Archive | Health Care Bill – Washington

Covered California Enrollees Complain Of Bait & Switch

A growing number of people who purchased health insurance through California’s state run exchange are complaining that they were misled about the availability of physicians in the network. Some are calling it a bait and switch.

  • Brent Undridge is one of those complaining. The Castro Valley resident said when he signed up for a Covered California plan back in December, he was led to believe he could continue seeing the same medical group he has been using for the past two decades.
  • But that did not turn out to be the case. I wanted to cry,“I’ve been going there for 26 years, I really like them and want to keep them as my doctors.”
  • Part of that expectation stemmed from President Barack Obama’s oft-repeated promise while campaigning for the Affordable Care Act that “If you like your doctor, you can keep your doctor.” A promise, the President later admitted was not accurate.
  • And it’s expected more Californians could find themselves in the same situation as Undridge as more and more doctors are opting not to accept Covered California patients, because they say reimbursement rates are too low or they can’t handle the additional clientele.
  • Covered California said it is investigating the complaints. The agency’s Dana Howard told KPIX 5: “If we do find that there is a preponderance of misinformation that is taking place,” the insurers will be held accountable.
  • But California’s insurance regulator, the Department of Managed Health Care (DMHC), said that could be an empty threat because inaccurate lists are not illegal. So far, DMHC said it has received about 350 complaints about Covered California insurance plans since the beginning of the year. Most of them from Anthem Blue Cross and Blue Shield customers.
  • Consumers who find their doctor was mistakenly listed at the time they enrolled, should call their insurer and ask it to make good on its promise.

Anthem Statement:

Anthem Blue Cross has made great progress in increasing the accuracy of the provider database and will continue to make improvements. Members who are having issues finding an in-network provider or who have questions about out of pocket expenses incurred should contact Anthem Blue Cross customer service for assistance.

Blue Shield Statement:

The number of complaints is accurate, but offers very little value out-of-context. More than 140,000 Californians selected Blue Shield plans as of December 31 meaning the 140 figure is a fraction of a percent of total enrollees. The high volumes have been challenging for Blue Shield and other plans, but we think it’s a good thing that so many Californians are purchasing health insurance through the exchange and we are working to address the backlog.

*Modified from a cbslocal.com – KPIX 5 article

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Duke University: 44% of U.S. firms consider cutting health care to current workers

Adding to a devastating CBO report of how Obamacare could damage the economy, a Duke University survey of top companies found that 44 percent are considering reducing health benefits to current employees due to Obamacare, confirming the fears of millions of American workers.  The survey was initially released in December and re-released Wednesday to provide context to the CBO report.

  • In its December survey of chief financial officers around the country, Duke also found that nearly half are “reluctant to hire full-time employers because of the Affordable Care Act.”
  • And 40 percent are considering shifting to part-time workers and others will hire fewer workers of fire some to avoid the costs of the program.
  • What’s more, they said in the study, “One in five firms indicates they are likely to hire fewer employees, and another one in 10 may lay off current employees in response to the law.”
  • Without the law, the CFOs told Duke that they would hire more full-time workers. CFOs indicate that full-time employment growth would be stronger in the absence of the ACA.”
  • Duke University’s Fuqua School of Business Professor Campbell R. Harvey said that the school’s survey shows that the economic hit the CBO warned of will be worse.
  • “Our survey shows that the situation is much more serious because employers tell us that they will choose not to hire and may lay people off,” he said. “I doubt the advocates of this legislation anticipated the negative impact on employment. The impact on the real economy is astonishing. Nearly one-third of firms may either terminate employees or hire fewer people in the future as a direct result of ACA.”
  • His colleague John Graham said in a statement promoting the survey, “An unintended consequence of the Affordable Care Act will be a reduction in full-time employment growth in the United States.
  • Companies plan to increase full-time employment by 1.4 percent in 2014, a rate of growth which is down from last quarter and unlikely to put a dent in the unemployment rate, assuming that the labor force participation rate remains constant.

*Modified from a washingtonexaminer.com article.

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Anthem to raise some premiums as much as 25%

Up to 306,000 Californians with older, individual Anthem health insurance policies — unchanged by Obamacare — are subject to the rate increases. Individual customers with older insurance policies untouched by Obamacare are getting some jarring news: Their premiums are going up as much as 25%. 

  • Amid the fury last fall over canceled health policies, consumer advocates and state officials warned people that holding onto grandfathered policies purchased before the federal healthcare law was enacted in 2010 wouldn’t shield them from significant rate hikes.
  • The Affordable Care Act makes it easier for people in this situation to switch coverage because insurers can no longer deny applicants on the basis of preexisting conditions or charge them more because of their medical history.
  • The company said customers do have new options thanks to the healthcare law. “Many of the members affected exchange and may have lower premiums if they decide to switch to an Affordable Care Act-compliant policy.
  • But changing plans isn’t an appealing option for some consumers who like the benefits they have now and worry about losing access to their doctors.

In recent months, state regulators have criticized major insurers for overstating what they expect to pay for patients’ future medical costs in order to support substantial rate increases. Other insurers have met resistance when boosting premiums on grandfathered policies.

But state officials don’t have authority to reject health insurance rate increases. An initiative on the November ballot seeks to change that by giving the insurance commissioner the power to deny excessive increases for health coverage.

Opponents of the ballot measure, including insurers, doctors, hospitals and business groups, say it doesn’t address the underlying reasons for rising premiums.

Critics also worry that stricter rate regulation could undermine the new state exchange, which negotiates rates with health plans as part of the healthcare law.

*Modified from a latimes.com article

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Cost of Generic Drugs Soaring Due to Increased Demand from Obamacare

The pervasive use of generic over brand-name medications was anticipated to be a money-saver, but recently prices are soaring, even up 6,000 percent for some common drugs that were once fairly low-cost. Seventy seven percent of pharmacists said they experienced 26 or more instances of a large increase in the acquisition price of a generic drug within the last six months of 2013.

Generic drugs such as Pravastatin, which treats high cholesterol, and the antibiotic Doxycycline spiked upwards of 1,000 percent in 2013, according to a survey by the National Community Pharmacists Association.

Eighty four percent of pharmacists said price fluctuations prevented them from providing care and remaining in business due to the fact that filling prescriptions resulted in losses when some patients refused their prescriptions because of costs.

The pharmaceutical consulting firm Pembroke Consulting found that within the last year more than a dozen drugs increased ten times their standard rate. Some pharmacists and physicians are pointing a finger of blame at drug companies for the price hikes.

At Costco, for example, at one given time the generic high blood pressure medication Irbesartan was nearly $300 for a 90-day supply of the 150 mg tablet, yet the cost of the same supply of the 300 mg tablet was only $30.

Dan Mendelson, CEO of consulting firm Avalere health, says prices of generic drugs have gone up because demand for them has risen. Since ObamaCare requires all health insurance plans in the exchanges to cover prescription drugs, the new health reform law may increase demand for drugs, causing prices for generic medications to rise even higher in the future.

*Modifed from a breibart.com article

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California’s Obamacare Scandal

Officials say a criminal record should not keep someone from getting a job. “Disclosing the names and criminal records of individuals applying to assist in Covered California’s push to enroll vast numbers in health insurance by March 31, 2014, is likely to discourage participation in this critical program and thus harm the people of California.”

  • Translation: If Californians had the same information as their insurance exchange’s bureaucrats regarding navigators’ criminal records, they’d be scared off — and that would undermine the political goal of high enrollment.

Perhaps Californians should consider themselves lucky that their navigators are required to submit to background checks at all — there is no such requirement in the ACA itself, and in as many as 31 states, no screening is mandated.

In California, however, certified enrollment counselors must pass a fingerprint-based criminal-background check conducted by the state Department of Justice. Applicants with potentially disqualifying convictions undergo individual legal review before a hiring decision is made, and they have the chance to appeal it within 60 days.

The problem is, a background check isn’t worth much unless it’s paired with an assessment process that screens out applicants who pose a risk to the public. In California, an applicant is disqualified only if he or she has “been convicted of or has a pending charge for a crime of moral turpitude that is substantially related to the qualifications, functions, or duties of the job.”

Furthermore, even though applicants are required to self-report prior offenses, records show that 21 prospective certified enrollment counselors who later proved to have criminal convictions failed to do so — and were approved anyway.

The fraud and forgery convictions, though disclosed by the applicants themselves, are the most worrying. Covered California’s Howard tells me, “There isn’t any law that says we should consider financial crimes as something that will follow you through the rest of your life, and therefore you should not have a job. That’s just not appropriate.”

But in some other states’ exchanges, financial crimes such as fraud and forgery are automatically disqualifying. And though no long-term statistics are available, the three-year recidivism rate for people convicted of fraud or forgery in California is a whopping 52.8 percent, according to a brand-new report from the state Department of Corrections and Rehabilitation.

“Somebody with multiple counts of forgery — it is in their nature to commit crime,” says identity-theft expert Robert Siciliano, CEO of BestIDTheftCompanys.com. “They see crime as the path of least resistance to make a living, and it would only make sense that they would gravitate toward a profession with this kind of access.”

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The ObamaCare Carnival of Perverse Incentives

With fewer glitches to deter them, millions of Americans are now logging on to the ObamaCare health-insurance-exchange websites or State exchanges such as Covered California.

  • When they get there, many are discovering some unpleasant surprises: The deductibles are higher than what most people are used to, the networks of doctors and hospitals are skimpier (in some cases much skimpier), and lifesaving drugs are often not on the insurers’ formularies.
  • Even after the government’s income-based subsidies are taken into account, the premiums are often higher than what people previously paid.
  •  Why is this happening? Because the new law gives insurance buyers and sellers perverse incentives to behave in ways that create these problems. Things will only get more out of whack as more and more unhealthy people enter a system designed to be paid for by premiums from healthy people.
  • Under the Affordable Care Act, the benefits insurers must offer are strictly regulated. The law piles on benefits for which everyone must have coverage, whether they could ever use the benefits or not. At the same time, insurers set their own premiums and choose their own networks of doctors and hospitals.
  • To keep premiums as low as possible, the insurers are offering very narrow networks, often leaving out the best doctors and the best hospitals.
  • In September, the Los Angeles Times reported that Blue Shield will have only about half the doctors in its exchange plan as it has in its traditional plan.
  •  The exchange health plans appear to care only about cost. They are offering low fees—sometimes even lower than the rock-bottom fees Medicaid pays health-care providers—and accepting only those providers who will take them.
  • Under the Affordable Care Act, insurers are required to charge the same premium rate to anyone who wants to sign up, regardless of health status; and they are required to accept anyone who applies. This means that to make ends meet they must overcharge the healthy and undercharge the sick.
  • It also means insurers have strong incentives to attract the healthy (on whom they make a profit) and avoid the sick (on whom they incur losses) by, in effect, making their plans less appealing to the sick.
  • Here’s how they seem to be doing it: In structuring the plans they offer on the exchanges, the insurers apparently assumed that the healthy will choose the plan they buy based on its price, while ignoring other features of the plan.
  • It makes sense: If I am healthy why wouldn’t I shop for the lowest price? If I later develop cancer, I can move to a plan that has the best cancer care. By law, these plans will be prohibited from charging me more than the premium paid by a healthy enrollee.
  •  Insurers also assume that people who already are ill or otherwise expect to use a lot of health care pay much closer attention to the cost of deductibles and which doctors and hospitals are in the insurer’s network.
  • To have any hope of balancing their books, insurers must then attract the maximum number of customers who are likely to stay healthy and thus not use so much of the care they paid for, while unhealthy people in effect use more than they paid for. This is why most plans are apparently designed to attract people willing to overlook high deductibles and less access to health care in return for lower premiums.
  • Yet no matter how narrow the provider network, health plans are going to cost more if they enroll more people with above-average health-care costs. And that is what is about to happen.
  • For some years, the federal government and some states have operated and subsidized risk pools. These allowed the chronically ill and other high-cost people who were “uninsurable” to purchase insurance for the same premium healthy people pay. Under ObamaCare, however, the pools are due to shut down and send their enrollees to the exchanges, where the above-average cost of their care will be implicitly borne by higher premiums charged to everyone enrolled in the plans.
  • To make matters worse, cities and towns with unfunded health-care commitments are getting ready to dump their retirees on the state exchanges. Since retirees are above-average age, they have above-average expected costs.
  • Then there are the job-lock employees—people who are working only to get health insurance because they are uninsurable in the individual market. Under ObamaCare, their incentive will be to quit their jobs and head to the exchanges.
  •  In sum: A lot of high-cost patients are about to enroll through the exchanges. This will force up premiums further for all other buyers.

*Modified for a WSJ.com article

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Look Out for the ACA’s ‘Double Whammy’

Some small businesses are facing a potential “double whammy” in 2016 from the Affordable Care Act, one expert warns. By 2016 the employer mandate will kick in for companies with between 50 and 100 employees, and they will be moved into the “Small Group Market” for insurance coverage.

  • While they are currently exempt from the employer mandate to provide insurance and not considered part of the “Small Group Market”, small businesses with between 50 and 100 employees will find that all that changes for the worse in 2016.
  • In the Small Group Market, insurers charge higher premiums, not least because, it’s cheaper to insure 200 people under a single contract than it is to insure 40 groups of five under 40 contracts, or 200 individuals.
  • By 2016, those with between 50 and 100 employees will be pushed into the Small Group, where the rates are higher. They need to think about it now, or they will be facing rate shock.
  • While the group had previously been for companies with 50 or fewer employees, the ACA raised the limit to 100 employees — though the increase was put off to 2016 because the law gave states the option to postpone, which they all took.
  • The reason they’re forcing these people into the Small Group Market is to expand the actuarial base and to absorb some of the expected losses. At the same time, Small Group premiums are likely to rise even more because of the benefit requirements in the ACA, which limit deductibles and don’t allow insurers to turn down those with pre-existing conditions.
  • Worse yet states may eventually merge the Small Group Market with the markets for individuals. If states don’t get the enrollment of young people that they expect [to make state insurance exchanges viable], then the likelihood of states combining the Small Group and individual markets will go up.
  • If the two are merged, premiums will likely rise even more. Among other things, individual deductibles tend to be higher, but the ACA caps deductibles.
  • These rules don’t apply to the Large Group Market – and to companies that are self-insured. Virtually every large company in the country is self-insured. They insure them themselves, but work through an insurance company.

*Modified from a benefitnews.com article

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Moody’s Downgrades Health Insurers on Obamacare Fears

The rocky rollout of Obamacare and the uncertainty surrounding its future has a major credit ratings firm nervous about health insurers. Moody’s Investor Service downgraded its outlook for the U.S. health care insurance sector to negative from stable on Thursday.

  • The move comes just days after contract documents between the Department of Health and Human Services’ and IT firm Accenture details the continuing shortfalls of healthcare.gov. If changes are not made to the sites’ back-end technology by March, the documents warn the entire health-care system may be in jeopardy.
  • Moody’s Analyst Steve Zaharuk, who authored the report, says it would take positive news regarding the implementation of the Affordable Care Act for the firm to upgrade the industry back to stable.
  • “We would need some positive enrollment numbers, the back-end problems with the exchange fixed and the regulatory environment, where changes are being made ad-hoc [stabilized]. Positive news would help the situation,” Zaharuk says.
  • The true test of how the ACA will impact insurers will come at the end of March, Zaharuk says, when the administration releases its final enrollment report. So far, 2.2 million people have enrolled on both federal and state exchanges, by only 24% are between ages 18-34, falling far below the 2.7 million young and healthy the administration had originally projected for year one of the ACA.
  • Ramifications from the ACA will likely have a ripple effect on the health-care industry for years to come, Zaharuk says. “It’s the law of the land now; a long-term thing. If it works right, it can have positive impacts for the insurance company.”
  • “The first test comes in March when we will see what enrollment looks like, if the back-end issues are fixed, if people are getting access to health care and what the costs and efficiencies are,” Zaharuk says. “IF these things don’t work, it may have a longer and more detrimental effect on the industry as they struggle under the new law.”
  • Fitch Ratings’ outlook for 2014 for the health-care industry is stable, acknowledging challenges for insurers, but claiming the industry is “up for the challenge.”
  • Similarly, S&P has maintained its outlook for the industry as stable, according to Martin Arrick, managing director of the non-profit hospital sector.

*Modified from a FoxBusiness.com article

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Exchanges See Little Progress on Uninsured

Early signals suggest the majority of the 2.2 million people who sought to enroll in private insurance through new marketplaces through Dec. 28 were previously covered elsewhere, raising questions about how swiftly this part of the health overhaul will be able to make a significant dent in the number of uninsured.

  • Insurers, brokers and consultants estimate at least two-thirds of those consumers previously bought their own coverage or were enrolled in employer-backed plans.
  •  An Ohio-based insurance broker said he has dismantled about 50 small employer-backed plans, some of which are steering workers to the new marketplaces.
  • An insurance agency that enrolled around 7,500 people in exchange plans, said 65% of its enrollees had prior coverage. Around 10% were dropping out of employer coverage, either because the employer stopped offering its plan or because they could qualify for subsidies on the marketplaces. Fifteen percent had previous individual plans canceled, and 40% decided to switch into coverage bought through an exchange from previous individual plans.
  • The data, based on surveys of enrollees, are preliminary. But insurers say the tally of newly insured consumers is falling short of their expectations, a worrying trend for an industry looking to the law to expand the ranks of its customers.
  • Only 11% of consumers who bought new coverage under the law were previously uninsured, according to a McKinsey & Co. survey of consumers thought to be eligible for the health-law marketplaces. The result is based on a sampling of 4,563 consumers performed between November and January, of whom 389 had enrolled in new insurance.
  • One reason for people declining to purchase plans was affordability. That was cited by 52% of those who had shopped for a new plan but not purchased one in McKinsey’s most recent sampling, performed in January. Another common problem was technical challenges in buying the plans, which 30% mentioned.
  • At Michigan-based Priority Health, only 25% of more than 1,000 enrollees surveyed in plans that comply with the law were previously uninsured, said Joan Budden, chief marketing officer.
  • The trend underscores a central test for the health law, whose marketplaces are meant to steer a broad cross section of new paying customers to private insurers. “One of the intents of the law was to address the uninsured problem in our country,” said David M. Cordani, chief executive of insurer Cigna Corp. Cigna doesn’t yet know what coverage its health-marketplace enrollees previously held.
  • Many health plans and providers are looking for the expansion of coverage to fuel growth. Insurers need to draw healthy uninsured people to offset costs, given that plans can no longer deny coverage to people with pre-existing conditions.
  • Department of Health and Human Services officials have said they don’t yet know the number of people who have signed up for coverage through the exchanges who had insurance at the time of their enrollment.
  • The health law is chipping away at the number of uninsured consumers in other ways. At least four million people are expected to join Medicaid rolls in the coming months.
  • But so far, health-plan executives say, subsidies to buy insurance in the marketplace, and broader changes to the law, seem to be encouraging many already-insured people to seek better rates.
  • In addition, some small companies are cutting back on coverage now that their workers can buy through the marketplaces, insurers and brokers say.
  • At Priority Health, about 25% of health-law customers had employer-supported plans last year, Ms. Budden said, while 50% bought their own coverage last year. Of the latter group, about half are getting subsidies.
  • “I don’t know we’re growing the number of people with insurance here, so much as we’re just adding complexity,” said Geoff Bartsh, vice president for policy at Medica Health Plans in Minneapolis.
  • It isn’t surprising that some percent of new purchasers of private health insurance are people who had insurance before. About 66% of people buying new individual health plans in early 2011 were covered by employer-backed plans in late 2010, according to a Kaiser Family Foundation analysis of federal survey data prepared for The Wall Street Journal. About 20% of enrollees in early 2011 were previously uninsured, the analysis found.
  • There is “massive churn in the individual market, and always has been,” said Larry Levitt, senior vice president at Kaiser. “It wouldn’t surprise me if many [health-law enrollees] were insured in the last year,” he said, but “that doesn’t mean they wouldn’t have ended up uninsured if not for the exchanges.”

*Modified from a WSJ.com article

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Another Obamacare provision for employers delayed

The Obama administration plans to delay enforcement of yet another Obamacare provision, according to a New York Times report. This line in the law would ban employers from discriminating “in favor of highly compensated individuals” when it comes to health insurance eligibility or benefits. Effectively, the provision prevents employers from providing their top executives cushy health benefits while low-level employees are given less optimal health insurance options.

  • The IRS will not enforce the provision in 2014 because they simply haven’t yet gotten around to actually writing the regulations that employers must follow, even though the Affordable Care Act was signed into law almost four years ago.
  • Obamacare originally required the IRS to enforce the health benefit “discrimination” ban just six months after the law was passed in March 2010. The Obama administration announced in 2010 that officials needed more time to write the rules, but assured Americans that the regulations would be finalized before Obamacare actually launched.

Years later, the IRS appears to still be grappling with the same questions about implementing the provision. IRS spokeswoman Michelle Eldridge denied in a statement that the agency had approved any new delay.

  • “The IRS has not announced any new or additional information on this issue,” Eldridge said. “The New York Times story refers to IRS Notice 2011-1, which was released to the press on December 22, 2010. That Notice stated that under Public Health Service Act, Section 2716 will not apply until after generally applicable guidance is issued, because the statute requires regulatory detail in order to operate properly.”
  • IRS officials appear to be stymied by the “regulatory detail” of the provision. For the IRS to mandate non-discrimination in health plans for employees with different compensations, the agency must decide how to quantify the value of employer-provided health benefits, how to define “highly compensated officials” and issue a final determination on what constitutes discrimination.
  • The tax agency has a series of scenarios made complicated by Obamacare’s structure that it will have to take into consideration before issuing guidance. Some low-earning employees may opt out of employer-sponsored health insurance in favor of increased subsidies via an Obamacare exchange, for example, while higher executives that aren’t privy to taxpayer subsidies for coverage do not. The IRS has yet to determine whether that employer would be discriminating even if the employer health plan has the same value for all employees.
  • Obamacare’s prescription for violating the ban is a $100 daily excise tax for each individual that was “discriminated” against.

*Modified from a dailycaller.com article

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