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Tag: medical costs

  • Health coverage expanding for Americans from November 1

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    The Centers for Medicare and Medicaid Services (CMS) and the Department of Health and Human Services (HHS) have revealed that access to catastrophic health coverage will be expanded from November 1 this year.

    The announcement comes ahead of the projected soar in health insurance premiums for the 2026 plan year, as enhanced tax credits for Affordable Care Act (ACA)-compliant plans are set to expire.

    Newsweek has contacted HHS and CMS via email for comment.

    Why It Matters

    Catastrophic health coverage plans are designed to protect consumers from very high medical costs in the event of serious illness or injury while having lower monthly premiums.

    File photo: a doctor fills out a patient’s medical notes.

    demaerre/Getty Images

    What To Know

    Those who qualify for catastrophic health coverage are those facing “hardship,” such as when “an individual becomes ineligible for taxpayer-subsidized low premiums due to the expiration of these subsidies at the end of this year,” Ge Bai, a professor of health policy and management at Johns Hopkins Bloomberg School of Public Health, Maryland, told Newsweek.

    Hardships are usually evaluated based on an individual’s projected annual household income, Bai added.

    These hardship exemptions may also recognize circumstances like “homelessness, eviction or foreclosure, natural disasters, bankruptcy, medical debt, or job-based coverage being unaffordable,” Kosali Simon, a professor and associate vice provost for health sciences at Indiana University Bloomington, told Newsweek.

    Previously, those under 30 were eligible for these catastrophe plans, but now those who are no longer eligible for advance payments of the premium tax credit (APTC) or cost-sharing reductions (CSRs) due to their projected annual income being either below 100 percent or above 400 percent of the federal poverty level will be eligible for a hardship exemption and can enroll in catastrophic coverage.

    In a press release, CMS said it also “plans to begin streamlining this process for consumers ineligible for APTC due to income and expand to consumers who are over 250 percent of the [federal poverty level] and are only ineligible for CSRs.”

    The policy likely means it “will become easier as a process and the what qualifies you for an exemption will be broadened,” Simon added.

    The new guidance applies to consumers in Federally-facilitated Exchange (FFE) states and those participating State-based Exchanges (SBEs). States participating in SBEs include: California, Colorado, Connecticut, Georgia, Idaho, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island, Vermont, Virginia and Washington. States participating in SBE’s on the Federal platform include: Arkansas, Illinois and Oregon.

    In terms of how effective the policy will be, Mark Pauly, a professor of health care management at Wharton School of the University of Pennsylvania, told Newsweek that “it depends on how strictly the rules are enforced.”

    He said this is “really a string and tape solution to covering people who fall below the income threshold for exchange subsidies.”

    Catastrophic coverage only begins after a very large deductible, meaning it is “really designed for someone who has access to a large amount of financial assets or credit, and could cover about $9,000 in healthcare spending as an individual or $18,000 as a family,” Keith Ericson, professor and department chair of markets, public policy and law at Boston University Questrom School of Business, told Newsweek.

    “This is not an effective strategy for getting low-income Americans access to healthcare because low-income families will have a lot of trouble coming up with an $18,000 deductible,” he added.

    What People Are Saying

    Secretary of HHS Robert F. Kennedy, Jr. said in a statement: “Catastrophic coverage offers affordable health insurance for younger Americans and those facing hardship to have security when they need it most. Expanding access to catastrophic coverage is another step in making health insurance more affordable, building on the progress made since the passage of President Trump’s One Big Beautiful Bill.”

    CMS Administrator Dr. Mehmet Oz said in a statement: “President Trump promised to give Americans real choices in health care, and today we are delivering on that promise. By expanding access to catastrophic plans, we are making sure hardworking people who face unexpected hardships can get affordable coverage that protects them from devastating medical costs. This change reflects our commitment to lowering costs, strengthening program integrity, and ensuring every American has a pathway to coverage that fits their needs without burdening taxpayers.”

    Ge Bai, a professor of health policy and management at Johns Hopkins Bloomberg School of Public Health, told Newsweek: “This policy expands access to affordable insurance coverage for low-income Americans and represents a paradigm shift in federal insurance regulation, that is, allowing a variety of plans to meet diversified patient needs. Since most non-senior Americans use relatively little healthcare each year, many will find these plans suitable: low monthly premiums combined with the ability to save directly on out-of-pocket costs by choosing low-cost care options and engaging in health-enhancing activities.”

    Kosali Simon, a professor and associate vice provost for health sciences at Indiana University Bloomington, told Newsweek: “This expansion may increase access and reduce the number of completely uninsured people, since catastrophic plans offer lower premiums and protect against worst-case medical bills. However, catastrophic plans do not qualify for subsidies or cost-sharing reductions, and premiums are still going to seem affordable to many. This means they are better suited to protecting against catastrophic costs than meeting the ongoing health needs of middle-income individuals.”

    Keith Ericson, professor and department chair of markets, public policy and law at Boston University Questrom School of Business, also told Newsweek: “This policy might contribute to the destabilization of the health insurance exchange market. Risk adjustment is an important stabilizer for the insurance market. Catastrophic health plans, however, don’t contribute to the standard risk adjustment pool. As a result, if healthier people move into catastrophic plans, leaving the sicker people behind, premiums could rise in the rest of the market. In this case, the policy would harm affordability for the metal tier plans purchased by the typical individual.”

    Coleman Drake, a professor in the Department of Health Policy and Management at the University of Pittsburgh, told Newsweek: “Those that do switch to catastrophic plans will do so because those plans have lower premiums and, in that sense, they will have access to more affordable coverage, though not more protection from healthcare costs nor affordable access to healthcare. Aside from their annual check-ups, enrollees in catastrophic plans have to pay for all of their healthcare until they hit their deductibles. Prior research has shown that when people are faced with large out-of-pocket costs, they broadly cut back on all forms of healthcare, regardless of how important it is for their health. In that sense, I worry that transitioning people to catastrophic coverage will worsen their health.”

    What Happens Next

    Starting from November 1, Americans in FFE states, or those participating in SBEs, can apply for health coverage with financial assistance through HealthCare.gov.

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  • CVS cuts 2024 profit forecast as insurance unit faces soaring medical costs

    CVS cuts 2024 profit forecast as insurance unit faces soaring medical costs

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    (Reuters) -CVS Health Corp slashed its annual profit forecast and missed Wall Street estimates for first-quarter earnings on Wednesday, as elevated demand for non-urgent procedures increased medical costs at its health insurance business.

    The U.S. healthcare giant cut its per-share adjusted earnings forecast for 2024 to at least $7.00 from at least $8.30, adding it anticipates the surge in medical procedures at its unit that houses health insurer Aetna to persist.

    Shares of the company fell 9.7% to $61.15 in premarket trading. They have fallen about 14% so far this year, through Tuesday’s close.

    U.S. health insurers have had to contend with rising medical costs over the past few quarters following higher demand for procedures, especially among older adults, that were delayed during the pandemic.

    CVS said in February it was seeing a rise in hip and knee surgeries, medical services related to the eyes, dental work, as well as vaccinations including the RSV shot during the last three months of 2023.

    The company’s health care benefits segment, which houses the Aetna unit, recorded medical cost ratio – the percentage of premiums spent on healthcare – of 90.4% for the first quarter. That compared with 84.6% a year earlier, and above analysts’ average estimate of 88.43%, according to LSEG data.

    Aetna is also expected to face pressure after the government announced 2025 reimbursement rates to providers of Medicare Advantage health plans below expectations, raising worries about a squeeze on margins.

    Humana last week pulled its already trimmed 2025 profit forecast, citing the disappointing rates.

    CVS, which withdrew its 2025 adjusted earnings forecast of $10 per share in August, said in February it was targeting low double-digit percentage growth.

    On an adjusted basis, the company reported a profit of $1.31 per share for the three months ended March 31, below analysts’ average estimate of $1.69.

    (Reporting by Christy Santhosh and Leroy Leo in Bengaluru; Editing by Sriraj Kalluvila)

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  • The Pandemic’s Legacy Is Already Clear

    The Pandemic’s Legacy Is Already Clear

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    Recently, after a week in which 2,789 Americans died of COVID-19, President Joe Biden proclaimed that “the pandemic is over.” Anthony Fauci described the controversy around the proclamation as a matter of “semantics,” but the facts we are living with can speak for themselves. COVID still kills roughly as many Americans every week as died on 9/11. It is on track to kill at least 100,000 a year—triple the typical toll of the flu. Despite gross undercounting, more than 50,000 infections are being recorded every day. The CDC estimates that 19 million adults have long COVID. Things have undoubtedly improved since the peak of the crisis, but calling the pandemic “over” is like calling a fight “finished” because your opponent is punching you in the ribs instead of the face.

    American leaders and pundits have been trying to call an end to the pandemic since its beginning, only to be faced with new surges or variants. This mindset not only compromises the nation’s ability to manage COVID, but also leaves it vulnerable to other outbreaks. Future pandemics aren’t hypothetical; they’re inevitable and imminent. New infectious diseases have regularly emerged throughout recent decades, and climate change is quickening the pace of such events. As rising temperatures force animals to relocate, species that have never coexisted will meet, allowing the viruses within them to find new hosts—humans included. Dealing with all of this again is a matter of when, not if.

    In 2018, I wrote an article in The Atlantic warning that the U.S. was not prepared for a pandemic. That diagnosis remains unchanged; if anything, I was too optimistic. America was ranked as the world’s most prepared country in 2019—and, bafflingly, again in 2021—but accounts for 16 percent of global COVID deaths despite having just 4 percent of the global population. It spends more on medical care than any other wealthy country, but its hospitals were nonetheless overwhelmed. It helped create vaccines in record time, but is 67th in the world in full vaccinations. (This trend cannot solely be attributed to political division; even the most heavily vaccinated blue state—Rhode Island—still lags behind 21 nations.) America experienced the largest life-expectancy decline of any wealthy country in 2020 and, unlike its peers, continued declining in 2021. If it had fared as well as just the average peer nation, 1.1 million people who died last year—a third of all American deaths—would still be alive.

    America’s superlatively poor performance cannot solely be blamed on either the Trump or Biden administrations, although both have made egregious errors. Rather, the new coronavirus exploited the country’s many failing systems: its overstuffed prisons and understaffed nursing homes; its chronically underfunded public-health system; its reliance on convoluted supply chains and a just-in-time economy; its for-profit health-care system, whose workers were already burned out; its decades-long project of unweaving social safety nets; and its legacy of racism and segregation that had already left Black and Indigenous communities and other communities of color disproportionately burdened with health problems. Even in the pre-COVID years, the U.S. was still losing about 626,000 people more than expected for a nation of its size and resources. COVID simply toppled an edifice whose foundations were already rotten.

    In furiously racing to rebuild on this same foundation, America sets itself up to collapse once more. Experience is reputedly the best teacher, and yet the U.S. repeated mistakes from the early pandemic when faced with the Delta and Omicron variants. It got early global access to vaccines, and nonetheless lost almost half a million people after all adults became eligible for the shots. It has struggled to control monkeypox—a slower-spreading virus for which there is already a vaccine. Its right-wing legislators have passed laws and rulings that curtail the possibility of important public-health measures like quarantines and vaccine mandates. It has made none of the broad changes that would protect its population against future pathogens, such as better ventilation or universal paid sick leave. Its choices virtually guarantee that everything that’s happened in the past three years will happen again.


    The U.S. will continue to struggle against infectious diseases in part because some of its most deeply held values are antithetical to the task of besting a virus. Since its founding, the country has prized a strain of rugged individualism that prioritizes individual freedom and valorizes self-reliance. According to this ethos, people are responsible for their own well-being, physical and moral strength are equated, social vulnerability results from personal weakness rather than policy failure, and handouts or advice from the government are unwelcome. Such ideals are disastrous when handling a pandemic, for two major reasons.

    First, diseases spread. Each person’s choices inextricably affect their community, and the threat to the collective always exceeds that to the individual. The original Omicron variant, for example, posed slightly less risk to each infected person than the variants that preceded it, but spread so quickly that it inundated hospitals, greatly magnifying COVID’s societal costs. To handle such threats, collective action is necessary. Governments need policies, such as vaccine requirements or, yes, mask mandates, that protect the health of entire populations, while individuals have to consider their contribution to everyone else’s risk alongside their own personal stakes. And yet, since the spring of 2021, pundits have mocked people who continue to think this way for being irrational and overcautious, and government officials have consistently framed COVID as a matter of personal responsibility.

    Second, a person’s circumstances always constrain their choices. Low-income and minority groups find it harder to avoid infections or isolate when sick because they’re more likely to live in crowded homes and hold hourly-wage jobs without paid leave or the option to work remotely. Places such as prisons and nursing homes, whose residents have little autonomy, became hot spots for the worst outbreaks. Treating a pandemic as an individualist free-for-all ignores how difficult it is for many Americans to protect themselves. It also leaves people with vulnerabilities that last across successive pathogens: The groups that suffered most during the H1N1 influenza pandemic of 2009 were the same ones that took the brunt of COVID, a decade later.

    America’s individualist bent has also shaped its entire health-care system, which ties health to wealth and employment. That system is organized around treating sick people at great and wasteful expense, instead of preventing communities from falling sick in the first place. The latter is the remit of public health rather than medicine, and has long been underfunded and undervalued. Even the CDC—the nation’s top public-health agency—changed its guidelines in February to prioritize hospitalizations over cases, implicitly tolerating infections as long as hospitals are stable. But such a strategy practically ensures that emergency rooms will be overwhelmed by a fast-spreading virus; that, consequently, health-care workers will quit; and that waves of chronically ill long-haulers who are disabled by their infections will seek care and receive nothing. All of that has happened and will happen again. America’s pandemic individualism means that it’s your job to protect yourself from infection; if you get sick, your treatment may be unaffordable, and if you don’t get better, you will struggle to find help, or even anyone who believes you.


    In the late 19th century, many scholars realized that epidemics were social problems, whose spread and toll are influenced by poverty, inequality, overcrowding, hazardous working conditions, poor sanitation, and political negligence. But after the advent of germ theory, this social model was displaced by a biomedical and militaristic one, in which diseases were simple battles between hosts and pathogens, playing out within individual bodies. This paradigm conveniently allowed people to ignore the social context of disease. Instead of tackling intractable social problems, scientists focused on fighting microscopic enemies with drugs, vaccines, and other products of scientific research—an approach that sat easily with America’s abiding fixation on technology as a panacea.

    The allure of biomedical panaceas is still strong. For more than a year, the Biden administration and its advisers have reassured Americans that, with vaccines and antivirals, “we have the tools” to control the pandemic. These tools are indeed effective, but their efficacy is limited if people can’t access them or don’t want to, and if the government doesn’t create policies that shift that dynamic. A profoundly unequal society was always going to struggle with access: People with low incomes, food insecurity, eviction risk, and no health insurance struggled to make or attend vaccine appointments, even after shots were widely available. A profoundly mistrustful society was always going to struggle with hesitancy, made worse by political polarization and rampantly spreading misinformation. The result is that just 72 percent of Americans have completed their initial course of shots and just half have gotten the first of the boosters necessary to protect against current variants. At the same time, almost all other protections have been stripped away, and COVID funding is evaporating. And yet the White House’s recent pandemic-preparedness strategy still focuses heavily on biomedical magic bullets, paying scant attention to the social conditions that could turn those bullets into duds.

    Technological solutions also tend to rise into society’s penthouses, while epidemics seep into its cracks. Cures, vaccines, and diagnostics first go to people with power, wealth, and education, who then move on, leaving the communities most affected by diseases to continue shouldering their burden. This dynamic explains why the same health inequities linger across the decades even as pathogens come and go, and why the U.S. has now normalized an appalling level of COVID death and disability. Such suffering is concentrated among elderly, immunocompromised, working-class, and minority communities—groups that are underrepresented among political decision makers and the media, who get to declare the pandemic over. Even when inequities are highlighted, knowledge seems to suppress action: In one study, white Americans felt less empathy for vulnerable communities and were less supportive of safety precautions after learning about COVID’s racial disparities. This attitude is self-destructive and limits the advantage that even the most privileged Americans enjoy. Measures that would flatten social inequities, such as universal health care and better ventilation, would benefit everyone—and their absence harms everyone, too. In 2021, young white Americans died at lower rates than Black and Indigenous Americans, but still at three times the rate of their counterparts in other wealthy countries.

    By failing to address its social weaknesses, the U.S. accumulates more of them. An estimated 9 million Americans have lost close loved ones to COVID; about 10 percent will likely experience prolonged grief, which the country’s meager mental-health services will struggle to address. Because of brain fog, fatigue, and other debilitating symptoms, long COVID is keeping the equivalent of 2 million to 4 million Americans out of work; between lost earnings and increased medical costs, it could cost the economy $2.6 trillion a year. The exodus of health-care workers, especially experienced veterans, has left hospitals with a shortfall of staff and know-how. Levels of trust—one of the most important predictors of a country’s success at controlling COVID—have fallen, making pandemic interventions harder to deploy, while creating fertile ground in which misinformation can germinate. This is the cost of accepting the unacceptable: an even weaker foundation that the next disease will assail.


    In the spring of 2020, I wrote that the pandemic would last for years, and that the U.S. would need long-term strategies to control it. But America’s leaders consistently acted as if they were fighting a skirmish rather than a siege, lifting protective measures too early, and then reenacting them too slowly. They have skirted the responsibility of articulating what it would actually look like for the pandemic to be over, which has meant that whenever citizens managed to flatten the curve, the time they bought was wasted. Endemicity was equated with inaction rather than active management. This attitude removed any incentive or will to make the sort of long-term changes that would curtail the current disaster and prevent future ones. And so America has little chance of effectively countering the inevitable pandemics of the future; it cannot even focus on the one that’s ongoing.

    If change happens, it will likely occur slowly and from the ground up. In the vein of ACT UP—the extraordinarily successful activist group that changed the world’s approach to AIDS—grassroots organizations of longhaulers, grievers, immunocompromised people, and others disproportionately harmed by the pandemic have formed, creating the kind of vocal constituency that public health has long lacked.

    More pandemics will happen, and the U.S. has spectacularly failed to contain the current one. But it cannot afford the luxury of nihilism. It still has time to address its bedrocks of individualism and inequality, to create a health system that effectively prevents sickness instead of merely struggling to treat it, and to enact policies that rightfully prioritize the needs of disabled and vulnerable communities. Such changes seem unrealistic given the relentless disappointments of the past three years, but substantial social progress always seems unfeasible until it is actually achieved. Normal led to this. It is not too late to fashion a better normal.

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    Ed Yong

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