Categories

Tag: The ACA

What Exactly Are Insurers Canceling? And Why?

A THCB reader in New York writes in:

There is one aspect of the ACA that isn’t being discussed a lot, but is pertinent to the future landscape of health care in this country — the extent to which the ACA is causing a sort of reset, or wiping of the slate, when it comes to insurance policies and procedures.

Previously, there were multiple insurers and multiple policies, many of which had been around for a long time.  If an insurer wanted to suddenly change providers in its network, ratchet down provider reimbursement, alter covered procedures or make other adjustments, this was feasible, but too much of a change would entail an outcry limiting insurers’ freedom of action.  The overall system had a certain air of stability or inertia, making any changes stand out, any big changes cause for scrutiny and possibly rebellion.

Now, with the ACA, everything is being tossed up in the air and when things land, much can and will be different.  Some changes are mandated by the ACA, such as minimum coverage, and insurers are cancelling inadequate policies, substituting very different ones.  But even when a policy doesn’t need to be changed, insurers will justify change by pointing to the ACA.

“Given the requirements of the ACA, we must make certain changes to your policy. In particular…”

We are at the beginning of a totally new insurance landscape, even if most of the insurers remain the same.  The public has been primed to expect major change and insurance companies will certainly make use of this expectation.

The result is likely to be more restrictive networks, decreased reimbursements to providers and other measures to limit cost.  Everything is now up for grabs.

If you have questions about the Affordable Care Act or your buying insurance on the federal state exchanges, drop us a a note. We’ll publish the good submissions.

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.

Continue reading…

What We Don’t Know Can Hurt Us

As the health insurance exchanges find their footing and potentially millions of Americans gain access to insurance, this may be a good time to step back and take a longer term view of the ACA. When you get down to it, expanding health insurance coverage was the easiest and least controversial part of health reform. There is no shortage of ways to expand health coverage and almost any credible health reform proposal would have done the job, provided enough money was thrown at the problem.

In designing the ACA, perhaps as a result of political pressure, President Obama opted for a combination of heavily subsidized individual insurance exchanges and generous expansions of Medicaid. Freed from political constraints, he might have instead pushed for the single payer system that many of his most ardent supporters desired. Republicans inclined to expand coverage (at least one of us is proof that unlike the unicorn these do exist) might have pushed for a pure voucher program that harnessed market forces.

All of these options would expand coverage to the degree that policymakers were willing to fund them. So while we congratulate the President for his political success (we doubt the other options could have made it through Congress), it is a simplistic mistake to evaluate the implementation of the ACA by counting the numbers of uninsured or waiting for the monthly updates on the enrollment figures from the exchanges website. Any regulator with a big enough purse can, in the fullness of time, expand access. Frankly, that’s the “easy” part of healthcare reform.

But what about the other elements of the so-called “triple aim” of health reform: cost and quality? You see, while we agree that liberal, moderate, and conservative health reforms can all improve coverage, they each will have very different effects on the other important outcomes. Consider for example the oft-discussed “Medicare for all”; i.e. a single payer system. This would increase access without the messiness of the exchanges. It would also allow the government to flex its monopsonistic muscles and quickly reduce costs – though likely at the expense of quality. In contrast, relying on markets may not reduce costs in the short run, and may not necessarily reward real quality (though it has a better short than single payer in this regard).

Evaluating health reform in the context of the “Triple Aim” is important, but even that approach is not nearly enough. There is a broad consensus among that technological change is the most important long run driver of cost and quality. It follows that the most important element of health reform is its impact on technological change.

To understand how technological change affects all of us, consider the profound impact of the top ten medical advances in the last ten years, as listed by CNN:

1. Sequencing the human genome
2. Stem cell research
3. HIV cocktails
4. Targeted cancer therapies.
5. Laparoscopic surgery

Continue reading…

We Should Be Getting More Data On The Affordable Care Act

The Obama administration released critical data last week on the aggregate levels of enrollment in the various individual Exchanges.  Most of the journalistic and blogospheric effort in the aftermath has been in trending: do these numbers portend a massive leap forward in Exchange enrollment such that there can be some confidence that the Affordable Care Act will in fact work?

Might this alternatively be some sort of temporary surge that is both too little and too late? All of this analysis is completely fine; I’ve engaged in it myself. But there are other issues that should be examined.

Here are five questions, mostly about data, I’d like to see other journalists or bloggers start to pursue. I’m doing some of it myself, but I would love company.

1. What is the distribution of enrollment among the various metal tiers?

If a lot of people are purchasing the gold and platinum plans, that is a sign that the people signing up have poor health and do not want to pay higher deductibles. This is particularly true if the same pattern exists among the enrollees receiving income-based subsidies: they, after all, are mostly purchasing gold and platinum because they need it, not because it easily accommodates their budget.  If, on the other hand, the distribution is weighted towards the bronze and silver plans, that is some evidence that the people signing up may not be coming as disproportionately from the low or middle expense range.

Unless one’s funds are very limited, it does not make sense for someone who knows they will have high medical expenses to purchase a bronze plan. Disproportionate purchase of gold and platinum policies heightens the potential for adverse selection problems to the extent insurers believed the federal government’s models, which assumed only mild “induced demand” for such policies.

Journalists should also continue pressing at the state and federal level for information on age distribution of enrollees; I can see no legitimate reason to withhold it.

Continue reading…

The Republican Dilemma

What a difference a few weeks make. Just as Republicans were desperately trying to extricate themselves from the fiasco of tying budget passage and debt ceiling legislation to repeal of the Affordable Care Act, the White House came to their rescue with its disastrous healthcare.gov start-up.

It’s now looking like the most egregious healthcare.gov glitches will be fixed by year-end, but with enough problems remaining in 2014 to continue to provide fodder for conservative (and other) critics. Unfortunately for the administration, just as the technical bugs are ironed out the spotlight will move to other aspects of Obamacare.

Premiums are going to take a jump next year, reflecting the lower than projected enrollment by the young and healthy (thanks in part to the healthcare.gov fiasco and the confusion created by Presidential and Congressional attempts to allow non-compliant plans to be extended). There’s a good chance of wholesale cancellations, too, as some insurers take a long look at the unhealthy business they’ve acquired and decide to abandon the exchange market. And it’s almost a given that every other increase in premiums or cut in coverage or cancellation of insurance will be blamed on the upheaval of the Affordable Care Act.

It’s enough to make gleeful Republican leaders believe in the Tooth Fairy.

But will the Tooth Fairy continue to deliver, notably in the Congressional midterms in 2014 and the Presidential election in 2016? The public attention span is notoriously short, and while the current chaos may influence the 2014 midterms, by 2016 the healthcare.gov disaster is likely to be a fading memory. Barack Obama won’t be running for reelection, so harping on the present White House’s incompetence will have limited impact. And while the eventual imposition of IRS fines on those still without coverage will certainly generate a new round of outrage–even assuming the IRS gets the calculations right–Hilary Clinton, or whoever the Democratic candidate turns out to be, will reasonably be able to ask “So where was the Republicans’ better idea?”

Continue reading…

November’s Numbers: Sorry. They’re Not Good. They’re Bad. Awful, Actually ..

The federal government announced yesterday that 137,204 people have selected a healthcare plan through the federal Exchange as of November 30, 2013. The number is an increase over the 29,794 who had done so by the end of October, a month during which the website portal for enrollment, healthcare.gov, was in disarray.

The government reports that 258,497 have now selected a plan through one of the state Exchanges, making a total of 364,682 enrolled. Asked by reporters whether the Obama administration stands by its estimate that 7 million will enroll in individual plans sold on the various Exchanges by March 31, 2013, the day necessary to do so in order to avoid a tax penalty,  Michael Hash, director of the office of health reform in the federal Health and Human Services Department, said that they were “on track, and we will reach the total that we thought.”

The pace of enrollment announced by the federal government today is inconsistent with the claim that its 7 million goal will be achieved. The claim rests on hopes of two surges, one taking place over the next 12 days before the December 23, 2013, deadline for coverage starting January 1, 2014 and a second surge taking place as we approach the end of March at which point, if coverage has not been obtained, many Americans will be hit with a tax penalty.

The magnitude of the surge required strains credulity.  A scenario in which most of  those who wanted coverage have already applied and in which the pace of enrollment stays the same or even sags for lengthy periods as we go forward would appear almost as likely. Plus, it seems unlikely that there will be major enrollment between December 23, 2013, the first deadline, and March 23, 2014, the second deadline. If someone wanted coverage, they would try to get it earlier. What does applying in the middle of February accomplish? Moreover, if, given the unpredictability of human behavior, the surge actually materialized, it might well strain the government’s computer systems.

Continue reading…

Resisting the Rush to Judgement On the Affordable Care Act

A full, fair reckoning of the impact of the Affordable Care Act (ACA) will take years. In an earlier blog post, we outlined some of the measures—such as reductions in rates of uninsurance and underinsurance and trends in health care costs and quality—by which the law should be judged and the time frames over which those judgments should be made.

In the mean time, however, the rush to reckoning seems irresistible. These interim conclusions could prove as faulty as the ACA websites, but they should at least be informed by the best information available. As of this writing, this is what we know about the major shortcomings and accomplishments of the ACA.

KEY SHORTCOMINGS:

  1. Poor management of the launch of the federal website, HealthCare.gov. The reasons for this failure are still emerging, but are likely multiple: management failures by the Obama administration, poor performance by its contractors, design flaws in the legislation itself, the decision by so many states not to run their own websites, a toxic political environment, and other factors.
  2. Poor messaging by the President. In retrospect, President Obama should have prepared the public better for the inevitability that some Americans would be left worse off by the law because of higher insurance prices or the need to switch health plans.
  3. Failure to prepare fully in advance for adverse impacts of the implementation of the ACA. There may have been more such preparation than meets the eye but if, for example, the administration had anticipated that private health plans might be cancelled, the policy response could have been waiting on the shelf. Instead, there was a last-minute scramble under the media spotlight.

KEY ACCOMPLISHMENTS:

  1. Provision of health insurance to: 7.8 million young Americans covered under a parent’s health plan who likely would not have been able to do so prior to the law’s passage, including 3 million who were previously uninsured; more than 200,000 Americans covered through state marketplaces as of November 25, 2013; and 26,794 covered through the federal marketplace as of November 2, 2013.
  2. Continue reading…

Probably Illegal and Unquestionably Stupid: Covered California’s Release of Personal Health Information.

The Los Angeles Times has reported that Covered California, the largest state’s health insurance exchange under the Affordable Care Act, has started releasing to insurance agents throughout the state the names and contact information of tens of thousands of persons who started an application using the state’s online system but failed to complete it.

The Covered California director Peter Lee acknowledges the practice but says that the outreach program still complies with privacy laws and was reviewed by the exchange’s legal counsel. “I can see a lot of people will be comforted and relieved at getting the help they need to navigate a confusing process,” explained Lee.

I am hardly as confident as Covered California’s lawyers apparently were that this practice was legal.

The law requires that disclosures to third parties be necessary and I do not see why Covered California could not have contacted non-completers directly and ask them if they wanted help from an insurance agent rather than disclosing their identity to insurance agents.  But even if the practice could be said to be borderline legal, it is difficult to imagine a practice more likely to sabotage enrollment efforts in California — and, since California’s interpretation could be precedent for other states — elsewhere.

For every person unable to complete their application online in California and who will, with the comforting help provided by insurance agents, now want to complete it, there are likely 10 who will be turned off by the cavalier attitude towards privacy exhibited by this government agency.  Beyond a violation of ACA privacy safeguards, the action is either a sign of desperation about enrollment figures, even in a state that boasts of its success such as Peter Lee’s California, or monumental stupidity.

If California wanted to create an adverse selection death spiral, it would be difficult to be more effective than, without notice or consent,  releasing personally identifiable information to insurance agents.

Continue reading…

Is Obamacare Responsible For the Recent Slowdown in Health Care Costs?

That is what we have been told the Obama administration will claim today as they begin the job of reselling Obamacare.

Is Obamacare even partly responsible for the slowdown in health care costs?

That is silly.

First, Obamacare is not a health care reform law; it is a health insurance reform law. No one on either side of the debate has ever argued anything different.

Does the law have some limited cost containment features in it?

Yes. But these are either pilot projects or are years from being fully implemented.

I have heard the argument that the Medicare cuts that were made to help pay for the program are examples of cost containment efforts that are having a short-term impact on controlling costs. The Democrats need to be careful with this one. I recall their countering Republican “Mediscare” claims by saying the Medicare cuts were not significant.

In a letter last year accompanying the Medicare Trustee’s report, the Medicare actuary said, “The [Obamacare Medicare cuts] will affect Medicare price levels more gradually, but a strong likelihood exists that, without very substantial transformational changes in health care practices, payment rates would become inadequate in the long range.”

Translated: The Obama Medicare provider cuts are not having a big impact in the short-run but will be unsustainable over the longer-term.

Continue reading…

Why “Liking” Your Plan Is Not the Point

In recent weeks, President Barack Obama has been appropriately raked over the coals for saying, multiple times, “If you like your health care plan, you’ll be able to keep it.” He shouldn’t have said it. The problem is, he shouldn’t have said it for entirely different reasons than most Americans think.

Let’s begin with a basic question: What does it mean to “like” one’s plan? And what is the value of this statement? All of this came to a head at an October 30 Congressional hearing with the Secretary of the Department of Health and Human Services, Kathleen Sebelius.

At the hearing, in a cantankerous challenge to Sebelius’s credibility, Tennessee Rep. Marsha Blackburn highlighted two constituents, Mark and Lucinda, who “like their plans,” but were being told they could not keep them because of the Patient Protection and Affordable Care Act (ACA), so-called “Obamacare.” A long-entrenched individualist rhetoric provided the framework for Blackburn’s point, namely that we should allow Mark and Lucinda to keep their plans in the name of individual freedom, just because they “like” them.

For purposes of argument, let’s assume that what Mark and Lucinda’s insurers are saying—that the cancellations are a result of the ACA—is true. But, as we do this, let’s also keep in mind that just because insurers claim premium hikes and cancellations are because of the ACA doesn’t mean that it’s true. In fact, it seems to be true only rarely and, even then, often as a half-truth.

But, anyway, let’s assume it is true. The question then becomes: why is it true? The problem is that this individual freedom is made possible by the assurances of a social safety net. This brings us back to the existential foundation of the ACA, namely that the choice to not carry health insurance—or to carry poor health insurance that individuals may find out, at some point, doesn’t cover something important—simply dumps those individuals into social institutions such as emergency rooms and local care centers, and does so in an extremely wasteful way. This returns us to the problem we started with and a question of whether or not ACA opponents are concerned with solving the problem of building a sustainable health care system.

In other words, Blackburn’s logic, as inspirational as it might be to some, bathed as it is in the rhetoric of freedom, is not premised on an analysis or understanding of health insurance, but deference to Mark and Lucinda to make their own choices, consequences be damned.

Continue reading…

Registration

Forgotten Password?