Aetna joins the parade

Aetna, and its Coventry affiliate, becomes the next major player to cry "no mas" on new business. In email this morning:

"We will not pay commissions for sales with coverage effective dates after March 1, 2016, and continuing through December 31, 2016 effective dates.  This applies to on- and off-exchange business."

Again, this is unquestionably a sound business (from their point of view): the fewer agents writing business (because let's face it: no one wants to work for free) the fewer new policies, and thus fewer claims.

Why is this important? Well, because the carriers are finding that off-Open Season enrollees tend to generate more (and more expensive) claims, and are more likely to drop coverage. What better way to tamp down on this abuse than by drastically curtailing the opportunity for it?

Gee, who coulda seen that coming?

Oh, yeah.

What Single Payer looks like

Words fail:

Tucson News Now

[Hat Tip: RedState]

SvenCare© Failing

It's been a while since we checked in on the Swedish national health care scheme (most recently here). Despite the country's relative homogeneity (which, to be fair, has come under increasing challenge due to the influx of, um, refugees), the system has gone on overload, with increasingly long wait times and a corresponding decrease in actual health care delivery.

As a result, almost 10% of the population now owns private health insurance, -

Wait: you didn't know that countries with national health care schemes also harbor the deep, dark secret shame of private health insurance? Regular IB readers know -

which amounts to almost half a million folks. And what does such a policy provide? Well, for one thing, much shorter wait times, which translates to faster return-to-work times, so it's win-win for those hard-working Swedes.

[Hat Tip: Co-blogger Mike F]

#TooBigToFail, insurance-style

So this headline caught my attention:

MetLife in talks with MassMutual for premier client deal

Briefly, Met's looking at spinning off its US advisor force, which caters to "middle- to upper-income consumers, including small-to-medium sized company executives and small business owners."

Intriguing, yes, but (way) outside my wheelhouse, so I called on my resident guru of all things "advisorish" FoIB Jeff M:

"Hey Jeff, I have a feeling this is important, but I don’t really understand it. Help?"

As usual, he jumped right into the fray, explaining:

"A week or so ago, the Feds declared Met as "too big to fail" thereby telling them..."You need to sell some of your business 'cause if one of your business units fails, it will cause grave harm to the US economy." Therefore and henceforth, Met is talking with Mass about Mass buying Met's life business.

Clear?"

Crystal.

Of course, there's a shorter version, as well:

"Nice business ya got here, be a shame somethin' were to happen to it...."

Hmmm.

Health Wonk Review: One step forward edition

Just when I think that the HWR can't possibly get any better, along comes good friend Louise Norris to prove me wrong. In fact, it may take me a while to read through all the great posts, from BHP's to pregnancy-as-SEP, digital health to those pesky 1040's, just terrific content.

Thanks, Louise!

Wednesday Afternoon Linkage

■ Courtesy of FoIB Jeff M, we learn that North Carolina's Blue Cross/Shield is continuing to take on water as its customer information interface melts down:

"Moncol learned all of the information several weeks ago when she went online to check her family's health savings account and found data on the McAllister family instead. After a few more clicks, she found she could access the investment accounts tied to the HSA."

Ooops. In fact, she could have actually changed pretty much all of that other family's info, or stolen their identity were she "that kind of person" (which, thankfully, she's not). But talk about a security hole big enough to drive a Mack truck through. Looks like the Tar Heel State's Blues could give the security-flawed 404Care.gov site a run for its money. 

■ As we've long noted, the above-mentioned 404care.gov site is rife with security issues, and as FoIB Holly R alerts us:

"During the two years before the disastrous opening of HealthCare.gov, federal officials in charge of creating the online insurance marketplace received 18 written warnings that the mammoth project was mismanaged and off course but never considered postponing its launch"

Well of course not, silly: why would massive security flaws hold us up? 

■ Another long-term topic has been faith-based (primarily Christian) "sharing ministries," a sort of religious crowd-funding arrangement for health care financing. Co-blogger Bob V sent us this latest news:

"The use of so-called “health sharing ministries” has soared in the wake of President Barack Obama’s health care reforms ... membership has more than doubled, from about 200,000 to about 530,000"

At over half a million participants, this is definitely a force with which to be reckoned. The usual caveats apply, of course: "the plans offer members no guarantee their medical bills will be shared, and ministries aren’t obligated to include a range of care that insurance companies are."

Still, by saving thousands of dollars in potential fines, and tens of thousands in deductibles and co-insurance, it sure seems that these folks have found something that works for them. and the fact that their ranks have swelled so fast and so far is pretty good proof of its appeal and effectiveness.

MVNHS© *still* hates young people

To be fair, they hate old folks, too, but The Much Vaunted National Health Service© seems to have a special place in the spot where their hearts should be for young people:

"A newlywed in Leeds, Britain, died about 18 months after developing a relentless itch all over her body, which doctors mistook as scabies or allergies but was actually a symptom of bile duct cancer"

And for the record: no, lotions and balms won't cut it versus chemo. By the time these rocket surgeons finally figured out that it was, in fact, cancer, it was too late and the poor woman passed away soon after. And lest we turn a cold eye, it would be well to remember that this type of health "care" scheme is the end goal of The ObamaTax.

Sleep tight.

Goodluck.gov - A Case Study In Government Failure

The HHS Office of Inspector General released a 92 page report today on the failure of the Obamacare exchange. Here's a summary of what they determined in case you don't want to read the whole thing:

"The development of HealthCare.gov faced a high risk of failure, given the technical complexity required, the fixed deadline, and a high degree of uncertainty about mission, scope, and funding. Still, we found that HHS and CMS made many missteps throughout development and implementation that led to the poor launch. Most critical was the absence of clear leadership, which caused delays in decisionmaking, lack of clarity in project tasks, and the inability of CMS to recognize the magnitude of problems as the project deteriorated. Additional HHS and CMS missteps included devoting too much time to developing policy, which left too little time for developing the website; making poor technical decisions; and failing to properly manage its key website development contract. CMS’s organizational structure and culture also hampered progress, including poor coordination between policy and technical work, resistance to communicating and heeding warnings of “bad news,” and reluctance to alter plans in the face of problems. CMS continued on a failing path to developing HealthCare.gov despite signs of trouble, making rushed corrections shortly before the launch that proved insufficient. These structural, cultural, and tactical deficiencies were particularly problematic for HealthCare.gov given the significant challenges of implementing a new program involving multiple stakeholders and a large technology build."

More than two years later and the DC braintrust is finally reiterating what we have been saying since before the launch of this tire fire.

You can't make this up, Kynect edition

From email just now:

"kynect.ky.gov will be down for maintenance from 7pm on Wednesday, February 24th until 7 am on Monday, February 29th. During maintenance, kynect customer service at 1-855-4kynect will not be able to help you enroll in coverage. This is to allow for the launch of a new Cabinet for Health and Family Services website, benefind."

And what, you may ask, is "benefind?"

Well:

"benefind allows Kentucky's families to easily access public assistance benefits and information 24/7 through an online application account"

We wrote recently of the demise of the Blue Grass State's Kynect program, looks like it's been repurposed.

Yay.

[Hat Tip: Cornerstone]

Your Tax $$'s Hard @ Work

For given values of "work."

Contrary to Bob's post last year, it appears that illegal aliens are still getting major health care coin courtesy of the US taxpayer:

"Illegal immigrants and individuals with unclear legal status wrongly benefited from up to $750 million in ObamaCare subsidies and the government is struggling to recoup the money"

Oh, I'm sure they're trying really hard.

Of course, this is really a problem with the whole system: while the 404Care.gov site requires one to "prove" one's eligibility, it gives folks months to come up with the appropriate documentation. And then, well, how long does it take to vet that "proof" once received? Meanwhile, hundreds of millions of dollars are flowing out of Treasury's coffers (directly to "unsuspecting" insurance carriers).

Funny how that works, no?

[Hat Tip: weaselzippers]

MVNHS© vs Cancer: You win!

If one wishes to see the (near) future of health care here in the US, one need only look Across the Pond to the Much Vaunted National Health Service©:

"Thousands of cancer patients to be denied treatment

Common drugs for breast, bowel, prostate, pancreatic and blood cancer will no longer be funded by the NHS following sweeping cutbacks"

Over 5,000 victims "beneficiaries" of that nationalized healthcare scheme will no longer receive the life-saving meds they need, and for which they relied on (apparently worthless) government promises. Round after round of cuts have been imposed as the system becomes increasingly unsustainable.

And why is that?

Well, one reason is the "sudden" influx of folks with no previous (or current, apparently) skin in the game. Another is a long-standing, downward trend in the actual delivery of care.

Something about getting what you pay for....

[Hat Tip: Co-blogger Bob V]

Privacy: Protection and Prevention

Every day, it seems, we hear about another computer security breach, with private financial, medical and other information, often including social security and credit card numbers.

In fact, I remarked recently - not entirely tongue in cheek - that the self-avowedly security-challenged 404Care.gov site seemed to be a "brilliant marketing scheme by LifeLock."

Which brings us to the newest addition to the Resources section of our sidebar: LifeLock.

We've partnered with the experts on protecting your most vital information, and can even offer a 10% discount for our readers. Just click on the LifeLock button for details, and (if you're so inclined) to sign up.

Thurston & Lovey, Subsidized

Courtesy of HotAir, we have this story about the North Star State's health insurance exchange, as well as its Medicaid program:

"When a millionaire on Medicaid calls you and says, ‘I’m going to spend the winter in Florida. Can you help me find a doctor,’ it’s like, what?”

Of course, this is hardly exclusive to Minnesota; the rules for calculating subsidy and Medicaid eligibility all rely solely on income. And if you're a millionaire, well, then, you have access to some pretty sharp accounting folks who can help you make darned sure that your MAGI is within acceptable range for either a subsidy or Medicaid.

There is, though, this little question:

"If they have $500,000 or $1 million in net worth, should these people qualify for subsidies?"

To which I would reply: Talk to the Hand, Judge Learned Hand.

Rx News: 70/30 is the new 80/20

It's a truism that (for example) 20% of one's customers create 80% of one's problems; the ratio is applicable to many other situations, as well.

But one area where it's apparently not is specialty meds:

"3 percent of the total pharmacy prescriptions are considered specialty, but they cost 30 percent of a plan’s overall pharmacy expense."

I should point out that this isn't exactly groundbreaking news; as we reported almost 6 years ago, "[a]ccording to UHC, "specialty medications" (e.g. injectibles) are used by less than 1% of its insureds, but represent an astonishing 20% of its pharma claims." And of course, med's are a major driver of health insurance costs, which is why we're seeing so many of them being moved to higher (and more expensive to the insured) tiers.

As pointed out in the article linked above, pharma costs increased 13% in 2014, driven in large part by "a 30.9 percent increase in spending on specialty pharmaceuticals." And it's only going to become worse as the population ages, generating demand for more and more meds to combat chronic conditions like arthritis and Alzheimers.

Happy days, indeed.

[Hat Tip: Allison Bell]

Monday LinkFest

■ First up, some potential good news in the war on cancer, specifically the early detection there of:

"Scientists are developing a 10-minute cancer test which can be taken at home with just a drop of saliva"

Just as with pregnancy tests, this simple and inexpensive (about $20) tech is unobtrusive and doesn't require even a pinprick of blood; best of all, it's (supposedly) 100% accurate.

It's about to enter clinical trials this year, and they're hoping for FDA approval by 2018.

■ The Zika virus is the newest crisis-du-jour, and with good reason: it's already led to numerous birth defects, and is thus far unstoppable. Add to that the fact that certain areas - particularly in the Caribbean - seem more infested than others, and the folks who sell travel insurance plans are having to really step up their game. FoIB Holly R passed along this news:

"InsureMyTrip, a travel insurance comparison site, reported a 20% surge in calls last week from travelers worried about the virus." The number one question they're getting is whether folks traveling to Zika hotspots can, out of an abundance of concern, cancel their trips and receive a refund.

The short answer: probably not. The longer answer: it depends. On what, you may ask? On whether or not you purchased the upgraded plan that includes an "any cause" bailout provision. Something to consider if you'r e planning that mid-winter cruise...

■ We've long been proponents of Concierge-model health care. As FoIB Jeff M tips us:

"North Raleigh physician is state's first embracing hybrid medical model ... under which patients pay an annual retainer fee and in return receive longer consultations during their office visits, along with Belcea’s promise to track patients’ medical conditions more closely and follow up as he or they see a need to do so."

As The ObamaTax continues its stranglehold on how healthcare is financed (and hence delivered), I would expect to see many more physicians adopt this type of practice (or it's cousin, Direct Primary Care).

(Un)Sustainability: 1,000 Words

[click pic to embiggen]

[Hat Tip: SoIB GS; Source]

Phrasing!

Ummm:

[Source]

[Hat Tip: Ʀєfùsєηíκ]

Late Breaking: Money, Money Health Wonk Review

Steve Anderson hosts this week's break-out edition of the Health Wonk Review. It's about money, for sure, bit it's also about egregious wealth creation (well, okay, that's money) and wasteful legislation, patient-centered care and connectivity.

In fact, it's just a great collection of thought-provoking insights - kudos to Steve!

North Carolina Blue Cross Struggling

Last month, we reported on some of the major challenges facing the Tar Heel State's Blue Cross/Shield:

"[M]essing up plan selections and effective dates, and dropping the ball on confirmations ... increasing security and safety measures at their facilities due to incidents involving “extremely frustrated customers.”

Well, the heat's now been turned up to red hot:

"The N.C. Department of Insurance will examine Blue Cross and Blue Shield of North Carolina to monitor the health insurer related to billing, coverage verification and other software issues ... [and] monitor compliance with statutes and regulations.”

Talk about an unenviable position.

But wait, it gets better (for certain values of "better"):

"Blue Cross CEO says insurer may leave ACA market in NC in 2017 ... expects to report its second consecutive financial loss in the coming weeks."

Y'know, when we mention "catastrophic plans" we're talking about HSA's, not bailing out water from a sinking boat.

[Hat Tip: FoIB Jeff M]

MVNHS© Struggling

Britain's Much Vaunted National Health System© is "on its knees:"

"[T]hanks to migrants from the European Union (EU) taking advantage of free movement rules.

Cancer treatment can cost up to £200,000 for the UK’s socialised healthcare service, and under Brussels law Britain must offer it to all EU nationals."

Long-time readers may recall co-blogger Mike's post on the Schengen Convention, which required  "that persons seeking an entry visa to a signatory country must have adequate medical insurance of their own." At the time, this was apparently vigorously enforced. Now, not so much:

"NHS Trusts were not prepared for the millions of EU migrants who have poured into Britain because the Government estimate was nowhere near the reality."

Sounds familiar, no?

The result, of course, is that the already shaky national health care scheme has become even less stable, as the government (really the British taxpayer, of course) scrambles to provide even modest levels of care. Add in the ever-increasing provider shortage ("less than 20 per cent of students wanting to become GPs") and you having the makings of an impending total collapse of the system.

But don't get too confident about our own, since we're facing pretty much the same (bleak) future under ObamaCare and open borders.

My favorite part of the MVNHS© saga, though, is this gem:

"Britain is attracting thousands of health tourists from across the EU who cannot get certain drugs or treatments in their home country so come to Britain and demand them as EU citizens."

"Health tourists." Yeah, go with that.

[Hat Tip: Co-blogger Bob V]

Genworth Struggling

Several days ago, Genworth Financial (one of the major LTCi carriers) suspended "new sales of life insurance products and fixed annuities to help reverse financial losses."

On the one hand, this should save the troubled carrier upwards of "$50 million in annual expenses." On the other, and this is the puzzler to me, it means they've also cut off a major source of revenue. I especially don't understand why they're stopping annuity sales; seems to me that these would be one of their more profitable lines.

Apparently not, though.

It's not surprising that they took major hits on their Long Term Care insurance business, that's pretty much industry SOP. As we noted the other day, these policies are quite different in terms of underwriting and claims than life insurance. Still, seems like there's something else going on here.

And, of course, there is.

We were able to obtain a copy of the February 5th report that Genworth sent to its field force. It's marked "FOR PRODUCER USE ONLY: NOT TO BE SHOWN TO THE PUBLIC," so we'll respect that but note some interesting tidbits:

"GAAP (Generally Accepted Accounting Principles) loss recognition testing margins for the business written since late 1995 were approximately $2.5 to $3.0 billion as higher expected future claim costs and expenses were more than offset by the impact of future in-force rate actions."

That makes sense: as noted above, there are decent profit margins built into life insurance and annuity plans.

The report also expands on the cost-cutting moves mentioned previously:

"Actions taken in 2015 are expected to reduce cash expenses by approximately $90 to $100 million pre-tax on an annualized basis, bringing total expected cash expense reductions to $150 million or more."

That's a substantial chunk of change; whether or not it's sufficient remains to be seen.

In a bit of damage control, the report confirms that "Genworth’s life insurance companies have more than sufficient capital to pay all eligible claims as they arise." This in order to squelch the (reasonable) objection "will y'all actually be around to pay my claim?"

And, of course, the company will continue (at least for now) to service existing policyowners. Of course, that's not necessarily a permanent commitment (just ask folks with Time or John Hancock life insurance policies).

One question that the report does not effectively address is the future of its LTCi business. It notes that the carrier is planning to "separate and isolate" that line from the life/annuity side, while noting in passing the very real challenge of its "LTC legacy block issues that continue to pressure ratings across the organization." In other words: they're getting hammered on older in-force plans.

We've discussed this before: "[T]oo many folks have kept their policies (not a bad thing, per se, just that carriers count on a certain amount of attrition), so both claims and reserves continue to mount." And of course, the longer the plans stay in force, the more likely they are to generate a claim (or claims).

[Hat Tip: FoIB Jeff M and Brian D]

Privacy, Shmivacy Redux

"You have no reasonable expectation of privacy regarding any communication or data transiting or stored on this information system"

As we noted several years ago, that's the (explicitly hidden) message greeting newly-registered visitors to the 404Care.gov site. But that rat's nest is far from the only place that your "private" health info isn't so private. To be sure, we've been blogging on this very issue for over a decade, but the stakes have grown higher, and the problem larger.

FoIB Ʀєfùsєηíκ did some heavy-duty research to document the claim that nothing's really private anymore:

"No one told the average American that HIPAA loosened data exchange and that it’s expanded now with HITECH, even to the community level, such that individuals are targeted for intervention by social services agencies.

And no one told patients that “de-identified data” is a myth ... Technology has advanced such that patients can rather easily be re-identified."

And since a picture's worth 1,000 words:

[click to embiggen]

I'm still not convinced that the whole ObamaTax isn't just a brilliant marketing scheme by LifeLock.

[Pic source]

How Much Does That Website Cost?

Open Enrollment 3.0 is complete. Now the brain trusts of Obamacare are touting the great success of healthcare.gov in managing the people who signed up without issues this year. Before they get too excited maybe we should step back and take a look at what we are paying for this "experience".

The Federally Facilitated Marketplace (FFM) charges a user fee of 3.5% of the premium. With an average premium of $4,152 in 2014 each enrolled person was paying $145.32. That's a cool $785 million based on the ASPE figures of 5.4 million people enrolled.

One would think that as the number of users increased an economy of scale would make this more affordable. Unfortunately this isn't the case. Since premiums increased (I know, can you believe it?) and HHS has kept the user fee at 3.5% we have seen a higher cost per person to operate the exchange.

With an average premium of $4,896 in 2016 the new cost per enrolled person is $171.36. With 9.6 million enrolled in the FFM it is now costing $1.65 billion to operate the exchange.

By the way, thanks taxpayers. You are paying 67% of these costs.

Tell me again why we haven't abandoned this tire fire yet.

Assumption status: #Fail

What with carriers cutting (and threatening to cut) agent commissions on individual health policies, I thought it'd be interesting to see if there was any change in the number of us who made the effort over the past few years  to become Marketplace certified. I assumed (yeah, I know) that the number would trend down, but had difficulty tracking accurate info on that.

Thanks to co-blogger Patrick P, however, we now have that data, and it's pretty interesting, if surprising (at least to me):

2014: 71,322
2015: 77,478
2016: 80,684

Now, that includes both individual and SHOP registration, but as I pointed out to Patrick, I think it's unlikely that there would be many agents who would go through the rigorous individual certification process and then skip the very simple SHOP registration one.

So we see that from the first year to the second, there was an increase of about  8.5% in the number of agents pulling the FFM trigger. Then from last year to this, the total again grew, but by a much smaller margin (a little over 4%, or about half of the previous season's).

If that trend holds, than next year one would expect to see about 1,600 new agents sign on.

But I don't think they will; in fact, I suspect that there will be a significant drop in the number of agents who bother to go through the training just so they can "sell" a product that doesn't pay a commission.

Time will, of course, tell.

End of Week Linkage [UPDATED]

■ First up, a tale of wasteful spending courtesy of co-blogger Bob V. According to the Congressional Budget Office:

"It will cost the federal government – taxpayers, that is – $50,000 for every person who gets health insurance under the Obamacare law"

And keep in mind, that's in addition to any actual premiums paid directly to insurers. And it still doesn't actually solve the "problem" of the uninsured:

"The best-case scenario described by the CBO would result in ‘between 24 million and 27 million’ fewer Americans being uninsured in 2025"

That's almost 1½ trillion dollars spent over 20 years and there will still be millions of folks left uninsured.

Great job!

■ Next up, from FoIB Jeff M, is some bad news for some Tar Heel State employees, who "could lose access to a popular health insurance option and see costs for other options rise." [ed: Updated, see below]

This despite the fact that President Obama himself promised that this could never happen.

UPDATE: It appears that this plan will not be eliminated (at least for now). Interesting.

Oh, and the bureauweenies in charge are also considering "eliminating coverage for spouses."

To be fair, lots of employers have begun adopting this strategy, and from their perspective it makes a lot of (financial) sense. And everyone then talks about how that's "dumping" these people "onto the Exchange." But what no one seems to have noticed is that it also creates an additional burden on families: health insurance plans have both individual and family Maximum Out-of-Pockets. But when you split them up, so that Dad's covered on one plan, and Mom and the kids on another, you've just added an additional additional out-of-pocket expenses.

Nice.

■ For Ohio-licensed insurance agents, there's some good news: the Buckeye State joins "21 other states that already allow insurance agents to carry over excess CE credits." This is welcome news for those of us who find themselves with extra CE's at the end of a cycle.

So what's keeping those other 36 states from joining in?

Finally! Free male cancer screening

Regular readers already know that the long list of ObamaTax "freebies" (preventive care bennies paid at 100% with no deductible, etc) does not include male-specific items such as prostate screenings.

But never fear, turns out a completely different Federal agency has that covered:

"At the Newark Liberty Airport TSA agent Dennis Brown discovered a lump on a local man’s testicle."

I for one had no idea that the pre-flight exam screening was so...thorough:

"TSA agents are told to “Thoroughly inspect the testicles.”

Guess Mom was right again about that whole clean underwear advice.

[Hat Tip: ‏@BrentCochran1]

Interesting Underwriting Dilemna

Had an unusual message when I arrived at the office today:

"Good morning! I'm considering donating a kidney to my father, and I've been told to ask about my life insurance. For one thing, can they cancel it or raise my rates if I do go through with with the donation, and will it affect my ability to increase my coverage later on?"

Great questions. First, no, companies can't cancel or increase the premiums on existing plans if you do go ahead. Carriers are only allowed to cancel existing plans if you either stop paying premiums (which is really you cancelling them) or for committing fraud when you applied.

The going forward part is interesting though: I presumed that there could (indeed, probably would) be some negative impact, at least initially. But I offered to reach out to the underwriter at my primary company, and she told me that "the client can be considered for coverage and for preferred class as long as the remaining kidney is functioning normally."

Pretty nifty!

And so it begins

Well, to be fair, it'd already begun, but I believe this marks the beginning of the end of agents selling health insurance plans. From Anthem email just now:

"[F]or 2016, we will not pay commissions on new Individual members who enroll in ACA-compliant medical plans - on or off the exchange - with effective dates between April 1, 2016 and December 31, 2016"

In comments to our post outlining why carriers really aren't allowed to pay different commission rates for on- vs off-Exchange business, co-blogger Bob commented:

"If [carriers] have to pay the same on and off the exchange, rather than raising (reinstating) commissions for HIX business just cut all business to $0."

Called it!

Aetna Not Pulling Plug on Obamacare .... Yet

In a not so surprising announcement from Aetna, CEO Mark Bertolini said Aetna is not giving up on Obamacare (yet) but  "has serious concerns about the sustainability of the public exchanges". - Bloomberg

Update on Obamacare by the numbers.

• Aetna’s 1 million individual commercial members make up 4.3 percent of its total membership, as of Dec. 31. Of those, 750,000 are people who signed up through the exchanges.
• UnitedHealth has said that it will probably take about $1 billion in losses on Obamacare plans when 2015 and 2016 results are combined. The company has that it should have stayed out of the market longer, and that it may quit the program in 2017

Indeed, the exchange (now called "The Marketplace") is a disaster for the carriers. 

Many who purchased coverage via the exchange pay little or nothing in premiums thanks to overly generous government handouts. 

Quite a few that secured coverage through the exchange did not have health insurance before. Some because they could not afford it. Others because a pre-existing health condition prohibited them from buying coverage.

A significant number of those who have a medical problem will rent insurance for a few months, get their medical issue treated, then drop coverage. The average time on the books for exchange business is 7 months and many cancel within 90 days.

Navigators that work for the exchange have no real understanding of health insurance and frequently take applications for people who should not qualify for coverage.  Subsequent audits for required documentation often results in coverage that is cancelled by the carrier due to compliance issues.

A significant number of policies are also cancelled for non-payment of premium. This, in spite of the fact that many subsidized premiums are less than $10 per month!

Obamacare has turned out to be little more than snake oil that came with promises to lower your premiums, allow you to keep your doctor and your plan and the ability to bend the health care cost curve thereby saving millions of dollars.

Instead, most have lost their plan and their doctor, their premiums are double or triple what they were before (plus higher deductibles and out of pocket) and there is no indication of actual savings in health care.

Voters were promised a health care panacea and what we got was a turd.

#ObamacareFail

Thoughtful Carrier Trick

We've written before about Gleaner Life (most recently here), and I wanted to note just what nice folks they are.

I recently had the opportunity to write a pair of unique policies on a client's two children using Gleaner's "Just for Kids" plan. This is a very simple, inexpensive plan: for a one-time premium of $125, a child is insured for $10,000, and it's convertible without any medical exam for up to $50,000. The initial coverage ends at age 25.

This is an easy and inexpensive way to guarantee a child's future insurability, and to cover unexpected funeral costs should the need arise. But the very best part is the warm and genuine "Welcome" letter the parents (or grandparents) receive when the policy arrives. I've seen a lot of these kinds of "Thank You" letters from carriers - and they're all, of course, appreciated - but this one is just really special.

Anyway, just a very pleasant way to begin the week (and month).

So, about those $0 commissions

We've written about the chilling effect that insurers hope to create by lowering commissions on Exchange-based business (or doing away with them altogether). Most recently, the Kentucky Department of Insurance weighed in, noting that this practice would be viewed as a violation of the insurance code.

Well, seems like the stakes are actually a bit higher:

"(f) Broker compensation in a Federally-facilitated Exchange.   A QHP issuer must pay the same broker compensation for QHPs offered through a Federally-facilitated Exchange that the QHP issuer pays for similar health plans offered in the State outside a Federally-facilitated Exchange." [emphasis in original]

That's from the Code of Federal Regulations as it pertains to the ACA. Seems pretty clear to me.

So then the question becomes: where do we go from here?

[Hat Tip: Sabrina Corlette]

Monday Morning Linkage

■ Losses mounting:

"Obamacare may get more bad financial news next week, as more insurers are expected to report financial issues due to the healthcare law."

Not that this is a surprise to anyone that's been paying attention; after all, Blue Cross/Shield of North Carolina has racked up over $400 million in losses in just the past 24 months. Tip of the iceberg, really.
 
■ In a bit of irony, the IRS is warning uninsured folks about tax scams [ed: no, not that tax scam!]:

"In some cases ... unscrupulous tax preparers tell clients to pay the penalties directly to them, and they keep the money"

Biggest surprise: that there are still uninsured folks. I thought the ObamaTax was supposed to end all that. Hunh.

■ From email this morning:

"Working to stem the spiraling costs of health care, improve health care outcomes and ensure the adequacy of quality services for its membership, nonprofit InHealth Mutual, Ohio’s only health insurance CO-OP, has reconfigured its provider network to trim health provider costs that fall significantly outside the average of its overall network."

Which is a fancy way of saying that their network's gone on a major diet, shedding 10 hospitals and a slew of physicians.

Look for this to continue as carriers look to cut mounting ACA-related claims (it's what happens when you delete underwriting and then pay folks to purchase insurance).