans provide little or no coverage for patients with previous conditions.

• The coverage may be limited to doctors services hospitalizations.

• Because of these coverage limitations, premiums may cost as much as 60% lower than ACA insurance.

• Skinny plans can be purchased at any time of the year and for shorter durations, such as three or six month contracts.

The demise of the individual mandate is not likely to affect the future of the ACA. Most Americans had health insurance coverage before the ACA. This was provided either by their employers or by programs such as Medicare and Medicaid.

Caught in the middle were the working poor and lower middle class who could not afford health insurances premiums. The majority of newly insured patients are in this group. ACA subsidies allowed them to buy health insurance. Politically it is unlikely this support will be withdrawn.

The ACA enabled about 17 million uninsured Americans to receive health insurance.

However, several years after the ACA was implemented, the effort appears stalled. Since 2014, 27 million Americans (11% of the population) remain uninsured. Almost half of the uninsured say the costs of insurance are too high, followed by a third who cite job loss or lack of employer-sponsored insurance. Many of the uninsured are trapped in states that refused federal subsidies for their citizens.

This stalemate is all about the price of insurance. If you have a good income and an employer-based health plan, you are protected by the financial ability to cover most costs. With low to mid-range income, you may not be able to afford any health insurance, especially if you must buy it yourself. The ACA subsidies can help, but only if they are allowed in your state and your income is low enough to qualify. Many Americans are caught in this vulnerable position, especially the self-employed, contract workers, and employees of small companies.

Skinny plans may be useful in providing a stopgap for healthy folks who are between jobs. But there is a potential risk. These plans offer limited coverage, similar to dental insurance. For a taste of that experience, ask anyone who had dental insurance but still paid a tidy sum for a root canal.  A hospital stay is even more expensive and, without adequate insurance coverage, can lead to enormous  debt.

“Make America Great Again” has been the rallying cry for opponents of the ACA and universal health coverage. Yet it’s hard to imagine that in the world’s leading nation, many productive citizens cannot afford health insurance

That’s nothing any American should boast about.

E-Cigarettes — Helpful, Risky, or Both?

By Mark A. Kelley, MD |4/9/18
Founder, HealthWeb Navigator

Walking down the street, sometimes I see people who appear to be strolling in a cloud. These folks are wrapped in vapor they inhale from e-cigarettes — a practice called vaping.

Vaping devices first emerged in the late 1990s. They feature a battery-powered heating element that heats up liquid nicotine to create an aerosol, which is free from the toxic byproducts of cigarette combustion. In theory, this device could make it easier and safer for smokers to kick the habit.

As a pulmonary physician, I wince when I hear about people voluntarily inhaling any foreign substance. We are already exposed to more environmental toxins than we realize, and adding something else seems unwise. However, quitting smoking is extremely difficult. Most remedies have been only slightly effective at best. Could vaping help?

After a decade or more of scientific studies, we know a few facts about e-cigarettes, although many questions still remain. Here are the key points:

1. The e-cigarette market is growing. Several studies have shown that between 2010-2013, the use of these devices had more than tripled to include 7% of the U.S. population. Most users are young and/or former smokers. About one-third have never smoked before. Nicotine is highly addictive which is why smokers have difficulty stopping. Vaping is popular among high school students, and their teachers fear that this will lead to cigarette smoking and other addictive habits.

This effect has been observed in a few studies but the trend is unclear. In 2015, the e-cigarette use rate among high school students declined from 16% to 11%. However, there is some evidence that e-cigarette use in high school students is a risk for taking up cigarette smoking.

2. E-cigarettes are safer than regular cigarettes. Both e-cigarette vapor and cigarette smoke contain nicotine, but only cigarette smoke has the harmful products of tobacco combustion. For that reason, most experts consider the e-cigarette to be safer than a regular tobacco cigarettes. However, in both cases, inhaled nicotine stimulates the cardiovascular system. It is unknown whether this effect has long-term consequences such as heart disease or hypertension.

3. E-cigarettes may help smokers quit — but the effect is small. The vast majority of e-cigarette users are current or former smokers. Based on research surveys, these patients are either trying to quit smoking or at least reduce their cigarette consumption. Many studies have compared e-cigarettes to other methods of smoking cessation such as nicotine patches, counseling etc. These studies have been inconclusive. A panel of experts recently suggested that e-cigarettes may slightly improve smoking cessation but the magnitude of the effect is small.

4. It’s too early to know all the risks of using e-cigarettes. These devices expose the user to liquid nicotine and chemicals that create the vapor. The chemicals involved with vaping — propylene glycol and glycerol — when heated, are known to produce carcinogens and compounds that irritate the airways. The exact risk from this exposure is currently unknown, though it is thought to be much lower than that of a regular cigarette. Therefore, for a smoker, switching to the lower risk e-cigarette is a good trade-off. But for non-smokers, using an e-cigarette introduces potential risk for lung disease and cancer. Outbreaks of asthma have already been reported in association with vaping.

5. E-Cigarettes are regulated differently around the world. The World Health Organization has called for strict regulatory control of e-cigarettes by keeping them away from non-smokers and minors. Some countries have banned the devices altogether.

In the U.S, many initially opposed these devices, presuming that they would lead to an increase in cigarette smoking. Some of this fervor has died down and is now focused on minors. At the moment, most states prohibit the sale of e-cigarettes to minors — the same policy as for cigarettes.

The FDA’s new director, Dr. Scott Gottlieb, has taken a fresh approach this problem. The FDA has established a program to fight nicotine addiction by reducing levels in tobacco and other products. Included in this mandate is continued surveillance of the safety and public health effects of e-cigarettes.

If this program is implemented, the role of e-cigarettes in public health may become clear. Ideally, e-cigarettes will rescue smokers from their habit — without recruiting new ones.

Of course the e-cigarette industry has other plans. Although some vaping devices carry a hefty price tag, overall vaping is relatively cheap and safer than cigarettes to boot. The industry is using those facts to leverage the market. Analysts predict that the vaping industry will see annual growth of 20% over the next decade with worldwide revenues of $50 billion by the next decade.  Most of those dollars will come from the industry’s best customers — Americans and Europeans.

If vaping becomes widely used, we may learn that it is safe. But we can’t rule out the opposite outcome either. Widespread vaping across large populations may introduce us to new diseases that could have been prevented.

There is a high cost for ignoring such potential risks. Just ask any patient who has suffered from the toxic effects of asbestos, second-hand smoke, or radon exposure.

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