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

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By David Dranove & Craig Garthwaite

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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Addressing Unapproved Meningitis Vaccine at Princeton

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By ARTHUR CAPLAN

Emergency doses of a meningitis vaccine not approved for use in the U.S. are likely to be on the way to Princeton University to halt a meningitis outbreak that has already sickened seven students. There are approved meningitis vaccines available, but they do not protect against Meningitis B—a strain not covered by the shots given in the U.S. and not a strain prevalent here.

Government health officials said Friday they have agreed to import Bexsero, a vaccine licensed only in Europe and Australia that does protect against meningitis B.  And that decision seems entirely reasonable given the threat that this nasty strain of meningitis poses.

That said, the question arises — what should those getting the vaccine be told?  Are they being offered a proven vaccine, an experimental vaccine, a vaccine believed to be the best choice given the threat of an epidemic or something else?  Can a student, campus worker or faculty member refuse the vaccination and stay in school or in a dorm?  Should those who have visited the campus recently be tracked down and offered the vaccine?  If people do refuse should they identify themselves in anyway as unvaccinated and to whom?

In general when using a drug or device that has not been approved by the FDA or other federal advisory agencies those who are offered the vaccine should be treated more as research subjects than patients.  They should be told all the facts about the vaccine, why it has not been approved in the U.S. and about the all too real threat that meningitis poses.  They should be given the opportunity to ask questions.  There is a duty to try and monitor those who get the vaccine or a representative sample of such persons, to watch for both efficacy and safety.  Vaccine refusal might be accepted, herd immunity could help in this regard, but university officials will need a policy concerning refusers and where they ought to go to study, live and work until the potential epidemic subsides.

Using a vaccine very likely to be safe and effective to stave off an outbreak of a nasty disease makes good moral sense.  However, it is important to treat emergency use as such and to do what can be done to inform subjects, track the results in those who are vaccinated and to find a path for those who will not accept vaccination.

Arthur Caplan, Ph.D. is head of the Division of Bioethics at New York University Langone Medical Center. This post originally appeared in bioethics.net blog.

New York State Plans Say “No Thanks” to Obama Fix

By THCB NEWS

This is clearly going to get complicated.

Next example: New York Health insurers say they probably won’t be taking up President Obama on his invitation to extend health plans cancelled earlier because they do not comply with the Affordable Care Act’s requirements.

“Just trying to go back and recreate a product that you’ve eliminated is not something that plans are looking forward to with great enjoyment,” Leslie Moran, vice president of the New York Health Plan Association said.

Besides, nobody is really sure New Yorkers want their old plans back anyway.

Premium increases on New York plans have been among the most modest in the country, largely because the New York individual insurance market was tightly regulated (translation = non-competitive) long before the Affordable Care Act came long.  Many New Yorkers have actually seen significant decreases in their monthly bills.

That’s one reason sales have been humming – well, pretty decent, anyway – on the New York exchange …

According to HHS, the state exchange enrolled 18,000 people in the month of October.

Worldone+Sermo’s next steps

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By Matthew Holt

Worldone+Sermo is the combination created last year of physician research company Worldone Interactive and the physician community Sermo. Sermo was an early Health 2.0 favorite that somewhat lost its way with both its early business model and a dive into politics, but behind it was an interesting experiment in clinical crowdsourcing.

Peter Kirk is the CEO of the combined business and I spoke to him in advance of his appearance at Health 2.0 Europe today in London. What’s clear is that Sermo is both poised to expand internationally and going to grow as a serious platform for clinical exchanges among professionals Watch the interview above to learn much more.

And one charity Sermo is supporting, called Floating Doctors, is showing really innovative use of the platform to help patients in very remote regions get expert diagnoses. The second video is well worth watching and gives a great example of the iConsult product. And if you are in London today, Peter will tell you more!

 

Why Can’t I Change My Plan?

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By THCBist

A THCB reader writes in with a question and a pretty disruptive suggestion. @NorCal Exchange writes:

“I’m a small business owner. I’m also a card-carrying Democrat. Frankly, I’m pretty pissed off about the way things have gone with this roll-out so far.  This was our one chance to get health reform right. And from what I can tell, we’ve totally screwed it up. Here’s one more thing a lot of the media coverage is missing. Even though THCB readers understand how open enrollment works, I’m guessing a lot of ordinary Americans don’t realize that under the new rules once they’ve applied for coverage they’re basically stuck with what they’ve got until the next enrollment period. This was a pretty big change in the first place. With all of this insanity, I’m guessing people are probably not reading the fine print and don’t know they’re locked in.

My prediction: there are going to be a lot of really unhappy people in the early part of 2014, when people realize what they’ve gotten themselves into. Why not allow people to change their plans? If you want an Amazon.com for healthcare, make the market for health insurance the same way as the market for anything else. If people decide to upgrade their coverage let them. If they get pissed at UnitedHealth’s customer service, let them cancel their policy and switch to AETNA or CIGNA. If I’m an idiot and don’t want preventative coverage let me build my own plan. If I’m worried that my daughter might get cancer let me add the Mayo clinic to my network. If my kid plays sports, let me add better ortho coverage. Yeah. Yeah. I know. This will turn the traditional underwriting model upside down. And a couple of health plans may even go out of business. But so what? My business may end up going out of business.  These guys are smart. They’ll figure out twenty new ways to make money and they’ll end up thanking us for disrupting their precious monopoly …”

What I Expect From the Medicare Program

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By Jeff Goldsmith

After half a lifetime of following the Medicare program, on October 1, 2013, I became a Medicare beneficiary.  I turned 65 on October 31.   I’m part of the leading edge of baby boomers joining the program, ten thousand a day.   We’re going to change this program, both by how we use it and what we expect its keepers in Washington to do to improve it.

Here are some reflections upon joining Medicare.

1-Don’t Refer to Me as “Retired”, Please. I’m still working (hard) and paying Medicare as well as income taxes taxes every month.   Like most of my fellow boomers, I lack the financial cushion I want in order to stop working.  Additionally, for what it’s worth, like all too many boomers, I don’t know how not to work.   So my main goal, which is closely aligned with the country’s,  is to stay healthy enough to keep working long enough to be able to retire comfortably when I wish to do so.

I plan on staying a long way away from the expensive parts of our healthcare system, if only to avoid being inadvertently harmed.  Rest assured that if I know I’m dying, you won’t find me in a hospital if I have any say in the matter.

I don’t consider myself “entitled” to Medicare, or to subsidies from younger people.  I’m paying more than $400 a month in Part B fees and the special assessment on Part D that got tacked on in the Affordable Care Act.   After what I’ve already paid in, that’s not exactly a flaming bargain.  I’ve paid Medicare enough over my working lifetime to buy a  house, and will pay more Medicare taxes for years to come for each month that I work. Nothing makes me angrier than the suggestion that I’m somehow sponging off my kids by participating in Medicare.

2- The Regular Medicare Program is a Relic. There is a lot of political fog enshrouding Medicare.  Personally, I could care less about the politics of this program.  The big choice was fairly cut and dried:  either regular Medicare plus a supplemental plan or Medicare Advantage.   After logging onto Medicare.gov, I found the regular Medicare benefit completely incomprehensible- chopped up into Parts that may have made legislative sense in the 1960’s.  If you included the supplemental coverage,  there were just too many moving parts that didn’t seem to fit together into a unified benefit.

So I chose Medicare Advantage. It’s simple to understand and user-friendly, and looks a lot like my previous coverage.   My doctor is a participating physician as is my beloved community hospital, Martha Jefferson.   And the price is right:  zero dollars after my Part B premium. More than 40% of boomers are picking Medicare Advantage, largely because it’s easy to use and remains a bargain. It will eventually be half the program.

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Five Questions Journalists Should Be Asking About the Affordable Care Act

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By Seth J. Chandler

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.

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What Could Have Been and What Still Has To Happen

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By ROBERT LASZEWSKI

Covered California, the state-run Obamacare health insurance exchange, announced on Wednesday that 59,000 people have so far signed up for health insurance.

Given that California amounts to about 10% of the nation’s population, this would suggest a smooth running federal exchange might well have enabled the Obama administration to have met its national first month goal of 500,000 sign-ups.

But the California enrollment also points to the real challenge Obamacare faces.

In the first month, 84% of the enrollees did not qualify for a subsidy. It has been widely estimated that about half of all potential enrollees will eventually qualify for a subsidy. As Covered California’s chief executive said, “Those are individuals who have been waiting a lifetime for health coverage.”

Covered California is not scheduled to release any age data until next week, but the health plans already know what they are getting. The President of the California health insurance trade association also said yesterday, “It is important for the exchange to achieve a balance in enrollment between the old and the young and the sick and the healthy to allow costs to be spread among all people.”

These Healthcare.gov problems have been a sideshow for Obamacare. The main event will be about whether more than just those who have been “waiting all of their lives” to get guarantee issue health insurance they are sure to make money on will eventually sign-up in adequate numbers.
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What the “Doc Fix” Should Tell You About the “Grandfather Fix”

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By Matt Barry

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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