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. 

I see, er, insure, Dead People

Actually, this is a great idea:

"An audit by the State Comptroller’s Office has revealed that hundreds of dead people were enrolled in New York’s health exchange, with nearly two dozen of them enrolling after death."

Point 1: Dead people Metabolically-challenged citizens (MCCs) have historically filed the fewest claims of any demographic.

Point 2: Is it their fault that they (presumably) died while waiting for the 404Care.gov site to let them proceed?

Point 3: MCCs are also the least likely to complain about bare-bones (sorry!) policies and skinny networks.

All-in-all, win-win.

Gaba, Gaba Do!

Meanwhile, on Twitter: One of the folks I follow is Charles Gaba, with whom I rarely agree, but who does offer rational, generally well-researched conversation. He's also a blogger, and has published a really extensive and well-done post with Six Seven pieces of ACA/Open Enrollment advice.

I do have a major problem with #6:

"The tax penalty for *not* being covered is $695 or 2.5% of your taxable income this year."

It's not that the information is inaccurate - it's not. My problem with it is that the fine penalty tax is both a good deal, and toothless.

We had quite the little conversation (at 140 characters per), but it really boiled down to this: the minimum fine for 2016 is $695 per person, which translates to $58 per month. If you're not getting a subsidy, there's no plan at any age that's going to be that low. Then add in the $6,000+ out-of-pocket for the Bronze plan (cheapest metallic level), and the fine begins to look like a real bargain.

Are there downsides to this?

Of course: there's always the risk that you'll need care. But that's what EMTALA is for, no? Now, I'm not (necessarily) advocating this strategy for folks in general, but I do think it's important to recognize its plausibility for healthy folks who make too much to be subsidy-eligible.

Related: Fellow insurance pro and blogger Louise Norris has a new (free!) ebook out, and it's quite timely: The Insider's Guide to Obamacare's Open Enrollment. Available now (for free!) at Amazon.

Training Day - Epilogue

So, the other day I finished up my 2016 Federal Marketplace (Exchange) training. As I noted previously, this is mostly a re-hash of previous years, but there was one significant change that I took note of, and which I think is a (very) good thing:

 

[click to embiggen]

"1. Online. The individual can log in ... then report a life change"

Previously, all status changes (moves, marriages, divorces, income adjustment, etc) had to be reported to the Marketplace by telephone. On the one hand, it's a toll-free number, but the problem I've always had with that was the lack of a "paper" trail (pixels would be fine, as well). Well, now that objection is resolved, and I feel better about the process going forward.

Beating the horse

FoIB Holly R tips us to this (unsurprising) news vicious lie:

"ObamaCare Rates Revealed; Lowest-Cost Plans Jump 13%"

To which I can only reply:

La plus ca change, HHS-style

So, this past summer we noted that during last year's Open Enrollment season, the Government Accounting Office (GAO) had successfully registered almost a dozen fake Exchange accounts, complete with subsidies and insurance policy purchases.

We're happy to report that all of these problems have now been fixed, and...

Wait, what?

/sigh

"[F]ederal watchdog office did set up 10 phony insurance coverage accounts with no pushback from those overseeing the applications."

They set up the "sting" to see if last year's experiences had borne fruit, in the form of "plugging up" the obvious HIX holes. And of course, the rocket surgeons running it are still failing.

[Hat Tip: Co-Blogger Patrick]

Ooops, you trusted us!

Talk about bait-and-switch:

"The Obama administration said many consumers will see noticeable premium increases when buying health coverage ... the price of the second-lowest-cost midrange “silver plan” ... will increase by 7.5% on average"

Hunh.

And yet:



How to square that circle?

[Hat Tip: FoIB Holly R]

So sorry, that's not covered

Regular readers already know that struggling South Carolina CO-OP Consumers’ Choice Health has hit the skids, and that Wyoming's WINHealth was in serious trouble.

Turns out, WIN has really lost:

"The Wyoming Department of Insurance said it is going to court to try to put [the] struggling health insurer ... into receivership."

Small wonder: they lost some two-and-a-half million dollars in the first half of this year alone, and of course got stiffed on the risk corridor cash it was counting on. Gee, might be a lesson there....

Oh, some 8,000 Cowboy State residents set to lose the insurance they (presumably) liked.

It's almost like they were lied to.

Easy come, easy go

So this happened:

"[T]he GAO report found that ... at least $1.6 billion [is] unaccounted for."

That's out of over $5 billion in "loans" sent to states, most of which went for state-based Exchanges (which, per SCOTUS, don't actually exist).

And there's this little gem:

"Even though states were supposed to set up their marketplaces by the end of last year, they are not yet legally required to return unused funds."

Hunh. Wonder what "yet" means.

Anyone? Bueller?

Interesting $Rx develpment:

For those folks following the saga of the $750-per-dose Daraprim kerfluffle, there's been a rather dramatic new development:

"Drugmaker to offer $1 version of $750-per-pill medication ... Imprimis Pharmaceuticals Inc. ... said Thursday it will supply capsules containing Daraprim's active ingredients, pyrimethamine and leucovorin, for $99 for a 100-capsule bottle"

Now that's a bargain!

And it proves (again) the power of the free market. In fact, the company plans to expand this effort to other "sole-source generic" meds. So the market self-corrects without heavy-handed government intervention.

Gee, wonder if this could apply to other sectors, as well.

The 97% "Solution"

The ObamaTax continues its run as a rousing success (for certain values of "success"). The stated premise was to get more people insured; most folks quite reasonably understood that to mean "buy health insurance." As with most endeavors driven by good (?) intentions rather than sound economics, of course this proved not to be the case.

Want proof?

Here ya go:

"Health insurance enrollment data for 2014 shows that ... the vast majority of the increase was the result of 8.99 million individuals being added to the Medicaid rolls."

Medicaid is most assuredly not "insurance," thereby putting the lie to claims of record-breaking enrollments. But even that fails to properly describe the utter failure of the train-wreck:

"[T]he net increase in private health insurance in 2014 was just 260,000 people."

Yup, when you add up all the folks who actually lost the coverage they (presumably) liked, plus all those folks now on the dole, just over a quarter of a million people actually gained coverage.

Somewhat short of that multi-million person goal, no?

Our Betters in DC vs Reality

As we've said before, Americans aren't as stupid as the rocket surgeons in DC seem to believe. Case in point: Billy Sewell, head honcho of Golden Corral. Because of the (evil) Employer Mandate, and although concerned about the cost, he started offering employees access to his company's group health plan.  Depending on participation, this move could cost him over a million dollars.

Fortunately for him, his employees knew that actually enrolling would be a sucker move on their part:

"His actual costs, though, turned out to be far smaller than he had feared. So far, only two people have signed up."

But hey, rousing success.

[Hat Tip: FoIB Holly R]

CO-OP Secrets and Suits [UPDATED]

Lawsuits, that is. Seems that our post yesterday about how the Centennial State CO-OP was circling the drain has some pushback:

"Colorado HealthOP [has] sued the state's Division of Insurance in response to the agency's action Friday that in effect will shut [it] down."

And they're serious, too: they're asking for an injunction to keep the state from booting them off its Exchange. Interesting development.

UPDATE: Wow, that was fast:

"Colorado HealthOP CEO Julia Hutchins said after Monday’s unsuccessful challenge that she was barred by law from describing it."

We could tell you, but then....

[Update Hat Tip: Charles Gaba]

Obviously, it's no secret that HealthOP is on the ropes, and Pat's post from this past Saturday named quite a few others. But (and this is a big but) we may still not have the whole story: there's apparently a secret list of 11 such entities "on the verge of failure." Since all 11 of those on the list are alleged to be on "enhanced oversight," I may end up eating my words (metaphorically, of course) regarding Ohio's own InHealth (also on enhanced oversight):

Two more CO-OPS down the tubes

So when the dust (finally) settles, will there be any left?

One wonders:

"The Colorado Division of Insurance today announced that it will decertify the Colorado Health Insurance Cooperative"

The Centennial State CO-OP will be enjoined from offering coverage to new victims enrollees, although it will be allowed to help its existing client base (as things wind down). With Open Enrollment around the corner, current policyholders will (presumably) at least have a place to land.

A bit to the west, folks in the Beaver State face a similar fate:

"Health Republic Insurance of Oregon, has also announced plans to wind down its operations by the end of the year."

Interestingly, that endeavor was masterminded by the same rocket surgeons responsible for the now shuttering New York state CO-OP.

Failure theatre tickets now on sale.

#LIAM2015 Epilogue

So, last week I met with George's widow here at the office, and handed her the $250,000 check that had been faithfully delivered, as promised, by the insurance company. I always take these occasions very seriously; I had been entrusted by the insured to do so.

It's become fashionable in the past few years for companies to mail checks directly to beneficiaries, at the request of the agent.

I find this appalling.

A dear friend says - and I wholeheartedly agree - that delivering the check, in person, is the final step in the promise an agent explicitly makes to his insureds. Now, when the beneficiary lives several states or hundreds of miles away, then I understand the need to use the Post Office, but only after connecting with him or her.

But for any and all local clients (and most of mine are within an hour or so drive), I will relinquish this duty only at the request of the beneficiary himself. I'd like to think that most of us do likewise, but am beginning to fear that this is not the case.

And that's pathetic.

Unexpected! Dismal ACA enrollment ahead

It will come as no surprise to regular IB readers that the outlook for Open Enrollment v3.0 isn't bright. What may be a surprise is the magnitude of the train-wreck:

"[W]hen the law was passed, the Congressional Budget Office projected that enrollment would grow by 8 million in 2016, and reach a total of 21 million effectuated enrollees. In other words, Obamacare’s exchanges are on track to achieve less than half of the enrollment that was originally predicted."

Now one might do well to ask just how the rocket surgeons in DC could miss the mark by so much. The answer to that is revealing (and more than a bit disturbing): According to HHS Secretary Burntwell, "our target assumes something that is pretty challenging, which is that more than one out of every four of the eligible uninsured will select plans.”

That is, despite all the hype, all the hoopla, and the billions of subsidy dollars being doled out, the folks at CMS still can't entice even a quarter of uninsureds to sign up. And why is that? Perhaps it's the fact that, despite Washington's assumptions, Americans aren't that terrible at math, and can see the value in paying (perhaps) the fine penalty tax, vice thousands - or even tens of thousand - of dollars in total out-of-pocket.

But hey, Ms Sylvia, by all means go with "challenging."

Now for some Co-op Bad News

Another two Co-ops have called it quits. Several of these closings are directly related to not receiving funds from the risk corridor program.

Here's a summary of federal loans they received and the number of people who will not be able to keep the insurance plan that they liked.

Two takeaways:  count on seeing more co-ops closing and never count on what the Government promises - especially when they are giving away other people's money.

Finally: Some *Good* CO-OP news

With all the disheartening CO-OP news lately, it's rather refreshing to find a reasonably sound one. And even better, one that I've been fortunate enough to recommend to some of my clients.

Headquartered near Columbus (OH), InHealth Mutual is a product of the ObamaTax, and, like its brethren, it relies on more than a few shekels from Uncle Sugar. This of course leads to sometimes problematic outcomes; for example, the company's currently under what's called "enhanced oversight" due to some rather substantial losses. As a result, they're "one of about two dozen ... co-ops nationwide that are receiving a combined $2.4 billion in loans" from the Feds.

On the other hand, head honcho Jesse Thomas is convinced that they can ride this out, and end up in the black. One reason he's so bullish on the company's future is that its "financial health ... remains higher than required" by both the state's Department of Insurance and the Feds. They're not out of the woods yet, of course; one way they're hoping to increase that cash flow is by convincing providers to accept lower reimbursements (that's probably easier said than done).

Time will tell, of course.

[Hat Tip: FoIB Colleen G]

User Error: HIX Mea Culpa

And now, the final (one hopes) chapter in my Exchange Training Saga 2016.

The good news is that I heard back from CMS, and the issue is resolved.

The bad news is that this was operator error (mine, to be precise). Apparently I missed 4 additional modules (I'm still not clear on how I missed them, but miss them I did), and that was why I couldn't generate certificates. In email from Kurt at CMS:

"My apologies – your record does show Agent/Broker, and for some reason I wrote Navigator.  However, the information is still correct.  Agent/Broker has 14 courses.  I have added the Agent/Broker curriculum to your record, and enrolled you in the remaining 4 course (011, 012, 013 and 014).  Once those are completed, you should be able to print your certificates."

So, my apologies to the folks at CMS for impugning their competence (well, at least in this instance), and my gratitude to them for helping me get it resolved.

Now, off to complete the rest of my training.

One Step Forward, 2+ Million Steps back

Let's see: even with skyrocketing rates, CO-OPS closing, policies cancelled and networks shrinking, at least we can say that the ObamaTax has met its primary goal of insuring more folks. After all, prior to its passage there were billions and billions of uninsured Americans, now that it's been the law for years, all of that's behind us.

Um....

"A full 32.3 million non-elderly people do not have health insurance despite the costly health reform act and the individual mandate tax penalty"

But how can that be? After all, these new plans are perfect: free birth control, guaranteed issue and immediate coverage of pre-existing conditions - including pregnancy! What's not to love?Lots, apparently.

Oh, and about that lede:

"A full 32.3 million non-elderly people do not have health insurance despite due to the costly health reform act and the individual mandate tax penalty"

Fixed for accuracy.

TN CO-OP assumes Room Temperature

And the hits just keep on comin':

"Community Health Alliance (CHA) has voluntarily entered state-approved runoff and will not offer insurance coverage in 2016."
 

And 27.000 people just lost the insurance they (presumably) liked.

Something about dominoes falling?

LTCi in the News

Item the 1st:

Northstar State bureaufolks are contemplating how they'll respond to recent (and often dramatic) Long Term Care insurance rate hikes. The good news?

"Over 99 percent of the policyholders have kept the policies, even with the increases"

On the other hand, venerable insurance wonk Joseph Belth castigated the industry, remarking that "there are many reasons why private insurance cannot be a good solution for handling LTC risk ... the probability of loss is high, knowing whether a covered loss has occurred is open to debate"

Um, not really, Doc: the contracts (and insurance policies are contracts) specifically identify triggers, and there's no evidence of widespread bad-faith claims denial.

Item the 2nd:

Meanwhile, in California, Gov Jerry Brown has signed off on legislation that tweaks how non-forfeiture benefits are handled. LTCi plans allow policyholders faced with rate increases to elect alternate benefits, such as a shorter payout timeline, or lower daily benefit amounts. The new law tightens up insurers' notification obligations.

Item the 3rd:

FoIB Jeff M alerts us to this report on the causes behind many policy lapses:

"Cognitively impaired individuals are more likely to allow a long-term-care insurance policy to lapse even though they're more likely to need long-term care ... less wealthy households allow their LTC policies to lapse more frequently, due in part to inability to continue paying insurance premiums"

As to the first, this is puzzling: all LTCi applications include the name of a 3rd party who would receive notification if a policyholder was behind on premiums. I can't imagine a scenario where that would be left blank (although, I could see where a change might not be communicated to the carrier).

The second is more nuanced: yes, premiums increase. But (as noted above), policyholders are offered various premium reduction options. Still, there's no perfect answer.

Cancer Walk 2015

Time's running out on this year's Making Strides Against Breast Cancer campaign: the walk is  just a few days away, and you can participate without even taking a step:

Just click here to make your donation, secure in the knowledge that you're helping to bring a cure one step closer.

Thank you!

An unCO-OPerative season

When they were first introduced via the ObamaTax, "Consumer Operated and Oriented Plans (CO-OP's) were ... an alternative to private health plans that are being offered to individuals and employer sponsored plans." They were touted as "start up insurance companies funded with taxpayer money that was set aside in the law. Each state was to have at least one or two of these not-for profit operations that would keep "profit mongering" private health insurance companies from paying extreme salaries to executives and huge dividends to wealthy investors."

As with most such initiatives based more on good intentions than sound economics, that hasn't worked out so well in practice. For example, as Patrick mentioned earlier this morning, the Blue Grass State's incarnation of this program has assumed room temperature (no surprise, as it's due to receive less than 12% of the risk corridor funds it was promised).

But it gets worse (depending on one's perspective, I suppose). Co-blogger Bob tips us to this disturbing (but inevitable) news:

"Half of Obamacare co-ops have eroding financial health."

The WashPo folks have even included a handy table to track these oncoming train-wrecks; it's not a pretty sight. If one were a betting person, I'd recommend $20 on Louisiana to go next.

But hey: rousing success.

Another One Bites The Dust (Part 5)

The Kentucky Health Cooperative announced it will be ceasing operations December 31, 2015 leaving 31,000 without their current health insurance plan. The federal government had funded them with approximately $58 million for start up and reserves. How much of that taxpayer money is given back is anyone's guess.

In it's announcement Kentucky Health stated that a big reason why it is closing is due to the fact that under the Risk Corridor program they are only receiving $9.7 million dollars instead of the $77 million they thought they were going to receive.

This theme is beginning to sound like a broken record.

WINhealth Loses

WINhealth, a Wyoming based insurance company announced that it will not be participating in the federal exchange this upcoming year. The decision is directly tied to the federal government's failure to have a timely, effective, and stable risk corridor program. Didn't Hank just mention this?

This shouldn't come as a surprise. When the government can't tell you how much you are owed and when/if you will be paid, even a risk based industry is unable to manage.

Training Day Update 2

Sigh.

Figured I'd update readers who've been following the saga of my 2016 Exchange training travails.

So, received this from the CMS folks:

"Thank you for contacting the Marketplace Learning Management System (MLMS) Helpdesk.

When you enrolled, you were not assigned the curriculum for Navigator – it was not added to your record.  The Navigator curriculum has 14 courses.  You still need courses 011, 012, 013 and 014."

Only one problem, which I quickly pointed out to the rocket surgeons at CMS:

"I am NOT a Navigator, I am a licensed insurance agent."

That was Tuesday; I re-sent it an hour or so ago.

And the wait continues....

BREAKING: Mid-sized Groups dodge a bullet

President Obama has signed into law the PACE Act, which allows each state to continue to determine the definition of "small" group. Without it, the definition would become 2-100 lives nationally.

It's expected that Ohio will continue to define "small" as between 2 and 50 employees.

About that 3000% rate decrease: Part 6,549

Bill and Susan have a grandfathered HSA-compliant health insurance plan which covers them and their three children. Because it's Grandfathered, it's immune from some ObamaTax requirements (such as maternity coverage), but it also means that they can't make any changes (such as increasing the deductible to save premium dollars).

Their December renewal landed on my desk the other day, and it's a doozy. Their plan has a $6,000 family maximum out-of-pocket (MOOP), and their rate jumped 30% to just under $1,000 a month. They're not subsidy-eligible, so no help there.

Of course, I suggested that we shop around, but (as usual nowadays) I warned them not to get their hopes up.

Which turned out to be good advice:

Company A offered a plan which doubled their family MOOP to over $12,000, and cost $15 a month more than their renewal, Yippee!!

Company U had a slightly better "deal:" Bill and Susan could shave $20 a month off their premium, and only double their out-of-pocket.

Or they could choose a plan with only $1,300 additional exposure, and a slight premium increase of only $200 more than their renewal.

Such a deal!

Early Fall Health Wonk Review is up

As usual, Joe Paduda has an outstanding selection of wonky posts, including a fascinating inside look at the role of IT and automation in health care.

Good stuff.

La Plus ca Change

Hey Mr Peabody!

Wayback (SWIDT?) in 2006, we blogged about Minnesota Blue Cross/Shield's new, bleeding edge health care transparency program:

"So, pick up a box of cereal, a package of pasta, or a can of peas, and you’ll find a handy little chart on the side. This is the Nutrition Facts label ... HealthcareFacts goes one (or three) better, by disclosing not just prices, but quality of care, outcomes, and more."

The idea was to distill critical, relevant health care cost information into as simple (and helpful) a form as possible. And it was indeed genius: who among us haven't at least glanced at the label on, say, that can of beans, or carton of milk? How great would it be to have that kind of detailed, but easily understood, information at one's fingertips when considering various health care options?

Fast forward 9 years, and, as Allison Bell reports, the federal SBC (Summary of Benefits) info required of all health care insurance plans have become bloated and useless:

"Federal regulators eventually decided that "four pages" could mean both sides of four sheets of paper."

Eight pages of fine print? Who reads that?

But it's "the law," so carriers are forced to toe the line.

Now, there's a movement afoot to reform that:

"When text boxes are long and full of complex terms, consumers will avoid reading the information in its entirety," officials say"

No kidding.

The reality is that people, as a rule, don't read their insurance policies any more than they read the EULA they agree to when they download a new app for their phone. Which is a shame: the whole point of the exercise is to produce a more well-informed health care and health insurance consumer, no?

Promise: Broken

Not to sound like a broken record, but remember when President Obama swore that "if you like your insurance, you can keep your insurance?"

Just got email from Humana that the following letter is going out to at least one of my clients:

Re:    Policy Number:
   
Your current Humana plan will no longer be available in your area for 2016
You will need to select a new health plan between November 1 – December 15,2015

Dear :

Unfortunately, your current Humana plan will no longer be available in your area beginning January, 2016; however, it will remain the same as it is today until December 31, 2015, as long as you continue to make your monthly payment. We know how important it is to select the health plan that best fits your needs, so we would like to help you understand your options and what to do next.

The entire letter is available here.

Color me shocked.

Urgent for our NJ readers

New Jersey health officials say nurse reused syringes while giving flu shots; testing urged.

Unintended Consequences #2,584

Back in 2013, we posted on the travails of an Old Line State same-sex couple trying to untangle their health insurance:

"I got a call today from a woman who needed to find new coverage. She had been covered by her same sex partner as a domestic partner, but since Maryland passed gay marriage, she's now been told that she can no longer stay on the policy unless they get married."

Fast forward two years, and the post-Obergefell era is claiming another scalp:

"The Obama administration reversed a policy Monday that had allowed unmarried federal employees and retirees in same-sex domestic partnerships to obtain insurance coverage for children of their partners"

That is, until now, same-sex couples could cover their children on their gummint-issue health insurance even if they weren't married. Back in Aught 14, "the Office of Personnel Management broadened eligibility ... It made children of an employee or retiree’s same-sex domestic partner — although not the partner himself or herself — eligible." That is, they could add their "step-children" (but not their Significant Other) to their health insurance plan.

As a result of the SCOTUS Obergefell ruling, that's no longer the case, and these folks will now have to join us great unwashed in searching for affordable health insurance.

Be careful what you wish for.

[Hat Tip: HotAir]

An embarrassment of linkage:

In no particular order:

■ Up to 3 million ObamaTax victims enrollees stand to forfeit their subsidies next year because they're behind on filing their taxes:

"Fully 40% of taxpayers who received ObamaCare subsidies last year haven't filed their taxes yet and are at risk of losing their subsidies for next year"

This, in addition to looming rate increases - Yikes!

■ Fear of going to the dentist is a major issue for a lot of folks; in fact, it affects 75% of us to some extent. But that may become a thing of the past with new Scottish tech (no, not that Scottish tech):

"Remineralization is a natural process ... Reminova's prototype device can speed up this process to the same amount of time it would take to have a filling -- but painlessly, without injections and drilling.'"

Sign me up!

■ LifeHealthPro's Allison Bell alerts us to something that's generally been under the radar:

"[I]nsurers that participated in Gen Re's latest critical illness issuer survey reported a total of $380 million in 2014 critical illness premium revenue, up 15 percent from the 2013 total."

It seems that the Critical Illness (CI) market is exploding, and it's not difficult to understand why: these plans pay actual cash dollars to their insureds who suffer a listed condition (such cancer or stroke).

Something to consider if you have one of the new high out-of-pocket ObamaPlans.

Training Day Update 1

First, the good news: I received email this morning from the training "Help" Desk in reply to my pleas for assistance.

The bad news is what it said:

"After you have completed all registration requirements for the Individual and/or SHOP Marketplace, you may print your completion certificate specific to the Marketplace(s) for which you completed registration.

Note: your certificate will be marked Incomplete if you have completed training but you have not completed identity proofing. After you have completed training and identity proofing, your registration completion certificate will be marked Complete."

Here's the problem:

[click to embiggen]

I've obviously completed step 1 and, as noted previously, completed all the training (as confirmed by the site itself).

So I replied that I had, in fact, completed both the identity proofing (?) and the training, but am still unable to print the certificates.

Wait and see, I suppose.

ICD-10 Arrives

Co-blogger (and Medical Office Manager) Kelley B is working on an interesting ICD-10 post, but I couldn't resist blogging on some of the more ... esoteric ... examples:

■ Other Contact With Pig (W55.49X)

■ Problems in Relationship With In-Laws (Z63.1)
[Methinks this one will become a Top 10]

■ Sucked Into Jet Engine (V97.33X)
[That's gonna leave a mark!]

■ Prolonged Stay in Weightless Environment (X52.XXX)
[Really? How prevalent is this?]

■ Struck By Turkey (W61.42XA)
[Paging Les Nesman!]

Welcome to the brave new world of health care.

[Hat Tip: Ace of Spades]

Runnin' on empty

As we've long noted (here, for instance) the ObamaTax 'risk corridor' (essentially a slush fund to cover excess claims) was always unsustainable. But hope springs eternal (at least in DC).

Until, of course, Mrs Thatcher's observation kicks in.

And that time is fast approaching:

"PPACA risk program may pay just 13% of 2014 claims ... insurer risk-management program may pay eligible insurers less than $362 million of the $2.9 billion in cash they were hoping to collect."

One can't help but to observe, though, that when one lies down with dogs... (looking at you, AHIP).

Sucks to be them.

Frustrating Government Tricks

So, it's that time of year again: Federal Marketplace training for Open Enrollment v3.0.

So, as I've done for the past few years, I set aside a day to get it all done, logged in and started learning. This year, there are 10 "modules," including 2 exams that must be passed (minimum of 70% correct answers). About halfway through, get this delightful message:

Sigh.

So, pick it back up an hour or so later, and complete the training (acing both exams, by the way). So far, so good.

Click over to print my certificates of completion, and am told that, despite the fact that I've completed all the modules (and the site confirms this) my training is "Incomplete," so no certs for me.

Are you kidding me?

So I futzed around on the site for another half hour or so, then decided enough for one day, will come back and pick it up - fresh - in the morning.

Which I do, to no avail. However, I find an online form to use to report a problem and an email address to accomplish same. Being a belt-and-suspenders kinda guy, I did both (keeping copies, of course). That's Wednesday (two days ago).

Wednesday comes and goes, no response from either inquiry, so repeat.

Thursday comes and goes, still no joy.

So this morning, I repeated (again), and then poked around a bit more until I find an actual phone number to call to report and/or discuss training issues. So I call the number, and a very nice young man named Jeremy explained that there is nothing he or anyone else at the "Help" Center can do, I'll just have to wait to hear from the folks at the online "Help" Desk. And no, he can't tell me how long that might be.

So here I sit in training limbo: yes, Open Enrollment doesn't start for a month, but I'd really like to put this behind me, and I can't do that. And I am completely powerless here: no one to threaten with bad ink (well, pixels), or to take my business elsewhere (only game in town).

Just call me Indy.

Private Fitbit Reporting for Duty

As we noted this past summer, the privacy challenges posed by folks using their FitBits (or similar exercise tracking devices) remain murky. One problem is that one doesn't necessarily know where the data will actually land, and whether or not that end-vendor (for lack of a better term) is a "HIPAA covered entity." The sticking point is defining just who (or what) is a "HIPAA covered entity."

The good news is that the situation recently became a bit less murky, at least for some folks:

"Fitbit announced it will enter into HIPAA business associate agreements with covered entity health plans and self-insured employers that will offer Fitbit’s wellness platform to employees and insured individuals."

So what does this mean in practice?

Basically, that FitBit will need to "implement the security controls required by the HIPAA Security Rule, but only with respect to data it is receiving from or collecting on behalf of covered entity health plans or healthcare providers."

So if your health plan includes FitBit-style tracking, then your info is likely  a bit more private than it has been. Of course, this applies only to FitBit users: if you're using some other similar device, you may want to do a little research on how your ostensibly private info is being treated.

Medicaid HIX Credits SNAFU

Co-blogger Bob alerts us to this little glitch:

"The CMS has sent letters to Medicaid consumers who received tax credits to purchase insurance through the Affordable Care Act marketplace."

The first problem is that subsidies are supposed to be available only to folks in a narrow swath of income; those that fall below the minimum and are thus Medicaid-eligible aren't eligible for tax credits (subsidies). But in some states using the Federal Exchange system, "a small number" of Medicaid-eligible folks received these credits by mistake.

Never fear, though:

"The agency says these people will have to ... pay back the amount of the credit they've received."

Which gets to the second problem: um, good luck squeezing blood from that particular turnip:

"Many people will not understand what they need to do. Low income families tend to move often, so many addresses may be inaccurate.”

Not to mention that they're Medicaid-eligible for a reason.

Top. Men.

From the Mailbag: Wellness & Privacy revisited

The other day, we posted on Houston's efforts to encourage workplace wellness, and expressed skepticism at how it's being implemented:

"So the vendor sells employee info, and employees that take a pass get dinged for $300?"

Long-time FoIB Matt H emailed to let me know that, all in all, the program seems to be working out:

"A group of this size and funding usually has various vendors handling different parts of the plan.  I believe the city has one biometric vendor, but they still have to migrate data to certain of the other vendors, thus the disclosure.  This is not uncommon in complex, multi-vendor arrangements.

The Houston Chronicle even did a piece on how well the city is doing; it's actually a huge success story."

Thanks, Matt!