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Being against Obamacare has been the keystone, the capstone, the mighty sledgehammer, the massive metaphor of your choice for the right for five years now. They couldn’t stop it from being passed. They couldn’t stop it at the Supreme Court.

They weren’t able to choke it off by “defunding” it. They rejoiced at the rubber-meets-the-sky rollout of Healthcare.gov, but then the kinks got worked out of that.They railed at the administration using discretionary powers built into the law to help it work better. Every horror story of Obamacare ruining people’s lives they came up with turned out to be false.

Almost all of the people cynically cancelled by the insurance companies as a way to sell them more expensive insurance got insured again fairly quickly. Then 7 million people signed up on the exchanges, and altogether some 10 million formerly uninsured people now have medical coverage.

But the right still needs to call it a “train wreck.” The magic mantra has to work for them. Just this morning, here’s a Republican Congressman saying that we have to cut Food Stamps because: Obamacare. Say that again slowly?

It’s getting harder and harder on the right to come up with new ways to say it isn’t working when it actually seems to be working. I have to hand it to them, though: Those spin factories are filled with hard-working creative people. Get to work early, stay late, trash Obamacare. Hey, it’s a living.

So what’s the latest? This fall, Obamacare premiums are going to “skyrocket”!

Continue reading “Obamacare Premiums Are Going To “Skyrocket”? Forget About It.”

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To properly price the exchange health insurance business going forward the carriers have to sharply increase the rates.

A senior executive for Wellpoint, which sells plans in 14 Obamacare exchanges, is quoted in a Reuters article telling Wall Street analysts there will be big rate increases in 2015, “Looking at the rate increases on a year-over-year basis on our exchanges, and it will vary by carrier, but all of them will probably be double digits.”

If the health plans do issue double digit rate increases for 2015, Obamacare is finished.

There are a ton of things that need to be fixed in Obamacare. But, I will suggest there is one thing that could save it.

The health insurance companies have to submit their new health insurance plans and rates between May 27 and June 27 for the 2015 Obamacare open-enrollment period beginning on November 15th. Any major modifications to the current Obamacare regulations need to be issued in the next month to give the carriers time to adjust and develop new products.

If the administration goes into the next open enrollment with the same unattractive plan offerings costing a lot more than they do today, they will not be able to reboot Obamacare.

Simply, health insurance plans that cost middle-class individuals and families 10% of their after-tax income and have average Silver Plan deductibles of more than $2,500 a month are not attractive and people won’t buy them any more enthusiastically next fall than they already have. See: Obamacare: The Uninsured Are Not Signing Up Because the Dogs Don’t Like It

Doubling the fines for not buying in 2015 will only give the Democrats more political problems––and it doesn’t look to me like they are going to enforce the fines anyway.

Health insurance plan executives are now faced with a daunting decision. How do they price the 2015 Obamacare exchange plans?

Even if the administration announces they have signed-up about 6 million people by March 31, the number of people enrolling would be well below expectations––only about 25% of those subsidy eligible will have signed up by the deadline. An enrollment that small guarantees the risk pool is sicker and more expensive than it needs to be in order to be sustainable.

But dramatically increasing the rates will only assure even fewer healthy people will sign up for 2015 and some of those who signed up for 2014 will back out over the higher rates. This is what a “death spiral” looks like.

Continue reading “Here’s How We Can Fix Obamacare if We Act Now and Stop Pretending the Problems Don’t Exist”

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A 26-year-old man who makes $36,000 a year in Philadelphia finds out that he is not eligible for a health insurance subsidy, and must pay his $205 monthly premium without any help.

This, despite the ACA’s subsidies for people earning up to 400% of poverty (about $46,000).

Has he fallen into the subsidy gap?

The latest talk about a subsidy gap into which some millennials are falling is mystifying to me. It seems to be a product of a misunderstanding about how the subsidies are calculated.

Let’s remember that the goal of the subsidies is to ensure that people earning between 100% and 400% of the federal poverty level (FPL) pay no more than a certain percentage of income on health insurance premiums.

This cap is set on a sliding scale, so that people on the higher end of the FPL scale are expected to pay a higher percentage.

The caps range from 2% for someone at poverty level up to 9.5% for someone earning between 300-400% of poverty level.  That’s how the Affordable Care Act defines “affordable.”

The amount of subsidy is based on the difference between that cap and the premiums for the second-cheapest silver plan on the market. The subsidies are not an entitlement for all people earning 100%-400% of FPL, nor should they be.

They kick in only when the premium for that silver plan exceeds the stated percentage of income.

Below that cap, the premiums are considered affordable and people are not eligible for subsidies. That’s not a gap; that’s the way the law is designed.

Continue reading “Why the Subsidy Gap Isn’t Actually a Gap”

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Recently I was asked to intervene on behalf of a patient who, trapped by circumstance, was paying off an enormous bill for a lithotripsy procedure. What I uncovered wasn’t news, but it drove home how egregious the current system can be, why it so badly needs to be fixed, and how the Affordable Care Act (ACA) helps move us in the right direction.

The patient had health insurance through her husband’s job. But it was cancelled just after the hospital validated it, because the employer failed to pay the premium. The procedure was performed, and the patient was charged as “self-pay.”

If Medicare had been the payor in this case, the hospital’s total reimbursement would have been a little less than $2,000. But the lithotripsy and associated costs were billed at $33,160, or just under 17 times the Medicare rate. After the patient applied for financial assistance, a 30% contractual adjustment was applied, reducing her bill to just under 12 times the Medicare rate.

If the health system had asked her to pay 190 percent of Medicare – typically the upper end of commercial insurance rates – her bill would have been about $3,800. By the time I was contacted, the patient and her husband – responsible people trying to make good on their debt – had already paid the health system $5,700 or 285 percent of Medicare. The hospital insisted they owed an additional $16,000.

I laid this out in a letter to the CEO and, probably because he wanted to avoid a detailed description of this unpleasantness in the local paper, he relented, zeroing out the patient’s balance. No hospital executive wants to be publicly profiled as a financial predator.

But while that resolved that patient’s problem, it did nothing to change the broader practice. Most US health systems, both for-profit and not-for-profit, exploit self-pay patients in this way. Worse, not-for-profit health systems legally pillage their communities’ most financially vulnerable patients while getting millions of dollars in tax breaks each year for providing charity care.

Aggressive collections procedures, including  home liens, are widespread.
Some states have strictly limited what hospitals can charge low income patients. In California, uninsured patients with incomes below 350 percent of the federal poverty level (FPL) – $82,425 in 2013 for a family of 4 – can be charged no more than Medicare rates. In New Jersey, patients within 500 percent of the FPL cannot be charged more than 115 percent of Medicare.

Section 9007 of the ACA took effect last year and prohibits excessive pricing for self-pay patients, and would revoke a charitable hospital’s tax-exempt status if it charges them more than it charges for insured patients. The language is ambiguous, conceivably allowing health systems to circumvent the law’s intent. But the spirit is clear. To keep their not-for-profit tax status and perks, health systems must stop taking advantage of self-pay patients.

Continue reading “And Yes, The Affordable Care Act Really Does Make Care More Affordable. Here’s One Example ….”

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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”

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A THCB Reader in Michigan writes:

“The rates listed on the Healthcare.gov/Michigan site are inaccurate “estimates.”  Being unable to apply on the website due to glitches, I simply go on the site to view plans for my husband and me.  Based on our locality, “estimates” shown are about $250 – $600 for bronze and silver plans.  We even see some gold plans for about $460.

But when I telephone the insurance companies (Aetna, Humana, BCBSM, HAP) for details and quotes, suddenly the costs of the same plans are $950 – $1750!  Obviously, the “estimates” are disingenuous, probably reflecting prices that are available only to very young adults with no medical history.

An estimate is not an estimate unless it is close to what the final price is expected to be, not one-half or one-third the final price. Insurance companies need to list the estimates on the .gov website by range, rather than a single rate.  For example, if a policy can be sold for as little as $250 or as much as $950 depending on the particulars of each insured, that policy estimate needs to read $250 – $950.  Until insurance companies do this, they are, effectively using a bait-and-switch sales technique, which is illegal.”

If you’ve had a bad or good experience attempting to buy health insurance on the state or federal exchanges, we’d like to know about it. E-mail us at editor@thehealthcareblog.com.

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Will all the White House messages, the stream of breathless Twitter updates on the number of hits and enrollments, and the press hype surrounding opening day send the uninsured public into panic mode? Will they prompt buyers to consider only the premium and click to enroll ASAP? And why not? For weeks the administration, state exchange officials and supporters of the Affordable Care Act have been telling the public how cheap premiums will be — much cheaper than expected.

A Pennsylvania woman told me she was chomping at the bit to enroll because she was eager to dump her policy from Aetna for a cheaper model from Blue Cross. Never mind that she had no idea whether the coverage was better, the same, or worse.

A Nebraska woman heard there was a worksheet to fill out and it had to be completed by October 1. It was first-come-first-served, an agent had told her.

If cheap premiums were the only thing shoppers had to consider, this sense of urgency might be fine. But it’s not. Here’s the problem.

Selecting a health insurance policy is fraught with potential missteps and misunderstandings. As the Nebraska woman told me, “You’re walking into a chasm of uncertainty. It’s like shopping for a used car. You don’t know if you’re getting a lemon,” a lemon you’re stuck with until the next open enrollment.

For consumers, the key advice right now is: don’t rush into anything. Tuesday, October 1st marked the first day of a six-month open enrollment period, not the last. Coverage doesn’t even begin until January 1, 2014, so there’s no need to buy the first policy you see. If you do want coverage on January 1, the deadline for enrolling is Dec 15.

Continue reading “Of Course, Then There’s The Fact That You May Be Better Off Waiting To Buy Coverage, Anyway …”

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October 1st marks the first ever public exchange open enrollment season.  This means some of the speculation around consumer awareness and understanding, enrollment/uptake, premiums, and payer participation (not to mention the technical readiness of the exchanges) will finally subside and give way to a clearer picture of the PPACA’s initial success in mandating individual health coverage.

Despite this approaching level of clarity, however, several very significant “blind-spots” will continue to persist, principally for the health insurance carriers that choose to participate by offering PPACA compliant plans in the exchange.

This is due to the law’s guaranteed issue mandate prohibiting health carriers from denying coverage based on preexisting conditions.  As a result, the traditional enrollment process which consists of a comprehensive assessment of each applicant’s health status and risk cast against the backdrop of time-tested underwriting guidelines is completely thrown out.

What takes its place is an extremely limited data set (i.e., the member’s age, tobacco/smoking status, geographic region, and family size) from which carriers can determine pre-approved premiums and variability therein.  To use an analogy, health insurance companies no longer have a “bouncer at the door” turning people away, or a sign reading No shirt, No shoes, No service at the entrance.

In other words, everyone, regardless of their risk profile, must now be welcomed in with open arms and with very limited risk-adjusted rates.

This wouldn’t necessarily be a problem if the enrolling population comprised a well understood risk pool representing a true cross-section of the population.  The reality, however, is that a predominantly unknown and potentially unhealthy population will flood the individual health insurance marketplace in a two weeks just as most states quickly phase out their high-risk pre-existing condition pools and shift them into the exchanges.

Continue reading “State Insurance Exchange Blind Spots: Unknown Risks and Unintended Consequences”

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While sitting in the crowded waiting room of a medical specialist’s office I was forced to listen to the television set directly over my head. Cranked up so that everyone could listen above the din of conversation, Wolf Blitzer introduced a video clip of the President hailing the latest news from New York about health insurance exchanges.

Speaking as if he was still on the campaign trail, the President’s words came through loud and clear over the television: thanks to his health reform, premiums in the New York exchange would be half that of premiums in the individual market. This was a model the entire nation should embrace.

No one heard me mutter under my breath that this was a model for New York and a small handful of other states that previously regulated their individual insurance markets effectively out of existence.

What the President undoubtedly knows, but dared not say, is that New York’s individual insurance market is unlike any other state. In New York, insurers cannot charge higher premiums to high risk enrollees.

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As a result of this aggressive community rating, high risk individuals are disproportionately represented in New York’s individual policy risk pools. This drives up premiums, which drives away low risks, driving premiums even higher. Insurers in New York are counting on the purchase mandate, combined with purchase subsidies, to lure low risks into the pool.

This is why they have lowered premiums.

Continue reading “What Happens In New York Stays In New York”

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There has never been a time in my life when I’ve owed a lot of money. That certainly has changed these past two years as my husband and myself find ourselves with medical debt that we may never pay off . As you can guess, we have no health insurance – we can’t afford it and even if we did have an extra $650 a month we couldn’t obtain it due to our pre-existing conditions.

Briefly, I had emergency surgery to remove a cyst on my ovary in 2010, a diagnosis of an auto-immune disease in 2011 and two bladder cancer surgeries in 2012. My husband has had high blood pressure for over 25 years due to a heart defect discovered in his 30’s.

My husband and I live very simple lives and have little debt. For the past 18 years we’ve been self-employed, owning a retail music store, and for many of those years I worked for other companies. Some offered medical coverage, some did not. And for some of those years I was able to offer medical coverage for our few employees which also covered my husband and myself. The group coverage was minimal and started out being affordable but with increases it was impossible to afford for long. I tried catastrophic coverage but that was almost as expensive as regular coverage but with a higher deductible. Of course, neither my husband nor I needed the coverage when we had it! They say youth is wasted on the young. I say health insurance is wasted on the young!

Continue reading “Health Insurance is Wasted on the Young”

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MASTHEAD


Matthew Holt
Founder & Publisher

John Irvine
Executive Editor

Jonathan Halvorson
Editor

Alex Epstein
Director of Digital Media

Munia Mitra, MD
Chief Medical Officer

Vikram Khanna
Editor-At-Large, Wellness

Maithri Vangala
Associate Editor

Michael Millenson
Contributing Editor










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