Archive for category Insurance Exchange

UnitedHealth, Aetna & Humana — exit exchanges

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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.

Insurance company UnitedHealth Aetna Humana
Ticker UNH AET HUM
2015 Revenue (Billions) $176.10 $61.65 $54.53
Operating Margin 6.61% 8.18% 4.17%
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.

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Insurance CEO Paid $66,000,000 — for what?

hatinringThe 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.

 

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The Uninsured — the failing South

thesouth 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:uninsured by region kumkuotThe 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.

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The Insurance Exchange Worked!

PickACardI 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!

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