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Tag: Obamacare Fix

With November Elections Six Months Away Obamacare Is Up for Grabs

flying cadeuciiHouse Energy and Commerce Committee Republicans seemed surprised last week when representatives of the insurance industry reported that they didn’t have enough data yet to forecast prices for next year’s health insurance exchanges, the market was not about to blow up, and that so far at least 80% of consumers have paid for the health insurance policies they purchased on the exchanges.

The executives also reported there are still serious back-end problems with HealthCare.gov––particularly in being able to reconcile the people the carriers think are covered and the people the government thinks are covered.

These are all things that you have read about a number of times on this blog.The insurance companies are doing their best to make Obamacare work.

Why?

Because if they want to be in the individual and small group markets, Obamacare is the only game in town––it has a monopoly over these markets. The same rules that apply to the individual market also apply to the even larger small group health insurance market.

Unless Obamacare is repealed this is the business reality insurance companies have to deal with. So, you make the best of it.

Republicans are right to think Obamacare is unpopular. The latest Real Clear Politics average of all major polls taken since open-enrollment closed still has 41% of those surveyed favorable to the law and 52% opposed to the law––about as bad it is always been.

But Obamacare is not going to be repealed. The sooner Republicans come to understand that the better for them.

I really think Democrats have the potential to take back, or at least neutralize, the health care issue by the November elections if Republicans aren’t careful.

What Extending the Obamacare Cancelled Policy Moratorium Really Means

The administration has confirmed that the individual policies that were supposed to be cancelled because of Obamacare can now remain in force another two years.

For months I have been saying millions of individual health insurance policies will be cancelled by year-end––most deferred until December because of the carriers’ early renewal programs and because of President Obama’s request the policies be extended in the states that have allowed it.

The administration, even today, as well as supporters of the new health law, have long downplayed the number of these “junk policy” cancellations as being insignificant.

Apparently, these cancelled policies are good enough and their number large enough to make a difference come the November 2014 elections.

As a person whose policy is scheduled to be cancelled at year-end, I am happy to be able to keep my policy with a better network, lower deductibles, and at a rate 66% less than the best Obamacare compliant policy I could get––presuming my insurance company and state allow it.

But for the sake of Obamacare’s long-term sustainability, this is not a good decision.

The fundamental problem here is that the administration is just not signing up enough people to make anyone confident this program is sustainable.

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The Obamacare Slippery Slope–What’s Your “Hardship?”

As of this morning, here are the new rules.

If you had a health insurance policy that was cancelled, you are now exempt from the individual mandate and its tax penalty should you not decide to buy a replacement policy. In addition, you can now sign up for the very high deductible Catastrophic Plan that was originally reserved only for those under the age of 30.

If you did not have a health insurance policy that was cancelled, you are still subject to the individual mandate and you are not entitled any special treatment toward signing up for the Catastrophic Plan. You must pay the full price for an exchange plan and accept whatever out-of-pocket costs and network limits it might have for the money.

The administration made this change under the “hardship” provisions already part of the law. They have simply defined hardship as having lost your old individual plan and your not being able to find something without it being a “hardship” to purchase, presumably over price or coverage.

This change was brought about when a number of Democratic Senators, some of them facing a tough reelection battle, demanded this concession.

The change was made without consulting the health insurance industry and it was a surprise to them. It is another Obamacare change months after their 2014 rates were set under the presumption all of these cancelled policyholders would be paying a lot more premium into the pool than they pay today.

One has to believe this will not be the last concession to Democrats under reelection pressure.

One has to wonder how this can’t other than undermine further how people feel about Obamacare––particularly its fairness––and taking their “social responsibility” to sign-up seriously.

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The Month of Anti-Deadlines

As we shake off the carb-coma and make our pre-resolutions, Congress and the Administration head into a sprint to the holiday recess fraught with health policy implications. Unlike every December in recent memory, there isn’t very much Congress actually has to do. Here are the top five things you need to know to follow the fun and prepare your organization for the changes afoot. A key theme to take home is that December 2013 is a month of anti-deadlines.

  1. The Nov. 30/Dec. 1 “fix” to Healthcare.gov was set arbitrarily and has simply teed up another pivot point for opponents to pounce. We already know the wand hasn’t tapped the electro-synapses of the site yet to make the dang thing work like it should. Expect more incremental improvements through the month and enrollment numbers to come in above current rock-bottom expectations, with a healthy chunk coming from the proud, the few … the state-based exchanges.
  2. The Dec. 13 deadline for budget conferees to produce a joint resolution is similarly fictional and self-imposed. While there are some burgeoning reports that co-chairs Murray and Ryan might be able to agree to FY14 funding levels and potentially alleviate some of the sequester, the buzz-o-sphere in Washington still has deep doubts. Even if the two negotiators come to agreement, House and Senate leadership have the bigger challenge of getting a bipartisan deal through their chambers.
  3. Jan. 15 is the real deadline for a budget agreement and the real goal is writing a check to fund the government through Sept. 30. A budget resolution is helpful to give appropriators time to write actual spending policy, but it can be bypassed if the end-game is a continuing resolution that keeps current funding allocations in place. (Congress hasn’t passed an actual budget resolution since Democrats controlled both chambers.) At the end of the day, we’ll be back to the all-too-familiar roundtable of congressional leaders and Obama reps hatching a last-minute deal to avert a shutdown.
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The Clock Is Ticking

There’s still time.  Much of the sensationalistic coverage since October has completely missed the point, argue defenders.  THCB reader Hiro Kawashima had this to say:

“What became clear is that President Obama’s most formidable enemy isn’t the Republican Party, angry insurers or antsy Congressional Democrats; it is time. The PPACA is running against the clock and what the PPACA needs most is time to work. Even before the bill was signed into law, it was clear that the true financial benefit of PPACA would not be realized for a decade. Each failure, each negative portrayal and each angry consumer shaves an additional second off the clock. The President’s proposed administrative fix will buy time for the White House to get the healthcare.gov website working and regain control of the narrative.

If none of the reasons above made any sense to you, here is an analogy from President Obama:

One way I described this to — I met with a group of senators when this issue first came up — and it’s not a perfect analogy — but we made a decision as a society that every car has to have a seatbelt or airbags.  And so you pass a regulation.  And there are some additional costs, particularly at the start of increasing the safety and protections, but we make a decision as a society that the costs are outweighed by the benefits of all the lives that are saved.  So what we’re saying now is if you’re buying a new car, you got to have a seatbelt.

Well, the problem with the grandfather clause that we put in place is it’s almost like we said to folks, you got to buy a new car, even if you can’t afford it right now.  And sooner or later, folks are going to start trading in their old cars.  But we don’t need — if their life circumstance is such where, for now at least, they want to keep the old car, even if the new car is better, we should be able to give them that option.  And that’s what we want to do.”

The Real Fix? The Exchanges Aren’t Working. Here’s Why …

Last week President Obama announced that he will try to keep his oft repeated promise to Americans in the individual market that they can keep their plans if they like them … for a year. The media have done an excellent job explaining why President Obama’s temporary patch to the ACA may endanger its existence; in the process the American public has learned more than it ever wanted to about adverse selection, cream skimming, and most importantly crass politics.

Though the full costs of adverse selection will be muted in the first year by risk corridors and reinsurance, it is clear that the failing website, the bad press, and the recently announced delay are placing maximal stress on even those backup provisions of the bill.

Even if the ACA survives this additional insult against the economics that support its very existence, we have witnessed yet another missed opportunity for positive reform to President Obama’s signature legislative achievement. And this time we can’t just blame intransigent tea-party Republicans and their quixotic efforts at repeal; here the buck stops at 1600 Pennsylvania Ave, NW.

While many of the plans that are affected by the President’s temporary patch might actually be plans that don’t qualify as “insurance” (i.e. they have low lifetime caps on expenditures or don’t cover hospital services), numerous others actually offer quite good coverage that just don’t meet the exceptionally high standards of the newly developed minimum essential health benefit (EHB).

In many ways, the first dollar coverage for preventive care and the wide ranging number of services covered by the ACA aren’t truly insurance either. Instead, these features amount to a very generous pre-payment plan for medical services supported by the United States treasury.

These elements of the EHB are too costly and unnecessary. Perhaps even more concerning, they are just the ante. As time goes on, vested interests for everything not included in the EHB will work tirelessly to insure that their favorite benefits are included. If you want evidence of this eventuality, you need look no further than the remarkably long and growing list of benefits mandated by most states.

Keep in mind that as the EHB grows more generous the premiums and subsidies on the exchanges will also grow. And we know who will pay their “fair share” of those increases.

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What the “Doc Fix” Should Tell You About the “Grandfather Fix”

With his announcement on Nov. 14 of a plan to offer a temporary reprieve to people facing cancellation of their health-care policies, President Barack Obama may have created his own version of the much-maligned, often yearly, Medicare “doc fix”.

The doc fix, a recurring effort by Congress to override statutory formulas that limit the growth in Medicare payments to doctors, often sparks political theatrics as lawmakers work to assuage the concerns of physician groups and Medicare recipients. Many members of Congress want to repeal and replace the underlying program — the sustainable growth rate formula for reimbursing physicians — but agreement has proved elusive, in part because of deficit concerns and the high cost of repealing the formula.

The president may have set himself up for another situation similar to the doc fix with his proposal to administratively tweak the health law. Obama said he will temporarily allow health insurance companies and state insurance commissioners to continue offering insurance plans “that would otherwise be terminated or canceled” for failing to meet the requirements of the Affordable Care Act (ACA).

Has President Obama created his own version of the annual “doc fix” by continuing insurance plans that would have otherwise been canceled?

While this change will help some health-insurance consumers, it is a serious complication for health insurers who in a few weeks will have to readjust their plans. In the 24 hours since the announcement, the initial reaction from insurers and state health insurance commissioners has been mixed. Some insurers have already voiced concerns that any short-term fix will deprive their ACA-compliant exchange plans of the healthier customers needed to keep rates down for everyone, including older, sicker customers.

Fast-forward 11 months to late October, 2014, with the midterm elections imminent and the president’s “transitional policy” about to expire. Will Democrats want the issue of whether people can “keep their health plan if they like it” raising its ugly head again, just as voters are about to cast their ballots?

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You Can Keep Your Plan. Maybe.*

Facing a revolt by Democratic lawmakers unhappy with the rollout of the health law, the Obama administration announced this morning that it will allow insurers to renew cancelled health plans that fail to meet the standards set by the Affordable Care Act.

Insurers will be required to notify customers with cancelled plans that they have the option of upgrading to an ACA-compliant plan. Plans can be extended through the end of 2014.

The decision does not impact new customers who will still be required to buy coverage that meets the stricter standards set by the new health law – either on the exchanges or directly from an insurer.

The move is likely to add additional confusion and uncertainty to an already chaotic marketplace shaken by the widely publicized problems at HealthCare.gov.

It is unclear, for example, how the customers of specific health plans who have already had their coverage cancelled will be impacted. The decision of whether or not to reinstate individual plans is being left up to individual insurers.

Exactly why they’d want to reinstate the cancelled plans isn’t obvious. Five million people have received cancellation letters according to one recent estimate.

Health plan insiders have argued for months that reversing course will be difficult, if not impossible, for plans that have built their actuarial models on the assumption that certain numbers of healthy people will enroll by certain dates.  Industry representatives immediately warned that the impact would likely be higher premiums.

In a letter sent to state health insurance commissioners this morning, Center for Consumer Information and Insurance Oversight (CCIIO) director Gary Cohn spelled out the details of the fix.  A plan must have been in effect on October 1st, 2013.  Health plans must notify consumers in writing of their eligibility for an ACA-compliant plan.  And they must explain what they’re not getting. A request that, in effect, asks insurers to advertise the Obamacare plans, something they haven’t exactly been enthusiastic about doing in the past. That may or may not turn out to be a smart move.

Health plan consultant Robert Laszewski – a frequent THCB contributor – warned:

This means that the insurance companies have 32 days to reprogram their computer systems for policies, rates, and eligibility, send notices to the policyholders via US Mail, send a very complex letter that describes just what the differences are between specific policies and Obamacare compliant plans, ask the consumer for their decision —  and give them a reasonable time to make that decision —  and then enter those decisions back into their systems without creating massive billing, claim payment, and provider eligibility list mistakes. This puts the insurance companies, who have successfully complied with the law, in a hell of a mess.

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