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.