A Carrier's Economist's take on ObamaCare

[Whew - That title really rolls off the tongue. FoIB and Blue Cross economist Michael Bertaut recently tweeted a series of posts explaining what has gone off the rails, and why. He's graciously granted us permission to post it here as a service to out readers]

As an economist for a Blue Plan, I can help; here are some of the impacts of the ACA on our organization and products since passage on 3/23/2010:

As an FYI, I've been in my role at at BCBSLA since 2004. Between 2010 and the actual ACA launch, we spent over $100,000,000 in new spending just on compliance work and building the systems to allow us to participate. This is money that could have bought actual health care. Pre-ACA we served an individual market with the following characteristics:

125,000 people

Average age 36 years

51% female

Average duration of 47 months [ed: how long folks kept their plans]

Average rate of $274/month

Average annual deductible $750

PPO broad network

Application rejection rate of 0.4% [ed: oh, the uninsurability cirsis!]

Fast forward to 2017:

165,000 people

Average age 46 years old [ed: 30% increase; older ~ sicker]

58% female [ed: more expensive claims]

Average duration 11 months [ed: one can see where this is heading...]

Average rate $725/month [ed: looks like Michael misspelled 3000% decrease]

Average deductible $3,500

Standard plans cover 40% of Medical providers (down from 95%) [ed: hello narrow networks!]

Rejection rate 0%

Only 40% of policyholders keep their plan for 12 premium payments in a row. [ed: let *that* sink in]

Despite huge rate increases and tight MLR restrictions our Individual block went from slightly profitable to -$250 million since 2014.

Oh, and now 52% of our individual customers qualify for $0 ATC/CSR. If there is a better way to wreck a market than the ACA, I haven’t found it yet.

Wondering why this happened? It’s actually 3 really bad policy decisions that have led us here:

■ The politically-determined (NOT economically-determined) age rating policy

■ The “federalization” of plan design which assumes states with $80,000 average annual household income will have same opportunity as states with $40,000.

■ And the real tragedy, repairing and creating stable insurance markets is hampered by lying politicians

Thanks, Michael!

Open Enrollment v5.0: ObamaCare #Winning

Ooops:

ACA Sign-Ups Fell by 4% This Year https://t.co/mQ2fAz1wG3

— Brit Hume (@brithume) December 23, 2017

In Memoriam: My Red-Headed Spitfire

I have been fortunate in my career to have some (very) longstanding clients. One of my very favorites, Pat B, passed way Christmas day at age 90. She'd been suffering from dementia for a while now, but was otherwise in (relatively) good health until very recently.

After over 30 years together, I miss her already.

When the girls were born, she knitted them the cutest little booties. She and Ernie were honored guests at our 10th anniversary party (also a long time ago).

I don't know many other agents who can brag that they actually insure every other member of a client's family, but I do. And can name them all (well, on a good day).

There was never a time that I didn't welcome seeing her bright red head passing by the window by our office's front door. She was strong-willed, and brightly-spirited. And she never missed calling me to wish me a happy birthday (we're both Libra's, so...).

Rest easy and well, dear Pat. You are missed.

Dayan Ha-Emet.

How Congress Can Fix Medicare

Congress needs to fix Medicare.

No they don't. It is fine the way it is. Besides, I EARNED it.

DC has been stealing money from the Trust Fund for years. Now there is nothing left to pay benefits.

Actually, the HI portion (Part A) seems to be solid for now. The Supplemental Insurance (Part B) is a bit more stable, mostly because it is funded in part by beneficiary premiums and "discretionary" general tax revenues.

The bigger problem facing Medicare is the decline in the ratio of workers paying taxes to beneficiaries.

But no worries. The folks at Juniper Research Group have it all figured out.

the Congressional Budget Office (CBO) in October released an updated analysis of illustrative proposals to create a premium support program for Medicare. The report explained how and why premium support could save even more money than CBO had estimated just a few years ago.

To the uninitiated, premium support would transform Medicare into a program roughly akin to the federal employee health benefit plan, or the Obamacare exchanges established in 2014. Insurers, including traditional government-run Medicare, would bid against each other to offer the usual complement of Medicare services. - MSN

Look at the statement in bold.

The solution is to create another Obamacare exchange, except for Medicare.

Tell me how well this has worked and then we can discuss it further.


#FixMedicare #SaveMedicare #Obamacare

Did You Know?

For many people the Christmas season has fond memories of family and friends, gifts, food (including lots of sugary treats) and more. Even those who do not have a Christian heritage, it is the music of the season that captures our attention and seems to lift our spirits.

Most of the Carols of Christmas are 200 years old and written by European musicians.

George Handel, a German born composer, spent much of his life in England. The Messiah, one of his more well known compositions, was written in 24 days. When he emerged from his study he is said to have exclaimed that he had "seen the face of God".

Contemporary Christian music has a place but has not replaced the hymns of old. The same is true for  most modern contemporary Christmas music.

One score, Mary Did You Know?, has been recorded by a number of musicians including Kenny Rogers, Donnie Osmond, Natalie Cole, Cee Lo Green and Pentatonix.

The Pentatonix version is sung acapella which differentiates itself from all the other recordings. The human voice is capable of producing sounds unequaled by musical instruments. This version is recorded without accompaniment, yet has a rich sound of woodwinds and percussion.

Written in the key of B minor, the song sounds similar to a Gregorian chant performed in an arched abbey.

The lyrics are simple yet provoke a wide range of emotions, especially among believers. Listen to the vocals and ponder the words. We believe even those who are not of the Christian faith will find peace and have their spirits lifted.

Merry Christmas from our place to yours.


Mary did you know that your baby boy will one day walk on water?

Mary did you know that your baby boy will save our sons and daughters?

Did you know that your baby boy has come to make you new?

This child that you've delivered, will soon deliver you

Mary did you know that your baby boy will give sight to a blind man?

Mary did you know that your baby boy will calm a storm with his hand?

Did you know that your baby boy has walked where angels trod?

And when you kiss your little baby, you have kissed the face of God

Mary did you know, Mary did you know, Mary did you know

The blind will see, the deaf will hear and the dead will live again

The lame will leap, the dumb will speak, the praises of the lamb

Mary did you know that your baby boy is Lord of all creation?

Mary did you know that your baby boy will one day rule the nations?

Did you know that your baby boy is heaven's perfect Lamb?

This sleeping child you're holding is the great I am

Mary did you know, Mary did you know, Mary did you know?


#Christmas #Mary

Efficient Use of Government Funds

For most, Open Enrollment 5.0 (OE5) in the Federal Marketplace is officially over. Trump's "sabotage" of the insurance market was a rousing success. In an all out assault on Obamacare they successfully cut the following funding:

• Outreach and Marketing from $100,000,000 to $10,000,000
• Unlicensed Assistance Programs from $63,000,000 to $37,000,000
• They also saved by reducing the amount of time people had for OE5 from 90 days to 45. This shortened window also saves on costs to pay government employees who work directly with enrollment assistance.
• Eliminated payments for Cost Sharing Reductions of over $7 Billion.

So what were Trump's sales results? Over 8.8 million people selected a plan. Down a paltry 4% from last year's enrollment of 9.2 million.

Exactly as every Obamacare supporter predicted.

STM takes a HIT

Our friends at Pivot Health, purveyors of Short Term Medical plans, alert us to the latest taxing information regarding these plans:

"In order to comply with section 9010 of the Affordable Care Act (ACA) insurance companies are subject to a new Health Insurance Tax, often referred to as HIT, of 3.5% that will be added to the cost of certain health insurance plans, including short term medical. 

The tax of 3.5% will be added to the Pivot Health Short Term Medical insurance premiums on policies with January 1, 2018 effective dates or later.  This would apply to clients that have started a 4 x 3 short term medical plan in 2017 or have a policy term starting in 2018.  Your client's health insurance premium will include this tax on all January 1, 2018 billing dates and beyond. 

This tax on health insurance premiums is a tax required by federal law."

The good news, if one can call it such, is that these plans are relatively inexpensive, so the nominal increase should be, well, nominal.

Still, it's another ObamaTax eating up value (and your health insurance dollars).

Life Insurance Poser: An Update

So, a few weeks ago I met with the widow of a client to complete the paperwork for filing a death claim. Complicating things was the fact that he died during the contestability period, which meant added scrutiny.

We quickly hit a bottleneck in the form of Matt's urologist, whose assistant wasn't particularly helpful, and so Amy asked me for help. Time was, I could easily make the phone call, but because of various privacy laws, doc's won't even acknowledge to me that a given person is even a patient. Still I offered to try, on the theory that perhaps Matt's privacy concerns died with him.

I never did hear back from the doc, but Amy called me a couple of days later to thank me; he'd completed and returned the form within a day of my call.

Heh.

About a week later, I received the check and let Amy know that it had arrived. And here's one of the two points I'd like to make:

It's still surprising to me that the current default in these circumstances is for the carrier to send the check directly to the beneficiary, and that this is at the agents' request. Unless said beneficiary is a plane-ride away, I just don't 'get' it: this is the most important part of the entire life insurance transaction. I made a promise to Matt that I would be there for Amy; how do I honor that promise by having the anonymous corporation entrust that check to Cliff Clavin for delivery (and maybe some practical advice)?

Which brings me to the second (albeit seriously intertwined) point: seeing the smile of gratitude on Amy's face reinforced just how important, and valuable, my job really is. I can stand tall knowing that I've helped to make it possible for her to continue her current standard of living for (at least) the foreseeable future.

What could possibly be better than that?

Pink Cadillac (Tax)

It's been a while since we last visited the Cadillac Tax:

"By postponing the Cadillac Tax from 2018 to 2020 ...  the federal government is reducing revenues to fund Obamacare"

And by the way, how'd that work out?

In the event, FoIB Rich W recently pointed out that:

"The ACA Cadillac Tax is still around, just not yet implemented. If employers do not crapify plans by pushing toward lower premium, higher out of pocket, over 50% of plans will be impacted w/in 5 years."

[click to embiggen]

On Single Payer: This will end well

A good friend, who actually lived through the experience, notes that the VA is, in fact, socialized medicine, with all the rights and privileges thereunto appertaining.

Such as this (via Stephen Miller) from McPaper:

"VA knowingly hires doctors with past malpractice claims, discipline for poor care ... [Schneider]  was forthright in his application about the license revocation and other malpractice troubles.But the VA hired him anyway."

Yay team!

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

"A VA hospital in Oklahoma knowingly hired a psychiatrist previously sanctioned for sexual misconduct who went on to sleep with a VA patient"

Talk about a purple heart.

But yeah, Single Payer (the explicit end-goal of ObamaCare) is gonna be great.

Oy, Canada! Part 6,437

Our friend Rich W alerts us to the latest CanuckCare news, and it's not pretty:

"Waiting for treatment has become a defining characteristic of Canadian health care ... waiting times for medically necessary treatment have in-creased since last year."

That last part is important because, unlike elective procedures, medically necessary treatment indicates a certain sense of urgency. And in the case of our Neighbors to the North, there are really two distinct factors at work:

First, "[fr]rom referral by a general practitioner to consultation with a specialist. The waiting time in this segment increased from 9.4 weeks in 2016 to 10.2 weeks this year." This could be potentially life-threatening; what if that referral was to an oncologist?

And second, "[f]rom the consultation with a specialist to the point at which the patient receives treatment. " Again, if chemo and/or radiation is called for, this could mean the difference between a few days versus years of life.

And, of course, the same would hold true for someone with, for example, an acute heart condition.

And it's not just treatment that's getting backburnered:

"Patients also experience significant waiting times for various diagnostic technologies."

These include what we'd consider fairly routine things like CT scans and MRI's, as well as ultrasounds, which could help detect potential issues in the baby.

The point, of course, is that single-payer medicine (the stated end-goal of ObamaCare) isn't the panacea its proponents tout it to be.

Always look on the Briteside of life

It was bound to happen:



And yes, the commercial is a parody of Big Pharma ads, but the service is legit (for certain values of "legit").

[Hat Tip: FoIB Holly R]

MVNHS©: The Gift that keeps on taking

Britain's Much Vaunted National Health System© has long been touted as the quintessential model of government-run, single-payer health "care." Today we offer two more shining examples of how that's working out.

First up, via FoIB Dr Gerard G, a lesson in how the MVNHS© manages to rein in run-away health care costs:

"Now NHS prepares to ration painkillers and routine operations: Bosses drawn guidelines after getting only a third of the money they asked for in the Budget"

That's really the fundamental problem with this kind of system: there's only so much supply to meet pent-up demand. As co-blogger Bob noted some time ago:

"The economics of goods and services can be reduced to simple demand and supply. Health care is no different ... Health care is also inelastic."

That is, one could substitute tea for coffee (for example), but there really isn't a substitute for health care. Sure, one could probably make do with an extra ibuprofen versus that codeine, but what's the stand-in for hip replacement?

Our second lesson comes courtesy of FoIB Rich W, who found this tragedy:

"Hospital apologises after pregnant teenager was turned away from hospital by midwife who blasted her for using an ambulance as ‘a taxi’ – just hours before her baby died."

Talk about compassionate care.

Fortunately, the hospital "was forced to apologise;" I'm sure that went a long way toward helping the young couple's healing process.

Good thing she didn't need that epidural.

Such a deal!

#ACAWinning!

[click to embiggen] 

For perspective, that translates to over $21,000 before the plan pays anything (well, except for free birth control and such). So again, going bare is no longer such an irrational response.

It's a Holly, Jolly Health Wonk Review

Our favorite elf (and HWR co-founder), Julie Ferguson, hosts this week's holiday-themed roundup of health care wonkery and policy.

Enjoy!

From the P&C Files: Winter is here!

Our friend Emily J at PuroClean ("The Paramedics of Property Damage") has some timely suggestions for IB readers:

The Complete Guide to Winterizing your Home

Now is the perfect time to prepare your home for the colder weather. Winterizing your home with the tips below are simple and easy. The longer you wait the more damage could possibly erupt with old man winter cold air rolls in.

Interior

• Furnace: When it comes to your heating system take the time to do a test run to make sure everything is working properly set to 80 degrees, listen for the furnace to turn on and wait for the warm air to blow. If it isn’t running properly, contact your local qualified service technician.
• Furnace Filters: Dirty filters can restrict airflow and boost energy demand. To extend the life of your furnace and keep costs low change furnace filters monthly.
• Preventing Freezing Pipes: Drain water from swimming pools and water sprinklers. Replace exterior faucets with freeze-proof faucets. Look for pipes that are vulnerable for freezing, pipes located by cracks or openings in walls, floors and ceilings. For pipes at risk for freezing consider installing specific products made to insulate water pipes like a "pipe sleeve" or installing UL-listed "heat tape," "heat cable," or similar materials on exposed water pipes. Keep the faucet on a trickle, cabinets open for warm air to circulate and if there are water supply lines in the garage keep the garage closed.  
• Thawing Pipes: Keep the faucet open for water to trickle out as you treat the frozen pipes, apply heat to the section of pipe using a electric heating pad, hair dryer or a space heater. Apply heat until the water pressure is fully restored, if you can not find the frozen section call a licensed plumber. If a pipe bursts or a water leak occurs, turn off your water shut-off valve and call your local service contractor..
• Air Ducts: Debris in air ducts can cause heating bills to rise. Get air ducts professionally cleaned by your local service contrator.
• Water Heater: Consider having your water heater flushed once a year.   
• Sump Pump: Test your sump pump to make sure it’s working properly.
• Home Detectors: Replace the batteries and test your smoke and carbon monoxide detectors.
• Put up some Plastic: A cheap alternative to prevent old drafty windows is buying a cheap window insulation kit at your local hardware store. This will help keep your home warm and your energy bills low.
• Fire Place: Clean and prepare your fire place and chimney. Make sure the chimney is clear of any nests from birds, squirrels or other animals. Inspect the fire brick in the fireplace, repair any mortar joint, a fire can spread into the stud wall behind the masonry fire brick.

Exterior

• Gutters: Clean gutters and downspouts to make sure both are free of leaves and debris, allowing water to flow properly. Clogged gutters are one of the major causes of ice dams. Replace old or damaged gutters with new ones that have built-in leaf guards.
• Roof: Inspect roof for shingles that are curling, missing, or broken.
• Seal up cracks and gaps: Be sure to caulk or weather strip around windows and door frames to prevent heat from escaping.  “Caulking and sealing openings is one of the least expensive maintenance jobs,” says Michael Hydeck, President of the National Association of the Remodeling Industry (NARI). “Openings in the structure can cause water to get in and freeze, resulting in cracks and mold buildup,” he says.
• Air Conditioner: Cover air conditioning unit outside to prevent debris from entering the system.
• Outdoor Furniture: Cover and store outdoor furniture.
• Yard Equipment: Clean up yard equipment.
• Water Hose: Blow out and store your hoses to prevent damage. Winterize outdoor faucets and spigots to prevent freezing pipes.
• Check for Peeling Paint: Peeling paint is a sign that existing paint is failing and can no longer protect the siding of the building which will deteriorate if not corrected.
• Yard: Rake leaves, trim trees and bushes.

 Always try to buy a snow shovel, salt, extra water, canned goods and other winter supplies before nasty weather hits.

Thanks, Emily!

Top O'The Week Linkfest

■ A few months ago, we noted that, far from elevating health care results among those most needy, "the weight of the scientific evidence is that Medicaid expansion has not saved lives."

Now, FoIB Holly R offers more proof that Medicaid over-promises and under-delivers:

"[F]or patients with other public [i.e., Medicaid] or no insurance, survival was often stubbornly unchanged, or, in some cancers, declining."

Ooops.

■ A slight correction (well, clarification) for our item last week on Wells Fargo's little insurance fraud fiasco. From the original article, we understood this to mean home (and perhaps auto) policies; thanks to FoIB Allison Bell, we learn that at least some of these appear to have been life insurance plans:

"California insurance regulators say problems with unauthorized product sales at Wells Fargo bank branches may have affected some sales of term life insurance."

Yikes.

■ And about that ObamaTax cost curve; back in September we noted that:

"Out-of-pocket costs for specialty drugs under the Affordable Care Act increased 16 percent from 2016 to 2017."

Ouch.

But wait, there's more:

"U.S. health care spending increased to $3.3 trillion in 2016, with out-of-pocket health care costs borne directly by consumers rising 3.9 percent — the fastest rate of growth since 2007."

#ACAWinning!

[Hat Tip: Jason]

ANOTHER Baby Charlie? The MVNHS© Strikes Again

Regular readers may recall the tragic story of Baby Charlie:

"The parents of terminally-ill baby Charlie Gard are 'utterly distraught' and facing fresh heartbreak after losing their final appeal in the European Court of Human Rights."

Well, turns out the caring, compassionate Angels of the Death Mercy at the Much Vaunted National Health Service© apparently haven't met their quota:

"Ader Hey Children’s Hospital has applied to the High Court to switch off life support for a baby in a coma, the ECHO understands. Alfie Evans’s family said they were now in a “living nightmare” after the hospital said they had exhausted all options in trying to diagnose and treat his mystery brain condition."

Get that?

They don't even know what's wrong with the poor boy.

Adding insult to (fatal) injury:

"An Italian children’ hospital has offered to take the child as a patient for further inquiries and treatment. But the UK hospital administration and doctors are not only saying NO, seeks a court order allowing them to withdraw life-sustaining treatment."

But hey: Free health care.

(For certain values of "care")

[Hat Tip: FoIB TPH]

From the P&C Files: Is this big?

Because it seems big:

"The accusation is the result of a department investigation that found that from 2008 to 2016, Wells Fargo customers were issued approximately 1,500 insurance policies and charged premiums without their knowledge or permission."

The result of this investigation  may be the revocation of WF's license to sell insurance in The Golden State.

[ed: Which, to be fair, may be to their benefit, based on the fires currently raging out of control]

I reached out to my P&C guru Bill M, who pointed out that:

A) Yes, this certainly appears to be fraud, and

B) In the grand scheme of things, 1500 incidents over 10 years seems more likely the actions of a "rogue" agency than systemic. Doesn't make it right, but probably easier to contain and remediate.

Will be interesting to see which licenses are pulled, and for how long.

[Hat Tip: FoIB PC360]

From the Comments

We're privileged to have some really interesting and informed commenters here, and the discussion can get lively (but always  civil!).

But we also get some .... well, unusual feedback, such as this one from Regina Raymond in reply to our recent MedMutual post:

"My husband of six years left me for another girl because I accused him of seeing another girl and since then I have been trying to get him back but he refused to come back to me, he was not responding to my calls or email and he even unfriended me on face-book and also unfollowed me on IG and he told me that he was done with me and my two kids.

I got really confused, I was searching on the internet for help and I saw a testimony of how a spell caster helped them to get their exes back so I decided to give it a trial, but i was even more confused because of many testimonies that i saw, but my heart told me to go for Dr [REDACTED] because I did many researches on him and I found nothing bad about him, that was how I contacted him and I explain my problem to him and he casted a love spell for me and guaranteed me 7 days that my ex will come back to me and to my greatest surprise the third day a great miracle fell on me and my ex came back to me and he begged for my forgiveness.

Dr [REDACTED] you are just the best, I will continue to publish his name because he is my Savior, we are now one big happy and united family, If you need his help you can Email him Do not loose hope too soon contact him If you need his help you can Email him ...  for easy and fast communication you can also call or add him on whats-app."

Well gosh, thanks so much, Regina, and congratulations!

Pretty sure this isn't considered an EHB, though.

Questionable Client Tricks

Well, not so much "tricks" as judgement:

One of our P&C clients is going through Open Enrollment at work, and the voluntary term life for both himself and his wife is going up pretty dramatically. This happens because most of these plans use age-banding; that is, your premium is (for example) $10/week from age 30 to 34, then $115 from 35 to 39, etc.

So he called to see if buying his own plan might be a better way to go.

It usually is: group term plans are generally guaranteed (or at least simplified) issue, which means little or no underwriting, which means carriers inflate the rates to cover for the unhealthier employees. Healthy ones can almost always do better on their own. The biggest advantage for these plans is that they're payroll-deducted, so a lot more convenient than cutting a check (although most carriers will do auto-withdrawal for monthly premium, which is pretty close).

Anyway, Joe is in good shape, but Kelly's not quite tall enough for her weight, which adversely affects her rate going in. I suggested 20 year term plans, and the numbers looked good for Joe, but they're thinking about going with a 10 year plan for Kelly in the hope that she'll shed a few pounds in the meantime and qualify for lower rates down the road.

I countered thusly:

"If you can swing the 20 year premium-wise, it's a much better idea. For one thing, you can always request a rate review down the road if/when Kelly drops a few pounds. Plus, who knows what rates will be with these companies 10 years down the road or (even more importantly)  whether her medical history would change where she couldn’t even qualify for a plan – regardless of the weight issue.

She would have to lose about 10 pounds and be stable at that weight for at least 1 year to get to get the next better rate class, and down to another 10 or 15 and stable for 1 year for best.  Of course, that’s assuming overall history and findings look good such as lipids, any other significant history, etc.

Your call, and I’m happy to oblige whatever you want – but also want to give the very best advice I can."

We shall see....

Blog Contest Alert

We've been nominated for Healthline's 2017 Most Loved Health Blogs contest (we're a previous award winner).

Voting's now open - We would really appreciate your support.

Thank You!

 
[First posted on 11/26/17] 

Boy Howdy, A Roaring Success

Well, for certain values of "success:"

Q. Obamacare enrollment is strong!

A. See chart. Look at rightmost bar. pic.twitter.com/cobMvFc11M

— Dean Clancy (@DeanClancy) December 3, 2017

[Hat Tip: FoIB Rich W]

From the mailbag: No Choice Health Insurance

So, received this in email this morning:

"Hello, my family and I are looking into health insurance assistance. One of our concerns about it is that we are looking for PPO plan and not HMO. We've been in touch with another agency and was informed that HMO plans were the only thing available. We were given this site to begin Healthsherpa.com and all we can see are HMO plans."

I have no idea who or what a Healthsherpa is, but presume it eventually ends up at the 404Care.gov site. Where, in fact, the only options for our area are Molina, CareSource and Buckeye Health, all of which are HMO's, and all of which are generally known as Medicaid "carriers." And that means even narrower networks (fewer providers).

Oh goody.

But it gets better:

"My wife and I have 4 kids and our ages are 29, 26, 9, 6, 4, and 3. 3 girls and 1 boy.Our household income is 40,000 a year."

I ran that through the handy subsidy calculator, which yielded - not surprisingly - this result:

"Results

You are likely eligible for Medicaid

"Based on the information you provided, you are likely eligible for Medicaid. Medicaid is a health coverage program run by states and the Federal government"

So not subsidy-eligible, either.

There are still choices, of course; we'll see which (if any) they elect.