Early look at Community Rating

A broker I work with passed on an analysis from Humana comparing a December renewal to community rating. 5 cases, 2 would see similar rates from Community rating, possibly a slight savings, 1 would see a 17 to 27% savings. If your one of the three flat to slight savings sounds great.

At what cost to the other two...?

23% increase minimum for 1 and 43% increase for the other. Neither of those are young and healthy groups. The test and success of ObamaCare will be how many groups eat their cost sharing for the good of the pool.

ObamaTax Bar Tab

Your ObamaTax dollars at work:

"I briefly scanned a schedule of upcoming mobile tour events ... That’s no fewer than three bourbon festivals on the Kentucky marketplace’s agenda."

That's right: in their efforts to trick entice young people into signing up for the ObamaTax, the rocket surgeons running the Blue Grass State's Exchange roll-out (get it?) are encouraging them to 'drink up and sign up.'

Maybe they know something....

Friday LinkFest

■ First up, not sure whether this is good news or not, but "Dr" Theodoric of York may be re-opening his practice:

"Trauma doctors at Johns Hopkins, the University of Maryland and other U.S. hospitals routinely use leeches as a temporary measure to keep blood flowing as new vessels grow in a damaged area."

Turns out, the little guys are helpful in more ways than one: they can help get blood flowing back into damaged areas, and their saliva "has a natural anesthetic."

■ Um, you know how we're supposed to be cutting out salt? Well apparently this is not necessarily such a hot idea. According to the CDC, "major reductions is no longer considered a substantial health hazard. The CDC even reported that reducing salt intake to below 1 tsp per day may be dangerous to your health."

We're still waiting on the report that low cholesterol causes AIDS.

■ It's not just senate staffers and movie theater ushers losing benefits. Venerable northeast grocery chain Wegman's has long provided part-time workers with access to health insurance benefits. Thanks to the ObamaTax, though, those days are coming to an end:

"Several Wegmans employees confirmed part-time health benefits had been cut and said the company said the decision was related to changes brought about by the Affordable Care Act."

Clean up on aisle 4.

■ This has been making the rounds for a few days now, an interactive explanation of how the ObamaTax will affect most people. It's not perfect - for one thing, there's a real possibility that the Exchanges won't be up and running by October, and of course the (Evil) Employer Mandate has been delayed - but it's a reasonable facsimile of the train wreck as it looks today.

[Thanks to Holly R and Gail S]

Finally, an appropriate ObamaTax ad venue

So it's not enough to enlist Matlock and Michael Jordan to tout the train-wreck, now the brain trust at HHS has finally embraced honesty in advertising:

"Marchand has been thinking up all sorts of ways to make sure young people hear about the new health program ... We’ve talked about everything we could use, even whether we could do some branding on porta-potties"

Well, the ObamaTax does stink, so there's that.

[Hat Tip: HotAir]

Her lips are moving...

Heh:

"The Department of Health and Human Services (HHS) is on track to open the health insurance exchange on Oct. 1 despite “mischaracterization” and “confusion”

So sayeth Marilyn Tavenner, chief administrative minion to Ms Shecantbeserious.

This despite on-going - and very public - acknowledgements by Ms Kathleen (et al) that the train wreck continues apace.

Ms Marilyn purports to "clear up myths  ... in the wake of the employer mandate postponement and coverage about final regulations it released Friday on eligibility for the exchanges."

While we do appreciate the great comedic material here, is it really appropriate for her to be joking around at a time like this?

Fees, Glorious Fees

So you think many of us dodged a bullet when the (Evil) Employer Mandate got pushed off a year?

Not so fast there, pardner.

Assurant's sent out an interesting FAQ (fact-sheet) about just what fees are due next year, exclusive of the employer reporting requirement. Lets take a look at some of the wonderful new expenses that will cause your insurance premiums to decrease 3000% next year:

1 - Annual Fee on Health Insurance Providers

Well first, let's make clear that this is a misnomer: insurers don't pay any fees, their insureds do. What's funny (ironic, not comedic) about this is that this fee is "to help fund the cost of PPACA." So it's a fee to pay for collecting itself.

Very meta, that.

2 - PPACA Transitional Reinsurance Fee

This one "is an annual per capita fee that funds a temporary reinsurance program" that lasts for 2 years ('14 to '16). It's essentially a pay-off to carriers involved in the now-defunct high risk pool program [Correction: this fee is designed to subsidize carriers as they take on higher risk individuals, and to "stabilize insurance premiums in the individual market" Thanks to Bob H in the comments for pointing this out!]

3 - Patient-Center Outcome Research Institute Fee (PCORI)

We've discussed this one before. Basically, it's a slush-fund for the benefit of a "not-for-profit corporation created by PPACA to give patients a better understanding of prevention, treatment and care options available."

You know, WebMD.

All of these fees go into your next renewal regardless of your company's size (or even if you've got an individual plan - remember, carriers don't pay these fees, you do).

[Hat Tip: Assurant's Jeremy F]

Cavalcade of Risk #187 now online

Bob Wilson makes his CavRisk hosting debut with a knockout effort, featuring risk-related posts on "hunger, health care, health care delayed, obesity and everything in between."

Out. Standing!

And a great big Thank You for all the fine folks who stepped up for hosting duty - we're set for the summer thanks to you.

The ObamaTax hits just keep on coming

As we noted earlier, "[m]illions of smokers could be priced out of health insurance because of tobacco penalties in [The ObamaTax]."

Typically, insurers ding smokers (well, tobacco users, really) 30% or more. Under the ObamaTax, this is likely to rise to 50% over non-smoker rates.

That is, they were supposed to.

But just like the (Evil) Employer Mandate, this integral part of the ObamaTax is is coming up short:

"The Obama administration ... has quietly notified insurers that a computer system glitch will limit penalties that the law says the companies may charge smokers."

Actually, given that Ms Shecantbeserious (et al) can't confirm employer group eligibility, and will rely on the "honor system" for subsidies, how many folks would admit to tobacco use anyway? And since plans are guaranteed issue, who cares how accurately an application is completed?

After all, who's to know?

Of COURSE your sensitive, PRIVATE health info is safe....

And speaking of the soon-to-be-online (maybe) Data Hub, isn't it nice to know that all your info is totally secure?

Totally:

"The IRS Mistakenly Exposed Thousands of Social Security Numbers

The incident involves the unwitting exposure of "tens of thousands" of Social Security numbers"

Doesn't that just make you feel so secure?

Health Care Good News, and Bad....

■ Japanese scientists have begun growing a liver:

"A group in Yokohama reported it has grown a primitive liver in a petri dish using a person's skin cells"

It's not a complete liver, but it's a big step forward in organ replacement. What will be very interesting is the race between the organic "growers" and the 3D printer folks.

■ Sadly, not all of these efforts work out:

"A toddler who in April became the youngest person ever to receive a bioengineered organ has died ...  implanted a bioengineered windpipe made from plastic fibers to which the girl’s own cells, taken from her bone marrow, were added"

There have been only a handful of these procedures done at all, and little Hannah Warren (who would have turned 3 next month) was the first here in the States.

[Hat Tip: FoIB Holly R]

Lack of Employer Reporting bogus excuse

The inability to get employer reporting up and running is the excuse De Jour for waiving penalities and not substantiating income when it comes to subsidies. It is also BS and a great example of poorly written bill by people with no clue what they are doing. ACA was passed in 2010. Prior to that;

As an employer I report quarterly to my State everyone I employee and how much I pay them for unemployment benefit purposes. When someone files a claim I promptly get notice, or multiple, requesting that I verify this information.

As an employer SS and Medicare taxes are paid monthly or quarterly for all employees.

When it comes to verifying income the States and Federal government are already sitting on the vast majority of this info. There is no need to create any employer reporting or new process to accomplish this. They have had this info for decades and well before the bill was written or passed. If the government can't pass this data between buildings with a 3 year advance notice then trying to collect it a second time from employers is going to really be a disaster.

In regards to other coverage, as a payor we are already required to report our population of insured over 55 to CMS. I rather we report everyone as it is easier than parsing member roles and hoping you don't miss someone. Creating an extract to send everyone is much easier than an extract to send only certain people CMS wants some of whom must be manually identified.

So here now is the federal government perplexed about how they are going to get data on those privately insured, as they continue to tell us to not send everyone privately insured under the current reporting mechanism. To remove the filters that limit what is sent now is a very easy process. To send the file more frequently is an easy process.

To create an entirely new process with new data set and reporting requirements....not so easy.

You can't help but ask, did they write this bill trying to fail or are they really this inept?

ObamaTax: Not Ready for Prime Time

Fresh on the heels of the ObamaTax (Evil) Employer Mandate Reprieve comes this news:

"The Obama administration announced Friday that it would significantly scale back the health law’s requirements that new insurance marketplaces verify consumers’ income and health insurance status."

Hunh?!

The plan is that, for the 16 states (plus DC) that have opted to run their own Exchanges (as opposed to the other 42 who've tasked Ms Shecantbeserious and her minions with that job), the gummint will rely on its citizens' sacred honor as to whether or not they're eligible for their employer's group plan, and thus (subject to income requirements) eligible for subsidies.

Which is, in the words of St Homer of Simpson, a great big "D'oh!"

As co-blogger Bob pointed out, when Ms Shecatbeserious relaxed the employer reporting regs, she made it impossible for the folks in capital City to cross-check this information in the first place. And I'm sure that folks will be just as honest regarding their income eligibility.

Turns out that the ObamaTax is quite the fiscal fiasco.

Gee, who'da thunk it?

And Anthem joins in...

As we noted the other day, some carriers are looking for creative ways to help their clients forestall at least some of the train-wreck:

"If we would like, UHC would change our renewal date to December 1 ... The primary benefit in taking this offer would be to delay the impact of the major rate increases due after January 1 ... A secondary benefit accrues to us due to the nature of our plan: we currently have an HSA-compliant plan"

Many (most?) high deductible health plans (eg Health Savings Accounts) will have to be re-negotiated next year since they won't be ObamaTax-compliant. By putting off the renewal an extra few months, employers buy time to figure out what to do about that.

In the meantime, Anthem has now joined United Healthcare in offering renewal date changes to its existing small group clientele (via email):

"Clients on our non-grandfathered Small Group (2-50) plans ... will be offered a December 2013 off-cycle policy effective date. If they accept the off-cycle policy effective date change offer, they will keep their current plan until November 30, 2014"

They point out several advantages:

• Ease into the new market and delay potentially higher rate increases
• Have more time to work with you to decide what coverage best meets their needs
• Keep their current plan through November 30, 2014
• Lock in a new premium through November 30, 2014

One thing they do note is the very real possibility that this means an extra 2013 rate hike (something our UHC rep assured us would not be the case for their clients). This could just be standard CYA verbiage, but who knows.

One thing Anthem's doing which I haven't seen (yet) from UHC is that they're sending out notices to its eligible groups, and that the "offer letter will illustrate their current rate, their off-cycle policy rate and their estimated 2014 ACA compliant plan rate."

So it's not a complete shot in the dark for small employers.

Cavalcade of Risk #187: Call for submissions

Bob Wilson hosts next week's Cav. Entries are due by Monday (the 8th).

To submit your risk-related post, just click here to email it.

You'll need to provide:

■ Your post's url and title
■ Your blog's url and name
■ Your name and email
■ A (brief) summary of the post

PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like). And please only submit if you are willing to link back to the carnival if your submission is accepted.

What should they have done?

With the latest delay in implementing ACA seeing the employer mandate pushed back a year we should start asking if there might not be a better way to accomplish the goals of ACA. As commenter Jardinero1 pointed out;

http://insureblog.blogspot.com/2013/07/why-obamacare-delay-because-hhs-and-irs

this is not the first failure of ObamaCare nor is it likely to be the last. Some failures, such as LTC insurance, were so obvious and colossal, you have to wonder if they even attempted for them to be viable.

The tough part of the question is even trying to figure out the purpose of ObamaCare in the first place. What did they really intend to accomplish with this bill?

Lower the uninsured rate - Young healthy people make up a disproportionate percentage of the uninsured. They can already buy decent polices for well under $100 per month. I don't think anyone can argue honestly that doubling or tripling the cost of a policy would get them to buy. If they wont pay $70 per month they aren't going to pay $200, even if you do tax them $95 per year.

The number of people that wanted insurance and either couldn't qualify or truly could not afford it was only four to six million. If the goal was to cover those four to six million completely overhauling systems that cover 200 million people makes no sense. What was spent in regulation cost, compliance, advertising, etc etc would have insured those  four to six million. Tweaks to Medicaid and Medicare would have accomplished that without disturbing 200 million other people.

If you want to force people to make the smart financial decision either require they carry insurance or refuse to treat those that don't. Either way keeping insurance as affordable as possible lowers the uninsured rate, using insurance as wealth redistribution only encourages people to exit the system.

Lower the cost of healthcare - An obvious non solution is a huge insurance bill. Insurance is the cost of healthcare plus administrative and risk fees. You might be able to squeeze 5% out of that additional cost but if your goal was to only reduce our healthcare cost 5% again this bill was overkill. Not only does ObamaCare not do anything to lower the cost of healthcare it has numerous provisions that have and will increase the cost of healthcare. Compliance cost being just one of them.

If you want to lower the cost of healthcare that can be done in 6 months and generate revenue for the government. Rent the Medicare network. There is roughly 100 million employees with group insurance most of whom pay a PEPM access fee of $5 to $20. Rent Medicare's network and the federal government is now making $500 million to $2 billion per month. This would also immediately accomplish most of the EDI goals of HIPAA and ACA as well. 

Redistribute wealth - If the intent was to force the haves to pay for the have notes a couple simple taxes could have accomplished that. In fact the bill contains a number of taxes to do just that, but it doesn't explain all the other changes and intrusions.

Taxes already fund Medicaid and thus redistribute wealth. Open Medicaid up to those that have catastrophic healthcare expenses and make them  pooled cost to the nation not a small group of unlucky co-workers or fellow policy holders. The poor quality of Medicaid should be enough to motivate people off of it when better options are available.

It's no wonder so many pieces of this reform are falling apart, they never made sense in the first. It is a bill of multiple actions but no solutions.

Question of the day

In response to my post last night, co-blogger Bob posed this doozy:

"Employers are exempt from reporting and will not be subject to fines.

But . . .

The individual mandate is still in play.

Subsidies require proof that you do not have an employer plan that complies with the guidelines, and if you do have a plan, is it affordable?

But if employers are not reporting this information, how will HHS know if you qualify for a subsidy?"

Indeed.

An offer you can't refuse?

Our group health insurance plan is with UHC; we currently have a March 1 renewal date. Recently, UHC made small group clients an interesting offer:

If we would like, UHC would change our renewal date to December 1.

While that seems rather innocuous, there are a number of implications. First, why would we want to do this? Second, what affect would this change have on our current 2013 rates (since we've already taken the renewal "hit")?

The primary benefit in taking this offer would be to delay the impact of the major rate increases due after January 1 (due to  Community Rating and the like). In effect, we'd be locking in our rates from March 1, 2013 to December 1, 2014. Pretty decent.

A secondary benefit accrues to us due to the nature of our plan: we currently have an HSA-compliant plan with a $3,500 individual deductible. As of next year, these are 'verboten,' and we'll have to either lower that below the $2,000 threshold or find a different configuration altogether [ed: remember when the President promised that "if you like your plan, you can keep your plan?" Good times, good times].

By electing to change our effective date, we also delay making that decision until late next year.

Other carriers have followed suit, of course; via email, Medical Mutual of Ohio offered this:

Q. Can non-grandfathered small group (1-49) or individual customers get an early renewal on December 1, 2013?

A. Yes. We recognize customers have valid business reasons for requesting changes to their coverage period. Just as we have in the past, we will continue to accommodate these requests.

That offer, by the way, doesn't apply to 50+ groups.

Oh, and it's worth noting that it doesn't appear that these renewal date changes will impact calendar year deductibles and co-insurance accumulations.

Why Obamacare Delay? Because HHS and IRS Fumbled Rollout

Oh, but that's not exactly what the headline says in this Forbes article:

Why Obamacare Delay? Because Half Of EmployersAren't Ready for Rollout

Half of employers not prepared to administer the employer mandate starting in January? Yeah, probably true.  But - the headline says the delay is because of employer unreadiness.  I think the headline is misleading; it promotes a superficial reason and ignores meaningful underlying reasons for why so many employers are not ready.

What meaningful, underlying reasons?

For starters, the reason many employers are not prepared is because of late-issued HHS and IRS regulations.  Over the past 3 years the agencies often missed their target dates for release of proposed regs, while employers waited.  Add to that the sheer length and typical bureaucratic opacity of the proposed regs when they did emerge, which required lengthy analysis by employers to determine just what the proposed regs asked them to do.

Another factor affecting employer readiness has been legitimate debate over the proposed regs when they were eventually released. As employers began to realize the profound impact on their businesses, they have appealed, demanded hearings, and filed suits to get the proposed regs withdrawn or substantially modified. The obvious example is the ongoing outcry against the requirement to cover contraception (which is nowhere found in ACA) - and there are other examples as well.

Keep in mind this is not the first time HHS was forced to interrupt the planned progress of ACA implementation. Just one example: new enrollment in the individual high-risk pools was stopped because HHS ran out of money (even though only a fraction of the expected population actually enrolled).

On balance therefore it seems to me the principal reasons HHS and IRS are forced to defer the employer mandate comes right back to their own front doors.  Employers were not ready largely because HHS and IRS did not perform their responsibilities in a timely manner.

As to the political convenience of avoiding controversy for the 2014 elections – if ACA implementation were going smoothly and on plan, that would be a political plus, not a minus. So I don’t see politics as fundamentally driving the decision to defer the employer mandate.   Politics plays its part, but I think  the underlying reason is the inability of HHS and IRS to issue timely regs, and otherwise to implement ACA as required by the legislation in the first place.

In my book, this latest decision to defer a key part of Obamacare is just more evidence of an ongoing bureaucratic mismanagement debacle.  And little anyone has seen can give confidence that HHS and IRS will be able to manage Obamacare any better, once it is, finally, implemented. Whenever that happens.

What the...? (Breaking)

So The ObamaTax Man has unilaterally decided to put the metaphoric brakes, at least temporarily, on the (Evil) Employer mandate:

"Businesses won’t be penalized next year if they fail to provide workers health insurance after the Obama administration decided to delay a key requirement under its signature 2010 health-care law."

So a couple of questions off the top of my head:

This was legislation he wanted passed, in fact rammed through, and which he signed, and he's only just now figuring out that it's a stink bomb?

Not the brightest light in the harbor, is he?

More to the point, it is the law, how can he just unilaterally suspend it?

Sheesh.

UPDATE: Mike has more:

"Keep in mind this is not the first time HHS was forced to interrupt the planned progress of ACA implementation. Just one example: new enrollment in the individual high-risk pools was stopped because HHS ran out of money (even though only a fraction of the expected population actually enrolled)"

Click through to read the whole thing.

In the news....

■ Is one ever too young to buy life or disability insurance? There are certainly some compelling reasons to do so: depending on the policy type, one can lock in much lower rates for a long period of time. And of course, it guarantees that you have at least some protection in place should your health go south. The WSJ has more.

■ Back in the day, President Obama promised that rates would decrease by 3000%. As we now know, that was, um....optimistic to say the least. Blue Grass blogger David Adams reports that "the Kentucky Department of Insurance has leaked data showing health insurance premiums under ObamaCare will increase by an average of eighty percent at the start of 2014"

■ And speaking of the WSJ, they also report something we've noted for a while now:

"The long-term-insurance industry now is shrinking, premiums are soaring and there is no fix in sight."

There are, of course, a number of contributing factors at work here, most notably retention and claims.

Hunh?

Here's the thing: Long Term Care insurance (LTCi) is most similar to disability insurance in terms of complexity and benefits. So it stands to reason that many (most?) carriers who've been in the market for a while based at least some of their rate structure on assumptions carried over from the DI side. One of those is "retention;" that is, how many policies stay in force over the long haul. It appears that many more folks have kept their LTCi plans than the carriers had anticipated.

Which sets up the next problem: claims. If more folks are holding onto their policies, then more folks than expected are experiencing claims. And the cost of care isn't abating, either, which tends to create a vicious cycle.

■ And finally, a while back we brought you the news that 3d printers were helping to fashion new organs. Apparently, that was only the beginning:

"Damaged bones could be fixed with a new technique that involves 3D printing ... if a child had a jawbone defect, you could take an image of the defect, feed it into a computer and print a replacement to precisely fill the defect using the patient's own cells"

Very cool.

[Thanks to FoIB Holly R and Gail S for their news tips]