I’m hearing a lot of the lazy “but what are the political implication” perpetual horse race questions from the media about recent developments surrounding the Affordable Care Act. That’s fun Inside-the-Beltway stuff, but in the mean time there are real people who are likely to be helped and hurt with matters as essential as their health. So, what I am not hearing enough of yet, however, are tough, substantive questions that get to the heart of whether the Affordable Care Act is going to be stillborn.
Here are some questions that I think intelligent journalists and blogger ought to be asking in light of recent developments with the Affordable Care Act. Getting answers in many cases may take persistent questioning and closer scrutiny of existing documents. In others, FOIA requests may be needed.
1. Actual v. Anticipated Age Distributions in the Exchanges
What is the age distribution by state and in the aggregate of persons who it is claimed have enrolled in Exchange-based plans under the Affordable Care Act? Once we have this data, we can compare it to (a) census data on the age distributions in the various states and (b) any prior estimates on what the age distribution of Exchange enrollees would be such as those described in this government document.
If there is a significant difference between the age distribution encountered thus far and the anticipated age distribution, that increases the probability of the ACA succumbing to an adverse selection death spiral.
Continue reading “Five Questions Journalists Should Be Asking About the Affordable Care Act”
Filed Under: OP-ED, THCB
Tagged: CBO, consumer driven health, Grandfather Fix, Health Plans, Premiums, Risk adjustment, risk corridors, Seth Chandler, Seth J. Chandler, The Affordable Care Act
Nov 16, 2013
Last week, I reported on my informal survey of health insurance companies and their estimate for how much rates will rise on account of the Affordable Care Act (“Obamacare”).
Today, there are press reports quoting the CEO of Aetna with their estimate. The Aetna estimate is worse than mine.
Health insurance premiums may as much as double for some small businesses and individual buyers in the U.S. when the Affordable Care Act’s major provisions start in 2014, Aetna Inc. (AET)’s chief executive officer said.
While subsidies in the law will shield some people, other consumers who make too much for assistance are in for “premium rate shock,” Mark Bertolini, who runs the third-biggest U.S. health-insurance company, told analysts yesterday at a conference in New York. The prospect has spurred discussion of having Congress delay or phase in parts of the law, he said.
“We’ve shared it all with the people in Washington and I think it’s a big concern,” the CEO said. “We’re going to see some markets go up as much as as 100 percent.”
Continue reading “More Signs of Rate Shock and Awe”
Filed Under: Health Plans, THCB
Tagged: Aetna, CBO, Health insurance, health insurance premiums, Mark Bertolini, premium hikes, Robert Laszewski
Dec 13, 2012
What will health insurance cost in 2014?
Will the new health insurance exchanges be ready on time or will the law have to be delayed?
There Will Be Sticker Shock!
First, get ready for some startling rate increases in the individual and small group health insurance marketplace due to the changes the law dictates.In a November 2009 report, the CBO estimated that premiums in the individual market would increase 10% to 13% on account of the health insurance requirements in the ACA. In the under 50 employee small group market, the CBO estimated that premiums would increase by 1% to a decrease of just 2% compared to what they would have been without the ACA. All of these differences in premium would be before income based federal subsidies are applied to anyone’s premiums.
In recent weeks, the Obama administration issued a series of proposed regulations for the health insurance market. Since then, I conducted an informal survey of a number of insurers with substantial individual and small group business. None of the people I talked to are academics or work for a think tank. None of them are in the spin business inside the Beltway. Every one of them has the responsibility for coming up with the correct rates their companies will have to charge.
Hold onto your hat.
On average, expect a 30% to 40% increase in the baseline cost of individual health insurance to account for the new premium taxes, reinsurance costs, benefit mandate increases, and underwriting reforms. Those increases can come in the form of outright price increases or bigger deductibles and co-pays.
Filed Under: Commentology, Health Plans, THCB, The Business of Health Care
Tagged: CBO, Health Insurance Exchanges, individual market, Premium, Robert Laszewski, Small Group
Dec 5, 2012
Let’s take a look at Mitt Romney’s Health Care plan using his own outline (“Mitt’s Plan”) on his website.
Romney’s approach to health care reform summarized:
- “Kill Obamacare” – There seems to be no chance Romney would try to fix the Affordable Care Act––he would repeal all of it.
- No new federal health insurance reform law – There is no indication from his policy outline that he would try to replace the health care reform law for those under age-65 (“Obamacare”) with a new federal law–his emphasis would be on making it easier for the states to tackle the issue as he did in Massachusetts.
- Small incremental steps – His approach for health insurance reform for those under age-65 relies on relatively small incremental market ideas when compared to the Democrats big Affordable Care Act–tort reform, association purchasing pools, insurance portability, more information technology, greater tax deductibility of insurance, purchasing insurance across state lines, more HSA flexibility.
- Getting the federal government out of the Medicaid program – He would fundamentally change Medicaid by putting the states entirely in control of it and capping the annual federal contribution–”block-granting.”
- Big changes for Medicare – Romney offers a fundamental reform for Medicare beginning for those who retire in ten years by creating a more robust private Medicare market and giving seniors a defined contribution premium support to pay for it.
Continue reading “Obama vs. Romney: A Detailed Analysis of Mitt Romney’s Health Care Reform Plan”
Filed Under: OP-ED, THCB
Tagged: 2012 Election, Block Grant, CBO, Massachusetts, Medicaid, Mitt Romney, Paul Ryan, President Obama, Robert Laszewski, safety net, The Affordable Care Act, Uncompensated Care Pool, Unfunded Mandates
Sep 11, 2012
By expanding Medicaid, the state-federal partnership that offers health insurance to low-income Americans, the Affordable Care Act set out to cover some 17 million uninsured – or roughly half of the 34 million who are expected to gain coverage under reform. But when the Supreme Court ruled on the Affordable Care Act in June, it struck down a key provision which threatened that if a state refused to co-operate in extending Medicaid to more of its citizens, it could lose the federal funding it now receives for its current Medicaid enrollees.
In a 7-to-2 decision, the justices ruled that this punishment was too coercive: “withholding of ‘existing Medicaid funds’ is ‘a gun to the head’” – that would force states to acquiesce.
As a result, states can, if they choose, opt out of the Medicaid expansion, and some governors are threatening to do just that – even though the federal government has committed to pay 100 percent of the cost from 2014 to 2017. After that, the federal share would gradually decline to 90 percent in 2020, and remain there. This is a generous offer; today the federal government now picks up just 57 percent of the Medicaid tab.
Nevertheless, some states claim that the 10 percent that they would have to ante up after 2020 is more than they can afford. A few go further and admit that this isn’t just about money: by rejecting the federal funds, they are voicing their objection to “Obamacare.”
Continue reading “Why Should You Care Whether or Not Your State Decides to Expand Medicaid Coverage?”
Filed Under: THCB
Tagged: CBO, gun to the head, health insurance subsidies, Maggie Mahar, Medicaid, Medicaid Expansion, Obamacare, private insurance, States, Texas, The Affordable Care Act, the uninsured
Aug 2, 2012
The Congressional Budget Office’s new estimates of the budgetary impact of the Affordable Care Act, made in the wake of the Supreme Court’s ruling last month, glides right by one obvious fact: the budget analysts really have no idea how the court ruling will affect their previous estimates.
The CBO report says very clearly that “what states will be able to do and what they will decide to do are both highly uncertain.” Translation? They don’t know any more than anyone else right now about how states will act, now that the high court has determined that the federal government can’t force states to participate in the expansion of Medicaid by withholding the federal share for existing activities.
CBO isn’t to blame for this uncertainty. Rather, they should be commended for their candor in acknowledging the degree of uncertainty that remains. Most news reports and commentaries on the new CBO findings have downplayed or ignored this problem.
Continue reading “Latest CBO Report on Health Law Adds to Business Uncertainty”
Filed Under: The Business of Health Care
Tagged: CBO, Matt Barry, Medicaid, national budget, The Affordable Care Act, The Supreme Court Challenge, uncertainty
Aug 1, 2012
Here’s the most underreported story of the summer. When the Supreme Court ruled on the Affordable Care Act (ObamaCare) it inadvertently liberated millions of people who were going to be forced into Medicaid. Now they will have the opportunity to have private health insurance instead. What difference does that make? It could be the difference between life and death.
A Congressional Budget Office (CBO) report this week says there are 3 million such people. The actual number could be several times that size. But first things first.
Imagine that you are the head of a family of three, struggling to get by on an income, say, of $25,000 a year. You’ve signed up for your employer’s health plan because you want your family to get good health care when they need it. But that takes a big bite out of your paycheck — $250 a month.
When you first heard about the president’s health plan, you heard him say that if you like the plan you’re in you can keep it. That was good news. You also believed the whole point of the reform was to help families like yours get health insurance if for some reason you had to seek insurance on your own.
Continue reading “The Supreme Court May Have Saved Lives … by Keeping People Off Medicaid”
Filed Under: THCB
Tagged: CBO, employer-sponsored health insurance, Health insurance, John Goodman, Medicaid, Obamacare, Outcomes, private health insurance, safety net, The Affordable Care Act
Jul 30, 2012
The big health care story in Washington, D.C this week comes down to three letters: CBO. The Congressional Budget Office released its latest projections about the Affordable Care Act’s cost and coverage, concluding that the Supreme Court’s changes to the ACA will lead to some states to opt out of its Medicaid reform. As a result, the ACA’s cost would fall by $84 billion over 11 years but lead to about three million fewer people receiving health insurance.
The CBO numbers are incredibly important in one sense: They reframe the debate over the ACA yet again. As I noted last week, more than two-thirds of states are waffling on whether to participate in the law’s Medicaid expansion, and the new CBO numbers will offer new targets for supporters and opponents of ObamaCare to make their case.
But the CBO score is also more of a political story than policy news. And as both parties continue to haggle over the ACA’s price and impact, keep in mind that the CBO’s projections about health law costs are often wrong.
So rather than focus on estimates of future reforms, we’ll focus on results from a current one: the Alternative Quality Contract. It’s an important payment pilot developed by Blue Cross Blue Shield of Massachusetts — and a key forerunner of the ACA’s accountable care organizations.
AQC Offers Template for ACO
Under the AQC, which Blue Cross launched in January 2009, a hospital or physician group negotiates a budget — or global payment — that covers the cost of care for all patients in their practice. If participating providers stay under budget, they receive bonuses; if they overspend, they pay the difference.
Continue reading “To Gauge ObamaCare Impact, Ignore CBO and Focus on AQC”
Filed Under: Uncategorized
Tagged: Alternative Quality Contract, CBO, cost and coverage, Dan Diamond, Economics, Medicaid, Medicaid Expansion, The Affordable Care Act, The DC
Jul 26, 2012
The United States faces large federal budget deficits over the short-, medium-, and long-term. Although perhaps subject to the greatest public attention, the short-term deficits are generally thought to be helping the economy recover. In contrast, medium- and long-term deficits projected for years after the economy returns to full-employment are a source of concern: these deficits will create growing and serious burdens on the economy even if they do not lead to an immediate crisis. Economists of all political stripes agree on this point.
While extending the Bush tax cuts, if that occurs, will play a big role in making the medium and long-term deficit problems worse, economists agree that a key driver of the long-term deficit problem is growth in government spending on health care. Medicare and Medicaid, our two largest health spending programs, currently account for 23 percent of federal spending, or 5.6 percent of GDP. Under current law and optimistic assumptions for health spending, the Congressional Budget Office (CBO) estimates these programs will represent 30 percent of total federal spending (6.8 percent of GDP) by 2022 and will continue to grow thereafter.
The prospect of health-driven deficits has produced a burst of proposals for reform. Sadly, the simple truth is that we do not yet know how to reform government health programs to both rein in costs and maintain or improve quality and access.
Continue reading “Inoculate the Budget Deficit From Healthcare Reform”
Filed Under: Uncategorized
Tagged: Brookings, Bush tax cuts, CBO, IPAB, Medicaid, Medicare, national deficit, Paul Ryan, The Affordable Care Act, value-added tax
May 9, 2012
I will suggest that most of us believe the way to control health care costs, and at the same time maintain or improve quality, is to both use the managed care tools we have developed over the years, and perhaps more importantly, change the payment incentives so that both cost control and quality are upper most in the minds of providers and payers.
The Congressional Budget Office (CBO) has just released an important review of Medicare’s results in testing those ideas. The news is not good.
From the CBO’s blog post:
In the past two decades, Medicare’s administrators have conducted demonstrations to test two broad approaches to enhancing the quality of health care and improving the efficiency of health care delivery in Medicare’s fee-for-service program. Disease management and care coordination demonstrations have sought to improve the quality of care of beneficiaries with chronic illnesses and those whose health care is expected to be particularly costly. Value-based payment demonstrations have given health care providers financial incentives to improve the quality and efficiency of care rather than payments based strictly on the volume and intensity of services delivered.
In an issue brief released today, CBO reviewed the outcomes of 10 major demonstrations—6 in the first category and 4 in the second—that have been evaluated by independent researchers. CBO finds that most programs tested in those demonstrations have not reduced federal spending on Medicare.
Continue reading “(Almost) Nothing Works”
Filed Under: OP-ED, THCB
Tagged: ACOs, CBO, Costs, Disease Management, Medicare
Jan 21, 2012