Mike Jacobson: Exploring Healthcare Cost Reduction

This also includes the many insurance agents who work every day to help their clients stay insured and at the best possible rates.

This week I want to focus on the health insurance industry and the never-ending struggle to balance the cost of insurance coverage with the cost of providing quality health care.

I have had the opportunity to serve on the Great Plains Health Board of Directors for the past several years. It was a great experience and learning opportunity that better prepared me to serve in the Nebraska Legislature.

Reflecting on my long banking history, I have always known that economic development begins with the availability of quality, affordable health care.

The North Platte region is fortunate to have such extraordinary facilities to serve everyone in District 42 and beyond. Think about how you would feel if we didn’t have a highly rated emergency department or an outstanding cancer center, a fantastic neurosurgeon, and a team of doctors and nurses who care about their patients. But this type of quality health care is expensive to provide.

After complying with a mountain of compliance requirements, hospitals that accept Medicare and Medicaid provide patient care but are reimbursed at rates well below their costs.

Added to this is the fact that many uninsured patients present daily to the emergency room without means of payment. Ultimately, it is those with health insurance who make up the difference in funding needed to operate at minimal profit.

To reduce costs for policyholders or employer-sponsored health plans, insurance companies offer Medicare Advantage plans.

It is important to note that Medicare Advantage plans are, in fact, private insurance products, not Medicare. If you purchase a Medicare Advantage plan, you are no longer enrolled in Medicare.

You can still cancel the Advantage plan, but you are not automatically eligible to enroll in Medicare. In fact, your premium could very likely be higher if you apply for Medicare later.

A Medicare Supplement policy is also an insurance policy, but it is truly a supplement to Medicare, and you remain enrolled in Medicare.

So why do insurers encourage Medicare Advantage plans? The answer is simple. Medicare Advantage plans are highly cost-effective policies that limit coverages, primarily through pre-authorization requirements.

For example, if a patient is admitted to a hospital and the hospital administers treatments before receiving a pre-authorization (which can sometimes take days), the provider receives no payment for their services.

This leads to delays in treatment, or the hospital or other providers don’t get paid. As a result, many providers have chosen not to accept Medicare Advantage as a source of payment.

When this happens, people insured with a Medicare Advantage policy must travel further from home to find a provider that accepts this coverage. Although more employers are adopting Medicare Advantage policies to reduce costs, we are seeing more providers abandon this type of coverage.

Rural areas tend to have fewer providers, but we see this trend in urban areas as well.

As health care costs rise, we will likely face more challenges when it comes to keeping hospitals open and quality health care accessible to everyone, but particularly those living in rural areas.

I remain committed to finding ways to help reduce health care costs. Adjusting Medicaid reimbursement rates will be an important step to alleviate some of the pressure. If providers can lose less money providing treatments to Medicaid and Medicare patients, then fewer costs will have to be offset by those with private insurance.

In turn, insurers won’t need to rely on plans like Medicare Advantage to find premium rates attractive to employers. I sponsored an interim study to explore Nebraska provider pricing and solutions to this problem.

I look forward to continuing to hear from you on the issues that matter to you. It is a privilege to be your State Senator and I will continue to make every effort to make a positive difference for the district and the state. You can reach me at mjacobson@leg.ne.gov or by calling my legislative office at 402-471-2729.