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To evaluate the effects of preferred pharmacy networks-a tool that Medicare Part D plans have recently adopted to steer patients to lower cost pharmacies-on the use of preferred pharmacies and factors underlying beneficiaries' decisions on whether to switch to preferred pharmacies.Medicare claims data were collected for a nationally representative 20% sample of beneficiaries during 2010-2016 and merged with annual Part D pharmacy network files.We examined preferred networks' impact on pharmacy choice by estimating a difference-in-differences model comparing preferred pharmacies' claim share before and after implementation among unsubsidized and subsidized beneficiaries. Additionally, we evaluated the factors affecting whether a beneficiary switched from mainly using nonpreferred to preferred pharmacies.We examined stand-alone drug plans that adopted a preferred network during 2011-2016. Our main sample included beneficiaries 65 years and older who stayed in their plan in both the first year of implementation and the year before and whose cost-sharing subsidy status and ZIP code remained unchanged during the 2-year period.Unsubsidized Part D beneficiaries faced an average difference of $129 per year in out-of-pocket spending between using nonpreferred and preferred pharmacies, while subsidized beneficiaries were insulated from these cost differences. The implementation of preferred networks resulted in a 3.7-percentage point (95% CI: 3.3, 4.2) increase in preferred pharmacies' claim share in the first year among the unsubsidized. Existing relationships with preferred pharmacies, the size of financial incentives, proximity to preferred pharmacies, and urban residence were positively associated with beneficiaries' decisions to switch to these pharmacies.Preferred pharmacy networks caused a moderate shift on average towards preferred pharmacies among unsubsidized beneficiaries, although stronger financial incentives correlated with more switching. Researchers and policymakers should better understand plans' cost-sharing strategies and assess whether communities have equitable access to preferred pharmacies.

This study investigates a sample of the pricing data released by hospitals under the price transparency law effective January 2021 to better understand the prices paid by health insurance exchange (HIX) plans relative to commercial group and Medicare Advantage plans.Cross-sectional analysis of hospital pricing data.We compared allowed amounts for 25 common inpatient services and 56 common outpatient services across 22 hospital-insurer dyads, selected by the availability of plan-specific pricing data from the top 100 hospitals by bed counts and the top 100 hospitals by gross revenue based on 2017 CMS data.Insurers in our sample generally negotiated allowed amounts for their HIX plans that were lower than their commercial group rates and well above their Medicare Advantage contracts within the same hospital.Allowed amounts for HIX plans were generally lower than commercial group rates and higher than Medicare Advantage rates. Better information on HIX pricing is needed as the federal government and states consider additional ways to expand health care coverage, such as public options or expanded Medicaid or Medicare eligibility.

Objectives Anesthesiology services are a focal point of policy making to address surprise medical billing. However, allowed amounts and charges for anesthesiology services have been understudied due to the specialty's unique conversion factor (CF) unit of payment and complex provider structures involving anesthesiologists and certified registered nurse anesthetists (CRNAs). This study compares payments for common outpatient anesthesiology services by commercial health plans, Medicare Advantage (MA), and traditional Medicare. Study design Analysis of 2016-2017 claims from Health Care Cost Institute. Methods We derived allowed amount and charge CFs for commercial and MA claims using the base units assigned to each procedure code, time units, and modifiers. We computed the ratio of the allowed amount and charge CFs relative to the traditional Medicare CF. We described these payment measures by provider structure and network status. Results Mean in-network commercial allowed amount CFs for anesthesiology services ($70) are 314% of the traditional Medicare rate ($22), whereas mean commercial charge CFs ($148) are 659% of the Medicare rate. Commercial payments vary widely and are higher to anesthesiologists than to CRNAs and higher out of network than in network. MA plan payments align with traditional Medicare with payment parity between anesthesiologists and CRNAs, both in network and out of network. Conclusions Common payment measures for anesthesia services-commercial allowed amounts, charges, or traditional Medicare-are highly divergent. MA plans' relatively low payments likely reflect the cost-containing influence of competition with traditional Medicare and MA's prohibition on balance billing. Out-of-network benchmarks for anesthesia services, such as the "qualifying payment amount" used in the No Surprises Act as a guidepost for arbitrators, may benefit from considering commercial payment differences across independent anesthesiologist, independent CRNA, or anesthesiologist-CRNA dyad provider structures.

Context: Reforming the Medicare Part D program—which provides prescription drug coverage to 49 million beneficiaries—has emerged as a key policy priority. Methods: The authors evaluate prescription drug claims from a 100% sample of Medicare Part D beneficiaries to evaluate the current spending distribution across different payers for different types of beneficiaries across different benefit phases. They then model how these estimates would change under a proposal to redesign the Medicare Part D standard benefit. Findings: Spending patterns differ for beneficiaries who do and do not qualify for low-income subsidies. Part D plans face limited liability for total spending under the current standard benefit design, amounting to 36% of total spending for beneficiaries who do not receive low-income subsidies and 28% of total spending for those who do. Proposed reforms would increase plan liability and significantly change the distribution of liability across plans, drug manufacturers, and the federal government. Conclusions: Though the original goal of the Part D program was to create a market of competing private plans that provide prescription drug coverage to Medicare beneficiaries, the standard benefit design that was included in the original legislation reflected significant political compromises. Reforming the standard benefit design to give plans more skin in the game could significantly affect competition in the market, with differential impact across drug classes and types of beneficiaries.

Surprise medical bills occur when a patient unexpectedly or involuntarily receives care from an out-of-network provider and is billed for the amount not covered by insurance. Past studies were unab...

In 2018 New Jersey implemented a final-offer arbitration system to resolve payment disputes between insurers and out-of-network providers over surprise medical bills. Similar proposals are being considered by Congress and other states. In this article we examine how arbitration decisions compare with other relevant provider payment amounts by linking administrative data from New Jersey arbitration cases to Medicare and commercial insurance claims data. We find that decisions track closely with one of the metrics that arbitrators are shown-the eightieth percentile of provider charges-with the median decision being 5.7 times prevailing in-network rates for the same services. It is not a foregone conclusion that arbitrators will select winning offers based on proximity to this target, although our findings suggest that it is a strong anchor. The amount that providers can expect to receive through the arbitration process also affects their bargaining leverage with insurers, which could affect in-network negotiated rates more broadly. Therefore, basing arbitration decisions or a payment standard on unilaterally set provider-billed charges appears likely to increase health care costs relative to other surprise billing solutions and perversely incentivizes providers to inflate their charges over time.

Objectives To quantify the proportion of health plan spending on services for which surprise billing is common-provided by radiologists, anesthesiologists, pathologists, emergency physicians, emergency ground ambulances, and emergency outpatient facilities-and estimate the potential impact of proposed policies to address surprise billing on health insurance premiums. Study design Analysis of 2017 commercial claims data from the Health Care Cost Institute, comprising 568.5 million claims from 44.8 million covered lives in 3 large US insurers: UnitedHealthcare, Aetna, and Humana. Methods We calculate the share of total health plan claims spending attributable to ancillary and emergency services. Next, we estimate the premium impact of proposed federal policies to address surprise billing, which, by removing provider leverage stemming from the ability to surprise-bill, could reduce in- and out-of-network payments for these services, in turn affecting premiums. Specifically, we model the premium impact of reducing payment for these services (1) by 15% and (2) to 150% of traditional Medicare payment rates. Results More than 10% of health plan spending is attributable to ancillary and emergency services that commonly surprise-bill. Reducing payment for these services by 15% would reduce premiums by 1.6% ($67 per member per year), and reducing average payment to 150% of traditional Medicare rates-the high end of payments to other specialists-would reduce premiums by 5.1% ($212 per member per year). These savings would reduce aggregate premiums for the nation's commercially insured population by approximately $12 billion and $38 billion, respectively. Conclusions Addressing surprise billing could substantially affect commercial insurance premiums.

Patients treated at in-network facilities can involuntarily receive services from out-of-network providers, which may result in “surprise bills.” While several studies report the surprise billing p...

Who Pays in Medicare Part D? As U.S. policymakers debate proposals for reforming the prescription-drug marketplace, they should recognize the need to update the Medicare Part D benefit design to gi...

This cross-sectional study uses 2017 and 2018 Medicare Part D clams to compare the amount Medicare pays for common generic prescriptions in Part D with prices available to patients without insurance at Costco.

Objective To understand the mechanisms that have held Part D beneficiary premiums stable despite increasing reinsurance subsidies. Data sources Secondary data on Part D plan bids, federal subsidies, and claims from 2007 through 2015. Study design Comparisons of standardized, enrollment-weighted average Part D plan bids and reinsurance bids with plan and reinsurance liability calculated from Part D claims data. Data collection/extraction methods Part D plan payment data were merged with premium data to derive plan bids, which were merged with claims-based spending measures. Principal findings Plan bids and reinsurance bids increasingly diverged from the spending observed in the claims data over the study period. This divergence was attributable to the growth in rebates and systematic under-bidding of expected reinsurance payments, enabling plans to hold premiums low and collect excess federal subsidies of approximately 3 percent of total Part D spending in 2015. Conclusions Revenue from rebates and excess federal subsidies via reinsurance reconciliation has played an important role in holding Part D premiums low, despite increasing federal reinsurance subsidies. While policy makers should consider implementing reforms to address these misincentives in the program, doing so is likely to result in unavoidable premium increases to levels more reflective of actual net spending.

Beginning with the 2018 benefit year, the Centers for Medicare and Medicaid Services started incorporating select prescription drug utilization information into the Marketplace risk adjustment model. There has been little evidence about the impact of this change on payment accuracy and the mechanisms through which it may occur. Using commercial claims in 2017 from a large national health insurer, we find that the policy change improves payment accuracy in our sample and would help mitigate insurers’ selection incentives for some enrollees through two channels: imputing missing diagnoses and varying risk scores to better capture the heterogeneity in expenditures among patients with certain health conditions. However, while improving payment accuracy overall, there are potential perverse incentives that could distort treatment choice for marginal patients. Additionally, overcompensation and undercompensation persists for certain patient subgroups, suggesting an opportunity to further refine and improve the model.

This cross-sectional study examines the prevalence and spending of patients with end-stage kidney disease in the individual market.

Policy Points Out-of-network air ambulance bills are a type of surprise medical bill and are driven by many of the same market failures behind other surprise medical bills, including patients' inability to choose in-network providers in an emergency or to avoid potential balance billing by out-of-network providers. The financial risk to consumers is high because more than three-quarters of air ambulances are out-of-network and their prices are high and rising. Consumers facing out-of-network air ambulance bills have few legal protections owing to the Airline Deregulation Act's federal preemption of state laws. Any federal policies for surprise medical bills should also address surprise air ambulance bills and should incorporate substantive consumer protections-not just billing transparency-and correct the market distortions for air ambulances. Context Out-of-network air ambulance bills are a growing problem for consumers. Because most air ambulance transports are out-of-network and prices are rising, patients are at risk of receiving large unexpected bills. This article estimates the prevalence and magnitude of privately insured persons' out-of-network air ambulance bills, describes the legal barriers to curtailing surprise air ambulance bills, and proposes policies to protect consumers from out-of-network air ambulance bills. Methods We used the Health Care Cost Institute's 2014-2017 data from three large national insurers to evaluate the share of air ambulance claims that are out-of-network and the prevalence and magnitude of potential surprise balance bills, focusing on rotary-wing transports. We estimated the magnitude of potential balance bills for out-of-network air ambulance services by calculating the difference between the provider's billed charges and the insurer's out-of-network allowed amount, including the patient's cost-sharing. For in-network air ambulance transports, we calculated the average charges and allowed amounts, both in absolute magnitude and as a multiple of the rate that Medicare pays for the same service. Findings We found that less than one-quarter of air ambulance transports of commercially insured patients were in-network. Two-in-five transports resulted in a potential balance bill, averaging $19,851. In the latter years of our data, in-network rates for transports by independent (non-hospital-based) carriers averaged $20,822, or 369% of the Medicare rate for the same service. Conclusions Because the states' efforts to curtail air ambulance balance billing have been preempted by the Airline Deregulation Act, a federal solution is needed. Owing to the failure of market forces to discipline either prices or supply, out-of-network air ambulance rates should be benchmarked to a multiple of Medicare rates or, alternatively, air ambulance services could be delivered and financed through an approach that combines competitive bidding and public utility regulation.

Patients treated at in-network facilities can involuntarily receive services from out-of-network providers, which may result in "surprise bills." While several studies report the surprise billing prevalence in emergency department and inpatient settings, none document the prevalence in ambulatory surgery centers (ASCs). The extent to which health plans pay a portion or all of out-of-network providers' bills in these situations is also unexplored. We analyzed 4.2 million ASC-based episodes of care in 2014-17, involving 3.3 million patients enrolled in UnitedHealth Group, Humana, and Aetna commercial plans. One in ten ASC episodes involved out-of-network ancillary providers at in-network ASC facilities. Insurers paid providers' full billed charges in 24 percent of the cases, leaving no balance to bill patients. After we accounted for insurer payment, we found that there were potential surprise bills in 8 percent of the episodes at in-network ASCs. The average balance per episode increased by 81 percent, from $819 in 2014 to $1,483 in 2017. Anesthesiologists (44 percent), certified registered nurse anesthetists (25 percent), and independent laboratories (10 percent) generated most potential surprise bills. There is a need for federal policy to expand protection from surprise bills to patients enrolled in all commercial insurance plans.

The exclusion of employment-based health insurance from income and payroll taxes is thought to increase the generosity of insurance coverage and, in turn, increase the overutilization of low-value health care services. We examine this inefficiency of overinsurance by quantifying the change in expected utility across 4 benchmark plans varying in actuarial value (AV) and focus on the distribution of each of these estimates across different groups of people varying in health status. Specifically, we quantify the changes in health care spending due to moral hazard and the changes in uncertainty tied to risk aversion using data from the nationally representative sample of adults with employment-based coverage from the 2007-2016 Medical Expenditure Panel Survey, and produce estimates of expected utility for 24 groups of people based on their age, gender, and preexisting conditions. Our model suggests an average preferred AV of 78% without the tax exclusion, with 29.0% of the population preferring a 60% AV, 6.5% preferring a 70% AV, 18.1% preferring an 80% AV, and 46.4% preferring a 90% AV. When incorporating the distortionary effect of the employment-based tax exclusion, the preferred plan increases to an 83% AV for low-income people (with 71.0% of the population preferring a 90% AV) and an 84% AV for high-income people (with 76.0% of the population preferring a 90% AV). We estimate that policy changes to make subsidies independent of a plan’s AV could result in increases in utility equal to about 2.7% of total health care spending, but with those net gains concentrated among the healthy.

Medicare Part D has no cap on beneficiaries’ out-of-pocket spending on outpatient prescription drugs, and, unlike Medicare Parts A and B, beneficiaries are prohibited from purchasing supplemental insurance that could provide such a cap. Historically, most beneficiaries whose annual Part D spending reached the catastrophic level were protected from unlimited personal liability by the Low-Income Subsidy (LIS). However, we found that the proportion of beneficiaries whose spending reached that level but did not qualify for the subsidy—and therefore remained liable for coinsurance—increased rapidly, from 18 percent in 2007 to 28 percent in 2015. Moreover, average total per person per year spending grew much more rapidly for those who did not qualify for the LIS than for those who did, primarily because of differences in price and utilization trends for the drugs that represented disproportionately large shares of their spending. We estimated that a cap for all Part D enrollees in 2015 would have raised monthly premiums by only $0.40–$1.31 per member. Policy makers could provide true insurance protection under Part D by implementing this approach.

Objective To examine the effects of insurance and hospital market concentration on hospital patients' experience of care, as hospitals may compete on quality for favorable insurance contracts. Data sources/study setting Secondary data for 2008-2015 on patient experience from Hospital Compare's patient survey data, hospital characteristics from the American Hospital Association (AHA) Annual Survey, and insurance market characteristics from HealthLeaders-InterStudy. Study design Hospital/year-level regressions predict each hospital's patient experience measure as a function of insurance and hospital market concentration and hospital fixed effects. The model is identified by longitudinal variation in insurance and hospital concentration. Data collection/extraction methods Hospital/year-level data from Hospital Compare and the AHA merged by market/year to insurance and hospital concentration measures. Principal findings Changes in patient satisfaction are positively associated with increases in insurance concentration and negatively associated with increases in hospital concentration. Moving from a market with 20th percentile insurance concentration and 80th percentile hospital concentration to a market with 80th percentile insurance concentration and 20th percentile hospital concentration increases the share of patients that rated the hospital highly from 66.9 percent (95% CI: 66.5-67.2 percent) to 67.9 percent (95% CI: 67.5-68.3 percent) and the share of patients that definitely recommend the hospital from 69.7 percent (95% CI: 69.4-70.0 percent) to 70.8 percent (95% CI: 70.5-71.2 percent). The relationship for insurance concentration is stronger in more concentrated hospital markets, while the relationship for hospital concentration is stronger in less concentrated hospital markets. Conclusions These findings add to the evidence on the harms of hospital consolidation but suggest that insurer consolidation may improve patient experience.

Reducing Unfair Out-of-Network Billing High charges for out-of-network care are demonstrably unfair when health plans have inadequate networks and when patients are treated by providers they don’t ...

To describe the number and availability of individual market plans sold by provider-owned insurers and compare differences in premiums between traditional and provider-owned insurers.Cross-sectional analysis.Using the Robert Wood Johnson Foundation's HIX Compare data, we identified insurers selling Affordable Care Act (ACA)-compliant policies in the individual market and identified those insurers owned by health systems by using information on their websites. We determined the number of insurers selling policies in each market and the size of the population living in areas where provider-owned insurers sold plans in 2016 and 2017. We used least squares regression to compare premiums between traditional and provider-owned insurers within markets, and we adjusted standard errors for clustering at the market and insurer level.There were 149 insurers that sold ACA-compliant plans in 2017, of which 51 were provider owned. Provider-owned insurers operated in 208 of the 503 exchange markets. We estimate that about 62% of US residents (more than 170 million people) live in a market in which a provider-owned insurer sells plans. Premiums did not differ significantly between traditional and provider-owned plans in 2017.Provider-owned insurers play a prominent role in the individual insurance market. Although health systems that sell insurance have incentives to reduce costs, provider-owned insurers and traditional insurers have similar premiums.

About one-third of Medicare beneficiaries had diabetes in 2016, up from 18% in 2000.1 More than 3 million were taking insulin at a cost of $13.3 billion to Medicare and beneficiaries. Beneficiaries’ mean out-of-pocket spending on insulin has nearly doubled over the last decade, raising concerns about access to an essential medication.1 Reported cost-related underuse of insulin is high,2 leading experts to recommend policy changes to reduce out-of-pocket costs to limit negative health consequences and financial burden.3,4 In an effort to address these concerns, the Centers for Medicare & Medicaid Services (CMS) recently announced a voluntary program—the Senior Savings Model—to test the effect of limiting Part D beneficiaries’ out-of-pocket spending on insulin to no more than $35 per month starting in 2021.5,6 To assess the potential outcomes associated with this policy, we compared changes in basal insulin use before and after reaching the coverage gap, in which beneficiaries face increased cost-sharing, for 2 distinct groups of nonsubsidized Part D enrollees: (1) beneficiaries in individual plans whose cost sharing can vary dramatically across coverage phases; and (2) those enrolled through an employer group–waiver plan (EGWP) where cost sharing is low and fairly constant across coverage phases.

The Affordable Care Act (ACA) imposes adjusted community rating in the small group market, which employers can avoid by self-insuring, raising concerns about adverse selection. We evaluate the impact of limiting allowable rating variation on employer self-insurance across industries with varied health risk, using cross-state variation in pre-ACA rating regulations, the nationally-representative 2008-2013 KFF/HRET Employer Health Benefits survey, and a triple-difference regression approach. We find that lower-risk employers subject to laws limiting allowable premium rating variation have a predicted probability of self-insurance that is about 18 percentage points higher than otherwise-similar higher-risk employers, suggesting that these selection concerns are warranted.

The Affordable Care Act (ACA) imposes adjusted community rating in the small group market, which employers can avoid by self-insuring, raising concerns about adverse selection. We evaluate the impact of limiting allowable rating variation on employer self-insurance across industries with varied health risk, using cross-state variation in pre-ACA rating regulations, the nationally-representative 2008–2013 KFF/HRET Employer Health Benefits survey, and a triple-difference regression approach. We find that lower-risk employers subject to laws limiting allowable premium rating variation have a predicted probability of self-insurance that is about 18 percentage points higher than otherwise-similar higher-risk employers, suggesting that these selection concerns are warranted.

To evaluate the impact of enrollment in a consumer-directed health plan (CDHP) on out-of-pocket (OOP) spending and on the financial burden associated with healthcare utilization.Using commercial claims data from 2011 through 2013, we estimated difference-in-differences models that compared changes in outcomes for individuals who switched to CDHPs (CDHP group) with outcome changes for individuals who remained in traditional plans (traditional plan group).We estimated the impact of CDHP enrollment on OOP spending at the point of care and on having high financial burden, defined as whether an enrollee spent 3% or more of household income on OOP spending. Additionally, we assessed these outcomes for 2 subgroups: those with lower household income and those with chronic conditions.Within the first year of CDHP enrollment, CDHP enrollees experienced a mean marginal increase in OOP spending of $285 (41% increase; 95% CI, $271-$299; P.001) relative to traditional plan enrollees. The lower-income and chronic conditions subgroups experienced mean marginal increases in OOP costs of $306 (44% increase; 95% CI, $257-$353; P.001) and $387 (56% increase; 95% CI, $339-$435; P.001), respectively. The probability of an enrollee having excessive financial burden increased by 4.3 percentage points (95% CI, 4.0-4.6; P.001) for the full CDHP sample. These effects were about 3 times larger for the lower-income subgroup (12.3 percentage points; 95% CI, 10.7-13.8; P.001) and 2 times larger for the chronic conditions subgroup (8.0 percentage points; 95% CI, 6.9-9.1; P.001).CDHP enrollment led to a significant increase in financial burden associated with healthcare utilization, especially for those with lower incomes and those with chronic conditions.

Specialty pharmaceuticals include most injectable and biologic agents used to treat complex conditions such as rheumatoid arthritis, multiple sclerosis, and cancer. We analyzed trends in specialty drug spending among Medicare beneficiaries ages sixty-five and older using 2007–11 pharmacy claims data from a 20 percent sample of Medicare beneficiaries. Annual specialty drug spending per beneficiary who used specialty drugs increased considerably during the study period, from $2,641 to $8,976. However, specialty drugs accounted for only 6.7 percent of total drug spending per beneficiary in 2007 and 9.1 percent in 2011. Moreover, in 2011 cost-sharing reductions under the Affordable Care Act significantly reduced specialty drug users’ out-of-pocket burden, which decreased 26 percent from 2010. Oral cancer agents accounted for a significant proportion of the increase in specialty drug spending among the study population. This suggests that the migration of specialty drug coverage from Medicare’s Part B medical benefit to the Part D pharmacy benefit because of new treatment options may play an important role in specialty pharmacy trends. This shift is likely to continue as pharmaceutical innovations enable more specialty therapeutics to be self-administered and to be covered under the pharmacy instead of the medical benefit.

Objectives To measure value in the delivery of inpatient care and to quantify its variation across U.S. regions. Data sources / Study setting A random (20%) sample of 33,713 elderly fee-for-service Medicare beneficiaries treated in 2,232 hospitals for a heart attack in 2013. Study design We estimate a production function for inpatient care, defining output as stays with favorable patient outcomes in terms of survival and readmission. The regression model includes hospital inputs measured by treatment costs, as well as patient characteristics. Region-level effects in the production function are used to estimate the productivity and value of the care delivered by hospitals within regions. Data collection / Extraction methods Medicare claims and enrollment files, linked to the Dartmouth Atlas of Health Care and Inpatient Prospective Payment System Impact Files. Principal findings Hospitals in the hospital referral region at the 90th percentile of the value distribution delivered 54% more high-quality stays than hospitals at the 10th percentile could have delivered, after adjusting for treatment costs and patient severity. Conclusions Variation in the delivery of high-value inpatient care points to opportunities for better quality and lower costs.

The Affordable Care Act (ACA) includes provisions to reduce Medicare beneficiaries’ out-of-pocket spending for prescription drugs by gradually closing the coverage gap between the initial coverage limit and the catastrophic coverage threshold (known as the “doughnut hole”) beginning in 2011. However, Medicare beneficiaries who take specialty pharmaceuticals might still face a large out-of-pocket burden because of uncapped cost sharing in the catastrophic coverage phase. Using 2008–12 pharmacy claims data from a 20 percent sample of Medicare beneficiaries, we analyzed trends in total spending and out-of-pocket spending among Medicare beneficiaries who take at least one high-cost specialty drug from the top eight specialty drug classes in terms of spending. Annual total drug spending per specialty drug user studied increased considerably during the study period, from $18,335 to $33,301, and the proportion of expenditures incurred while in the catastrophic coverage phase increased from 70 percent to 80 percent. We observed a 26 percent decrease in mean annual out-of-pocket expenditures incurred below the catastrophic coverage threshold, likely attributable to the ACA’s doughnut-hole cost-sharing reductions, but increases in mean annual out-of-pocket expenditures incurred while in the catastrophic coverage phase almost entirely offset these reductions. Policy makers should consider implementing limits on patients’ out-of-pocket burden.

The “Cadillac tax” on high-cost employer-sponsored health coverage exacerbates inequities by differentially affecting the costs and subsidization of coverage for lower- and higher-income workers.

Importance Nearly one-third of Medicare beneficiaries are enrolled in a Medicare Advantage (MA) plan, yet little is known about the prices that MA plans pay for physician services. Medicare Advantage insurers typically also sell commercial plans, and the extent to which MA physician reimbursement reflects traditional Medicare (TM) rates vs negotiated commercial prices is unclear. Objective To compare prices paid for physician and other health care services in MA, traditional Medicare, and commercial plans. Design, Setting, and Participants Retrospective analysis of claims data evaluating MA prices paid to physicians and for laboratory services and durable medical equipment between 2007 and 2012 in 348 US core-based statistical areas. The study population included all MA and commercial enrollees with a large national health insurer operating in both markets, as well as a 20% sample of TM beneficiaries. Exposures Enrollment in an MA plan. Main Outcomes and Measures Mean reimbursement paid to physicians, laboratories, and durable medical equipment suppliers for MA and commercial enrollees relative to TM rates for 11 Healthcare Common Procedure Coding Systems (HCPCS) codes spanning 7 sites of care. Results The sample consisted of 144 million claims. Physician reimbursement in MA was more strongly tied to TM rates than commercial prices, although MA plans tended to pay physicians less than TM. For a mid-level office visit with an established patient ( Current Procedural Terminology [ CPT ] code 99213), the mean MA price was 96.9% (95% CI, 96.7%-97.2%) of TM. Across the common physician services we evaluated, mean MA reimbursement ranged from 91.3% of TM for cataract removal in an ambulatory surgery center ( CPT 66984; 95% CI, 90.7%-91.9%) to 102.3% of TM for complex evaluation and management of a patient in the emergency department ( CPT 99285; 95% CI, 102.1%-102.6%). However, for laboratory services and durable medical equipment, where commercial prices are lower than TM rates, MA plans take advantage of these lower commercial prices, ranging from 67.4% for a walker (HCPCS code E0143; 95% CI, 66.3%-68.5%) to 75.8% for a complete blood cell count ( CPT 85025; 95% CI, 75.0%-76.6%). Conclusions and Relevance Traditional Medicare’s administratively set rates act as a strong anchor for physician reimbursement in the MA market, although MA plans succeed in negotiating lower prices for other health care services for which TM overpays. Reforms that transition the Medicare program toward some premium support models could substantially affect how physicians and other clinicians are paid.

The US health insurance industry is highly concentrated, and health insurance premiums are high and rising rapidly. Policymakers have focused on the possible link between the two, leading to ACA provisions to increase insurer competition. However, while market power may enable insurers to include higher profit margins in their premiums, it may also result in stronger bargaining leverage with hospitals to negotiate lower payment rates to partially offset these higher premiums. We empirically examine the relationship between employer-sponsored fully-insured health insurance premiums and the level of concentration in local insurer and hospital markets using the nationally-representative 2006-2011 KFF/HRET Employer Health Benefits Survey. We exploit a unique feature of employer-sponsored insurance, in which self-insured employers purchase only administrative services from managed care organizations, to disentangle these different effects on insurer concentration by constructing one concentration measure representing fully-insured plans' transactions with employers and the other concentration measure representing insurers' bargaining with hospitals. As expected, we find that premiums are indeed higher for plans sold in markets with higher levels of concentration relevant to insurer transactions with employers, lower for plans in markets with higher levels of insurer concentration relevant to insurer bargaining with hospitals, and higher for plans in markets with higher levels of hospital market concentration.

The Affordable Care Act calls for the establishment of state-level health insurance exchanges. The viability and success of these exchanges will require effective risk-adjustment strategies to compensate for differences in enrollees' health status across health plans. This article describes why the Affordable Care Act could lead to favorable or adverse risk selection across plans. It reviews provisions in the act and recent proposed regulations intended to mitigate the problem of risk selection. We performed a simulation that showed that under the premium rating restrictions in the law, large incentives for insurers to attract healthier enrollees will be likely to persist-resulting in substantial overpayment to plans with very healthy enrollees and underpayment to plans with very sick members. We conclude that risk adjustment based on patients' diagnoses, such as will be in place from 2014 on, will yield payments to insurers that will be more accurate than what will come solely from the age-adjusted and other rating allowed by the act. We also describe additional challenges of implementing risk adjustment.

In this video we demonstrate how our lab routinely passages HuES human embryonic stem cell lines with trypsin. Human embryonic stem cells are artifacts of cell culture, and tend to acquire karyotypic abnormalities with high population doublings. Proper passaging is essential for maintaining a healthy, undifferentiated, karyotypically normal HuES human embryonic stem cell culture. First, an expanding culture is washed in PBS to remove residual media and cell debris, then cells are overlaid with a minimal volume of warm 0.05% Trypsin-EDTA. Trypsin is left on the cells for up to five minutes, then cells are gently dislodged with a 2mL serological pipette. The cell suspension is collected and mixed with a large volume of HuES media, then cells are collected by gentle centrifugation. The inactivated trypsin media mixture is removed, and cells resuspended in pre-warmed HuES media. An appropriate split ratio is calculated (generally 1:10 to 1:20), and cells re-plated onto a 1-2 day old plate containing a monolayer of irradiated mouse embryonic fibroblast feeder cells. The newly seeded HuES culture plate is left undisturbed for 48 hrs, then media is changed every day thereafter. It is important not to trpsinize down to a single cell suspension, as this increases the risk of introducing karyotypic abnormalities.

Here we demonstrate how our lab freezes HuES human embryonic stem cell lines. A healthy, exponentially expanding culture is washed with PBS to remove residual media that could otherwise quench the Trypsin reaction. Warmed 0.05% Trypsin-EDTA is then added to cover the cells, and the plate allowed to incubate for up to 5 mins at room temperature. During this time cells can be observed rounding, and colonies lifting off the plate surface. Gentle repeated pipetting will remove cells and colonies from the plate surface. Trypsinized cells are placed in a standard conical tube containing pre-warmed hES cell media to quench remaining trypsin, and then spun. Cells are resuspended growth media at a concentration of approximately one million cells in one mL of media, a concentration such that one frozen aliquot is sufficient to resurrect a culture on a 10cm plate. After cells are adequately resuspended, ice cold freezing media is added at equal volume. Cell suspensions are mixed thoroughly, aliquoted into freezing vials, and allowed to slowly freeze to -80C over 24 hours. Frozen cells can then moved to the vapor phase of liquid nitrogen for long term storage, or remain at -80 for approximately six months.