Anecdotal evidence piling up

David Williams, a Massachusetts-based healthcare industry consultant (and FoIB) has a very interesting new post from the Land of RomneyCare:

"Obamacare caused one small businesses’s Blue Cross Blue Shield of Massachusetts premium to jump by 29 percent ... After that I heard from two other BCBS MA customers who were experiencing big premium hikes."

David reached out to Blue Cross for confirmation and elucidation, and (surprisngly) they offered a helpful explication. Click on through for the unexpected twist.

Too little, too late [UPDATED]

Sing it, Johnny:

"A nonpartisan congressional investigation has concluded that management failures by the Obama administration set the stage for the computer woes that paralyzed President Barack Obama's health care program website last fall"

Which is nice, but what difference, at this point, does it make?

UPDATE (HGS@7-31-14):

Adding insult to injury, we now learn that the 404Care.gov site debacle cost  almost $1 Billion, and still needs work:

"The price tag for healthcare.gov, the Obamacare website, is approaching $1 billion even as key features remain incomplete ... If the management doesn’t improve “significant risks remain that upcoming open enrollment periods could encounter challenges”

Gotta love that last bit: "could encounter challenges."

Masters of understatement, these rocket surgeons.

When journalist/propogandist don't understand their subject, Is Medicare getting more efficent?

Not sure if I should refer to Vox as journalism; their attempt at understanding the per-capita Part A spending is more along the lines of humor.

But what's definitely clear — and what's driving this trend — is that Medicare is spending significantly less per person than they did two years ago. And this report expects that trend to continue for another two years going forward.

Ms Kliff has a number of guesses of why this is, including Obamacare of course. What she misses is the most obvious one: Medicare growth usually happens when someone turns 65. And 65 year-olds have lower claims cost then 80 year-olds. If you add 1.6 million people at the healthiest end of your spectrum, and the costliest end of your spectrum dies off, you would expect average claims to drop. When that growth is higher then usual, i.e. all the baby boomers, you would expect sustained reduction in per capita cost.

They had 3% growth to demographics in the most favorable spectrum possible. A 2% reduction in cost for that favorable of a 3% change in demographics is not impressive. Looking at CMS's website and their press release, it appears they don't understand the actuarial sciences either.

Liberals Must Hate Obamacare

A GOP lawsuit against the Obama administration on overstepping their constitutional authority in delaying the employer mandate in Obamacare has led to Democratic outcries and a platform to fundraise for their base. Liberals call the lawsuit frivolous and that an attempt to impeach the President will follow. They say it is a waste of money and a witch hunt designed to tear apart Obamacare. They also want GOP members of Congress to do their jobs and as the President said: "stop hating all the time."

While the GOP lawsuit focuses on the employer mandate, it should be noted that since it's inception Obamacare has had 42 changes made to it. 24 of them have been done by the administration with no input from Congress or the courts. These include: the individual mandate delay, the employer mandate delay, early closing the high risk pool (PCIP), canceled Medicare Advantage cuts, an extension of transitional (Grandmothered) plans, and doubling the allowable deductibles on small employer plans. All of these changes made by the Administration are detrimental to consumers.

I always assumed that liberals are in favor of the law. If this is true then why are they against a lawsuit that is designed to implement exactly what they want? Why do they want employers to be able to avoid penalties for not providing insurance to their employees? Why are they against measures that are designed to lower health care costs? Why are they against consumers having better benefits?

Truth is they aren't. Instead they have their heads buried in the sand, missing the point of a lawsuit that is brought forth by the side of the aisle they despise. And the DCCC hopes they continue to stay buried while hopefully collecting $19 from each one.

(Not so) Reassuring Re-insurance

One of the (many) problems with the ObamaTax that's been flying under the radar is the soon-to-be cancelled re-insurance program:

"Insurance companies will no longer have access to ACA’s “re-insurance” and “risk corridor” programs. The first item currently allows insurers to bill the government for the most expensive patients."

Basically, this re-insurance is a way to funnel taxpayer money directly from DC into insurance carriers' coffers, and was designed to bribe the industry into supporting the ObamaTax protect carriers from the inevitable adverse selection they were afraid of under the Guaranteed Issue provision of the law. It's available for a limited time only (well, at least until HHS Secretary Burntwell unilaterally extends it).

And just how much of your money are we talking about here?

Well:

"Aetna Inc. believes it should qualify for $50 million in federal reinsurance benefits, based on actual individual health insurance claims submitted during the first half of the year."

And why is that?

Think of it this way: when you can't be turned down for health insurance - no matter how sick you are - any premium is a bargain compared to the cost of medical care. Add in ObamaTax subsidies, which further reduces your costs, and it's no wonder that a lot of seriously ill folks are signing up (or trying to, anyway).

Aetna, of course, sees the writing on the wall (and in their ledgers) and has its hand out to Uncle Sugar for some of that sweet, sweet reinsurance cash. And why not? They've earned it, right?

But of course, they're not the only carrier with its hand out:

"Big Government and Big Insurance have worked together to promote Obamacare.  They’ve also worked together to make sure taxpayers will help bail out insurance companies who lose money selling insurance under Obamacare."

And remember, Aetna's not even the biggest boy on the block; what happens when Blue Cross or UHC take their place in line? That's the price we pay for carriers' agreeing to shill for the ObamaTax after initially resisting it.

Quid pro quo: It's what's for dinner.

Speaking of monkeys and unicorns...

Bob's post yesterday on the travails of a couple trying to find affordable health insurance in an Obamaworld proved once again that there are no coincidences:

I have spent the past few days working with a couple of very long-term clients. They've trusted me with their health insurance needs for several years (at least 5 that I can recall off-hand). Both of them have HSA-compliant plans with moderately high family deductibles ($6,000 for one, $10,000 for the other), and both are insured with Medical Mutual (MMO). Both of them renew September 1st.

MMO has elected to participate in the Obamastration's offer to extend existing policies another year or so (so-called "grandmothering")..

"Don and Sharon" got a 28% rate increase from last year, when their rate was $442 a month (or $5,300 a year). Their plan has a $10,000 family deductible, then pays 100% of covered charges after that (most preventive care items are paid on a first-dollar basis, no deductible necessary). So their maximum non-preventive-care related out-of-pocket exposure was about $15,000.

Their new rate is about $560/month, or about $6,700 a year. Add that to the $10,000 deductible, and for most non-preventive health care they'll shell out almost $17,000 before any insurance payments are made on their behalf.

But as Igor says, "could be worse:"

In shopping alternate plans for them, all of which would be required to be fully ObamaTax-compliant, the "best" (least expensive) plan I could find for them had a $12,000 deductible (20% higher than their current plan) and a rate of $900 a month (almost $11,000 a year). That translates to $23,000 out-of-pocket before the insurance would kick in (again, for most non-preventive items).

"Ronnie and Laurie" also have an HSA plan with MMO, albeit with a slightly lower deductible ($6,000 for the family). They've also been "grandmothered" in, so could keep their plan, for which they currently pay $570 per month (or about $6,800 per year, for a total out of pocket exposure of about $12,800). They can keep it by agreeing to a 30% rate hike, which would increase their premiums to $740 per month ($8,000) per year. That would mean $14,000 out-of-pocket for non-preventive care before the plan would pay a red cent.

Shopping around for them, we find the following alternatives:

Company A, with a $12,000 family deductible and a monthly price tag of $872. That's $22,000 out of pocket before the plan kicks in.

Company H offered a plan a little closer to what they currently enjoy: a $7,300 family deductible at the bargain price of $1,020 per month. For those paying along at home, that's about $19,000 up-front.

Or they could stay with Medical Mutual and elect a fully-compliant ObamaTax plan, complete with $12,000 family deductible and low, low monthly payments of just $900. That's also $23,000 out the door.

Choices, choices.

Rideshare Tricks - An Update

So, just over 3 years ago, we posted on the opportunities - and dangers - of ride-sharing:

"Seeing a business opportunity in millions of cars that sit idle at office parking lots or on weekends, several start-up companies have introduced "peer-to-peer" car-sharing services"

We noted at the time that there were still a number of unanswered questions vis insurance coverage for folks who rented out their vehicles, and those who rented them.

Fast-forward 3 years, and the PIA (Independent Agents' association, primarily for P&C folks) has some new news, in the form of a handy flyer that details all the potential issues. Among them:

■ First, rideshare drivers aren’t currently subject to the regulations that taxi and livery services follow. That means drivers aren’t required to have city-regulated vehicle inspections or background checks, a public safety concern to many cities

■ Neither ridesharing nor vehicle sharing services are covered by traditional personal auto insurance policies. [ed: which we pointed out in our original post]

This caught my eye in a big way:

"A six-year-old girl was killed in a collision with a rideshare car in San Francisco. The driver said he was awaiting a fare at the time of the accident. Because the driver wasn’t transporting a passenger when the accident occurred, the rideshare company said he wasn’t covered by their policy – leaving the driver financially responsible"

Now, that one's still awaiting the court's decision, but it should be an eye-opener to folks thinking about either end of the transaction.

The more you know....

Download the flyer here.

A Grace-ful Benefit Revolution

Over at Benefit Revolution, Craig Gottwals has an in-depth look at the 90 day grace period conundrum (about which Bob first blogged here last year).  Briefly, folks who buy a plan on-Exchange (and who get a subsidy) have a unique opportunity to game the system in a big way.

Craig's post also features an interesting video of his (very) recent appearance on the A&G Radio show discussing the issue.

Nice job, Craig!

State Exchanges vs Subsidies

While we wait for the Halbig/King decisions to be resolved, and noting that they may not be as big a deal as so many folks believe,  here's video proof that it was no "drafting error" [ed: skip to just past the 31 minute mark for the money quote]:



 
In case you can't make it out, MIT economist Jonathan Gruber - a key player in designing The ObamaTax - clearly says "What’s important to remember politically about this is if you're a state and you don’t set up an exchange, that means your citizens don't get their tax credits."

Oopsies!

[Hat Tip: Reason]

I see fake people...

So here's the thing:

"Investigators ... created 12 fake health insurance test applicants and... have gotten qualified health plan (QHP) coverage for 11 through the [404Care.gov site]."

So what's the big deal?

If someone hacks your Visa card, they can (potentially) rack up some major purchases. But who in their right mind wants to steal insurance?

Here's the problem(s):

As Bob points out, it underscores just how poorly the 404Care site was designed and implemented, and how it continues to be an embarrassment to all who've worked on it (assuming they had any shame to begin with). More importantly, though, folks who successfully game the system in this way:

"Get free (or almost free) insurance until such time as the Feds figure out that they never were entitled to it (again, assuming they're even caught at all). So after claims have been paid and the government (and the carriers) want their money back, the perp is long gone."

Nate offers another scenario:

"If I was an illegal alien undocumented guest with a serious medical condition, free insurance would be great. You don’t even have to really try to fake it; just provide a valid insurance ID and they will treat and gladly bill the carrier for you."

And Pat offers this:

"The bigger point is that HHS isn’t verifying jack squat. Income, identity, Social Security number, even residence may not be accurate. If 11 of 18 fraudulent attempts got through then how many of the “true enrollments” are not accurate?"

And that's truly scary: recall that thousands (perhaps tens or even hundreds of thousands) of folks experienced enrollment "glitches," so we have no way of knowing how many folks really enrolled, and how many of those that did were, in fact, fraudsters using someone else's ID.

Warm fuzzies, anyone?

Heroic Carrier Tricks: CNA edition

Back in the day, the Cincinnati Life Insurance Company sold Long Term Care insurance (LTCi), and a colleague (since retired) sold a number of these. Recently, a Cincinnati LTCi client called to complain about a claims problem, and I was happy to try to help out.

Note: I had understood (mistakenly, as it turned out), that Cincinnati had actually sold its block of business to another carrier. This is a not-infrequent occurrence in the LTCi biz, but was not the case here. Instead, they had turned over policy service to a Third Party Administrator, LTCG, which also services other carriers' policies, including CNA. Unfortunately, I hadn't known this.

I invited the client to come into the office so that we could call in to try to resolve the problem. This turned into a roughly 90 minute call, during which time I know that I heard the rep with whom we were speaking say "CNA." I made a note of that, and made the assumption that Cincinnati had sold their policies to them. Later, I figured out that she had simply misspoken.

We were unable to get resolution to the problem, and so I reached out to CNA's media relations folks to let them know that I would be posting an unflattering review of the situation. I was contacted almost immediately by the very nice, professional Jennifer, who offered to reach out to their claims folks to see what could be done.

I was also contacted by a gentleman named Terry, who works for LTCG (the policy administrators). He had done some research, and was convinced that this was not a CNA policy at all. Since my mind was already made up, and Jennifer had already taken ownership, I paid that little heed.

This was a mistake.

Behind the scenes, Jennifer connected with a supervisor in the CNA claims department, and they were able to ascertain not only that this was not a CNA policy, but in fact a Cincinnati one. And that would have been enough: they could have just stopped right there and told me to take it up with Cincinnati and LTCG.

But they did not:

Instead of simply shrugging it off and passing it back to me, they reached out to the Cincinnati folks on behalf of this client - not CNA's - and helped to resolve the issues. Late yesterday afternoon, I received a text from the client that Cincinnati (well, LTCG) had reached out to her, and that they had everything necessary to approve the claim.

I was, and am, stunned.

CNA was under zero obligation to do anything more than confirm that this wasn't their policyholder. And yet they went out of their way to help her get a claim issue resolved. That is world class service, and I am absolutely grateful to Jennifer at CNA and Terry at LTCG for their help, patience and perseverance in getting us to this point.

Kudos, CNA!

Cavalcade of Risk #213: Don't Panic edition

Econ-blogger extraordinaire Jason Shafrin hosts this week's short but eclectic collection of risk-related posts, from life and health insurance to Worker's Comp, and plenty in-between.

Five Takeaways from Halbig and King

1. The decision on Halbig (D.C. Circuit) isn't taking subsidies away from people nor is the decision on King (4th Circuit) to allow everyone who qualifies to receive a subsidy. It is simply about the law and how it is interpreted. One might also ask how one court ruling said 36 states were federal exchanges while the other ruling said 34 states were federal exchange. This is what happens when a law is poorly written, rushed to a vote, and passes. We end up with a discombobulated mess. This isn't unique to Obamacare. Many other laws that were rushed through end up with unintended consequences too. Obamacare is still full steam ahead on rickety tracks and those who are on board still have ways to purchase heavily discounted tickets. Until further court rulings, these discounted tickets can still be purchased in every state.

2. Media loves a crisis even more than Rahm Emanuel. Coverage of both cases were headline news across the country. But as Bob pointed out yesterday, maybe this isn't such a BFD. The number of people this impacts is less than 2.5% of our population. While that number is projected to rise, CBO figures it will max out at 8% of our population.

3. We are more divided as a nation than ever. Six judges voted exactly along partisan lines for yesterday's rulings. Immediately following the release of Halbig the Twitter world lit up with liberals claiming Republican judges were guilty of Judicial Activism then followed it up - in the same article - with how the White House would request the entire D.C. Circuit Court hear the case and that the court leans 7-4 in favor of democrats. Evidently they don't see this side of it as Judicial Activism.

4. Lobbyists. The American Hospital Association, Association of Health Insurance Plans, and AARP were three of the organizations that filed amicus briefs on behalf of the government in the Halbig case. Obamacare is a gravy train for the people and the businesses they represent. There is no doubt that these groups have some legitimate business concerns surrounding these rulings. But they also see Obamacare as an opportunity. I would expect a very strong grassroots effort by these groups to begin extensive lobbying at the state level. Someone once said elections have consequences. 2014 will no doubt be about Obamacare once again. There are 33 senate seats, all house seats, and 36 governorships up for election this year.

5. Expect a huge push for states to establish their own exchanges over the next several months. Lobbyists and backers of Obamacare will inundate states who didn't set up exchanges. It will also push states that were looking to go from their state based exchange to the federal exchange. The only point agreed upon by all courts is that an exchange established by a state is eligible for federal subsidies. To make this mess go away the only avenue to take is for all 57 states to step up and create their own. For supporters of subsidies, waiting on John Roberts to decide the outcome would be like playing a game of Russian roulette.

Dumb Carrier tricks...Kaiser Edition

For the last month, I've been receiving emails from Kaiser about a change in policy:

As your business partner, we want to make you aware that Kaiser Permanente’s subscriber termination policy will be enforced effective August 1, 2014, for small groups only (not applicable for large groups). Small groups can no longer retroactively terminate subscribers or dependents prior to the month we receive the request. As a result, all subscriber terminations will be effective in the month we receive the request unless a future termination date is requested. 

For example, if you or one of your clients requests to terminate a member’s coverage beginning August 1, we must receive the request no later than August 31. A termination request received in August cannot be made effective retroactively to July 1 or June 1.

Assume, just for a moment, that you're a company with an ex-employee covered under Cobra.  You don't receive a premium payment from the employee.  The end of the month approaches.  What do you do?  

The short answer is "nothing."  The employee has a 30 day grace period to pay the late premium.  Payment is considered made on the date that it is sent to the plan.  There's no way to know by month-end whether or not the employee's coverage should be cancelled. 

Under the previous policy, you could notify Kaiser in the middle of the following month and cancel coverage back to the paid-to date.  Under the new one, you can't.  As far as I can tell, under the new policy, every time a small employer has an employee elect Cobra, they're going to be stuck paying for the last month's premium themselves. 

More on Halbig [UPDATED]

Continued from this morning.

Meanwhile, the Fourth Circuit Court of Appeals just ruled that the subsidies do, in fact, apply across all the Exchanges, putting it in direct conflict with Halbig.

One would think that this would mean a certain trip to the Supremes, but maybe not:

"One thing the Supreme Court takes into consideration when deciding to take cases is whether or not there's a split in how various circuits are treating an issue. Right now there's a split but if they go en banc at the DC circuit and the heavily Democratic full court overturns the panel's decision that eliminates the split and could give SCOTUS an out on taking this issue on."

Unfortunately, that sounds about right to me.

So, good news this morning, (likely) reality this afternoon.

UPDATE FROM BOB: I don't see this as big either way. If the subsidies go, no big deal.

Using admin numbers:

■ 8.5M applied, 85% got subsidies
■ That's about 7M
■ 1.2M failed to pay their initial premium. Another 2.5M have lapsed (or will lapse) due to non-payment by the end of the year.
■ Net about 4M that got subsidies and some of those got them legally through state exchanges.
■ If the subsidies are clawed back (certainly possible) that leaves 4M pissed off voters.
■ As a raw number that is not a game changer.

Stupid Anthem Tricks: One Week Later

For those following along at home, it's now been a week since we reached out to Anthem for the answer to a very simple question:

"Does one receive deductible credit from a "legacy" plan when one transitions to an ACA one or not?"

[ed: I had initially reached out to Anthem last Monday, but gave them a few days to respond before posting that]

I just emailed my contact to see if she'd gotten a definitive answer yet, and she's replied "I have not. Still waiting."

Since this seems to be dragging on, I've suggested to my client that we file a formal complaint with the Ohio Department of Insurance. I'll let you know if she's up for doing so.

Navigator Two-fers

So those unlicensed, unvetted Navigators, which (at last count) cost over $67 million, have racked up some pretty impressive numbers.

For certain values of "impressive:"

"If you do the math, 28,000 individuals assisting 10.6 million people over 210 days breaks down to 1.8 people per day per service representative."

Bob broke these numbers down a little differently, but the point remains the same: a colossal failure. Part of the problem was baked into the cake: because of the complexity of the subsidy calculations and the sheer number of available plans, coupled with folks with no prior insurance experience or knowledge, Navigators were spending upwards of two hours per "prospect." Not exactly cost-efficient.

But then, this is the gummint, not exactly known for it's spendthrift ways.

Cavalcade of Risk #213: Call for submissions

Jason Shafrin hosts next week's Cav. Entries are due by Monday (the 21st).

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.

And now for something completely different... [BUMPED and UPDATED]

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For the next two days (today and tomorrow), you can download - Gratis! [ed: Peruvian for Free] - his newest effort: Information Technology Strategic Leadership. All he asks in return is that you give it a positive comment on Amazon if you like it.

Tom says he's making this generous offer because he "feels strongly about the subject of IT leadership. Frankly, as an outside consultant and as an executive staff member, I have watched too many people promoted to the leadership ranks based on their great technical knowledge rather than their leadership ability. This is never a good decision for the enterprise."

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Frustrating Carrier Tricks

So apparently, Anthem has hired Nancy Pelosi:

"We cannot tell if the accums have been moved from facets until there is an actual claim on the new ACA policy/system."

[Translation: "she must have new expenses for us to learn whether her previous ones count"]

Hunh?

Allow me to explain:

One of my clients has had an Anthem HSA-compatible health plan for a number of years. Effective July 1, her plan was "mapped" (transitioned) to a new, similarly-configured ACA-compliant plan with a slightly higher deductible.

A few weeks before the "new" plan took effect, she had an injury. The cost of treatment satisfied her deductible, and we wanted to know if these expenses would apply to her new plan, or whether she has had a brand new deductible as of July 1.

Look, this is not complicated: Does one receive deductible credit from a "legacy" plan when one transitions to an ACA one or not?

Since I couldn't get a straight answer from my regular sources, I reached out to the media relations folks (a practice with which I have had previous success) for help. I had already written the bulk of this post, castigating Anthem for its lack of transparency and forthrightness, and included several quotes from it.

I was soon contacted by a very nice young lady who asked for a copy of the proposed post, which I gladly provided. She promised to look into it. This was Monday. It is now Thursday, and the fact that we still have no definitive answer (despite also providing my client's name and policy number) tells me all that I need to know.

The rocket surgeons at Anthem will not give us a straight answer to a very simple question. It seems to me that there can be only two reasons for this:

One, they truly don't know, in which case they are so incompetent as to have no business issuing "insurance" contracts that they don't even understand themselves, or they are deliberately obfuscating (for what purpose I have no idea).

Right now I'm leaning towards the former. In which case, one would do well to avoid having anything to do with Anthem's "insurance" policies.