(Male) Cancer Wars

A year-and-a-half ago, we noted the shameful discrepancy in the kinds of "first dollar" care offered women (and children) versus us Y-chromosome types:

"All ACA-compliant plans must include a laundry list of Essential Health Benefits, including very specific preventive care coverage ... there is no corresponding requirement to cover, say, prostate exams or even STD screening for [menfolk]."

[ed: "first-dollar" coverage means not subject to deductibles or co-pays; ie "freebies"]

And it looks like the unstated goal of that omission is bearing fruit:

"The administration wants to penalize doctors who routinely order the PSA blood test."

So it's not enough just to make it expensive, we must go even farther, by punishing those recalcitrant doc's - who show no compunction about amputating feet willy-nilly - who care enough about their male patients to order a simple test that could very likely save their life (one sees no corresponding threat against mammography).

#MaleLivesMatter

[Hat Tip: Co-Blogger Mike F]

What Comes Down Must Go Up?

Readers may recall the September Daraprim kerfluffle, regarding the preferred treatment of the potentially deadly (but rare) "parasitic infection called toxoplasmosis." Briefly, Turing had purchased the rights to the medication used to fight the infection, and then boosted its price from about $13 to $750. The company eventually promised to back off the spike.

But that was then (two months ago) and this is now:

"Turing Pharmaceuticals is reneging on its pledge to cut the $750-per-pill price.Instead, the small biotech company is reducing what it charges hospitals, by up to 50 percent, for its parasitic infection treatment"

Which is great news (well, for certain values of "great:" after all, it does represent a pretty hefty increase over its pre-Turing cost) for hospitalized patients, but what about those playing along at home?

The bad news is that the $750-a-copy price will apparently stand.

The good news is that Imprimis Pharmaceuticals, a competitor, is making available a low-cost alternative.

How low-cost?

This low-cost:
 

The only real challenge right now is getting insurers to cover it. My take is that, at $1 a pop, that really shouldn't be a major issue.

Peggy & Your Private Health Data

We've been writing about who really has access to your personal health info for a very long time:

"In a time zone 17 hours ahead, a radiologist in Australia, working for a company called NightHawk Radiology Services, had been sitting before the same images ... Once your medical information travels to Australia, India or wherever you basically lose your HIPAA rights."

That's from 2006, and things haven't improved. As we noted last month, even something as innocuous as your Fitbit is fair game for data hunters. Fortunately, the folks behind that product have voluntarily agreed to comply with (some?) HIPAA privacy regs.

On the other hand, the bigger picture is much less sunny:

"At-home paternity tests fall outside the law's purview. For that matter, so do wearables ... that measure steps and sleep, gene testing companies such as 23andMe, and online repositories where individuals can store their health records."

This can lead to unfortunate consequences, primarily because the government agencies responsible for enforcing HIPAA's privacy reg's much authority to do so:

"A 2009 law called on HHS to work with the Federal Trade Commission ... to submit recommendations to Congress within a year on how to deal with entities handling health information that falls outside of HIPAA. Six years later, however, no recommendations have been issued."

Shocking, I know.

The bottom line is that, at this point, a lot of our ostensibly private health info is potentially freely available to any number of government agencies, vendors, even fellow consumers:

"Part of the lab's website address caught her attention, and her professional instincts kicked in. By tweaking the URL slightly, a sprawling directory appeared that gave her access to the test results of 6,000 people."

How many others are out there?

Another ObamaTax "Success" Story

Speaking of rates going down 3000%, here's the story of a family doing its best to not only provide for itself, but to take on another unfortunate. The Smith's had already adopted a baby several years ago, and have just recently completed the grueling task of adopting another.

In the meantime, their current medical plan - an HSA with a $12,000 family deductible - renews on January 1 with a 30% rate increase No problem, let's go shopping:

Company A offers a $13,100 family deductible for $1,006 (saving $670 a year in premiums, but raising the potential out-of-pocket by $1,100)

Company U's plan has a $13,000 family out-of-pocket, but saves the family only $300 a year (for an additional $1,000 potential exposure)

Company I's plan seems to be the "bargain:" it saves the family $840 a year in premiums, and only increases the max out-of-pocket by $500.

So, which would you choose?

404Care.gov strikes again

Via email from Anthem:

"Healthcare.gov missing information will require some individual members to re-enroll for 2016 - We recently learned that the Health Insurance Marketplace (also called the exchange) is missing some information that some of our members provided on their applications last year when they bought their plans through the exchange."



The good news is that Anthem (and, presumably, the other carriers involved) is moving quickly to notify its affected insureds and get the issue resolved. Private sector to the rescue!

If you're insured through an Exchange-based plan, might be worth your while to get ahead of this by contacting your carrier right away.

Gaba, Gaba does

Ask some great questions:

"CMS is doling out just 12.5% of the monies owed to various carriers ... **evenly** to every carrier which is owed money, regardless of how much or little they're owed ... Are they legally required to make the payments this way, or could they use their discretion to prioritize certain carriers over others if they wanted to?" [emphasis in original]

Aye, thar's the rub, no? After all, if they do "prioritize" payments, then they're guilty of playing favorites, and if they don't, they're still doing so, no?

The crux of Charles' concern is that the Big Boys can likely weather the storm, but these delays pose the very real risk of sinking smaller players (think CO-OPs writ large).

In your humble blogger's opinion, this is really just going according to plan; that is, single-payer has always been the end-game (just ask Herr Gruber), and this is just another step along that path.

Unexpected! Carrier Trick

So UHC finally decided to dip its toes into the 404Care.gov market, only to immediately yank them back out:

"The nation’s largest health insurer fired a shot across the bow of ObamaCare on Thursday, citing flagging enrollment and high-risk customers in suggesting it may have to pull out of the exchanges in 2017"

What, 2 years of miserable ObamaTax numbers were hiding in plain sight?

So what's their solution? Well, one way to dampen enthusiasm would be to drastically cut agent comp for Exchange-based business. But that would be an incredibly slimy, cynical move.

So, naturally, UHC has drastically reduced agent comp for on-Exchange business.

Now, is this their prerogative? Of course it is. Does it make sense? Well, from their perspective, perhaps: after all, if they essentially suppress the agent-driven market, they're less likely to have to face the major loss ratio music. And what with the risk corridor money looking pretty iffy, that may be the only realistic strategy.

Oh well, easy come, easy go...

Melvin & The SubPar Plan

Readers may recall when President Obama called out pre-ACA plans as "sub-par;" that is, that they had both unreasonably high out-of-pocket exposure plus high premiums. The ObamaTax was touted as the fix-it for both problems.

Let's take a look at how well that's worked out, shall we?

IB regulars may recall the saga of Melvin and the tricky prescription. Melvin's plan, issued by Medical Mutual of Ohio, is a "grandfathered" HSA plan with a $3000 per person, $6000 per family deductible, then 100% covered after that. We just got his 2016 renewal in the mail, complete with a 14% rate hike. The good news is that that's about half of what I'm seeing with ObamaTax-compliant plans. The bad news (sort of) is that his family's premium is increasing from $516 a month to $586. This includes Melvin, Mrs Melvin, and two Mini-Melvins. If you're looking at that $586 skeptically, I don't blame you: that is a heckuva bargain.

If you're thinking that it's way out of line, well, here's a comparable quote from another carrier (several to choose from, this one seemed the most photogenic, and is right in line with all the others number-wise):

Yes, almost $1200 a month, plus much higher potential out-of-pocket.

On the other hand, it does include "free" birth control and maternity (for his 40-something better half). Some deal.

And this is why The Grey Lady recently reported breathlessly:

"[F]or many consumers, the sticker shock is coming not on the front end, when they purchase the plans, but on the back end when they get sick: sky-high deductibles that are leaving some newly insured feeling nearly as vulnerable as they were before they had coverage."

To be fair, the new plans provide "free" colonoscopies in addition to the birth control convenience items and maternity. But most of these plans aren't even HSA-compliant, so there's no opportunity to sock away extra dollars (what few there may be left after paying the grossly inflated premiums). And of course, one wonders how many folks actually take advantage of the "free" routine exams and such.

As we've averred many, many times here at IB, insurance is - well, should be - a risk management tool, and thus cover  big-ticket items, not $9-a-month pills. What did the rocket surgeons in DC think was going to happen when they crammed all those freebies in, while simultaneously proscribing carriers from underwriting new applicants?

Having health insurance may confer access, but what good is that access if one can't afford to actually benefit from it?

Economics of Paid Family Leave

The issue of paid family medical leave is bubbling up as it becomes a talking point with some of the presidential candidates. Social media is abuzz with

various groups pushing for legislation which will require a business to provide paid family medical leave, most notably, following the birth of a child.

Sounds noble, doesn't it?

But like all other mandates, it comes with a cost.

If businesses, large and small, are required to provide even 3 months of paid leave consider the cost of such a measure.

While the woman (and her spouse) are home taking care of their newborn and collecting a paycheck, what is going on at work?

At least two, and possibly four, people are being paid during the family leave. The work load has to be absorbed by someone. Either other workers (not on leave) are performing their own jobs but also picking up the slack. Some of them may be paid overtime.

Some jobs are so unique the company has to hire a temp to take the place.

There is a cost to that, and that cost is passed along in the form of higher prices.

Advocates say the U.S. is the only industrialized country that does not provide paid family leave.

I suppose those countries would the ones with a socialized form of government that are currently on the verge of bankruptcy.

Others talk about companies in the U.S. that currently provide paid family leave. Companies like Nestle', Amazon, Google and so forth. Those are big companies that made a conscious decision to voluntarily offer paid family leave. No one forced them to offer this benefit.

Fortune 500 companies employ roughly 20% of the total workforce.

That leaves 80% of the working population employed by smaller companies.

One of the problems with government mandates is they fail to take into account the consequences of new rules.

Obamacare has consequences.

Raising the minimum wage to $15 has consequences.

The same will be true if DC requires paid family leave.

All this begs the question. How have we made it this far as a country without paid family leave? What did generations before us do?

My guess is they planned and saved for the event. That is called personal responsibility.

What a novel idea.


#PaidFamilyMedicalLeave

Pre-Thanksgiving Health Wonk Review

Brad Wright hosts this week's round-up of wonky posts full of helpful info and unique insights.

Who knew Norman Rockwell was a health policy wonk?

Universal Health Coverage in the United States

Those who cry out for "universal health coverage" like other civilized nations need to look no further than U.S. territories. Critics mention the VA as a corrupt, broken system but at the same time point to Medicare as a shining light.

Puerto Rico is a U.S. territory where 70% of the population is covered by either Medicare or Medicaid. How well is that working out?

The island is bracing for steep funding cuts to federal health care plans that serve nearly 70 percent of the U.S. territory's 3.5 million people. Local officials have been talking with the federal government about the proposed funding loss, but believe they will be implemented nevertheless.

The cuts will affect the entire U.S., but Puerto Rico is expected to feel them more acutely because the island already receives lower funding levels than the mainland, it has a poverty level higher than any U.S. state and it is already in the midst of an economic crisis and a nearly decade-long recession.

Funding for Puerto Rico's Medicare Advantage program, serving about 560,000 of the island's more disadvantaged people, will be slashed by 11 percent in January, a move expected to lead to more expensive copays and the loss of some benefits. More cuts to Medicaid are anticipated over the next two years, affecting about 1.6 million Puerto Ricans like Gonzalez who rely on the funds through Mi Salud, a local government health care plan. - My Way

If Medicare for all isn't working so well with 3.5 million people how will it work when you have 330 million on Medicare Part E?


#MedicareForAll #MedicarePartE

1,000 Words on O'Care

[Hat Tip: Co-blogger Bob V]

Leaving money on the table - An Update

Almost two months ago, we reported on the (sad?) fact that over "2 million public exchange enrollees eligible for cost-sharing reductions are not receiving the subsides because they selected a non-qualifying plan"

This referred to the curious way in which certain plans are eligible not just for premium subsidies, but also with out-of-pocket expenses (deductibles and co-insurance). Now, this isn't necessarily a major problem: if you don't have (a lot of) claims, it really doesn't impact your bottom line.

But it turns out that folks are also leaving actual cash dollars on the table in the form of premium subsidies that would directly impact their wallets:

"[M]ore than 24 million people were eligible for ObamaCare tax credits last year. By March, only 41 percent of them had selected a plan on a government insurance exchange."

That's less than 10 million folks who even bothered to add them to their "cart;" it shouldn't surprise regular IB readers than only about a third of those folks actually pulled the enrollment trigger. For perspective, this means that out of 24 million eligibles only about 3 million actually signed up.

Now why is that?

Well, as usual, the rocket surgeons in DC have done a crappy job of getting the word out: "of the uninsured people who are probably eligible for tax credits but not enrolled, about half of them said that they had not heard of the tax credits." Nor had they clicked on over to the 404Care.gov site (arguably a wise decision, that).

And who's to blame?

Here's a clue:

Over 6 years ago, Mike asked "Why has Medicaid failed to protect the poor?" He pointed out that (as of 2009) over two thirds of uninsured folks were likely eligible for Medicaid, but were not enrolled. This was (and continues to be) a failure of government, and it seems reasonable to conclude that it's the same dynamic (or lack thereof) that's leaving so many folks in the ACA subsidy dust.

Happy days, indeed.

Worse Insurance, Higher Cost

Obamacare: Is it broken promises or were we fed a line of BS? The answer is both. The fact is, your insurance is going to get worse and you are going to pay more for it.

Here's to hoping you never, ever, get sick!

 Here's to hoping the economy sucks and you don't get pay raises!

Nothing like living the American dream.

On Anecdotes & Data

So, about that 3000% rate decrease:

Working on a renewal (actually, one of several dozen at the moment, but this one's pretty representative); mom, dad, some ankle biters. Grandfathered HSA plan, $3,000 per person, $6,000 per family deductible, then 100%. As with all plans nowadays, first-dollar preventive care coverage (for mom and the kids only, of course, except for dad's colonoscopy every 5 or 10 years).

Current rate is $770 per month, heading north by 30% to a nice round $1,000. That's $12,000 in premiums before any meds or any major medical expense is covered, but after that, no worries. Plan is Grandfathered, so no coverage options (like a higher deductible to bring down that rate).

So, start shopping, and of course, the "best" alternative I can find is $1,140 per month, with a $6250 per person, $12,000 family deductible. So that's almost $1,700 a year in additional premium, plus thousands of dollars in potential additional out-of-pocket.

It does come with "free" birth control, though...

Oh, did I mention that Mom's 43 (and done)?

Sweet deal.

New Republic vs EPC

"The Equal Protection Clause of the 14th amendment of the U.S. Constitution prohibits states from denying any person within its jurisdiction the equal protection of the laws."

Reason I bring this up is because of the recent shuttering of the Empire State's New Republic (NR) CO-OP. Most of the time, there's a "cushion" between the time a plan is told to shut down and when folks actually lose coverage. This isn't the case with NR: coverage for its insureds ends on November 30th, period. This leaves them with a couple of challenges:

First, obtaining new coverage for December. The state has figured out a way to "auto-enroll" these folks in a new plan with intact carriers. One supposes that they could also choose a Short Term Medical plan (assuming those are still available in New York). And, of course, losing coverage in this manner is itself a Special Open Enrollment trigger (as regards December coverage).

The problem is that some (many? most?) of these folks will have met some or all of their 2015 deductibles (and, perhaps their entire maximum out-of-pockets). These are not going to be acknowledged by their new carrier; that is, they'll have an entire new annual out-of-pocket for December then again starting January 1st.

This is truly a bummer.

And it's also not legally correctable.

Here's why:

There is no way to compel the new carrier to credit expenses covered by a previous one, regardless of when they were incurred. So the fact that these poor folks are left high-and-dry for December is too bad, but there's nothing that can legally be done to resolve that. If the state (or the Feds, for that matter - CO-OPS are purely an invention of the ObamaTax) were to grant this kind of relief to victims previous NR insureds, they'd have to do that for everyone who's been in that situation.

And who would those folks be?

Well, anyone who lost employer coverage in, say July (or March, or a week ago) and had to obtain a new plan with another carrier. Or anyone else who's been recently eligible for a Special Open Enrollment and had (or chose) to switch carriers. If the NR folks are entitled, then everyone else in similar straits are, too.

Thanks, EPC!

Friday Spindle Clearing

In no particular order:

■ The Ohio Department of Insurance is touting its (not-so-new) lost insurance policy service, available to Buckeyes (and/or their beneficiaries) looking to see if Grams or Gramps had any unaccounted-for life insurance policies or annuities. It's a free service, but there's some paperwork involved.

■ The much-touted new Agent Hotline set up by the rocket surgeons in DC has turned out to be a big dud:

"A hotline set up ... to assist brokers with the public exchanges will only assist agents with user IDs, site registration and training questions — not client issues."

Which was to have been the whole point of the exercise in the first place.

Shocking, I know.

■ FoIB Jeff M tips us to this bolt from the blue:

"North Carolina consumers who buy their own health insurance are facing major price increases  ... it’s approved rates covering about 610,000 people that will be one-third to one-fifth higher in 2016"

Fortunately, that'll all be offset by the promised 3000% rate decreases any day now.

Right?

■ And now for something completely different:

The Pastry Artist's Adventure is a blog written (and updated frequently) by an aspiring pastry chef (and delightful young lady, to boot), currently in her 2nd year at the prestigious Sullivan University Culinary Arts program. It's fun to see the next generation of great bakers and chefs starting to spread their wings.

Ch-ch-changes: Adult "children"

The ObamaTax allows "adult children" to stay on their folks' insurance until age 26. Here in Ohio, the rocket surgeons in Columbus upped the ante, and let them stay on to age 28.

Now that's changing: as of January 1, 2016 the Buckeye State will fall into line with the other 57:

"I have my adult dependent child on my insurance coverage.  Will he/she still be able to stay on my health insurance? 

◦Dependent children can stay on their parent’s insurance until they turn 26."

Small steps.

[Hat Tip: Medical Mutual of Ohio]

MVNHS© Taking on Water

Last time we checked in with Britain's Much Vaunted National Health System©, we learned that new mums with breast cancer don't fare very well, healthcare-wise. Turns out, that was just a harbinger of things to come.

To wit:

"UK now has one of the worst healthcare systems in the developed world, according to OECD report"

Now what in the wide wide world of sports would prompt that pronouncement?

Oh:

"Hospitals are now so short-staffed and underequipped ... Staff are too rushed to improve levels of care ... obesity levels are “dire”

In other words: Thursday.

Here's the best part, though: all those folks bemoaning how we spend so much money on health care with poor results, and point to schemes like the MVNHS© as models to follow?

Guess what:

"Mr Pearson said the UK was spending “considerably less” than many OECD countries and that “you get what you pay for” in healthcare."

So if spending more doesn't help, and spending less doesn't, either, then maybe (just maybe) there are other factors to consider?

Wonder what those could be...

And the winner (loser?) is...

LifeHealthPro has just released the results of its survey of consumers' rankings of various health insurers.

Coming in dead last is United Healthcare, with just 62% of respondents willing to recommend it.

Interestingly, Aetna and Coventry are in 11th and 12th place (respectively); I don't really "get" this, since they're joined at the hip corporately. Perhaps the survey was conducted prior to Aetna's Coventry acquisition?

Our old friend Anthem is solidly in the middle, holding down 8th place.

Leading the pack, though, is Horizon Blue Cross/Shield of New Jersey, with a solid 85% of those surveyed willing to recommend it.

Two observations:

First, over half of the list is made up of various Blue Cross/Shield affiliates; this makes sense when you consider market share.

Second, and more discomfiting, is that it's not clear whether this reflects group plans or individual ones, nor on- or off-Exchange purchases. I think this is a major oversight, and would like to see it addressed in any future versions.

Obamacare - Just Say No

Even if you like your Obamacare health insurance plan don't count on using it.

one thing is out of the government's control: whether doctors and hospitals will agree to accept patients who buy these plans.

Some newly insured patients wonder whether it's worth paying for coverage they can't actually use. Even when they do find a provider, reports show they face crippling out-of-pocket costs they didn't expect. - US News

If that isn't bad enough, there is the problem with smaller networks.

In most states, doctors can choose not to participate in the networks offered in the marketplaces, also known as exchanges, created by the Affordable Care Act, President Barack Obama's signature health care law. Then again, they can choose not to participate in any other type of health insurance plan as well. Some doctors opt out of Medicaid, the government's health program for low-income Americans, and others opt out of Medicare, the government's program for adults 65 and older. Others limit the percentage of patients they'll accept who are covered by these plans.

What do you do?

Good question.

Now that your ONLY choice is an Obamacare design, you are pretty much screwed.

#ObamacareFail

Health Wonk Review @ HBB

Health Business Blog's David Williams hosts this week's interesting, healthful collection of health care punditry and wonkery. Good info, helpful summaries, what's not to love?

The Problem with Obamacare

Amidst all the saber rattling about whether Obamacare is good or not, this simple example illustrates why

health insurance carriers are losing money and leaving the market.

Lisa Patton turns 26 years old this month. That means, she will lose coverage under her parents health insurance. But she doesn't want to pay up to $250 a month for a plan under Obamacare.

"Being a graduate student and living in D.C., and kind of barely making ends meet now, it's just hard to factor in the cost of an extra bill," she said. - CBS News

I got news for you dear. The $700 penalty is nothing compared to having to come up with money to pay off medical bills of several thousand dollars.

Ocare was supposed to eliminate medical bankruptcy. At least that was the campaign promised.

Then there is this.

"I've had Obamacare insurance now for two years and it did go up the second year," said Dawn Erin an actress and singer living in Texas.

Erin said Obamacare made her Hepatitis C medication affordable.

"Total cost of that medication was approximately $70,000. And my co-pay was 5 bucks," she said.

OK, in case you missed it, the healthy people are not buying coverage, but the sick ones are.

Houston, we have a problem.

Obamacare insurance carriers are burning money faster than DC can print it and hand it out to the "less fortunate"

#ObamacareFail

Piling on: A physician's perspective

Right about the time that Kelley posted on the very real challenges that she's seeing at her practice (as well as her colleagues'), I received this in email from a physician:

"I've had issues with the way insurance is moving with caring for patients.  Many patients on high deductible plans want me to go over ALL their medical problems/concerns during their preventative visit then code it as preventative since that has to be covered 100%.  That just seems like fraud to me, and when I tell them I can go over their back pain and their side effects from their blood pressure medications but it's not preventative so there may be some charges, multiple patients have gotten very angry at me."

I of course pointed out that it is, in fact, fraud, and that it was wise to have declined the request. The rest seems to confirm what we learned from Kelley, and is likely to get worse.

I actually received a follow-up email this morning (in direct response to Kelley's post):

"I was seeing a patient for blood pressure and adjusting their medication because her blood pressure was still high.  She hadn't paid her bills yet, but I was still happy to see her for a follow up (we can set up a payment plan if a patient has difficulty paying their bills).  She asked my secretary if there would be an additional charge for that visit that day.  When my secretary said that, yes, a charge for that day's visit would be sent to the insurance company, the patient had a break down.  She started screaming that it's a follow up and should be covered under the same charge as her first visit.  She then said that if she dies it's our fault, refused to be seen if the visit wasn't guaranteed to be free, and stormed out of the office."

That'll teach that awful doc.

Right?

It seems to me that there are actually a number of different issues at play here:

First, it'd be interesting to know how many of these folks are newly-insured, and thus unfamiliar with how office visit co-pays have worked for a very long time. After all, the idea that co-pays apply to each discrete visit isn't new. And even on plans without co-pays (such as HSAs) it's always been the case that each visit generates its own charge.

I'd also be interested to see if this trend holds, and whether it drives more physicians to DPC or Concierge models.

Oh brave new world, indeed.

Obamacare's Three R's - And Then Some

Nope, its not reading, writing, and arithmetic. We all should know that when it comes to Obamacare the people who wrote it didn't comprehend it, nobody who voted for or against it had read it, and the arithmetic, well let's just say it's wrong.

So what are the Three R's of Obamacare? It's Reinsurance, Risk Adjustment, and Risk Corridors. All are mechanisms designed to help insurers stay in business when the pool of sick people cannonballed into the Exchanges last year. The confusion begins because most folks don't understand that each works through a different channel with different funding mechanisms and payouts.

Here's a little explainer that I hope will provide insight into the trouble insurers are getting into because they have relied on these three mechanisms.

We will start with the two "temporary" programs, Transitional Reinsurance and the Risk Corridor.

TRANSITIONAL REINSURANCE

Transitional Reinsurance began in 2014 and is scheduled to end in 2016. This mechanism is designed to pay plans that insure higher cost individuals. All health insurance issuers and all self-funded plans pay into this fund (yes, everyone who has insurance pays this). However, only individual market plans with high cost enrollees receive funds.

In 2014 the reinsurance fund received $63 per covered person per year. If you have a family of five the insurer pays $315 to the reinsurance fund. For 2015 the fund is receiving $44 per covered person. The last year of the program is scheduled to be $27 but has not yet been finalized.

Originally the Transitional Reinsurance fund was scheduled to pay high claims in the individual market. The insurer would receive 80% reimbursement of a claim from $60,000 up to $250,000. For example, if a covered member with insurer A had a $160,000 claim the insurer would pay $60,000 plus 20% of the remaining $100,000 for a total of $80,000. The Reinsurance fund would pay the other $80,000.

Because the enrollment in individual plans was so low and everyone still paid in, the the geniuses in DC decided to change how they were paying out the Reinsurance. They lowered the threshold down to $45,000 and increased the coinsurance to 100%. So in the scenario above the actual payment would have been $45,000 for the insurer and $115,000 paid by the Reinsurance fund.

RISK CORRIDOR

The Risk Corridor program is one that is currently getting all of the attention. This three year program was set to transfer money from profitable insurers to insurers who suffered losses in Exchanges. It only applies to insurers who offer Qualified Health Plans (QHP). In this case any insurer who participated and had less than 97% of target amounts of claims pays into the funds and any insurer who had more than 103% of target amounts receives the funds. It was supposed to work in conjunction with the Minimum Loss Ratio provisions of Obamacare. In this program payments do not have to be net to zero. In other words, if there is money left over the government keeps it. Or, if there isn't enough money then insurers could get hammered with losses.

The goal of this program was to push insurers not to set their rates too high by promising to pay those who undercut their premiums with money from insurers who set their rates too high. In many cases insurers, especially the new non-profit insurance Cooperatives, assumed they would be receiving money from this mechanism.

Last year 86% of all insurers either recorded a receivable (30%) or no receivable or payable (56%) meaning that they all were either counting on funds or didn't plan to have to pay any funds. Initially HHS estimated that $2.9 billion dollars would be available for those insurers who were losing money. What is actually paying out is around $362 million. Yes, that is 13% of the original target.

The outcomes have been brutal, especially for those insurers who were just starting up or are regional or local carriers that weren't flush with capital to begin with. As of this post it appears that 11 of the 23 Obamacare financed Insurance Cooperatives have announced they are shuttering their plans. In almost every case the main culprit is the extreme reduction of Risk Corridor funds they were counting on to keep them afloat.

RISK ADJUSTMENT

The Risk Adjustment program is the only permanent program under Obamacare's reinsurance vehicles. This is designed to transfer funds from insurers who have lower insured risk profiles to insurers with higher risk profiles. The program has a net to zero payment system meaning that there should always be funding for it. This could mean more payments for profitable insurers and more receivables for insurers who suffer heavy losses.

This program includes all insurance plans in the individual and small group markets that are not grandfathered regardless of whether or not they are in the Exchange. It has been hard to determine how much this fee will cost insurers as the volatility in the marketplace is pretty intense. Until there is credible claims data, insurers will have to hope their actuaries have excellent crystal balls.

CONCLUSION OR JUST THE BEGINNING?

While these three items appear to be getting all the attention it's important to note this is just the beginning, and in most cases, a very small sliver of the new costs insurers are facing due to Obamacare.

If you really want to see how your costs are impacted we must also include the PCORI fee that indexes annually but sunsets in 2019, the annual Health Insurance Industry Fee that according to most insurance carriers will account for 3%-4% of your premiums annually, the Health Insurance Marketplace fee that HHS has set at 3.5% in states using the Federal Exchange, and finally, the soon-to-come Cadillac Tax on premiums in excess of a set amount. The Cadillac tax will be a 40% excise tax on insurance companies who have plans with premiums that are considered "too high".

THE REAL CONCLUSION

We all have been hoodwinked and Democrats keep telling us that Obamacare is working. They are right: it's working for the government.

A government which now has assembled a 3.5% fee on your premiums for Exchange operations, a 4% tax on insurance premiums that insurers must pay, a $2.08 PCORI fee that each insured person must pay, a $63 (now $44) per insured person fee for reinsurance, an unknown amount that profitable insurers must pay to insurers who incur losses through risk adjustment, and lastly an overwhelmingly underfunded risk corridor program that is causing insurers to consider closing their doors because they can't financially stay in business.

So much for the promise of $2500 savings in our insurance premiums. With the government piling on layer after layer there's no way your insurance premiums won't keep going up.

Wolverine CO-OP flailing

Looks like we can add Consumers Mutual Insurance of Michigan to the growing list of CO-OPs headed down the tubes:

"While Eich said he could not disclose the options, he said one is “winding down” the company, which has 28,000 members, including about 6,000 on the exchange"

This, after blowing through an initial $72 million of tax-payer dollars just to get started, and another $150,000 from various Michigan counties. The good news is that all of these funds will be paid back...wait, what?

"It is not clear who would be responsible for paying back any of the loans, after all the claims are paid by Consumers."

Oh.

[Hat Tip: Co-blogger Bob V]

Musings on ACA Open Enrollment Day

“I’ve paid you enough”

This is an actual sentence uttered to me by a patient who was resisting coming back in for an appointment to see the physician regarding treatment of a severe infection. The physician wanted to monitor her during her run of medications, but due to her high co-pay and astronomical deductible, she “felt” that she had already paid enough.

” I need to cancel this test for now.  My insurance will not pay because it will go straight to the deductible which is $5500 and my family has not even met it yet.  I CAN NOT AFFORD A LARGE MEDICAL BILL. I will just have to wait until next year, maybe August 2016 before i can have the test.”

This is a message another patient left on the portal, canceling a rather important test due to her high deductible.

Then from my medical practice list serve was this quote regarding patients paying their co-payment and out of pocket expenses:

“We are looking to strengthen the policy about collection of deductibles but sometimes the amounts are just too darn high that folks don't come in because they are not able to pay for them.

Classic example:  The patient's deductible is literally $5.000.00 who is not coming in the door with this kind of money even with enough balance on their credit limit to pay for it even if having one.  Meaning that if we verify coverage before they come in it's still not helping.”

Now, correct me if I am wrong, but wasn’t the ACA supposed to LOWER medical costs to encourage patients to INCREASE their visits to the physicians? What I and my colleagues across the country are experiencing is that patients are not coming in for their visits, citing costs as the most common reason for cancelling their appointment or putting off treatment.

I noted several years ago that more patients had plans with high deductibles and that our bad debt by patients was rising, I instituted a payment plan to help my patients pay their large medical bills. I became more proactive in contacting the patients regarding high out-of-pocket expenses and then setting them up on a payment plan, anywhere from two to six monthly payments, to handle their expenses.  For some patients, even payment plans do not work because they do not have any extra money. It is becoming more difficult to collect monies owed by patients and I do not see it becoming any easier in the near future.

So, as Americans go to the Marketplace today and in the next few weeks and are enticed to buy a bronze plan because the premiums are lower, please remember to look at the deductible and calculate if you can “afford” to have such “inexpensive” health insurance.

Medicaid vs Insurance

So, over on Twitter (among other places), folks have been crowing that Medicaid expansion has contributed mightily in bringing down the number of uninsured. I politely pointed out that Medicaid ≠ insurance, which then set off a storm of protests:

"CHIP has the word insurance in the title."

 Abraham Lincoln had an answer for that one.

I also pointed out that (obviously) insurance = risk + premium, while Medicaid = income redistribution.

They didn't like that either:

Sigh.

It's really a very simple thing, so I challenged my detractors to "name an insurance company that sells Medicaid policies."

FoIB Allison Bell gamely offered "Anthem, UnitedHealth, Aetna, Centene" as examples. This refers to carriers which have entered into agreements with states seeking to "privatize" Medicaid.

Unfortunately, this answer also doesn't fly, for the simple reason that these carriers don't "sell" Medicaid policies, they administer Medicaid for participating states. They are paid by taxpayers as a whole, not individual policyholders.

Nice try, though!

The salient point here is that Medicaid beneficiaries [ed: hey - that's another clue!], unlike those who purchase insurance, have no skin in the game. Now, one could make the case that neither do folks who "buy" fully subsidized ObamaPlans, but that's another post.