Archive for category Affordable Care Act
Insurance companies now have found a way to deny insurance because of pre-existing conditions, as a group. This is nearly insane. Any first year lawyer would realize the following:
- It is not legal to kill a person so it is not legal to kill a group of people.
- It is not legal to run a red light so it is not legal to run a group of red lights
- It is not legal to deny insurance because of pre-existing conditions so it is not legal to deny insurance to a group with pre-existing conditions.
It took a few years since the ACA was enacted for insurance companies to realize the subsidized insurance exchanges have poor people, disabled people, and people who can’t work because of illness — they have, surprise, surprise, PRE-EXISTING CONDITIONS.
Now, after years of huge windfall profits, several large insurance companies have decided not to sell insurance to the group of people who purchase on the insurance exchanges. Why do we need a Supreme Court decision when any cop knows it’s a crime. Where do large companies like health insurance companies and Volkswagen get the idea they are entitled to do business as they please?
The insurance companies who have decided not to participate in the health insurance exchanges are listed below with the financials as reported on Yahoo. They are not hurting, revenue last quarter is better than the same quarter last year.
|2015 Revenue (Billions)||$176.10||$61.65||$54.53|
|52 wk price change||$14.38||-$3.14||-$5.33|
|Quarterly revenue (yoy)||28.2%||5.4%||2.0%|
A surprising twist to this story was reported by David Belk: big insurance companies avoid risk by having the companies they serve “self-insure”. Meaning, the companies (like a cable company or a hospital or an RV company) take the risk, put up the money, and let the “insurance company” just do the paperwork. For the eight largest health insurance companies only about 30% of their business actually has financial risk — the rest is “self-insured”, otherwise called Administrative Service Contracts (ASC).
So now the picture is clear — insurance companies avoid risk. They want someone else to take the risk and they are very skilled at shifting the risk to others. The question is whether the U.S. really needs these paper shufflers skimming profits?
The simple answer is no. Congress needs to level the playing field for insurance companies — if they sell insurance they must sell insurance on the exchanges. Unless insurance companies can take the risk of health insurance exchanges they need to be replaced with a single payer system. Colorado will decide this question on a ballot in 2016 — they have the right question, hopefully the people will choose the single payer system.
The Affordable Care Act (ACA) does have some teeth to reduce drug prices. The ACA formed a 15 member group intended to restrain the growth in cost of Medicare without reducing benefits. The Independent Payment Advisory Board (IPAB) has powers to improve efficiency and prevent Medicare from being victimized by business interests.
Mergers of large pharmaceutical companies have created near monopolies for setting prices — the new specialty drugs are a case in point. Also, by repeatedly suing smaller companies and generic manufacturers the competition is under siege if not defeated. The huge rise in drug prices have become a national disaster because individuals and Medicare just can’t afford the price gouging.
The IPAB has some power to help the problem — hopefully they will act to implement reference pricing of new drugs. It forces drugs with a similar effect to charge the same amount — old drugs and new. So if a new wonderful drug “Neximabob” is no better for arthritis than ibuprofen then the prices must be the same.
The Federal Drug Administration can not require drug-comparison research. This has been a wonderful marketing loophole for big pharma. It’s time consuming to do comparison research. By the time “Neximabob” is found to be a sham, billions of prescriptions have been filled,billions of dollars have been paid and Medicare has lost billions. But, you will be happy to know, the FDA says “Neximabob” is safe and effective.
The IBAP can act on expert opinion rather than wait for full comparison research. One option for drug companies is to do the comparison research (which they fight) or do more lobbying (more that the hundreds of millions they already spend).
Guess where the money for drug lobbying comes from? the very tax payers and Medicare recipients who pay for the medications in the first place — it’s just not fair. Next time you hear the IBAP is so so bad you will know who is speaking — it’s not consumers!
Note: According to the Congressional Research Service the IBAP is not currently active because the rise in Medicare cost in 2015 is not enough to trigger actions by the committee. There is some thought it may become active in 2017 unless repealed by Congress.
The author of this blog is willing to be the CEO of United Healthcare for a mere $60,000,000 / year. That would save the insurance company 6 million dollars a year — a real bargain. So why does United Healthcare need a new CEO?
The Wall Street Journal reported today that United Healthcare (the nations largest healthcare insurer) can’t seem to make enough money with clients who get insurance on the government exchanges. They feel other insurance companies should have those pesky patients, who cost more for a couple of years, because they did not have insurance before.
United Healthcare (NYSE:UNH) has been having a lackluster financial situation for the past few months, like almost all other stocks — perhaps a little worse. Reports show the health insurer will lower its earnings-per-share outlook to $6 per share, down from its earlier forecast of $6.25 to $6.35 per share.
Could it be that the 25 cent drop in earnings is due to business on the exchanges? — surely it’s not the fault of the CEO? But, why take a chance, get a new CEO. The company could get a new CEO for half the price and even might be able to snag someone with a PhD in economics to help figure out what to do. Duh — lower the operating costs!
Presidential candidate, Dr. Ben Carson*, says insurance companies should be low-cost non-profit operations simply to process claims. It makes a lot of sense. Why is so much profit being extracted from the US healthcare system by insurance companies? It does not need to be that way. The companies keep about 20% to 25% of premiums for CEO salary, expenses and profits. In France, insurance companies are limited to 6%. Yes, it can be done.
* This is not a political endorsement, just an observation.
Wishful thinking is not sound public policy. (Bjorn Lomborg) The South, unlike the rest of the US, has rising numbers of the uninsured. The “Health Reform Monitoring Study” from the Urban Institute is disturbing . Why? Because insurance subsidies were supposed to insure more people. The problem seems to be the money is not reaching the people who can’t afford insurance. The original ACA plan was for Medicaid to cover the very lowest income people then at some higher income level the ACA insurance subsides would take over. Many states in the South did not elect to expand Medicaid so there is a gap between Medicaid and the income level at which ACA subsidies are available. According to the study, the most frequent reason given by uninsured people for not having insurance is: “it costs too much” and second “it might affect immigration status”. The following is a graph is a comparison of each region between 2013 and 2014: The South has a huge problem with health literacy — many residents have no idea how to approach health insurance. About 11% of Southern uninsured people say they do not want insurance — it’s like asking someone if they want a kumquat — if you don’t understand what it is or what it costs you might not want one.
The Governors of the Southern States are hurting people, not something expected. Somehow they thought by not expanding Medicaid and ignoring the ACA the health care problems in the South would go away or get better by magic. Wishful thinking is not a strategy for success.
Here is the list:
- Pay doctors more
- Let the government pay subsidies to families not covered by the employee’s health insurance.
- Get rid of fee-for-service payments
- Smooth the transition from Medicaid to subsidized health insurance
- Transparent pricing
There are obviously some problems with this “consensus”. To begin with, who is part of the consensus? And who benefits from the 5 suggestions? On the face the ideas seem OK but where is overall cost reduction — the real crux of our health care problem?
So, to address each point:
- Pay doctors more — if the payment is not tied to reducing health care costs and increasing quality then it is money down the drain.
- Covering families — seems simple enough but why should business be exempt from doing what they have traditionally done? Employer insurance needs to cover the whole family — that’s simple.
- Get rid of fee-for-service. Yes that payment method is a problem but there must be an incentive for health care providers to provide a high volume of work and an incentive to do quality work. The simple solution is to pay a health care system (an accountable care organization) to provide care for a large group of people for a yearly fee. The organization must meet quality and budget constraints as opposed to our current “the sky is the limit” fee model.
- Smooth the the transition away from Medicaid. At this point Medicaid is less expensive than standard indemnity plans — why think about a change? If the person enters the workforce the employer just pays the cost — simple. Changing providers is not easy but if quality is uniformly better there would not be such concern.
- Transparent pricing. This is presented to suggest people could decide on what tests and treatments to buy if only they knew the prices — patients have never had the knowledge to make that decision and never will. The transparency of pricing should be the price for ALL the healthcare a person needs per year. Market forces may be helpful on the macro level (like for a healthcare system) but there is no free market for healthcare on the micro level — imagine a person being asked to choose between various methods of treating diabetes or the best way to remove an appendix (the decision is either random or biased by what the very person asking the question tells them).
The U.S. is experiencing something its citizens have not witnessed before: the transition away from population healthcare decisions being made behind closed doors at insurance companies to those decisions being made in the political arena. Other countries experience this all the time — just look at newspaper headlines in the UK or France over the past 20 years!
Again, Steven Brill of Time Magazine twists the knife in the hospital chargemaster with his article “Bungling the Easy Stuff” published 12/16/13. Uninsured patients continue to suffer hospital price gouging and personal bankruptcy even though legislative relief was passed years ago when the Affordable Care Act was enacted.
Mr. Brill explains that the ACA prevents hospitals from collecting fees based on the chargemaster (the discredited fee schedule of astronomic charges). But, because no rules were published in the Federal Register no legal help is available to victims of the practice.
How could this happen? Because the work to implement the rules to prevent overcharging did not seem worth the effort, after all, in 2014 everybody will have insurance! Sadly, during the 4 years up to the time when everybody supposedly will have insurance legal enforcement was sidelined.
Although Mr. Brill piles blame on the Obama administration one must also blame those in congress who pass bill after bill to try to stop the ACA — this is unbelievable — one side not implementing the law and the other side trying to kill the law both without regard to the finances of the vulnerable uninsured while hospitals ignore the will of congress and continue an unethical practice.
Mr. Brill has been hammering on the problems of the chargemaster. It’s time to listen and help your fellow citizens — hospital boards need to stop the practice immediately. Citizens need to ask hospital board members why they stand for such a cruel and unethical practice? Perhaps they should give the money back. However, the current plan is to use the money to buy ads to extol the caring nature of hospitals — that will make us all feel better.
I waited a month before before using Connect for Health Colorado because I heard about the insurance exchange website problems. The exchanges started in October. It’s November now so I did it — I purchased health insurance with the exchange. There were a few minor website issues which I will discuss later but, overall it was a vast improvement over what I went through just a year ago. As expected, the price was higher than last year (it’s higher every year, nothing new).
Over the past few years I have had insurance problems. I left my previous employer and their group insurance plan but purchased individual insurance from the same carrier according to COBRA rules — other individual insurance choices were very expensive. After 18 months COBRA came to an end and so did my insurance. Along the way I moved to a different state. So, I had to get new insurance in a new state. I quickly learned insurance companies require payment of the first month premium before they would would consider an application (or tell you a firm price), a definite deterrent to applying for too many alternatives.
I applied to 2 insurance companies and dutifully filled out the 15 page health questionnaire for each. One company, the affiliate of my original insurance company, immediately rejected my application, no questions asked. I suddenly realized I had been designated persona non grata within that national carrier without even knowing it — the possibility of insurance with them had been cancelled. Too old, too many claims, who knows? They advised I contact a state program for people in my situation (increased risk so let the state take the case!)
The other company requested a letter from my doctor and after some anxious weeks they approved my insurance (for which I will always be grateful).
Now, a year later, my new insurance company sent me a letter stating that all their policies were being revised to comply with the new insurance rules. They promised to let me continue as a customer with a new policy but, the current policy was cancelled. Not again!
I fired up my computer and logged on to the insurance exchange. There were four insurance company choices. Each insurance company had a quality rating 1 to 5 stars and a list of prices and benefits. Thankfully, my current insurance company had 5 quality stars and was also the lowest priced. I noticed the original insurance company that gave me the lightning rejection last year now wants my business — sorry big buddy, your application is rejected by me!
The information I had to enter was minimal. The only intrusive information required was whether I smoked (heaven forbid) and my race. But, compared to the questions last year this was a piece of cake. Last year it took me 6 hours to get through all the questions, now the whole process took only an hour. Last year I felt like every question was intended to disqualify me or find some evidence of a preexisting condition. This year the pressure was off.
I added the insurance to my “CART” and checked out. I must pay the first month premium, but not right now. Finally, there was the “DONE” button which was a nice touch.
As I mentioned initially, there are a few website issues. On several pages the prompt to enter information overlaps with the actual information field. One page opens at the bottom not showing missing information at the top — when submit is clicked the site says information is missing — I scroll up and fill in the blanks. Finally, the system has difficulty finding my current provider’s name — only by using “ADVANCED SEARCH” is it successful.
Overall, I am very satisfied with the experience. I suppose people who have not applied for insurance in the past few years will fail to realize what a huge mess we had. Health insurance cost needs to come down — fodder for more blogs!
President Obama vs. Republican Congress. Another grudge match, the sweaty pugilists in the corners, puffs of smoke from the cigars in the front row, the referee holding the mike, saying it’s the 8th round, the clang of the bell, the jabs, the left hook, bam – a hard right to the teeth, finally the round ends with a flurry of punches under the belt. We now interrupt the show for an important announcement.
HEALTH CARE IS NOT A CONTEST. We are not in a reality show, this is real life. The consequences are life and death. Why is there an argument or a fight?
The sky-box view. Look down at the basic arguments of the two sides:
- Obama — health care is a right
- Republican congress — health care is not a right
- Both agree — health care costs too much
The punches and counter punches.
Punch: The southern US has poor health care
Counter: Not our problem, don’t fix it with our money
Punch: Insurance companies are unethical
Counter: They are just businesses trying to make a profit
Punch: Primary care is better and more efficient
Counter: The market determines what is better or more efficient
Punch: Everybody should have access to health care
Counter: Only those who have money should have access
Punch: If everybody has insurance the system would be more fair
Counter: Don’t tell me to buy insurance, I will do what I want.
Punch: Raise taxes to pay for the uninsured
Counter: We can’t afford higher taxes
Punch: We already pay enough to provide good health care for everybody
Counter: We don’t want regulations. Some of us get great health care already
Punch: U.S. health care only ranks 30th in the world
Counter: Poverty and old age are the fault of individuals, don’t count them
Punch: We need government oversight of health care quality
Counter: That’s what lawyers are for
Punch: Women need care for female health problems
Counter: What is good enough for men is good enough for women
Punch: The constitution gives the right to life, liberty and the pursuit of happiness. You can’t have any of those things without being healthy.
Counter: The Constitution says nothing about a right to health care.
Punch: All this fighting makes me forget about poor health care quality and high cost
Counter: Me too.
How much extra are you willing to pay to continue to see your current primary care provider? $100 per visit? $20 per visit, or $2 per visit? That’s an individual decision. But, insurance industry studies show an average person in a health plan would change primary care providers if they had to pay more than $2 extra.
This is one of those dichotomies where people rate choice of providers very highly but in practice are not willing to pay more than about $2 to pick one provider over another. Doctors uniformly place a much higher value on the doctor-patient relationship than patients themselves.
However, to paint the picture with a large brush leaves out details. Patients who have primary care providers that manage chronic illness like diabetes, asthma or migraine headaches are much more willing to pay higher co-pays to maintain that relationship. Sometimes the relationship with a specialist is worth more to patients, but not always, because of a prevailing notion specialists are more alike than primary care providers.
The $2 statistic also includes the huge number of people who do not see a health care provider regularly — they just go to a clinic when a problem arises. In fact, they just want to be seen quickly, the name of the provider is not important.
Over the past 10 years employers have changed insurance carriers on average every 3 years. A change in insurance often forces people to change providers in order to stay “in-panel” and avoid high out of pocket costs. Anna Wilde Mathews’ article “Health Plans Limit Choice of Doctors” appeared in the Wall Street Journal today (8/15/13). She suggests the Affordable Care Act causes patients to change health care providers, an assertion that has no relevance, since that’s how our current system works! Not to say this is good — in fact, forcing patients with chronic illnesses to change providers borders on unethical business behavior.
Conclusion: rather than whine about the Affordable Care Act we need reasonable legislation to improve US healthcare, NOT legislation to return to something worse. Businesses should not have to change health plans so frequently. We need more large high functioning health plans (like Kaiser Permanente and a few others) so businesses don’t feel the need to change insurance carriers so patients can keep the health care providers they like.
According to Louise Radnofsky of the Wall Street Journal 7/1/13 “Insurance Costs Set for a Jolt“. Should this really come as a surprise?
No surprise indeed, because very little has been done to reduce health care costs. The ACA has 2 important financial provisions:
- Everyone must purchase insurance
- Insurance companies can’t cherry pick healthy people and dump the rest on public institutions.
The rise in total cost of US health care will continue but those who pay for it will change. The bizarre system the US now has which forces hospitals to care for the uninsured by cost-shifting to private insurance will stop. The cessation of cost-shifting will make costs more transparent but not smaller.
The problem is in the transition from one method of finance to another. As the transition proceeds hospitals get a windfall profit, insurance companies raise rates due to uncertainty but score a profit with so many new policies, premiums rise for many, and taxes go up for some. Eventually, the system finds a new equilibrium.
Sadly, Congress has been paralyzed by partisan issues so no improvements to the ACA have been made and no actions taken to make health care more efficient. Other countries with health systems seem to steer the ship of healthcare but the US can’t seem to disengage the autopilot.
It seems likely that each State and even some large cities will need to act without help from the federal government. We need ACOs to reduce cost and States could help that system grow.
That’s my view, what’s yours?