A while back Michael Lujan, who was one of the originals working at Covered California, came to see me at the Health 2.0 office. He and his colleagues realized that the workflow for small business health insurance quotations between the carriers and the agents was broken. Yet, despite the ACA (or maybe because of it!) agents are responsible for 90% of small business health quotes.
Any small business who’s ever got a health insurance quote from an agent has likely seen a relatively incomprehensible series of prices and benefits on a PDF. And if they want to see a change, the broker has to go back to the carrier/insurer and start again.
For the past year or so LimeLight Health (working at incubator Launchpad Health) has been trying to make that an interactive process, and the result is their product Quotepad. Another really interesting niche product in our convoluted health care mess.
There are dozens of ways to take stock of the Affordable Care Act as it turns 5 years old today. According to HHS statistics:
16.4 million more people with health insurance, lowering the uninsured rate by 35 percent.
$9 billion saved because of the law’s requirement that insurance companies spend at least 80 cents of every dollar on actual care instead of overhead, marketing, and profits
$15 billion less spent on prescription drugs by some 10 million Medicare beneficiaries because of expanded drug coverage under Medicare Part D
Significantly more labor market flexibility as consumers gained access to good coverage outside the workplace
Impressive. But the real surprise after five years is that the ACA may actually be helping to substantially lower the trajectory of healthcare spending. That was far from a certain outcome. Dubbed the Patient Protection and Affordable Care Act for public relations purposes, there were, in fact, no iron clad, accountable provisions that would in the long run assure that health insurance or care overall would become “affordable.”
ACA supporters appear to have lucked out—so far. Or maybe, just maybe, it wasn’t luck at all but a well-placed faith that the balance of regulation and marketplace competition that the law wove together was the right way to go.
To be sure, other forces such as the recession were in play—accounting for as much as half of the reduction in spending growth since 2010. But as the ACA is once again under threat in the Supreme Court and as relentless Republican opposition continues, it’s worth paying close attention to new forecasts from the likes of the Congressional Budget Office (CBO) and the actuaries at the Centers for Medicare and Medicare Services (CMS).
The ACA is driving changes in 17 percent of the U.S. economy that, if reversed or interrupted, would have profound impact on federal, state, business, and family budgets. A quick look at some important numbers follows:
When the latest post from Michael Cannon–he who seeks to sink the subsidies attached to the Federal exchange–hit my inbox, I wondered, “Why don’t his opponents stop arguing the specifics, and instead explain what the Supreme Court ought to do. I also don’t see why Mark Andreeseen (@pmarca) should have all the fun with long Twitter essays. So in only 5 tweets complete with misspellings and other contortions to get my thoughts into 140 characters, this is what I sent back
1/ I might be prepared to concede that @mfcannon is right on the facts of what the wording of the law says (King vs Burwell)
Recently we wrote that it was well past time to end the employer mandate in the Affordable Care Act. In light of some commentary, we thought it best to revisit this issue in more detail. It seems that most of the support for the employer mandate comes from a misguided understanding of why employers are currently the primary source of private health insurance. It is explicitly not because of a sense of “responsibility” to the employee, at least not any more responsibility than they feel when they pay employee wages for their work.
Here is a basic summary of how labor markets work, based on decades of very widely accepted academic research and practical experience. Employees receive compensation from their employers in return for their work product. In other words, employers aren’t running charities for their workers, but neither are workers volunteering their time at firms. Each expects something from the other. Some employee compensation comes in the form of cash wages and some in the form of fringe benefits such as health insurance, pensions, free coffee, parking, etc.Continue reading…
A predictable irony of the never-ending Affordable Care Act (ACA) debate is that the one provision that the Republicans should be attacking — free “checkups” for everyone — is one of the few provisions they aren’t attacking. Why should they attack them? Simple — checkups, on balance, are worthless. Why provide a 100 percent subsidy for a worthless good? Where is the GOP when you need it?
How worthless are checkups? Dr. Ezekiel Emanuel — one of the architects of the ACA and its “free” checkup centerpiece — recently recommended not getting them. As if “free” is not cheap enough, the ACA also pushes ubiquitous corporate wellness programs, which often pay employees to get checkups — or fine them if they don’t. This policy establishes a de facto negative price for millions of workers, making checkups the only worthless service on earth that one could get paid to utilize.Continue reading…
The New Year always brings many changes. In addition to soon to be broken resolutions, this particular year ushered in strict mandates requiring employers with more than 100 full-time employees to either provide health insurance to those employees or pay fines of between $2000 and $3,000. We’ve seen many firms publicly respond to this by cutting benefits to part-time workers. Despite the criticism that often accompanies these decisions, in many, if not all, of these cases this move benefits employees. Without the offer of employer-provided insurance they get access to the ACA exchanges.
Part of the criticism stems from the implicit belief that firms “give” benefits to their employees out of some form of philanthropy. These benefits are just a tax-preferred (though not really for low-income employees) form of compensation, and research shows that increases in benefit costs result in lower wages for employees. The firms that have cut benefits will either increase wages or lose a lot of employees. (If they cut benefits, do not raise wages, and do not lose workers, then they must not have been profit maximizing to begin with; we highly doubt that firms like WalMart would have knowingly forsaken an opportunity to maximize profits.)Continue reading…
Barring a Republican landslide in 2016, it looks like the Affordable Care Act (ACA) is here to stay. By and large, we think that is a good thing. While there are many things in the ACA that we would like to see changed, the law has provided needed coverage for millions of Americans that found themselves (for a variety of reasons) shut out of the health insurance market.
That being said, since its passage the ACA has evolved and the rule makers in CMS continue to tinker around the edges. We are especially encouraged by CMS’ willingness to relax some of the restrictions on insurance design, but remain concerned about some of the rules governing employers and the definition of what is “insurance.” In the next few blogs we will examine some of the best, and worst, of the ongoing ACA saga.
We start with one of CMS’s best moves—encouraging reference pricing. The term reference pricing was first used in conjunction with European central government pricing of pharmaceuticals. Germany and other countries place drugs into therapeutic categories (such as statins or antipsychotics) and announce a “reference price” which insurers (either public or, in Germany, quasi-public) that insurers will reimburse for the drug. Patients may purchase more expensive drugs, but they were financially responsible for all costs above the references price. Research shows that reference pricing helps reduce drug spending both by encouraging price reductions (towards the reference price) and reducing purchases of higher priced drugs within a reference category. Other research has found suggestive evidence of similar results for reference pricing for medical services.
While the ACA does little to govern pricing in the pharma market, the concept of reference pricing can and should be extended other medical products and services. In particular, insurers can establish reference prices for bundled episodes of illness such as joint replacement surgery. Under the original ACA rules set forth by CMS, insurers were free to establish a fixed price for bundled episodes. They could even require enrollees to pay the full difference between the provider’s price and the reference price. But there was a catch. It wasn’t clear if any spending above the reference price would count to the enrollees by enrollees out of pocket limits (currently $6,600 for individual plans and $13,200 for family plans). Obviously, allowing the out of pocket limit to bind on reference pricing would limit the effectiveness of this cost control measure.
The headlines and their storylines that you’re not likely to read in 2015:
Physicians optimistic about their future. They’re wildly enthusiastic about the mandate to use electronic medical records to coordinate patient care more effectively, and see the shift away from volume to value as positive trend for the industry. Increased penalties about unnecessary care and report cards about their clinical performance are welcomed as physicians embrace transparency. NOT!
Facts: Trust in physicians remains high but has slipped in recent years. Their compensation remains high relative to overall population at 5.8:1, but physician discontent is palpable. And the visibility given their business dealings vis a vis the Physician Sunshine Act and Medicare Physician database is unwelcome and discomforting.
The Affordable Care Act repealed. Overcoming a President veto, the Senate and House approved repeal. The newly insured in Medicaid and health exchanges will be easily absorbed into the current insurance system so the ranks of the uninsured will not swell. NOT!Continue reading…
On the Healthcare.gov web site I was filling the application – an arduous process that – even when pre-filled from last year, takes 30 – 45 minutes. At the review and sign, I found ONE date that was wrong: the day and month were inadvertently transposed. from 09/08 to 08/09. Since the information will be checked against tax records I thought it best to correct this prior to signing.
I clicked on the “edit” button which brought a box “Do you really want to edit your application”, Yes! That’s why I clicked the button – BOOM! back to “GO”,
So it took almost 45 minutes to go through again, (I do work by the way, so this time consuming process is not OK), but I did it. THEN at review I found I had been so frustrated OR the process accepted the key stroke wrong so I now had 09/03 instead of 09/08.
NOT wanting to go back to the very beginning AGAIN, I called the help desk, thinking this would save time. The agent was supportive and pleasant, but basically REFILLED the ENTIRE form again!!!!!!!
JOE wrote THCB with an interesting question that could be an outlier or could be significant:
Do you know of a consulting firm or advisory firm that can assist me in applying for insurance through Covered California? When I applied for insurance through the Covered California website, they gave me a list of places where I can get assistance. The phone numbers go to dead voice mail boxes or don’t work at all. I am willing to pay for assistance from somebody that understands the system.
Listen to them on Itunes or Spotify
Subscribe to our mailing list
Want to Partner with THCB?
View our Advertisement & Sponsorship Prospectus here