For most doctors, it’s easier to explain heart surgery than medical bills — especially with the major changes coming as a result of the Affordable Care Act.
So Payson Regional Medical Center’s Chief Executive Officer Chris Wolf, Chief Financial Officer Peter Finelli and Business Office Director Shelly Thompson took on the topic of billing and insurance at a recent Lunch & Learn hosted by the Senior Circle.
Wolf said even he has to rely on Thompson to explain things. Thompson has been with the hospital for 20 years and “is a top authority on reimbursement and without her, I’d be just as blind as you.”
Thompson said, “Medicare is your insurance and we bill and collect for you and do everything we can to help you with that.”
Finelli said up until 2011, Arizona was one of only a few states to provide a Medicaid-type service (the Arizona Health Care Cost Containment System) for childless adults. When the state removed 300,000 childless adults from AHCCCS, the cost went up 11 times for hospitals to cover the care of the indigent. No hospital can turn away anyone seeking emergency medical care, regardless of their ability or inability to pay, he said.
Even with the return of those childless adults to the AHCCCS rolls, he said Medicare and Medicaid barely cover the costs of services provided.
“Health care is expensive and has lots of underlying cost,” Finelli said.
The expansion of the AHCCCS rolls will most likely make Arizona health care more expensive, he said. The state’s hospitals have agreed to be taxed to cover Arizona’s share of the expansion, Finelli said. The hospitals agreed not to raise rates to cover the cost of the new hospital tax on the theory that providing additional coverage for the uninsured would reduce their uncompensated care burden. The federal government will pay for most of the costs of the program, but the state and hospitals will still face additional costs, he said.
The health insurance exchanges the new law requires could also increase costs, although some other states that have set up the exchanges have found the cost of the policies actually went down.
Finelli used an illustration placing the average annual cost of base insurance at about $10,000. With the exchanges, the participating insurance companies will be covering about 96 percent of the premium — or $9,600 of the $10,000, leaving the policyholder to pay the balance of 4 percent or $400. However, patients can also get income-based subsidies that could cover all or most of their premium cost.
If people don’t sign up for insurance, they will be penalized $95 the first year and about $270 the second year. And the Internal Revenue Service will take the money from your tax refund, Finelli said.
Most young people would rather skip enrolling and deal with the penalty — it is less expensive than their share of the health insurance premium.
He said only one company in Arizona “signed up” to be part of the insurance exchange — Blue Cross.
Other companies see the costs as too expensive to be fiscally sound.
“The majority of the users (of the exchanges) are likely to be unhealthy and in constant need of services,” Finelli said.
Every new enrollee is entitled to a mandatory health screening and coverage for pre-existing conditions. The new law also bars a cap on lifetime benefits.
He said an unprecedented number of Americans (the baby boomers) are entering the peak years of need for services.
“No one is looking at how to reduce health care costs, they are looking at how to pay for it,” he said. “In fact, insurance companies are ramping up premiums — sometimes by double digits — to cover the cost of providing for those with higher risks.”
However, California and New York have attracted many insurance companies to their health exchanges. The policies on the exchange range from significantly cheaper to slightly more expensive than comparable policies on the private market, despite the increased coverage requirements. Arizona decided not to set up its own exchange, which means the federal government will set up the exchange in this state, which will offer residents one-stop shopping for insurance. People who apply for a policy on the exchange can also apply for a federal subsidy to reduce the cost of their premium.