So many old rules in health care and insurance no longer seem to apply.
I keep stumbling upon situations, where, what used to be up is now down and what used to be down is now up.
No one seems to know for sure how things will settle out under the new reality created by Obamacare and the even more unpredictable reactions to the law by health care companies, employers and, most especially, you and me.
I’ve started using the term “weightlessness” to describe this state we’re in. Picture the astronauts on the international space station, floating through a room, flipping at will, as likely to settle on a wall or on the ceiling as on the floor.
That’s what life is like under Obamacare now—for physicians, hospital administrators, insurance executives, benefits brokers and employers.
Here are a few examples:
1. I wrote last week about how a chunk of workers, even at large employers with generous benefits, would actually get a better deal on health insurance from the Obamacare exchanges than from their employers. So their employers are starting to consider whether they should deliberately make health benefits unaffordable for those low-wage workers, so they can qualify for Obamacare’s tax-subsidized insurance.
That could be good for both employers and employees. The effect on taxpayers, which would switch from granting a tax credit to employers to instead granting it to the employees, is unclear.
2. Even though insurers were certain that price would be king on the Obamacare exchanges, that hasn’t led most customers to buy the plans with the cheapest premiums. As I wrote Friday, 76 percent of those shopping on the exchanges in my home state of Indiana have picked the higher-premium silver and gold plans, with only 24 percent picking bronze plans.
“There are a few geographies where we believe we are gaining share despite lower price competition which points to the value of our local market depth, knowledge, brand, reputation and networks,” WellPoint Inc. CEO Joe Swedish said during an January conference call with investors.
It’s possible that’s a result of older and sicker patients being the earliest buyers on the exchange, and that as healthier people buy coverage, they’ll gravitate to the low-cost bronze plans. But that hasn’t happened—which, as I wrote on Friday, has proved wrong hospitals’ concerns about the super-high deductible bronze plans.
Continue reading “The Weightlessness of Obamacare”
Filed Under: Uncategorized
Tagged: Benefits, Employers, Insurers, J.K. Wall, Milliman, Obamacare, Risk adjustment, Subsidies, the business of healthcare
Feb 18, 2014
Rumors have been circulating in the marketplace all week that the administration was thinking of extending the individual health insurance policies that Obamacare was supposed to have cancelled for as much as three more years.
Those rumors have now come out into the open with Tom Murphy’s AP story on Friday.
That the administration might extend these polices shouldn’t come as a shock. My sense has always been that at least 80% of the pre-Obamacare policies would ultimately have to be canceled because of the administration’s stringent grandfathering rules that forced almost all of the old individual market into the new Obamacare risk pool.
But with the literal drop dead date for these old policies hitting by December 31, 2014, that would have meant those final cancellation letters would have had to go out about election day 2014. That would have meant that the administration was going to have to live through the cancelled policy nightmare all over again––but this time on election day.
The health insurance plans hate the idea of another three-year reprieve. They have been counting on the relatively healthy block of prior business pouring into the new Obamacare exchanges to help stabilize the rates as lots of previously uninsured and sicker people come flooding in.
With enrollment of the previously uninsured running so badly thus far, getting this relatively healthier block in the new risk pool is all the more important. The administration’s now doing this wouldn’t just be changing the rules; it would be changing the whole game.
Republicans, and a few vulnerable Democrats, had essentially called for this last fall when legislation was floated in both the House and Senate with the “If You Like Your Policy You Can Keep It,” proposals. At the time, the administration and Democratic leaders rightly said if this sort of thing would have been made permanent it would have a very negative impact on what people in the new pool would pay––and on their already high deductibles and narrow networks.
At the beginning of this post I asked, Is Obamacare unraveling?
First, as I have said before on this blog, the law’s reinsurance provisions will mean Obamacare can keep limping along for at least three years. And, even making this change won’t alter my opinion on this. It will just cost the government more reinsurance money to keep the carriers whole.
By asking if it is unraveling, what I really wonder about is the whole sense of fairness in the law and the expectation that everybody needs to get the Democrat’s definition of “minimum benefits” whether they want them or not.
Continue reading “Is Obamacare Unraveling?”
Filed Under: The Business of Health Care
Tagged: Enrollment, Health Insurance Exchanges, Health Plans, Individual mandate, Obamacare, Open Enrollment, Robert Laszewski, The ACA
Feb 9, 2014
The Republicans have an alternative to Obamacare and they may have given the Democrats a big political gift.
The proposal was unveiled last Monday by Republican Senators Richard Burr, (NC), Tom Coburn (OK), and Orrin Hatch (UT).
The Republican plan targets many of the most unpopular parts of the Affordable Care Act such as expensive mandated benefits and the resulting lack of choice, the individual mandate, the employer mandate, and age-rating disruptions.
My sense is that most independent voters––the ones that matter in an election-year––don’t want Obamacare repealed; they want it fixed.
The problem for Republicans is that they have such a visceral response to the term “Obamacare” that they just can’t bring themselves to fix it. The notion that Obamacare might be fixed and allowed to continue as part of an Obama legacy and as a Democratic accomplishment is something they can’t get past.
So, the only way Republicans can propose an alternative to Obamacare is to first wipe the health insurance reform slate clean and start over.
Continue reading “The Republican Alternative to Obamacare: Their Aversion to Fixing it May Prove to Be a Political Mistake”
Filed Under: THCB
Tagged: Employers, Insurance Subsidies, Medicaid Expansion, Obamacare, Pre-Existing Condition, Republicans, Robert Laszewski, Tax Exclusion, The ACA
Feb 4, 2014
Here’s a point most of us can agree on. Tackling ballooning health care costs requires more than insurance reform because the charge and cost structure for health services in the U.S. is inconsistent and irrational. The same quality CT scan that costs $500 at one outpatient facility costs $2,000 at a nearby teaching hospital.
Obamacare’s typical high-deductible insurance plans encourage many cost-conscious consumers to shop around for low-ticket items below their deductible — and that is good. However, the bulk of health care spending is attributable to patients who rapidly blow through their deductible, after which they have no incentive to shop for value. Those 5 percent of people — who spend a whopping 50 percent of the nation’s health care dollars — have little incentive to consider price. With the cost of multiple medications, frequent doctors visits, use of specialists and one or more hospitalizations a year, these 5 percent will exceed even the highest deductible in the first few months of each year.
So what might be the single most powerful tool to slow the seemingly intractable yet unsustainable increases in health spending affecting practically every family in America? “Referenced-based” pricing for health services encourages patients — most significantly, those with the highest costs — to act as smart consumers by seeking the most cost-effective care, even after they have exceeded their deductible.
Here’s how it works. Insurance companies or employers set a limit they are willing to pay for a specified service of excellent quality — say, $1,000 for a CT scan — and communicate that reference price clearly to consumers. If patients choose a location where the charge is below the maximum set reimbursement rate, they pay nothing. If they choose a provider where the charge is higher, they pay the difference.
As patient-consumers shop around for the best price and quality services, competition in the market pushes prices down and value up.
Continue reading “Prices Drop When Health Consumers Shop Around For Healthcare”
Filed Under: Economics, OP-ED
Tagged: Costs, Obamacare, Reference-based pricing, The ACA, William Frist
Jan 25, 2014
It is now becoming clear that the Obama administration will not have Health.care.gov fixed by December 1 so hundreds of thousands, or perhaps millions, of people will be able to smoothly enroll by January 1.
Why do I say that? Look at this from the administration spokesperson’s daily Healthcare.gov progress report on Friday:
Essentially what is happening is people [those working on the fixes] are going through the entire process. As we have fixed certain pieces of functionality, like the account creation process, we’re seeing volume go further down the application. We’re identifying new issues that we need to be in a position to troubleshoot.
Does that sound like the kind of report you would expect if they were on track to fix this in less than three weeks? Their biggest problem is that they admittedly don’t know what they don’t know.
The spokesperson also reiterated the administration intends to have Obamacare’s computer system “functioning smoothly for the vast majority of users” by the end of the month.
It’s time for the Obama administration to get real.
It takes months to properly test a complex data system like this. Two things are obvious:
- When they launched on October 1, very little of the testing had been completed.
- They are now in the midst of that many months long testing and fixing period. It is clear they don’t have a few weeks of work left; they have months of work left. Continue reading “A Plan B For Healthcare.gov?”
Filed Under: THCB
Tagged: Affordable Care Act, Healthcare.gov, Obamacare, Robert Laszewski, Termination letters
Nov 10, 2013
Since October 1, I have logged on to various websites across the Internet to book three flights, make hotel reservations in four cities, buy a pair of boots, some t-shirts and a set of nifty retro Mason jars.
What I haven’t bought: health insurance through healthcare.gov.
Nor have I tried, even after being able to (finally) create an account and see the prices on specific plans offered here in South Jersey, after weeks of frustration.
Here’s why: Given my family’s initial experience in setting up an account and the horror stories that continue to pour out day by day, we simply have no faith that the system will work if we attempt to sign up. And, given the bungling to date, we are not confident our insurance will be there January 1 – even if we are able to Whac-A-Mole our way through the registration process.
Think about it this way: If you really need to get to Miami, would you attempt to buy a plane ticket on a sketchy site that may or may not sell you a ticket that may or may not be waiting for you for a plane that may or may not be there when you get to the airport on the travel day?
Of course not. Nor are we comfortable relying on healthcare.gov, 1-800 numbers, navigators or parchment to sign up for health insurance through the federal exchange at this point.
Continue reading “I Give Up”
Filed Under: OP-ED, THCB
Tagged: Exchanges, Life In the Affordable Care Act, Obamacare
Oct 28, 2013
The reason that Republicans shut down the federal government, it turns out, was to “restore patient-centered healthcare in America.”
As the lead author of a policy paper entitled, “Will the Affordable Care Act Move Patient-Centeredness to Center Stage?” I admit to a certain guilty thrill when I read this precise demand coming as the climax of a letter sent by 80 hard-right representatives to House Speaker John Boehner (R-OH). You don’t get much more “center stage” than shutting off the federal money spigot, which is what the letter – discussed in a recent article in The New Yorker – threatened unless the ACA was defunded.
Having said that, patient-centeredness was a truly odd choice to occupy a central role in the conservative casus belli that ended up disrupting the entire U.S. economy until the right wing finally caved.
To begin with, the term is a minor piece of jargon likely to draw blank stares from pretty much the entire American public. Even for us health policy mavens, the GOP letter linking James Madison on the redress of grievances to defunding Obamacare to a “restoration” of patient-centeredness required major mental gymnastics.
Then there’s the unintentional linguistic irony. The term “patient-centered medicine” originated after World War II with a psychoanalyst who urged physicians to relate to patients as people with physical and psychological needs, not just a bundle of symptoms. “Patient-centered care” further defined itself as exploring “patients’ needs and concerns as patients themselves define them,” according to a book by the Picker/Commonwealth Program for Patient-Centered Care, which coined the term in 1987. Patient-centered care was adopted as a “goal” by the Institute of Medicine, which added its own definition, in 2001.
But here’s where the irony kicks in. Obamacare opponents assert that the ACA undermines the traditional doctor-patient relationship – although I suspect that being able to pay your doctor because you have health insurance actually improves it quite a bit.
Yet in calling for “patient-centered healthcare” instead of the more common “patient-centered care” or even patient-centered medicine, conservatives unwittingly abandoned doctor-patient language in favor of business-speak.
Continue reading “GOP’s Oddest Obamacare Rejection: “Patient-Centered Healthcare””
Filed Under: THCB
Tagged: GOP, GOP Repeal, government shutdown, healthcare vs. health care, Michael Millenson, Obamacare, Patient-centered care, Patients, The ACA
Oct 27, 2013
My sense is that the biggest reason Obamacare is now in trouble is because of the top-secret way in which the administration has handled the rollout. If they had developed the computer system in a transparent way, the marketplace would have told them long ago this would not work.
No one outside the inner circle at the Department of Health and Human Services has any idea what’s really going on behind the Wizard’s curtain. Hasn’t for months. Doesn’t now.
So any technical advice any of us could give would be, to say the least, uninformed.
If I were on the inside, and it were up to me, the first thing I would do is bring in a group of heavyweight information technology experts to tell me just what was really going on. The administration cannot trust the people who have been working on this because they told them to launch this mess on October 1 and almost three weeks in there has been no improvement on the website or in the backroom––they no longer have credibility.
I would ask those experts to very quickly answer three questions:
- Can this thing be fixed on the fly––as the administration appears to be trying to do?
- If it can’t be fixed on the fly––and three weeks into this that sure looks doubtful––then can it be taken down for one or two months with a high degree of confidence it can be brought back up in time to enroll people sooner rather than later?
- If the first two options are not possible, just how long will the computer system have to be shutdown before Obamacare can be launched in a way that there can be confidence it will work smoothly?
Then I would take their advice.
Continue reading “Should the Obamacare Exchanges Be Shut Down?”
Filed Under: OP-ED, Tech, THCB
Tagged: Health Insurance Exchanges, Healthcare.gov, HHS, Obamacare, Robert Laszewski, The ACA
Oct 19, 2013
Beholding David H. Howard’s rendering of the crazy-quilt of financial sources that have been tapped by the designers of the Affordable Care Act of 2010 (hereafter ACA ’10) to finance the new entitlements they put in place – a little nuisance tax here, a little nuisance cut in other federal spending there – reminds me once more of the sincere, indeed touching, naiveté with which Democrats tend to go about enacting new entitlements.
It is a totally counterproductive and inelegant approach. To be sure, none of the added taxes or spending cuts in the bill seriously disrupt anyone; but they do spread a little pain all around. Therefore, it seems almost deliberately designed to maximize opposition to it from many quarters.
It also leads to acute embarrassments, such as having to postpone by a year (and perhaps more years) the unseemly penalty imposed on employers with 50 or more employees each working 40 your or more etc etc, even at the appearance of having broken the law – or so we are told.
When will the Democrats ever learn?
And from whom might they learn?
From the Republicans, of course.
Dream back to the good old days – 2003 – when the Bush Administration and the Republican Congress pushed through, with deft parliamentary maneuvering and some arms twisting, H.R. 1 (2003), the Medicare Prescription Drug, Improvement, and Modernization Act – hereafter the MMA ’03.
Continue reading “How Naïve Can Democrats Get?”
Filed Under: Economics, OP-ED, THCB
Tagged: Cadillac Tax, Democrats, Economics, Employer Mandate, entitlements, GOP Repeal, Medical Device Tax, Medicare Prescription Drug Improvement and Modernization Act, Medicare spending, Obamacare, The ACA, Uwe Reinhardt
Oct 14, 2013
Today, more than three years after being signed into law, and more than a year after surviving a Supreme Court challenge, the Affordable Care Act, more commonly known as Obamacare, finally begins to fulfill its promise. Most of this country has long since taken sides, despite appalling gaps in popular understanding of what the law means, what it does, and what it doesn’t do.
Let me admit that I’ve never had particularly warm feelings toward President Obama. I think his foreign policy is a mess. The trillions in debt that the U.S. has run up over the past 5 years will hurt my generation and future generations, and if Republicans can be faulted for their fantasy that the federal budget can be balanced exclusively through spending cuts, Obama has sustained the Democratic fairy tale that raising taxes on “millionaires and billionaires” is all that is necessary to pay the skyrocketing bills.
On multiple occasions during my time in government, the President had no qualms about squashing science and scientists for political convenience. He is a perpetual campaigner, preferring theatrical gestures to the backstage grunt work of governing. And for all of his rhetorical gifts when preaching to the choir, he’s been one of the least effective persuaders-in-chief to have held the office.
And so, naturally, I oppose Obamacare. I oppose a government takeover of health care that includes morally repugnant death panels staffed by faceless bureaucrats who will decide whose grandparents live or die and make it impossible for clinicians to provide compassionate end-of-life care. I oppose the provision in Obamacare that says that in order for some of the 50 million uninsured Americans to obtain health insurance, an equal or greater number must forfeit their existing plans or be laid off from their jobs.
I oppose the discarding of personal responsibility for one’s health in Obamacare. I oppose Obamacare’s expansion of the nanny-state that will regulate the most private aspects of people’s lives.
It’s a good thing that Obamacare, constructed on a foundation of health reform scare stories, doesn’t exist and never will.
Instead, the Affordable Care Act (which I support) is based on a similar law in Massachusetts that was signed by a Republican governor and openly supported by the administration of George W. Bush. It achieves the bulk of health insurance expansion by leveling the playing field for self-employed persons and employees of small businesses who, until now, didn’t have a fraction of the premium negotiating power of large corporations that pool risk and provide benefits regardless of health status.
Continue reading “I Oppose Obamacare. I Support the Affordable Care Act.”
Filed Under: OP-ED, THCB
Tagged: GOP, GOP Repeal, Kenny Lin, Obama administration, Obamacare, The ACA
Oct 1, 2013