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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Insurers under fire as Obamacare kicks in

New policyholders are having trouble confirming coverage, obtaining ID numbers and getting care. Obamacare’s biggest problem isn’t the troubled HealthCare.gov or the Covered California website anymore.

Consumers are easing up on criticism of government exchanges and turning their frustration and fury toward some of the nation’s biggest health insurers. All too often, new policyholders say, the companies can’t confirm coverage, won’t answer basic questions, and haven’t issued identification numbers needed to fill prescriptions or get medical care.

  • Day after day, people say, they contact insurance company call centers waiting hours at a time with no response. Meantime, insurers have already taken many customers’ payments for coverage intended to take effect Jan. 1.
  • But without proof of insurance, patients are having to pay hundreds of dollars out of pocket for medications and doctor visits, if they can afford it. Insurance agents say dismal service has become commonplace across many companies.

These industry problems pose the next major hurdle for what’s already been a flawed rollout for President Obama’s signature law. It could further sour public opinion on the overhaul and hamper enrollment efforts through March 31, when the first sign-up period ends.

  • Recent government changes to the law’s implementation and deadlines are impacting the timeline for us to process customer applications, issue billing statements, process payment and issue coverage ID cards.

Alan Sager, a health-policy professor at Boston University, said the insurance company fiascoes are another barrier to overcome after the government website problems. “There’s equal opportunity for incompetence by the public and private sector in administering such a large new program,” he said. “People are deservedly angry and resentful.”

Some insurers have begun to apologize this week, acknowledging a lackluster response amid an unprecedented surge of applicants for the individual insurance market. Nationwide, more than 2 million people enrolled in private health plans by the end of last year, either through HealthCare.gov or state-run marketplaces.

  • Industry officials say the disastrous launch of the federal exchange and the ever-changing rules from the Obama administration have complicated their job and contributed to the backlog.

“Health plans have gone above and beyond to protect consumers from disruptions caused by the ongoing problems with HealthCare.gov” and some state exchanges, said Robert Zirkelbach, spokesman for America’s Health Insurance Plans, an industry group. “The last-minute changes to deadlines and rules have made the process more complicated and time-consuming.”

But some consumers think big insurers had plenty of opportunity to get ready. “Insurance companies of this size should have been far better prepared. They knew it was coming,” said Katherine Kokko, 34, a public-health consultant in New Hampshire.

She easily signed up for an Anthem Blue Cross Blue Shield policy through HealthCare.gov on Dec. 20 and soon after paid her $325 monthly premium. But after waiting on hold more than 10 hours in all this week, a company representative said she didn’t have an identification number. As a result, Anthem wouldn’t authorize physical therapy she needs after knee surgery last month.

These problems are particularly acute for families with ongoing medical needs, such as cancer treatment, pregnancy and other chronic conditions.

Bill Strong of Santa Barbara has a 6-year-old daughter who requires 24-hour care for a rare disease, spinal muscular atrophy. The family’s previous plan was canceled because it didn’t meet all the requirements of the Affordable Care Act. The family enrolled with Blue Shield of California on Dec. 23 and paid its $1,000 monthly premium for a Platinum plan.

But Strong said he hasn’t heard anything from the company despite two weeks of phone calls. Strong already paid for one prescription himself, and his daughter is scheduled to get a $4,000 injection Friday. Also, his wife is nine months pregnant.

“The company is not set up to handle the volume coming through,” Strong said. “It’s creating a lot of stress on us we don’t need.” Blue Shield of California apologized to customers for its “unacceptable” performance on its Facebook page this week.

“While we anticipated and planned for increased traffic, the sheer volume of enrollments has swamped all major health plans,” the San Francisco insurer said.

WellPoint, the nation’s second-largest health insurer and parent of Anthem Blue Cross, has drawn the ire of many customers in California and 13 other states where it’s selling policies on and off government exchanges.

The company said it responded to more than 1 million customer calls over two days last week, equal to the amount it typically receives over an entire month. It said it has more than 1,000 employees answering calls.

Insurers say the inability of many people to enroll through HealthCare.gov in October and November, coupled with deadline extensions to get Jan. 1 coverage, created an unexpected bottleneck of applications in late December.

The wave of policy cancellations for millions of Americans this fall added to the upheaval, and industry officials have also complained about lost or delayed delivery of enrollment files from the federal and state exchanges.

Blue Shield of California said it is still getting applications for Jan. 1 coverage from the state exchange.

A spokesman for HealthCare.gov said “we have fixed most of the issues that may impact a consumer’s enrollment with a health plan.”

In light of the lingering problems, California’s exchange extended the payment deadline to Jan. 15 for coverage starting Jan. 1, and some insurers across the country have granted even more time.

Some consumers are demanding partial refunds on January premiums that were paid weeks ago. Jeffrey Morgan, a marketing consultant in Lakewood, said Anthem Blue Cross rejected his refund request after waiting on the phone more than two hours Thursday.

Morgan has paid his January premium of $1,200 for his family’s coverage, but the company erroneously sent him a member ID card showing his coverage isn’t in effect until March 1.

“I enrolled well before the deadline and paid well before the deadline and I need prescriptions that are critical to my healthcare,” Morgan said.

Even insurance agents say they can’t get through to the companies to assist their clients. This whole law is a gift to insurance companies, they owe us good customer service.

*Modified from a latimes.com article

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Hiccups persist in California health insurance exchange

Covered California is still sorting through paper applications for health insurance starting Jan. 1, and some people are having trouble related to invoices, coverage confirmation or online payments.

Paperwork and computer glitches are still tripping up some eager consumers who are seeking coverage through California’s insurance exchange and its 11 health plans.

  • On Monday, the Covered California exchange said that all the applications it received online for coverage starting Jan. 1 have been sent to participating insurers, but that it is still sorting through an unspecified number of paper applications for that time period. In light of that delay, last weekend the state exchange extended the payment deadline for January premiums by nine days to Jan. 15.
  • A week into the new year, some people are still waiting to get an invoice or confirmation of coverage. Other enrollees have run into problems trying to pay online and long hold times when calling to get answers from their insurer or the exchange.

A surge of applicants in late December has created bottlenecks at government-run exchanges and insurers nationwide trying to implement the Affordable Care Act.

Overall, more than 400,000 Californians have signed up for private health plans so far through the state exchange. About 100,000 of those people enrolled in the final four days before the Dec. 23 deadline to have coverage in effect Jan. 1.

“We did receive a flood of applications before the deadline, so we are working at top speed to process all those and get them through the pipeline,” exchange spokeswoman Anne Gonzales said. “We understand people are waiting, and we are going as quickly as possible on our end.”

She said the exchange had to follow up with some applicants to get additional documentation before sending those files to insurers. Gonzales said she didn’t have a figure for how many applications for Jan. 1 coverage are still pending.

Insurers said some problems are inevitable because enrollment deadlines were repeatedly extended to help more people sign up in time for Jan. 1 coverage. The original deadline was Dec. 15, and Covered California was letting people finish applications as late as Dec. 27 after several extensions.

Insurers “are making every effort to ensure people are enrolled if they have made a good-faith effort,” said Nicole Evans, a spokeswoman for the California Assn. of Health Plans. “This kind of volume at one time in the individual insurance market is unprecedented.”

San Francisco resident Marin Perez, 29, tried for days to pay his $211 monthly premium to Anthem Blue Cross, a unit of industry giant WellPoint Inc. He and other consumers have said the company’s online payment system wasn’t working in recent days.

So, Perez said, he called the company, waiting on hold twice Friday for more than two hours apiece with no success. “It was a complete nightmare,” said Perez, content manager for a technology start-up. He hasn’t had health insurance since leaving his previous job about three months ago.

“It seems the private sector should be a little more savvy about managing this,” Perez said. “I thought many times, just forget it, I’m going to take my chances” without insurance. Perez said he was able to pay Monday only after contacting an Anthem official directly.

An Anthem spokesman said the company’s online payment system has gone down “intermittently” and the company “continues to increase its stability.”

Los Angeles resident Sandy Ragan, 60, was able to pay her premium for a Bronze plan with L.A. Care Health Plan on Dec. 9. But she’s frustrated because she hasn’t received a membership card or any other information from her insurer. She said she has asthma and high cholesterol and would like to see a doctor using her new benefits.

A spokeswoman for L.A. Care said it takes consumer complaints seriously and it is always looking to improve its service.

Healthcare giant Kaiser Permanente said exchange enrollees can make medical appointments and get care even if they haven’t yet received an invoice or paid their first premium. Anthem Blue Cross said its enrollees needing care can file a claim and get reimbursed later, subject to the terms of their policy.

Modified from a latimes.com article

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Obamacare may get sick if young Americans don’t sign up

Now that more than 2 million people have signed up for private insurance plans created by President Barack Obama’s healthcare law, a crucial next check-up for the new marketplace will be to see how old customers are.

  • Early data from a handful of state exchanges shows the administration needs more young adults to sign up in the next three months to help offset costs from older enrollees and prevent insurers from raising their rates.

Critics of Obama’s Affordable Care Act say the market won’t attract enough young people to keep it financially viable, putting more pressure on government funds to compensate for any insurer losses.

  • Data from seven states and the District of Columbia, which are running their own marketplaces, show that of more than 200,000 enrollees, nearly 22 percent are 18 to 34 years old, according to a Reuters analysis.

The administration had hoped that over 38 percent, or 2.7 million, of all enrollees in 2014 would be 18 to 35 years old, based on a Congressional Budget Office estimate that 7 million people would sign up by the end of March.

“The whole insurance relationship is counting on them signing up,” said Dale Yamamoto, an independent healthcare actuarial consultant. “Otherwise rates will have to increase.”

The picture from the initial state data is likely to change, since it mostly includes people who enrolled only through November, before a year-end surge of sign-ups for people wanting coverage effective Jan 1. Many experts speculate the early enrollees were more likely to be in urgent need of coverage, and therefore more likely to be older or sicker.

A recent survey by The Commonwealth Fund, a healthcare research foundation, found that 41 percent of those who had shopped at the various state marketplaces by the end of December were ages 19 to 34, up from 32 percent from an October survey.

One marketplace with current data, the District of Columbia, said on Friday that of the 3,646 enrollees in private plans through Thursday, about 44 percent are young adults.

A FACTOR OF PRICE

  • The Affordable Care Act, popularly known as Obamacare, prevents insurers from charging people more if they have a health problem. Age is one of the few factors that can affect the price, with insurers allowed to charge up to three times more for a 64-year-old than someone in their early 20s.

But the healthcare costs for a 64-year-old on average are nearly five times as much as a 21-year-old, according to a study of claims from three large insurers Yamamoto conducted for the Society of Actuaries.

“The more that the marketplace is able to attract a broad mix of enrollees including the young and healthy … the more that costs will be sustainable and premiums will be more affordable,” said Robert Zirkelbach, spokesman for America’s Health Insurance plans, a trade group for insurers.

Other factors may be as crucial, if not more, in determining the stability of the new market, including the health status of enrollees, regardless of their age, and how that lines up with what individual insurers had projected. But those details will only become clearer later in the year based on the medical claims filed by the newly insured, making age the best early proxy about whether the market is sustainable.

The Centers for Medicare and Medicaid Services, which oversees the marketplace for 36 states, has yet to provide any demographic data about enrollees. CMS is expected to release an enrollment report later this month.

Data may come sooner from insurers as they discuss their recent financial performance with investors in the next few weeks. Humana Inc said on Thursday that the mix of enrollment in its marketplace plans were likely to be “more adverse than previously expected.

  • But healthcare experts say insurers need a better mix of enrollees than seen in the early data.

“If a quarter or more of the enrollees are young adults, I would think that’s an encouraging sign, particularly for the first half of the open enrollment period,” said Larry Levitt, senior vice president at the Kaiser Family Foundation healthcare think-tank.

By the end of March, “if it’s lower than that, I think there would be some cause for concern,” Levitt said.

Levitt and colleagues at Kaiser analyzed a scenario that they deemed “worst case” in which young adults represented 25 percent of enrollees. They found that costs then would be about 2.4 percent higher, but insurers would retain a very slim profit margin. As a result, the Kaiser authors projected the companies would raise premiums by a commensurate amount, but not enough to destabilize the market.

Using the same data as Kaiser but different assumptions, Seth Chandler, a law professor at the University of Houston who specializes in insurance, said costs would be 3.5 percent higher, should only 25 percent of enrollees be young adults.

  • “If we see fewer than 30 percent of the enrollees being in that 18-to-34 age bracket, that’s a warning sign that there are problems,” Chandler said. “If the demographics come in poorly, insurers are going to lose money.”

Chandler is a skeptic of the healthcare law and writes a blog called “ACA Death Spiral.” Such a spiral is thought to occur if insurers facing higher costs raise premiums, so only very sick people buy coverage, leading to even higher premiums with the pattern continuing until the insurance market either disappears or shrinks to the point that it is not sustainable.

*Modified from a Reuters article

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New ObamaCare fees coming in 2014

Here comes the ObamaCare tax bill. The cost of President Obama’s massive health-care law will hit Americans in 2014 as new taxes pile up on their insurance premiums and on their income-tax bills.

Most insurers aren’t advertising the ObamaCare taxes that are added on to premiums, opting instead to discretely pass them on to customers while quietly lobbying lawmakers for a break.

But one insurance company, Blue Cross Blue Shield of Alabama, laid bare the taxes on its bills with a separate line item for “Affordable Care Act Fees and Taxes.”

  • The new taxes on one customer’s bill added up to $23.14 a month, or $277.68 annually, according to Kaiser Health News. It boosted the monthly premium from $322.26 to $345.40 for that individual.
  • The new taxes and fees include a 2 percent levy on every health plan, which is expected to net about $8 billion for the government in 2014 and increase to $14.3 billion in 2018.
  • There’s also a $2 fee per policy that goes into a new medical-research trust fund called the Patient Centered Outcomes Research Institute.
  • Insurers pay a 3.5 percent user fee to sell medical plans on the HealthCare.gov Web site.

ObamaCare supporters argue that federal subsidies for many low-income Americans will not only cover the taxes, but pay a big chunk of the premiums.

But ObamaCare taxes don’t stop with health-plan premiums.

  • Americans also will pay hidden taxes, such as the 2.3 percent medical-device tax that will inflate the cost of items such as pacemakers, stents and prosthetic limbs.
  • Those with high out-of-pocket medical expenses also will get smaller income-tax deductions.
  • Americans are currently allowed to deduct expenses that exceed 7.5 percent of their annual income. The threshold jumps to 10 percent under ObamaCare, costing taxpayers about $15 billion over 10 years.

Then there’s the new Medicare tax.

  • Under ObamaCare, individual tax filers earning more than $200,000 and families earning more than $250,000 will pay an added 0.9 percent Medicare surtax on top of the existing 1.45 percent Medicare payroll tax.
  • They’ll also pay an extra 3.8 percent Medicare tax on unearned income, such as investment dividends, rental income and capital gains.

Modified from a NewYorkPost.com article

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Insurance Companies Deserve Obamacare

The latest attempt by the Obama administration to avoid the consequences of its inept implementation of the Affordable Care Act has been to issue yet another of its surprise edicts. This new Health and Human Services regulation, which was announced Thursday night, “significantly relaxed the rules of the federal health-care law for millions of consumers whose individual insurance policies have been canceled, saying they can buy bare-bones plans or entirely avoid a requirement that most Americans have health coverage.”

This last minute movement of the goalpost comes on the heels of another HHS rule change, issued a week ago, that essentially forces insurers to provide retroactive, discounted coverage to the many Americans who are about to lose their insurance plans because of Obamacare.

  • Insurers are not amused. The statement released by the President of America’s Health Insurance Plans was typical: “This latest rule change could cause significant instability in the marketplace and lead to further confusion and disruption for consumers.”

 The White House and HHS claim, however, that this is really no big deal. They assert that the rule change will only affect a few hundred thousand people.

The negative effects of the rule changes will be felt mostly by insurers, and the administration knows that few tears will be shed for the plight of Blue Cross Blue Shield or Kaiser Permanente. The electorate regards the industry with a jaundiced eye.

  • The insurers did nothing to improve their public image by entering into a Faustian bargain with the White House whereby they agreed to promote Obamacare in return for potentially enormous profits from millions of new customers who will be herded to them by its exchanges.

In 2012, the health insurers kept their part of the deal by spending $216 million to pimp Obamacare, but the president and his accomplices began double-crossing them as soon as it became politically expedient. Before the latest two imperial decrees, for example, the administration postponed implementation of the employer mandate for a year and delayed the beginning of the 2015 enrollment period until after the upcoming midterms.

  • These rule changes will cost health insurers millions in expected premiums.

Yet even after these betrayals, the representatives of the insurance industry were actually surprised by the latest arbitrary edicts. After last week’s rule change, the National Association of Insurance Commissioners issued the following statement: “This decision continues different rules for different policies and threatens to undermine the new market, and may lead to higher premiums and market disruptions in 2014 and beyond.” Officials from America’s Health Insurance Plans issued a similarly querulous statement.

  • But the nation’s insurance executives still think they have a deal. They are still betting big money that Obamacare will turn into a cash cow. The Wall Street Journal reports that insurers will spend $500 million promoting the Affordable Care Act in 2014. In fact, one company plans a huge ad buy before the end of this year: “WellPoint…said it expects to spend up to $100 million by the end of this year on TV, social media and print ads targeting mostly young and healthy people.”

This Wellpoint pitch is, if possible, even more naïve than the expectation that the government will stop changing the rules in the middle of the game.

  • While it may be true that the public school system has steadily eroded the critical thinking skills of the nation’s young adults, they are still not dumb enough to pay exorbitant premiums for health coverage they neither want nor need.

This is particularly true if a viable alternative is available. And there is, in fact, a better choice. The penalty for not carrying insurance is only $95.

  • And, sure enough, they are not signing up in large enough numbers to prevent Obamacare from collapsing under its own weight. As the Atlantic reports, “18 to 34 year olds have only made up about 20 percent of enrollees in states we have data for.

That’s half of what they need to be for the system to work. Otherwise, premiums could rise, which could make more healthy people forgo insurance—and premiums could rise again.” This is the “insurance death spiral” that arises when low-risk individuals choose to remain uninsured while high-risk individuals enroll in droves.

  • Obamacare’s perverse incentives have rendered this death spiral virtually inevitable. Thus, the health insurance companies will suffer the same fate as all of Obama’s other collaborators in the fraudulent cause of health care “reform.” Just as the quisling strategies of the American Medical Association and Big Pharma have already hurt physicians and stunted medical innovation, the role health insurance companies have played in perpetrating Obamacare will inflict serious damage on their own industry.

It is not a coincidence that many of the people who promoted the “Affordable Care Act” are now claiming that its travails are rooted in the decision to allow insurers to play a role. These people will increasingly claim that a single payer system is the only cure for Obamacare’s ills. And they will advocate the eradication of insurance companies from American health care. That would be condign punishment indeed.

Modified from a Spectator.org article

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Will Insurers Ever Say Enough’s Enough To Obamacare?

How can anyone run a business this way?

Modified from an article by Greg Scandlen, December 27, 2013 on thefederalist.com website

Will Insurers Ever Say Enough’s Enough To Obamacare?   As an insurance guy, I liked that it was moving insurers away from their misguided notion of being the big boss in health care and back to the role of financial protection.

But the industry didn’t much like that aspect of it. Sure, they would sell the products because employers demanded it, but they were losing control as banks entered the market to manage the first few thousand dollars of expenses of a patient’s contract. The banks were still focused on financial protection and didn’t have ambitions to become health care managers.

  • So when Obama came along with an offer to require all Americans to buy their products, it was an offer they couldn’t refuse. Especially when the products he had in mind were comprehensive, cover-everything health plans. No more bank involvement. We’ll really be in the catbird seat now!

I’ve been working professionally in health policy since 1979 when I was hired by the Blue Cross Blue Shield plan in Maine. Before I left the Blues I was heading the state relations department for the national association in Washington. Then I went on to organize a trade association of health insurance companies that were interested in promoting free market solutions in health care.

What has happened to the insurance industry has me stunned.

Now, I am no apologist for the industry. I have been one of its biggest critics. Its dalliance with Managed Care was an enormous mistake that took its mission away from financial protection into health services management – something it was never qualified to do.

  • The industry not only did a poor job of it, but it alienated and embittered the only people who really matter in health care – doctors and patients.

Granted, Managed Care pleased employers for a few years. It restrained their costs in the mid-1990s. But employers don’t really know anything about health care, either.

  • What they do know is the morale of their workers, and Managed Care was the biggest morale-killer ever. Employees were furious that care was being denied by insurance company bureaucrats in Hartford, Connecticut, and they let company HR departments know it.

Employers started looking for other ways to restrain costs while preserving patient choice, and came to embrace “consumer-directed” health care (CDHC) in the early 2000s. This approach has been enormously successful and it has lowered costs and increased patient involvement in health care decision-making.

The naivety I had witnessed during the Clinton Wars was still in force. Many of us tried to warn the industry that they would regret this arrangement. Yes, they might be assured of modest profits, but the cost of sacrificing their autonomy would be far too high. They would become little more than public utilities. They would lose all control over benefit design, marketing practices, and rate setting. They would have no idea of the risks they were enrolling and would have to set premiums blindly.

It has become much, much worse than I ever imagined. Obamacare is not even fully in effect yet and already we are seeing the President playing with the carriers like a toddler plays with toy trucks –

  • Employers will be mandated to buy your policies for 2014
  • (Oops, employers are angry)
  • Employers won’t be mandated until 2015 – if then
  • Small employers will give workers a choice of health plans through the SHOP program in 2014
  • (Oops, we can’t get the web site ready in time)
  • Small employers won’t have to offer a choice of plan until – sometime later
  • You must cancel these individual policies
  • (Oops, public backlash)
  • You must reinstate these policies
  • (Oops, many insurance commissioners won’t allow it)
  • You must continue to cover providers and drugs even for cancelled policies
  • The deadline for enrollment will be December 15, 2013
  • (Oops, web site problems)
  • The deadline for enrollment will be December 23, 2013
  • (Oops, too much traffic)
  • The deadline for enrollment will be December 24, 2013
  • Never mind, there is no deadline
  • First month’s premium must be received by December 31, 2013
  • (Oops, back-end problems with the web site)
  • First month’s premium must be received by January 8, 2014
  • Make that January 10, 2014

How can anyone run a business this way? This is worse than being a federal agency. No federal agency would be expected to stop and start on a personal whim like this. These aren’t rules, they aren’t regulations, they are dictates based on nothing more than Kathleen Sebelius’ momentary feelings.

  • These are only the “glitches” that have been made public. God knows what orders and threats are being issued in closed-door meetings.

How long will the insurance industry abide being treated like shoe shine boys? Mr. Obama will not be in office forever. His regime is already coming to an end. What will these companies do then? He will no longer be around to grant or withhold bailout (“risk corridor”) money.

 

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Many who enrolled in health plans still await confirmation

Anxiety grows as health plan delays could leave some customers without a policy by January 1st.

Some people who picked a health plan as far back as October through the Covered California exchange say insurers are telling them they still have no record of their enrollment. As a result, bills haven’t gone out and consumers can’t pay their initial premium to ensure coverage takes effect in less than three weeks.

“There are certainly some people who have enrolled or think they have enrolled and haven’t received confirmation,” said Paul Markovich, chief executive of Blue Shield of California. “It’s our version of Black Friday right now and that is what we are coping with.”

In California, insurers are working with the state exchange on how to address the potentially thorny problem of patients who applied in time but don’t have proof of insurance when they need to visit the emergency room or get a prescription filled in early January.

Insurance companies typically won’t cover any medical bills until a customer pays the premium. The deadline for payment was recently extended to January 6th.

Thousands of Californians have overcome long waits and website glitches to sign up for Obamacare insurance, but now enrollment snags may prevent some of them from actually having coverage starting January 1st.

Consumers’ anxiety has grown as they endure long waits on the phone, computer errors and conflicting answers from the state and insurers about their coverage.

The average wait time at the state’s call centers climbed to 36 minutes last week, and California is still trying to clear a backlog of paper applications filed in October and November.

State officials acknowledge there have been delays, but they say the vast majority of people are enrolling smoothly and getting their first insurance bills. The state said it didn’t have exact figures on how many customers are still waiting for proof of insurance.

Thursday, Covered California said more than 156,000 people had enrolled in private health plans through December 7th. An additional 179,000 Californians have qualified for an expansion of Medi-Cal, the state’s Medicaid program for the poor.

The stakes are big for people with chronic health conditions and serious medical issues. The loss of coverage could pose significant problems for them financially and for their health.

Lee, head of Covered California, said exchange employees are working overtime to process applications, and the state’s call centers will be open the next two Sundays to help meet increased demand. He said the exchange is sending customer files daily to the 11 insurers participating in the state marketplace.

The separate federal exchange for 36 other states has been trying to fix errors in the customer files it has sent to insurance companies. In contrast, the California Assn. of Health Plans, an industry group, says the information from Covered California has had a “high rate of accuracy.”

*Modified from a LATimes.com article

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Finding health plans that include the doctors you want

Many consumers shopping for coverage through Covered California have trouble finding policies that include the doctors and hospitals they’re accustomed to seeing.

  • To make insurance affordable, insurers are seeking to control costs in part by limiting the number of doctors and hospitals included in their networks.

Shopping for doctors is never easy. This year, the state’s new health exchange seems to be making it tougher than ever.

  • Most of the insurance companies on the exchange are offering provider networks that are far narrower than those sold on the market today. Blue Shield is offering a network through its exchange plans that represents roughly 37% of its full network.

Many consumers who currently have insurance and are shopping for a new plan through Covered California are finding it difficult to locate policies that include the doctors and hospitals they’re accustomed to seeing.

Covered California issued a report last week saying that more than 58,000 physicians were available through the exchange’s plans, compared with the 63,000 to 72,000 physicians in the state’s largest commercial networks.  But how that plays out for consumers probably depends on the specific plan they choose.

  • In many cases, even doctors themselves are unsure of their status in the new plans. Insurers have a long history of inaccurate and outdated provider listings, which the law does nothing to fix. And the provider lists found on Covered California have themselves been riddled with errors.

*Modified from a LATimes.com article

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