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Tag: Health Insurance Exchanges

Rate Shock and Awe in California

I have to say I was surprised with the press reports last week that there wasn’t “rate shock” in California when the California exchange offered preliminary information about their new plans and rates.

At least one prominent health actuarial group had predicted a 30% baseline increase in costs for California’s new health insurance exchange plans under the Affordable Care Act (ObamaCare”).

As the director of the California exchange put it, “These rates are way below the worst-case gloom-and-doom scenarios we have heard.”

But a few days later there is lots more information coming out and it would appear we have a case of apples to oranges to grapefruit. And, we have a pretty good case of rate shock.

First, the exchange officials pointed out that we have to be careful to compare apples to apples when looking at 2013 rates and comparing them to the 2014 exchange rates because the 2014 exchange plans have far more generous benefits.

Yes we do, particularly when the California exchange forces us to give up our apple and buy a more expensive orange.

One of the reasons health insurance in the exchange will cost a lot more in most states is because the new health law outlaws many of the existing plans now being offered and requires only those much richer plans to be sold.

Are people going to get more coverage for their money? Yes. Do they want more coverage if the premium costs for those plans is a lot higher? Likely yes if taxpayers are paying for most of it. If not, clearly they didn’t want to pay for it before. Come January, lots of California consumers in the small group and individual market are going to get a letter from their existing insurer telling them their current plan is no longer available and the cost of the new required plans will be a lot more.

Simply, the new law is taking plan design choices away instead of letting the consumer decide what is good for them. Does that matter in California?

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A Health Insurance Exchange That Won’t Be a “Train Wreck”

Every week, I get an email from the Maryland Health Connection––the state run health insurance exchange.
Maryland is one of a minority of states that are building their own Affordable Care Act (“ObamaCare”) exchange.

You can go to their site and sign up for these weekly updates.

Let me suggest that Maryland is an example of what an on-track and well organized effort looks like for any exchange hoping to be ready to enroll people on October 1––and ensure that they will be covered should they walk into a doctor’s office on January 1, 2014.

Maryland is simply ticking through all of the key milestones they must meet. The latest release reviewed its efforts to launch the connector program (those who will assist people in signing up), the status of the carrier filings (Maryland Blue Cross has filed for an average increase of 25% for individual coverage warning young people could pay as much as 150% more), the timelines for carrier submissions of coverage packages, and they outlined their third party administration program to be able to launch the small business choice (SHOP) option––unlike the federal exchange Maryland will have the SHOP option.

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Is the Suspension of the Pre-Existing Condition Insurance Plan a Preview of Obamacare’s Failure?

Following the Obama administration’s announcement about the suspension of enrollment in a high-risk health insurance program known as the Pre-Existing Condition Insurance Plan, a flurry of commentary began on what the move means for the Affordable Care Act.

Some observers said that the program’s underwhelming enrollment numbers and high costs foreshadow inevitable problems with the ACA’s health insurance exchanges, while others drew a clear division between a program intended to insure only those with pre-existing health conditions and state marketplaces designed to spread risk by insuring both those who are sick and those in good health.

Two months after the halted enrollment, the debate continues.

Closing the Pools

The high-risk pools were designed to help sick U.S. residents gain coverage ahead of January 2014, when the ACA’s ban on denying individuals coverage because of pre-existing conditions will take effect.

In early February, the administration announced several cost-saving reforms intended to prevent the $5 billion program from running out of money. However, on Feb. 15, HHS officials announced that enrollment in the high-risk pools would end because of rising costs and limited funding.

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The Affordable Care Act: Like It Or Not, It’s Catalyzing a Golden Age In Health Care Investing

Now that President Obama has been re-elected and the Supreme Court has upheld the Accountable Care Act, healthcare reform is here to stay. So what does reform mean for healthcare investors? I believe it will usher in a new fertile period for innovative,venture‐backed companies that can navigate the brave new world of healthcare delivery and management.

The Accountable Care Act impact on healthcare IT investing is already being felt.Venture investment in 2013 is showing significant growth from last year. In 2012,according to PWC, a global accounting firm,the life sciences sector which includes healthcare IT accounted for 25 percent of all venture capital dollars invested which totaled nearly $1.2 billion in 163 deals,more than double the $480 million in 49 deals in 2011 and almost six‐times the $211 million in 22 deals in 2010.

Now is the time to make order out of chaos and to set the stage for a next‐generation healthcare system that can effectively service our nation. At Psilos Group, we have just released our fifth Healthcare Economics and Innovation Outlook and identified the following four areas as the most promising opportunities for healthcare investors in 2013 and beyond: Private health exchanges, consumer‐focused insurance programs, 21st century healthcare technologies, and innovations that reduce error and waste.

Investing In Exchanges

The healthcare insurance marketplace—and the way insurance is bought and sold—is facing massive change.Healthcare insurance exchanges, both public and private,promise to create a more organized and competitive market for buying healthcare insurance, which could moderate price increases that are currently spiraling out of control.

From our perspective, exchanges are an intelligent place to invest. Software and services will power the exchanges. Psilos envisions massive opportunities for technologies that enable operators of both public and private exchanges to build high functioning platforms, including the shopping software and back‐end administrative technology and service products needed to serve tens of millions of people efficiently.

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The Arkansas Experiment: Is the ‘Private Option’ a Realistic Plan For Medicaid?

Arkansas is now the first state to use Medicaid expansion dollars to buy private coverage for many of its 250,000 newly eligible residents rather than enroll them in the existing Medicaid program. This week the Arkansas House of Representatives approved the plan, followed by the  Senate, to confirm that the state will be implementing this “market-based approach” to expanding Medicaid.

The idea of buying private insurance for Medicaid recipients is emerging as a “conservative compromise” for some of the 24 states (home to more than 25 million uninsured residents) leaning toward rejecting federal funding the Affordable Care Act provides for the expansion. In the original legislation, the ACA required states to expand Medicaid to adults earning up to 138 percent of the federal poverty level, $15,870 for an individual or $32,499 for a family of four. The federal government would fully cover the costs of this expansion for two years, with states gradually having to contribute 10% by 2020. Last summer, the Supreme Court struck down the Medicaid expansion requirement, allowing states to refuse federal funding and opt out of the expansion.

But most of these states, including Florida, Texas and Indiana, are leaving a lot of money on the table—from hundreds of millions to $1 billion or more in federal funding.  Under pressure from healthcare providers and other interested parties, some governors view premium assistance programs that move the poor, disabled and frail elderly to the state insurance exchanges to buy private insurance as a way to capture this windfall without appearing to embrace ObamaCare.

In Missouri, for example, Republican state legislator Jay Barnes calls the Obama administration’s plan for Medicaid expansion a “one-size-fits-all, far-left-wing ideological path.”

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Can We Put the Hospital Marketing Genie Back in the Bottle?

I am old enough to remember when physicians did not advertise. It was considered a professional ethical issue. Hospital advertising consisted of institutional “We’re here” ads.  Anything aggressive by docs or hospitals was considered bad taste… but that was before health care became as competitive as any other type of business.

I have been barraged, as have many of you, by a wave of hospital advertisements as our health care marketplaces consolidate and organizations seek to brand and differentiate themselves. We are subjected to print, radio, and TV ads extolling services, expensive technology, and that fact that each institution cares more than its competitors.

Charlie Rohlfing blogged recently about the worst in hospital advertising techniques, and you will recognize them all. They usually include a Da Vinci Robot and orthopedic surgery that will “get you back in the game.” They claim to be “state-of-the-art,” “leading edge,” or “cutting edge,” with actors playing doctors and nurses in masks.

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Pandora’s Pillbox

WASHINGTON — Oral contraceptives may be small, but they are proving to be tough pills for a vast number of Americans to swallow.

Last week, the Sunlight Foundation reported that the contraception provisions of President Obama’s health reform law garnered 147,000 comments from the public — more than on any other regulatory ruling, on any subject, in the history of the nation. Really.

The unprecedented flood of comments came from a wide range of organizations and individuals who support or oppose mandated contraception coverage as part of Obamacare.

Supporters, in general, want to extend coverage for this cornerstone of women’s health; oral contraceptives are used not just for birth control, but also for the treatment of pelvic pain, irregular periods, fibroid tumors, ovarian cysts, endometriosis, severe acne, mood disorders, and excessive menstrual bleeding that could lead to anemia. Opponents, in general, want to block this extension based on religious, moral or personal objections to women using pooled insurance resources to pay for pills that enable sex-for-fun — and that can be used, as it happens, for early termination of an unwanted pregnancy.

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Obamacare’s Other Benefit

If it is done right, the Affordable Care Act (a.k.a. Obamacare) may well promise uninsured Americans a lot more than cheap, reliable medical care. It can also open the door to the democratic empowerment of millions of poor people, who are often alienated from much of the nation’s civic life, by strengthening the organizations that give them a voice.

This year more than 30 million uninsured Americans are to begin signing up for Obamacare, but the vast majority of those eligible for either the expanded Medicaid program, or for subsidized private health insurance through state health exchanges, have no idea how to enroll. Surveys and focus groups have found that up to three-quarters of Americans who might directly benefit from the program are skeptical that the law can provide high-quality insurance coverage at a price they can afford.

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Six Months Out Health Plan Execs Say They Doubt Exchanges Will Be Ready

As the Obama administration continues its top secret effort to build federal insurance exchanges in about 34 states while 16 states are doing it on their own, that continues to be the big question.

HHS is using IT consulting firm CGI for much of the work on the exchanges and the federal data hub. CGI has their plate full since they are not only working on the federal exchange but also doing work for the state exchanges in at least Colorado, Vermont, and Hawaii.

Earlier this month, the Senate Finance Committee held an oversight hearing. The Obama guy in charge of exchange development testified before them. I thought it was notable that it was the Democrats who expressed the greatest concern, and frustration, over senators not getting a clear idea for just where the administration is toward the goal of launching the new health insurance exchanges on October 1.

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A $910 Million Price Tag For California Exchange: A Dark Omen of Things to Come

So far California has received $910 million in federal grants to launch its new health insurance exchange under the Affordable Care Act (“Obamacare”).

The California exchange, “Covered California,” has so far awarded a $183 million contract to Accenture to build the website, enrollment, and eligibility system and another $174 million to operate the exchange for four years.

The state will also spend $250 million on a two-year marketing campaign. By comparison California Senator Barbara Boxer spent $28 million on her 2010 statewide reelection campaign while her challenger spent another $22 million.

The most recent installment of the $910 million in federal money was a $674 million grant. The exchange’s executive director noted that was less than the $706 million he had asked for. “The feds reduced the 2014 potential payment for outreach and enrollment by about $30 million,” he said. “But we think we have enough resources on hand to do the biggest outreach that I have ever seen.”

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