CO-OP Lifeline?

We've written extensively about CO-OPs (most recently here); I've actually been a fan of the model all along. The major problem is that in practice, that model doesn't appear to be self-sustaining, as more than half of them are already kaput, and most of the rest are in major financial straits.

But there may still be hope, albeit in a totally ironic way:

"The Obama administration’s top health insurance official told Congress [that] he wants to “loosen up capital rules” to allow private investors to become part owners of the dozen surviving Obamacare co-ops."

So, private enterprise swooping in to save the government's day - who could have seen that coming?

Of course, privatizing them means that they cease to be, you know, co-ops and become what we in the industry call "insurance companies." Not that there's anything wrong with that.

What it means in the big picture is that we've burned through hundreds of millions of dollars to prove that government-sponsored health insurance companies don't actually work in the real world.

Which may be a valuable lesson in and of itself, no?

Ted Cruz Lies

We all remember this promise:



So it's surprising that Republican presidential hopeful Ted Cruz would make the obviously and demonstrably false claim that he and his family had lost their Blue Cross health insurance because the carrier cancelled all of its individual policies.

He further compounded this lie with the equally silly claim that a new plan would have premiums 50% higher than the cancelled one.

Balderdash!



And Senator Cruz expects us to believe his wild claims. Sheesh.

[Hat Tip: FoIB Holly R]

Life Insurance FUNdamentals

Over at Forbes, Tim Maurer has a very interesting and helpful compendium of useful life insurance information and principles.

One, however, stands out:

5. Life insurance is a risk management tool, not an investment.

This cannot be stressed enough.

Recently, I received email from a carrier touting its newest Indexed Universal Life product, hailing it as "Using Life Insurance for Your Client’s Smart Money."

Basically, the company recommended using its quasi-investment-based life insurance policy as a single-premium "one-and-done" policy; that is, no more premiums would (probably) ever be due. The idea is that the policy's cash value would grow quickly  based on the stock market. There are a lot of problems with this strategy, but the primary one is that, as Mr Maurer notes, there are plenty of other, more effective investment vehicles available.

Good info, good advice.

Kudos to Us (Again)

It's only been a few months since we were named one of the Top Men's Health Blogs, and now the Milken Institute School of Public Health at the George Washington University has included us in its "54 Healthcare Blogs to Read in 2016."

And we're in terrific company, including the folks at Julie Ferguson's Workers Comp Insider, Jason Shafrin's Health Care Economist and Kaiser Health News.

Sweet!

Snowy Wednesday Linkfest

■ As we've long noted (most recently here), 404Care.gov security is actually an exercise in kabuki theater. Need more proof?

Well:

"Judicial Watch today released over 1,000 pages of new documents that show federal health care officials knew that the Obamacare website, when it launched in 2013, did not have the required “authorization to operate” (ATO) from agency information security officials."

So they knew from the git-go that the site was vulnerable, a metaphorical cesspool of data virii, and yet they forced citizens who wished to avail themselves of subsidies to expose themselves to it.

Nice.

■ Likewise, we've been advising readers of the stupidity that is the (Evil) Individual Mandate: a toothless, nominal fee as opposed to an outrageous premium and massive out-of-pocket exposure.

At last, someone in the MSM 'gets it:'

"You spend thousands of dollars a year on insurance ...and you can't afford to go to the doctor."

No kidding.

But hey, free birth control convenience items.

■ Finally, the Rocket Surgeons in DC© have figured out that perhaps the "30 special enrollment” categories may be creating some perverse incentives, and are threatening to crack down on miscreants who actually take advantage of the system's own inherent flaws. According to the official CMS blog:

"One of the areas we have been reviewing closely is the special enrollment periods we offer ... elimination of several unnecessary special enrollment periods, clarifies the definitions of other special enrollment periods, and provides stronger enforcement so that special enrollment periods"

Hahahaha!

Sure they are. Fact is, virtually no one has even heard of most of them, including "tax season open enrollment" and a bunch of other esoteric, obscure circumstances.

But I'm sure the roughly 8 or so people who get their wrists slapped for this are the primary cause of carrier woes.

UHC vs ACA: Winning!

As we've previously noted, United Healthcare is the 800# gorilla in the Federal Marketplace ("Exchange") room. While this may, in fact, be an enviable position, it's not without risk. Namely, "the bigger they are..."

Well, you know the rest:

"UnitedHealth lost $720 million on its individual-market health plans in 2015 ... nearly $300 million above estimates made a few months ago."

Ouch.

Of course, this was completely unexpected, nor was there any way for prescient carrier prognosticators to anticipate...

Wait, what?

"The health insurer ... said the poor experience in the ACA exchanges was due to sicker-than-average consumers enrolling in its health plans and a surplus of people signing up outside of the open-enrollment window."

Really? Sick folks signing up for health insurance at discounted rates for top-notch policies? Who'da thunk it?

[ed: On the other hand, what off-Open Enrollment sign-ups have to do with this is a mystery]

Fortunately, the company will be able to recoup most of these losses through the government's backstop risk corridor program.

Right?

Fool me once, shame on you. Fool me twice . . .

One of the reasons Bernie Sanders’ sun is rising - and Hillary Clinton’s is setting – is their difference over government-paid generic medical insurance.  (Which, of course, they still call “healthcare”).

Bernie favors a single-payer arrangement he calls Medicare for All. This is popular among the self-described progressives in the Democrat Party, and among the American left. It’s popular because its leading advocates – e.g., Bernie – promise it will give everyone better coverage, will cost less, and will be easy to use. What’s not to like?

Contrast Hillary who favors fixing Obamacare, or at least she says she favors fixing Obamacare.  Her major objection to Bernie’s plan is that Medicare for All would cost too much, and therefore require even higher taxes to pay for it. That’s less popular among progressives/leftists, partly because Obamacare has become so unpopular, and partly because Hillary does not promise wonderful things for free.  It’s also less popular outside Hillary’s orbit because of the growing recognition that Obamacare already costs too much and is probably not fixable.  Anyway, for the first time in almost 25 years, Hillary does not hold high ground on medical insurance - and the polls reflect that.

There’s an interesting back story here.  At least two states have already tried to design workable single-payer plans for their residents. Both gave up because of high cost. One of them is Connecticut, the other is Bernie’s own Vermont.

In 2007, Connecticut shut down its state single-payer project because it would have cost more than the entire state budget.

And in 2014, Vermont shut down its state single-payer project. With Bernie’s help, Vermont had received $45 million federal funding to design such a program for the Green Mountain People’s Republic.  Vermont hired Top Men for the design group, including the notorious Jonathan Gruber from MIT.   But Vermont shut down its project because it would have cost almost as much as the entire state budget.  Vermont supporters of single-payer didn’t like that because, they claimed, savings would far outweigh the costs.  Ever hear that before?

This backstory is not exactly secret, but hasn’t been much reported, either.  During 2016, the candidates’ differences over government-paid generic medical insurance will likely become much more prominent.  Superficially Medicare for All does look better than Obamacare, I think mainly because Obamacare is so dysfunctional.  Let’s not forget Obamacare was deceptively sold to America by the progressive/left wing of the Democrat party; the Democrat-majority Congress passed Obamacare without a single Republican yea in either the House or Senate; and then we found that all along, the progressive/leftists consider Americans “stupid”.

My opinion?  None of the promises progressive/leftists make about Medicare for All – more coverage, for less cost, and simpler administration - survive thoughtful analysis from experts other than the partisan progressive/leftists themselves.  Technically, there are huge flaws that cannot be ignored.  Politically, fancy promises about how great it’s gonna be, have been made before by the same people, and spectacularly failed to materialize.  Exhibit A:  Obamacare.  Fool me once . . . etc.

Getting serious with Tar Heel State's BX

Last week, we reported that Blue Cross of North Carolina was in quite the pickle, what with messing up plan selections and effective dates, and dropping the ball on confirmations, too.

Well, looks like the heat's getting turned up under their tushies:

"Blue Cross Blue Shield of North Carolina sent an email to employees saying they were increasing security and safety measures at their facilities due to incidents involving “extremely frustrated customers.”

Local constabularies will be increasing patrols and police presence at some of the carrier's facilities, as frustrated customers become increasingly more, well, frustrated:

Health Wonk Review: Happy New Year! edition

Welcome, friends, to 2016-style health care wonkery. Later this month, we'll be celebrating our 11th anniversary here at IB; it's fascinating to look back over almost a dozen years of posts (and quite a few 'Reviews hosted) to see how much has changed, and how much hasn't.

But no time for waxing nostalgic, let's get on with the show:

■ First up is our good friend (and colleague) Jay Norris. Jay was recently appointed to the Board of Directors of Connect for Health Colorado, the Centennial State's exchange. He's concerned about a policy decision made by the Exchange to begin blocking enrollments from out of state brokers at the beginning of open enrollment. Here he explains why.

■ Over at Health Affairs Blog, Susan DeVore writes about six big trends to watch for in health care for 2016, including MACRA, telemedicine, value-based contracting, specialty pharmaceuticals, and others. She notes that with the upcoming Presidential election, health care is once again keeping us up at night. How much of the current debate is hyperbolic rhetoric? What policy changes are realistic in an election year? What market trends in the private sector will drive the most change?” Good questions, Susan.

■ At Workers Comp Insider, 'Review coordinator (and all-around gracious lady) Julie Ferguson lets us in on the depressing fact of the week:  In 2014, there were approximately one and a half times more drug overdose deaths in the U.S. than deaths from motor vehicle crashes. She looks at developments in the nation’s opioid and prescription drug epidemic via a pair of recent studies on the topic, as well as a roundup of some other noteworthy writing on opioids.

■ For the next few months, Health System Ed's Peggy Salvatore will be blogging on digital strategy for healthcare organizations in preparation for a pharmaceutical conference on digital health (the ePharma Summit 2016). This is the first post in the series, which is about how pharma spends a lot on marketing and provides a necessary product, and that as an industry it the means and the clout to make a positive difference. But will it? Stay tuned...

■ Longtime foil Wendell Potter notes that all of the Republican presidential candidates have condemned the Affordable Care Act and pledged to replace it as soon as they’re elected. But with what? Wendell runs down their likely replacement proposals, which he’s dubbed “The Faulty Five."

■ Dr Jaan Sidorov is one of my very favorite wonk-bloggers and. as usual, he doesn't disappoint. This week, he likens mHealth to dashboard tachometers, arguing that when mHealth is "smart, synergistic and scalable," the tachometer can improve insurer/vehicle performance.  Without those features, however, there's enough about mHealth to make it very attractive to consumers on a retail basis. Vroom, vroom!

■ I've only recently been following Charles Gaba, and I regret having missed his insights over the years. Here, he acknowledges that the ACA mandate penalty costs less than the premiums for some people, but... Well, he offers some important clarifications regarding the case studies quoted in a recent NY Times story about people deliberately choosing to pay the Individual Mandate penalty rather than sign up.

■ Like Peggy S, Joe Paduda has put together a series; his is on how he thinks the ACA's getting along, from enrollment to costs. As usual, he's concise and on-point. Part One is here, and Part Two here.

■ Longtime HWR contributor David Williams has been following Republican presidential candidate Ted Cruz, specifically his proposal to speed up FDA approvals, which has been garnering a lot of criticism, much of it deserved. But why do opponents have to go all the way back to 1956 for evidence against the plan? Instead, asks David, shouldn't we use the proposal as an opportunity to debate the role of safety and efficacy in approvals, and to examine why some parts of the FDA work better than others? Another good question.

[ed: Do I sense a theme?]

■ Uber-wonk Roy Poses alerts us to the new CDC draft guidelines that urged more conservative use of narcotics for non-malignant chronic pain, and which immediately attracted a barrage of criticism. His take? Those arguments against them were underwhelming. Click through to learn why.

■ Dr Brad Flansbaum addresses a recent New Yorks Time article about whether doctors should unionize, and comes away unconvinced either way. What's so great about this post is the series of insightful questions he poses to both sides of the debate.

[ed: Yup]

■ And now for something completely different. Our own post examines CanuckCare©'s rather lackadaisical view of death: as in the Canadian Medical Association considering allowing doctors to LIE about patients death to cover up euthanasia. Spoiler Alert: at least one Canadian med school's already doing so.

Thanks for tuning in, and please join us at Joe P's place on the 28th.

O'Care in Real Life

So, one of my small group clients just lost the last person on his group plan. It had gotten so expensive that no one could really afford to stay on it. Shopping around didn't help: everything we looked at was at least as expensive for comparable benefits. And the plan was pretty much bare-bones, not a lot of fat to trim.

He'd like to be able to continue offering some kind of coverage, but now that the plan has no active members, there's not much we can do. One alternative is to offer to help pay for individual plans (there are still legit ways to do this), but that's really only an option during Open Enrollment, which means that, for most of the year, no can do.

Tom has been a client - and friend - for almost 30 years. A small business owner, he was proud to be able to offer his employees coverage. Now that's gone.

"Affordable" Care Act, indeed.

Dis-Kynected

As we reported last month, newly-elected Blue Grass State Governor Matt Bevin announced that he'd be pulling the plug on its legally-questionable  health insurance exchange, Kynect. And so he has:

"Gov. Matt Bevin has notified federal authorities he plans to dismantle kynect ... goal is to eliminate "the redundancy" of Kentucky's online health exchange."

As we noted in December, all the panty-twisters' protestations are, in fact, meritless, since the program itself was simply an exercise in phone-and-penmanship by former Governor Bashear. And there's this: "most Kentuckians are paying for the service through the 1 percent surcharge for a service that only a fraction of Kentuckians use." I thought O'Care supporters were all in for "fairness."

Guess that depends on the definition of "fair."

The MVNHS© Strikes Back

Emphasis on "strikes:"

"Tens of thousands of junior doctors, a term that covers medical professionals with as much as a decade of experience, were believed to have refused to work, providing only emergency coverage because of a dispute over pay and working conditions"

This is the oft-overlooked truth about nationalized health care schemes: the providers become employees of the state ("who pays the piper calls the tune"), and are thus subject to said government's whims. In this case, some 4,000 elective procedures, including hip and knee replacements, were put off; one wonders how many patients' symptoms are now even worse.

And I certainly didn't know this, despite being a long-time student of the Much Vaunted National Health Service©:

"[D]octors are officially required to work a 48-hour week"

So let's see: the government tells doc's how much they must work (and that's a pretty heavy load), and how much they'll be paid. Seems like there should be a term for that.

But, hey: Free health care.

Major Blue Snafu

Courtesy of FoIB Jeff M:

"Blue Cross and Blue Shield customers in North Carolina will be getting refunds ... they could not confirm whether they were insured ...  about 25,000 customers were accidentally put into the wrong health plans."

Three very serious problems, and it's not really clear how much they overlap (ie how many were overcharged vs how many couldn't confirm vs how many put in wrong plans). The good news is that the BX folks are working to resolve these issues.

And of course, it could be worse:

Obamacare CO-OPs - the NeverEnding Story?

News came last September of the collapse of Health Republic New York, the nation’s biggest nonprofit CO-OP health insurer created by the Affordable Care Act.  It was “ordered to shut down as is reels toward insolvency, disrupting coverage for more than 200,000 New York State residents.”  But the disruption in coverage is only part of the story.  Health Republic’s collapse has also created financial domino effects across the state, for hospitals and doctors - and for other insurers.

“Hospitals and doctors told New York Senators Wednesday [January 6th] they’ve got $200 million or more in unpaid bills because of last year’s financial failure of insurance cooperative Health Republic,  and they want the state to step in.”

"UnitedHealth Group Inc., the largest U.S. health insurer, said its rates for Obamacare plans in NewYork may be too low because the failure of a competing insurer last year might lead to shortfalls in payments designed to stabilize Obamacare markets – payments they counted on when setting their 2016 premiums. "

Additional serious losses in NY in 2016 increases the likelihood that United will pull out of the State Exchange for 2017. Of course United's participation in all other Exchanges for 2017 is in doubt and the doubt just got bigger.  United’s CEO Stephen Hemsley now says that participating in the Obamacare individual Insurance Exchanges “was for us a bad decision”

Most NY insurers, not just United, say that the New York State rate-review process failed.  The New York State Insurance Department disagrees.

UnitedHealth requested a 22 percent rate increase for individual Obamacare plans. Instead, state regulators allowed the company to boost rates by 1.65 percent. The company also sells business under the Oxford brand, which requested a 5.32 percent rate increase,and was forced instead to cut rates by 12.25 percent.

But Health Republic was able to lock in rates much lower than its competitors, NY's Depatment of Financial Services health insurance honcho Troy Oechsner claims that “we did the right thing at the time, given the uncertainty of the market.”

Was this simple regulatory failure?  Or could it have been deliberate political maneuvering of rate approvals to show that Obamacare really reduced medical insurance premiums?  And to help Health Republic capture significant membership so this leading Obamacare CO-OP would be hailed as a “success?”

If it turns out political maneuvering is even a little bit true, my guess is that there are political influence peddlers from Washington to New York (and insurance dept officials in New York, too) who should lawyer up and start worrying about significant prison time.

Note:  there are two other co-ops sharing the "HealthRepublic name" - in New Jersey and Oregon - but they're not affiliated with New York's version and aren't affected in this particular instance.

However: all three were set up by the Brooklyn-based Freelancers Union, about which we've written extensively - if not favorably - in the past.

Friday Term of Art: "Unsustainable"

That is, the whole flimsy house of cards upon which the ObamaTax was built relies substantially on enticing young (and presumably healthy) victims people to enroll. That's because, by and large, this cohort tends to have fewer (and less expensive) claims, so they represent essentially free money to "the system."

But what happens when you can't entice threaten cajole them into actually pulling the 404Care.gov trigger?

Well, you have lots of unhealthy folks (of all ages) signing up, causing major claims, which are then supposed to be backstopped by Uncle Sugar (how's that working out?).

Which brings us to this completely predictable news:

"26% of people who signed up for coverage as of Dec. 26 in the 38 states that use the federal exchange were ages 18 to 34 ... largely unchanged from a roughly comparable two-month period through Jan. 16, 2015."

So what does that mean?

In a nutshell: that which can't go on, won't . That is, as more and more younger (generally healthier) young people continue to opt out, claims will continue to rise with little or no corresponding increase in premium revenue.

But hey, they'll just make it up on volume.

[Hat Tip: FoIB Michael Cannon]

Obamacare and Small Business in 1000 Words

[click pic to embiggen]

If I like my plan I can keep it?

$2500 savings?

3000% rate reduction?

#Obamacarefail

Veddy Interestink

So we've been reporting on various carriers' unilateral decision to stop paying commissions, and wondered:

"Since it will no longer be paying commissions, will [carriers] now refund the portion of [their] clients' premiums that represent that cost?"

Blue Grass State honchos have weighed in, and the answer is (pleasantly) surprising:

"Kentucky has published an Advisory Opinion to clarify inquiries regarding the non-payment of commission payments to agents for certain products ... Failure to pay commissions in accordance with the rate filing will be considered a violation of the Insurance Code."

And this edict applies specifically to health insurers (both individual and group).

Now, it affects only carriers and agents in Kentucky (for now), but it will be interesting to see if other jurisdictions will hop on board.

So, some good news for a change.

Thursday Morning LinkFest

■ From the Everything Old is New Again Department:

Way back in Aught-Six, we reported on a groundbreaking plan called PACE, a self-funding option for small group:

"ACMG has developed a unique new product that brings the benefits of ERISA plans and the “stability” of fully insured plans to the small group market."

Almost a decade later (yesterday, to be precise), FoIB Jeff M alerted us to a "new" program called Level Funded Health:

"Level funded health plans appear like a hybrid between a traditional group health insurance plan along with a form of self-insurance."

LFH is available for groups with as few as 5 employees; being self-funded also means being able to duck some major ObamaTax requirements (which should help to keep the price down).

Methinks these types of plans will become more and more attractive as small group plans keep getting squeezed in the marketplace.

■ From the Annals of the MVNHS©:

"Tumors force 11-year-old boy to undergo mastectomy"

Turns out, this young lad apparently had several benign tumors in his chest, and recently became "the first child in the country to undergo a mastectomy."

He seems to be making a speedy recovery.

■ From the Medicinal Alcohol & Yogurt Department:

"A craft beer made with ingredients from kefir — a fermented milk drink that resembles yogurt— may sound a little gross. But drinking it could bring health benefits"

What benefits, you ask?

Well, reduced stomach inflammation and ulcers, for starters.

The bad news is that its effects have so far been tested only on rats, who apparently have no problem with the mixture.

Tastes great, less ulcers?

Win some, Lose more

As Bob noted this past November, "Ocare was supposed to eliminate medical bankruptcy. At least that was the campaign promised."

So how's that working out?

Oh:

[click pic to embiggen]

According to the folks at the Kaiser Family Foundation, folks who had employer sponsored health plans (ESI) fared even worse than those who were uninsured.

And as an aside, 5+ years in, and there are still uninsured? Thought that was the whole point of the ObamaTax. Hunh.

And also note that it doesn't seem to matter what type of plan design either (high vs low deductible). Of course, the deductible is only part of the story: the total out-of-pocket will also include co-insurance and premiums.

Talk about #ObamaCareFail.

[Hat Tip: Larry Levitt]

ObamaTax D'unh!

So The Grey lady has finally figured out what we've known pretty much all along:

"Many See I.R.S. Penalties as More Affordable Than Insurance"

No kidding.

As we've long noted, most recently this past October:

"If you're not getting a subsidy, there's no plan at any age that's going to be [as low as the penalty tax fine]."

We already know that the first wave of the most recent Open Enrollment season was an unmitigated disaster, with far fewer victims enrollees than either predicted nor necessary for sustainability. This of course has a major dampening effect on insurers, who need the influx of the mostly healthy folks that wisely opt out to help offset huge claims losses.

Sucks to be them.

[H/T Gabe Malor]