Las Vegas Sun

October 23, 2019

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Lower premiums, medical costs can’t get here fast enough for Nevadans

health care reform

Steve Marcus

Yvette Williams, chairwoman of the Clark County Democratic Black Caucus, hopes the reform law will lower her family’s health care costs, which have risen to about $1,000 a month. Health insurance premiums for working Nevada families rose 55 percent from 2000 to 2007, while incomes rose 21 percent.

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Like many other Las Vegas Valley residents, Yvette Williams is hoping the new national health insurance law will choke down the siphoning of money from her family’s budget.

Her husband, a mechanical engineer for a defense contractor, sees slightly more than $500 a month taken out of his checks for health insurance for the couple and their two teenage daughters. It translates to more than $6,000 a year. The co-pay for the family is $25 per doctor visit. The family also has monthly prescription drug costs of nearly $300 a month, or $3,600 a year. And that’s even though Williams is only taking her asthma medication seasonally instead of year-round as recommended by her doctor.

“We’re spending about $1,000 a month on health care,” Williams says.

It has forced the family to forego vacations.

Under the new law, she’s hoping their drug costs will be reduced and “we’d like to see our monthly premiums go down,” Williams says. “We’re hoping his company will find some other insurance that is more competitive in terms of price and that those cost savings would be passed on to us.”

Reform advocates point to a study by Health Care For America Now!, a pro-reform group backed by organized labor groups such as the Culinary Union, minority and women’s groups and coalitions such as the Progressive Leadership Alliance of Nevada.

The study calculated that health insurance premiums for working Nevada families rose 55 percent from 2000 to 2007 while incomes rose only 21 percent. It also found that average annual premiums for Nevadans rose from $6,688 in 2000 to $10,341 in 2007.

Because the new national health insurance law is supposed to give consumers more ways to get insurance, it’s expected to force industry giants to offer more comprehensive plans at lower prices.

Reform advocates have argued that the potential savings for consumers could be particularly significant in Nevada, because two companies, UnitedHealthcare of Nevada and Anthem Blue Cross and Blue Shield, control a combined 75 percent of the state’s health insurance market.

But others counter that gaining more ways to buy insurance doesn’t necessarily mean Nevadans will suddenly have more companies to choose from. The insurance industry has consolidated in recent years, so fewer insurers exist throughout the nation.

“The concern about the consolidation of the health insurance industry is that they have an unfair advantage over the patients,” Larry Matheis, executive director of the Nevada State Medical Association, says. “The insurance companies have been able to decide what they will and won’t pay for and they make doctors jump through hoops.”

In part to address the consolidation of the industry, the new law allows the option of multistate plans that would allow an insurer to offer the same insurance package to consumers in numerous states, rather than force the customer to buy potentially higher-cost plans that are approved only in their own state.

The multistate plans are intended to give participating insurers an opportunity to offer premiums at a lower cost over a broader customer base.

A multistate plan could give Nevadans access to prestigious out-of-state companies such as nonprofit Kaiser Permanente in California, says Michael Ginsburg, a health care community organizer for the Progressive Leadership Alliance of Nevada.

“If United and Anthem had to compete with Kaiser, they would have no choice but to offer a better product at a lower cost,” Ginsburg says. “I don’t see any way they will be able to hang on to their 75 percent market share.”

Kaiser might not be the best example of potential new competition, though, because it’s not simply an insurance company. Instead, it controls its own system of physicians and medical facilities. To do what it’s famous for in California, Kaiser would have to set up a similar system in Nevada.

But no matter the company, Nevada Insurance Commissioner Scott Kipper says he doesn’t “believe there are going to be many new health carriers coming into the marketplace anytime soon.”

Kipper oversees Nevada’s insurance regulations, which differ from those of other states. An example is that beginning next year, all insurers in Nevada are required to provide optional coverage for treatment of autism.

Will Nevada have to get rid of that provision, or others, to participate in multistate plans? If so, the Legislature would have to make that decision. And how will the various differences between states be worked out — and how long might that take?

The time and effort will be worth it, reform advocates argue, because the savings for consumers could be significant.

The legislation passed by the Democratic-controlled Congress and signed into law by President Barack Obama last month will allow Nevada to create exchanges that, at least initially, will allow individual consumers and small businesses with up to 100 employees to shop online for the best insurance deals. Tax credits are also being made available to help make insurance affordable for eligible consumers and small businesses.

Another option it offers is member-run, nonprofit health insurance cooperatives that can be formed by any group of individuals or employers as long as they apply for and get approval from Health and Human Services. The legislation provides $6 billion in federal loans for which co-ops can apply to help with their starting costs, with the money to be repaid over 10 years.

“I would bet that a lot of Nevadans would go into a co-op,” Ginsburg, a health care community organizer for the Progressive Leadership Alliance of Nevada, says. “They would include small businesses, independent contractors, people in the service industry and people who have catastrophic plans that cover only medical emergencies.”

Forming a successful co-op won’t be easy, though. The 63-year-old Group Health Cooperative in Seattle, widely considered to be the nation’s most successful health co-op, is more than simply a nonprofit insurer. It has 900 salaried physicians working in 26 medical centers.

“To be fair, it’s not clear what impact a co-op would have on premiums,” Group Health spokesman Mike Foley says. “A lot of what a co-op is about has to do more with patient focus and care.”

The law mandates that all Americans have insurance — a provision Gov. Jim Gibbons says is unconstitutional. When Democratic Attorney General Catherine Cortez Masto refused to join a lawsuit backed by fellow Republican governors challenging the legality of the insurance law, Gibbons appointed Las Vegas attorney Mark Hutchison to represent Nevada. Hutchison took the case free of charge.

Kipper’s pessimism about potential benefits of the law might be influenced by politics as well, considering that longtime Gibbons aide and current Nevada Department of Business & Industry Director Dianne Cornwall appointed Kipper state insurance commissioner.

Not surprisingly, the leaders of Nevada’s dominant duo are less than enthusiastic about the reform.

Stephen Hemsley, president and CEO of United’s parent company, UnitedHealth Group, says: “We remain concerned that any advances under the new law will be eroded by the unchecked rise of health care costs that were not adequately addressed in the legislation.”

Anthem President Mike Murphy has similar concerns.

“We are disappointed that the legislation does not do enough to reduce cost in the system or improve quality — two important keys to building a system that will help get our country on a sustainable path to providing affordable coverage for all Americans,” Murphy says.

Both companies declined to comment on how the new law will affect them in Nevada because they say they don’t yet know how it will be implemented.

That task is in the hands of the U.S. Department of Health and Human Services, which has only just begun writing regulations to implement the law. An aide to Senate Majority Leader Harry Reid, D-Nev., who is familiar with the reform’s details, predicts it will be 2012, at the earliest, before the regulations are finalized.

Cara Roberts, spokeswoman for the 6,000-member Las Vegas Chamber of Commerce, says she expects businesses to take whatever advantage they can of the law once its details become more clear. One provision of the law that has been highlighted by supporters are tax credits that will help small businesses buy insurance for their employees, though she said those companies are most likely to choose insurers that already do business in Nevada.

“Many businesses are still trying to figure out how the law will apply to them,” she says. “A lot of companies are confused by the legislation.”

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