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A Midsummer Wonk’s Dream

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Welcome to the Midsummer Health Wonk Review!  It’s always a pleasure to host, and this edition actually isn’t a Shakespeare theme, but it is jam-packed with excellent articles from some of the best writers in the healthcare blog world.  The HWR had a break before this edition and will have a hiatus after this one too. We’re starting things off with a few articles that help to shed light on some aspects of health care reform that should be straight-forward but sometimes get a bit convoluted with political rhetoric.  Then we’ve got several posts about corruption in healthcare and healthcare policy, and lots of posts that provide contrasting and well-reasoned viewpoints on healthcare reform and healthcare in general.  We’ll keep things cool with some winter and spring pictures we took around us here in Northern Colorado.  Enjoy!

Colorado mountains near Fort CollinsIn an excellent piece debunking popular “wisdom” regarding immigrants and healthcare, Joe Paduda of Managed Care Matters explains that when it comes to the Medicare Trust Fund, immigrants put in a lot more than they take out:  In 2009, immigrants paid in 14.7% of trust fund contributions but only accounted for 7.9% of its spending, with a net surplus of almost $14 billion.  US-born people accounted for a deficit of almost $31 billion in the Medicare Trust Fund that same year.  This appears to be a long-term trend:  From 2002 to 2009, immigrants contributed $115.2 billion more to the Medicare Trust Fund than they received in Medicare benefits.  Joe goes on to explain the details and warn those who rally behind strict immigration reform that they may want to rethink their position.  Our Medicare Trust Fund would be in a lot worse shape without the immigrant population.

And if you’re curious about the implementation track for the ACA (and understandably confused by the constant talk of repeal, delay, replace, etc. that we keep hearing from some politicians) Linda Bergthold has what I consider to be a straight-forward and factual review of the situation.  To sum it up, she’s predicting that the employer mandate will go into effect in 2015, as currently scheduled (following a one-year delay, but not a repeal), and that the individual mandate will be implemented in 2014, as planned.  And while some states that delayed the creation of an exchange marketplace will likely have a tougher time getting everything up and running by 2014, the exchanges will be operational next year.  I imagine there will be some bumps in the road as the ACA is fully implemented over the next few years.  But we can work on ironing those out as we go – there’s no need to start from scratch.

Although the exchanges are likely to be successful in the long run, it won’t be without significant effort on the part of the people running them.  At Health Affairs Blog, Barbara Markham Smith and Jack Meyer explain their recommendations for strategies that can help the exchanges be successful both out of the gates and for the long haul.  They discuss pricing (don’t make it too high!) as well as communication/advertising programs that need to be unified, clear, concise and nation-wide in order to generate awareness and interest in as many people as possible.  Baby pine tree in snow(Unfortunately, there’s a significant portion of the country’s leadership who seem to want the exchanges to fail – even to the detriment of the American people – and are content to spread mis-information about the entire law.  This is a considerable hurdle that the exchanges will have to overcome.)  Barbara and Jack recommend a temporary respite from the tax reconciliation that will be done to determine whether a person or family that received a subsidy is required to pay back a portion of it due to increased income compared with the prior year.  And they also call for fostering increased competition and CO-OP creation in the states have not yet done so.  All in all, pretty solid ideas for success in the exchanges and policy-makers would be wise to take heed.

I think of Dr. Roy Poses as the healthcare blog world whistleblower – he can always be counted on to expose nefarious acts in the healthcare industry, and Health Care Renewal is a must-read blog.  Here is his take on the recent Transparency International poll that found 43% of US respondents believe that the US healthcare system is corrupt, and that 64% believe that the government is run by big money and special interests.  Roy notes that unfortunately, most of the media coverage of the Transparency International poll has focused on world-wide data and/or specifics from far-away lands.  Instead of focusing on our own serious problems with corruption in healthcare, it seems that a lot of media outlets (keep in mind that media is sometimes beholden to special interests too…) prefer to present the problem as something that happens in other countries as opposed to something that we need to work on here in the US.

Continuing with the corruption theme, Eric Turkewitz of the NY Personal Injury Law Blog shares a multi-part series about Dr. Katz, who has been rebuked for lying on the stand in a personal injury trial that resulted in a mistrial because of the doctor’s actions.  Central to the issue is the practice of independent medical exams (with the word “independent” being very loosely used in this case) conducted by doctors who are hired by insurance companies when they are defending personal injury cases.  In the case that Eric is writing about, the doctor makes a 7 figure income creek in Fort Collins Coloradofrom his medical-legal practice, but in one case that has been made public, he grossly over-stated the amount of time he spent with a patient (he claimed it was 10 – 20 minutes, but a secretly-made video recording of the visit showed that it was under two minutes).  Eric has looked at additional data and found that the average length of Dr. Katz’s exams was around 4 minutes.  Additional details on this story are here.  Wow.  The doctor was obviously concerned first and foremost with money, but the insurance companies who hired him were likely not doing due diligence to make sure that he was providing accurate data.  They may have been more concerned with finding a doctor who would tell them what they wanted to hear rather than the actual details of the patients’ medical cases.  Sad all around, but sadder still is the fact that it’s probably not all that unusual.

And for a little more on the cronyism/corruption topic (maybe those corruption figures Roy mentioned from the Transparency International poll were skewed a bit too low?), Hank Stern of InsureBlog writes about agencies and individuals who have been involved with the Obama Administration for some time, and are now finding themselves in lucrative financial and/or influential positions as the ACA gets implemented.  In other words, business as usual in the government.  Government appointments, grants, etc. are often awarded this way (ie, appearing to be rewards for donations and/or loyalty), in every administration, regardless of which party is in power.  There’s ample room for opponents to cry foul, but it also has to be pointed out that presidents and secretaries and others in power have to be able to select people they trust for top leadership positions.  And trust is earned over time.  There’s a fine line between selecting the right candidate for the job, having that person be someone trusted by the top officials, and avoiding cronyism.  I don’t know what the right answer is, but it’s easy to see how the appointments and grants and leadership roles being handed out with the ACA could be construed as rewards for political support and loyalty.

At Health Beat, Maggie Mahar writes a thoughtful and thorough review of Miriam Zoll’s Cracked Open: Liberty, Fertility and the Pursuit of High Tech Babies.  After reading Maggie’s article, I’m eager to read the book itself (Maggie leaves a bit of a cliff hanger at the end…).  Assisted reproductive technology is certainly a blessing to many families.  But it can also be fraught with problems that stem from both overly-optimistic expectations on the part of patients (and society in general), over-promising on the part of providers, and a medical field that is largely unregulated and often not covered by health insurance policies.

At Health Business Blog, David Williams explains his skepticism about DealWell, a new Priceline-style website for healthcare services.  I am very much in favor of increasing transparency in healthcare pricing and moving away from the proprietary pricing system we have now, where even the most dedicated patient “shoppers” can find it impossible to obtain real healthcare prices before having a procedure.  And to that end, I love thePut a bird on it! idea of a website where people can bid on the care they need and providers can accept or decline the offer depending on their current workload and the payment offered.  But David makes some excellent points about the downsides:  not being integrated with health insurance is a big one, especially since nearly everyone will have to have health insurance starting in 2014 (even if a procedure is lower than your deductible, it makes sense to stay in network and have the amount you pay be credited towards your deductible, in case you need additional care later in the year).  Although DealWell might be a good option for people looking for one-time services that aren’t covered by health insurance (such a LASIK or a dental implant, for example), it’s probably not going to be the next big thing in healthcare price transparency.

Over at Disease Management Care Blog, Jaan Sidorov takes a closer look at the glowing picture painted by CMS regarding ACO pilot programs, digs a little deeper, and gives us a slightly less rosy view of the results.  And there’s even a T-Rex analogy, to keep things even more interesting.  Jaan points out that the ACOs that didn’t meet the pilot program goals are likely feeling the sting of losing millions of dollars, since the initial investment costs are not cheap.  Although 9 of the 32 pilot ACO providers have said that they want to leave the program, I wonder if results will be better as time goes by, mitigating the initial investment costs somewhat?  Stay tuned.

Julie Ferguson of Workers’ Comp Insider writes about the July 6th 777 crash at SFO, detailing how the flight attendants did an excellent job of putting their emergency training into practice, saving lives in the process.  Julie notes that while it’s easy to shrug off emergency plans simply because we rarely come face-to-face with an emergency, such preparedness can mean the difference between life and death.  Does your business have a solid plan in place to deal with emergencies?  Has everyone at the business been trained on it?  How fast can your building be evacuated if necessary?  All good things to think about.

Writing at Health Access Blog, Anthony Wright discusses the one-year delay of the employer mandate portion of the ACA that will require employers with more than 50 employees to provide health insurance to eligible full-time workers.  Anthony makes some very important points:  the delay doesn’t impact anyone’s eligibility for health insurance and/or subsidies.  People who would have been offered health insurance from an sledding in Coloradoemployer with the employer mandate in place will still be able to get coverage through their state’s exchange – and if they make up to 400% of the federal poverty level, they’ll qualify for subsidies to help pay for it.  In addition, the vast majority of large employers in the US already offer health insurance to their employees and have historically done so without a mandate requiring it.  It’s unlikely that a large amount of those employers will suddenly drop their coverage in 2014.  But Anthony goes on to note that if the delay were extended for additional years, it could begin to destabilize the financial foundation of the ACA and employers might begin to shift more workers onto exchange plans, relying on tax-funded subsidies to foot a portion of the bill.

The Healthcare Economist, aka Jason Shafrin, brings us a great summary of health insurance in China over the past half century.  Until the end of the 1970s, there were three main health insurance systems in China that covered nearly everyone.  But the wheels started to come off after that; by 1998 almost half of the urban population had no health insurance, and by 2003, 95% of the rural population in China was uninsured.  In the last ten years, China has tackled health care reform in order to try to remedy the problem.  While plenty of progress has been made, there is still a long way to go.

Jared Rhoads has written a review of The Autistic Brain by Temple Grandin.  His review is a good read, and the book looks like it is as well.  Professor Grandin teaches at Colorado State University – my alma mater –  and consults for the livestock industry as well as being a bestselling author.   She’s an inspiring and accomplished person even without taking into account her own autism.  Her book combines her personal Temple Grandin professor at CSU - Colorado State Universityexperiences with the latest that science has to offer us with regards to autism.  If you’re interested in autism, Jared’s summary is that this book is a good place to start learning more.  I’m adding it to my list of books to read, so thanks for the tip Jared!

John Goodman lays out some of the results of the ACA thus far (fair enough, but keep in mind that most of the law hasn’t been implemented yet).  He details some positives and negatives, both expected and unintended, although his overall take is that the ACA is not a great solution.  Strongly worded opinions about the ACA will likely meet with a round of applause from one side of the political spectrum, and boos from the other side.  But regardless of your position, I would say that it’s tough to argue with John’s point about high deductible, consumer-driven health plans.  I think he’s correct in saying that they’re probably going to be quite popular starting in 2014, when they will be among the least-expensive plans available.  This is probably particularly true among people who won’t qualify for subsidies.

That’s it for this mid-summer edition of the Health Wonk Review.  Many thanks to Julie and Joe for keeping such a great blog carnival going all these years!  The HWR now has a summer hiatus. Don’t miss the next edition on August 15th, which will be hosted by David Williams at Health Business Blog.

Apples And Oranges: Employer Mandate And Individual Mandate

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On the heels of last week’s employer mandate delay and a few other smaller – but not insignificant – delays in ACA implementation, it’s not surprising to see that Republicans in Congress are pushing hard for a delay of the individual mandate too, with Speaker Boehner echoing many of his conservative colleagues’ position with his thoughts on the matter: “Is it fair for the president of the United States to give American businesses an exemption from his health care law’s mandates without giving the same exemption to the rest of America? Hell no, it’s not fair.“

It’s anyone’s guess what will happen in Congress between now and the end of the year.  States like Colorado that opted to run their own exchanges and got going on the process soon after the ACA passed in 2010 are likely to be less impacted by relaxed federal guidelines, since they’re probably exceeding minimum standards already.  Patty Fontneau, CEO of Connect for Health Colorado (the Colorado exchange) noted in a meeting this week that the delay of the employer mandate doesn’t change anything for the Colorado exchange, since the exchange will be offering health insurance for individuals and small businesses, while the employer mandate focuses on businesses with more than 50 employees.   If anything, the delay would mean that that Connect for Health Colorado might have more eligible enrollees, since some people who Mandate for Individuals to purchase health insurance is different than the employer mandatework for large employers might still be on their own to purchase individual health insurance next year instead of getting it through their employers (as might have been the case if the employer mandate had not been pushed back a year).

Adding to the confusion is the Senate bill that was introduced this spring to officially define full time as 40 hours a week (S 701, Forty Hours is Full Time Act of 2013).  Since the employer mandate for large businesses to provide health insurance to their employees only applies to full-time employees, the definition of full time is critical to the discussion.  While most of the public generally accepts the idea that full time is 40 hours a week (although my nurse friends who work three 12 hour shifts per week most definitely consider their job to be full time…), the ACA is worded so that employees working over 30 hours per week (assuming there are at least 50 total employees) would have to be provided with health insurance in order for the employer to avoid a fine.  Senate Bill 701 has received a lot of attention in the media, but Govtrack gives it a 0% chance of being enacted, so it appears that the 30 hour rule in the ACA will likely still be in place when the employer mandate goes into effect in 2015.

Getting back to the issue of the individual mandate, there are a few […]

Subsidies Are Key To Limiting Rate Shock for Coverage in Exchanges

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[…] because it provides premiums for bronze-level plans as well as the standard silver-level (subsidies are calculated based on premiums for silver plans, and premiums that have been discussed in the media thus far have been almost entirely for silver plans).  Healthy individuals and families who currently opt for higher deductible plans will be the ones who see the biggest change in premiums, since the ACA generally shifts plans towards richer benefits.  So while benefits will be greater in the future, premiums will be too – and families who would rather have lower premiums and higher out-of-pocket exposure will be herded onto higher-priced, richer-benefit plans.  Bronze-level plans will be their obvious choice, although even those planpremiums for bronze-level plans in Colorado health insurance exchanges will have richer benefits than many of the high deductible plans that are currently available in the individual market.  Families and individuals who prefer richer benefits already will find that their premium changes are not as dramatic, since they will likely end up with an ACA-compliant plan that is more similar in design to what they currently buy (they will be more likely to opt for silver or gold plans).

I’m using a family of four modeled after my own family so that I can compare premiums with what we pay now.  Our current plan is $403/month for two adults (mid/late 30s) and two small children.  That’s $4836 per year, and we spend an additional $540 per year on an accident supplement that would cover most of our out-of-pocket exposure if we were to have a claim because of an injury.

According to the KFF subsidy calculator, a bronze plan for our family would cost $9330/year – almost double what we pay now.  The benefits would be richer than what we have now (more in line with HSA-qualified plans, which we’ve opted not to have anymore because of their higher cost), but the premiums will be significantly higher too.  Of course we have to assume that even if the ACA had not passed, our premiums would continue to increase each year.  Over the last several years, premiums in the individual market in Colorado have increased for most of our clients by double digits most years, so we can safely assume that we’d probably have had at least a $500/year premium increase next year anyway.  But that’s not even close to the 93% increase to the bronze level premium for an ACA-compliant plan.

Those numbers don’t take subsidies into account though.  The $9330 is the base price for a bronze plan for a family similar to ours.  The actual amount the family will pay in premiums depends entirely on the family’s modified adjusted gross income (MAGI).  Here are the premium amounts that the family would pay for a bronze plan at various income levels, assuming that they purchase their coverage through their state’s exchange and take advantage of the available subsidy:

  • $40,000 annual income:  Bronze plan premium = $38/year (subsidy pays $9292)
  • $50,000 annual income:  Bronze plan premium = $1438/year (subsidy pays $7892)
  • $60,000 annual income:  Bronze plan premium = $2986/year (subsidy pays $6344)
  • $70,000 annual income:  Bronze plan premium = $4667/year (subsidy pays $4663)
  • $80,000 annual income:  Bronze plan premium = $5673/year (subsidy pays $3657)
  • $90,000 annual income:  Bronze plan premium = $6623/year (subsidy pays $2707)
  • $95,000 annual income (and above):  Bronze plan premium = $9330/year, with no subsidy.

The estimated median income for FY 2013 for four-person households in the US is $74,964 (note that this is higher than the overall estimated median household income, because it’s specific to four-person households, which often include two working parents and people who are further along in their careers, as opposed to people who have just finished school and entered the workforce for the first time).  And keep in mind the math[…]

Many Traditional Plans Are Currently Less Expensive Than HDHPs

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We used to be just as impressed with HDHPs and HSAs, but – at least in Colorado – they have lost some of their appeal over the last few years because HDHPs aren’t as price competitive as they once were.  Our own family had an HDHP and HSA for several years, but we switched a couple years ago to a new Many Traditional Plans are less expensive than HSA qualified HDHPsplan that is not HSA-qualified (we’re still allowed to have our HSA, and we are able to withdraw money from it if we need to pay medical expenses.  But we can’t contribute any additional money to it unless we switch back to an HSA-qualified HDHP).  The reason we switched was the premium.  Our HSA-qualified plan was going up to $570/month, and the new plan we chose was $311/month (it’s now right around $400).  HSA-qualified plans have one joint deductible for the whole family, and expenses like prescriptions are rolled into that unified deductible.  That’s in contrast to the type of plan we have now, with a maximum out of pocket that allows for two family members to meet individual deductible and coinsurance limits (basically doubling the potential – although unlikely – out of pocket exposure).  Our current plan also follows the recent trend of incorporating a separate prescription deductible that must be met before prescriptions are covered with a traditional copay.  This type of plan has lesser benefits than an HDHP, and thus the premiums tend to be lower as well.

Several years ago, HDHPs were very popular among our clients in Colorado.  But over the last few years, they’ve become much less popular, mainly because there are so many less-expensive health insurance options on the market now.  HDHPs haven’t really changed in terms of design, but their premiums have climbed to reflect the rising cost of health care.  In order to provide more affordable options, health insurance carriers have designed new plans with increased out-of-pocket exposure and lower premiums.  Because HDHPs are relatively constrained by regulations regarding their structure, they haven’t been able to remain at the low end of the price scale in the health insurance market.  In fact, many HDHP plan designs are now […]

Do You Need Critical Illness Insurance?

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When my father was 54, he was diagnosed with an auto immune disease that struck quickly and in a devastating fashion.  He lost his kidneys to the disease, and spent the next 11 years on dialysis until he received a kidney transplant last summer.  Thankfully, he had long-term disability insurance through his employer, along with… Read more about Do You Need Critical Illness Insurance?

Mixed Messages In WSJ About The Independent Payment Advisory Board – IPAB

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“Signs of ObamaCare’s failings mount daily, including soaring insurance costs, looming provider shortages and inadequate insurance exchanges.”  That’s the lead-in for a recent Wall Street Journal article about the Independent Payment Advisory Board (IPAB), written by David B. Rivkin Jr. and Elizabeth P. Foley.  Regardless of how much factual information is presented in the remainder of the article, the authors show a strong bias against the ACA right from the get-go.  The reader is warned from the start that ACA provisions will no doubt be disparaged in the article, and it makes one wonder how much of the article is factual and how much is spin.

It is an interesting article, as long as you read it with a clear understanding of the authors’ biases.  It does seem a bit hyped and exaggerated in terms of the potential problems and power of the IPAB.  After reading the WSJ article, one could start to imagine the IPAB as a bunch of Mussolinis ACA Independent Payment Advisory Board - IPABsitting around a conference table, gleefully cutting payments to Medicare providers and hamstringing hospitals with higher-than-average costs.  I wrote about the IPAB last fall, in a fact-checking post following the presidential debate in Denver.  I don’t think it does our country (or our health care system) any favors to paint a picture of an uncontrolled, unaccountable bunch of government bureaucrats making decisions about medical care.  Why not focus instead on how the IPAB could be successful in reforming Medicare so that we no longer do unnecessary (and potentially harmful) screening tests?  There’s still debate over whether regional variation in Medicare spending is justified or not (the answer is probably somewhere in the middle), and that could be another place for the IPAB to focus their attention.  There are many aspects of Medicare spending where the IPAB’s intervention is […]

Subsidy Calculations Not As Simple As They Seem

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If you’re confused about the subsidies for health insurance starting in the exchanges in 2014, you’re probably not alone.  Although the basic math is quite simple in terms of the maximum amount a family or individual will have to pay based on their income if they earn less than 400% of federal poverty level, it’s still tough to pin down specifics in terms of who will end up getting subsidies, especially for people who are right on the border of the income cut-off.

There have been subsidy calculators online for quite some time.  The first one we found was from the Kaiser Family Foundation, but numerous others have appeared recently.  Connect for Health Colorado, the Colorado exchange, has a calculator on its website, but their calculations aren’t calculatin subsidies for health insurance exchangebased on Colorado data yet.  On the contrary, the calculator includes language explaining that “The premiums in this calculator reflect national estimates from the Congressional Budget Office for silver plans, adjusted for premium inflation and age rating.”  So for the time being anyway, you can’t use the Connect for Health Colorado calculator to generate Colorado-specific subsidy numbers.

That might change after the Division of Insurance releases official rates at the end of July.  Part of the confusion around rates and subsidies stems from the fact that rates are not yet finalized.  There’s still a lot of number-crunching (and maybe some “do-overs” from carriers) going on, and July 31 has been set as the date for final numbers to be released in Colorado.

For now, it appears that most subsidy calculators are using generalized national average data, estimated by the CBO.  But the numbers turn out differently depending on what calculator you use.  Let’s consider a family of four, with an income right around the cut-off for subsidy qualification.  We’ll do a calculation based on an income of $94,000 and another using $94,500 (which puts them just above the subsidy qualification limit of 400% of FPL).  For two parents (age 37 and 35) and two young children with an annual household income of $94,000, the Kaiser Family Foundation calculator estimates a total subsidy of […]

Guaranteed Issue Health Insurance Increases Entrepreneurship

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Removing the pre-existing condition barrier to entry in the individual health insurance market is a good way to make people more likely to take the leap into self-employment instead of feeling tied to their guaranteed-issue group health insurance

[caption id="attachment_5992" align="alignleft" width="169"]Guaranteed Issue Health Insurance Increases Entrepreneurship A local Fort Collins business – New Belgium Brewing[/caption]

policy.  There’s definitely room to debate the issue on an individual basis.  Some people, especially younger, healthy people who have always qualified for underwritten health insurance and who earn enough money to be above the subsidy cutoff (about $46,000 for an individual and $94,000 for a family of four), might find themselves financially worse off under Obamacare (although they will likely have better quality health insurance going forward, which could improve their financial situation if they ever needed to use it).  But from the perspective of benefiting as many people as possible, the new rules regarding individual health insurance are good ones.  Most young people (the population hardest hit by rate hikes related to making individual policies guaranteed issue) will qualify for subsidies to lower their out-of-pocket spending on premiums.  And nobody will have to deal with the frustration of not being able to qualify for health insurance outside of an employer group plan.  A few years ago, in states that didn’t have high risk pools available, people who couldn’t qualify for […]

Clearing Up Confusion Around The Health Insurance Provider Fee

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One of the funding mechanisms for the health insurance exchanges is the implementation of the health insurer fee that will go into effect in 2014.  I’ve seen this referred to as a health insurance provider fee (a bit confusing as it might lead people to believe that the fee is imposed on medical providers rather than insurers), a health insurance industry fee, and an ACA health insurance carrier fee, among others.  But whatever you want to ACA health insurance provider or carrier fee to fund exchangescall it, the fee is an amount that will be collected from health insurance carriers starting next year, and the funds will be used to help pay for the state and federal health insurance exchanges.

The fee will generate $8 billion in 2014, and will increase each year up to $14.3 billion in 2018.  After that, it will increase annually in line with health insurance premiums.  Insurance carriers will be responsible for remitting their share of the fee, which is calculated based on the insurer’s total collected premiums from the prior year.

As is generally the case with any new fees or mandates that increase costs for insurance companies, this fee will be passed on to companies and individuals who purchase policies.  However, it won’t necessarily be easy to determine how much the fee is impacting your health insurance premiums, since many carriers are expected to just roll the fee into their total premiums.

In Colorado, Rocky Mountain Health Plans has stated that they will be adding the health insurance provider fee as a separate line item on their bills in an effort to be as transparent as possible.  They will begin collecting the fee next month (July 2013) in order to spread the fee over a longer time horizon and thus lessen the impact on next year’s premiums.  Carriers can choose to wait to begin collecting the fee, but the total amount collected will be the same regardless:  Roughly 2% – 2.5% of total premiums in 2014, and 3% – 4% of total premiums in future years.  In the individual market, RMHP will be Rocky Mountain Health Plans HMO Coloradocollecting $4.12 per member per month, for the rest of 2013.  If you have a SOLO plan with RMHP and notice a line item on your bill labeled “Health Insurance Providers Fee”, now you’ll know what it is (be aware that the total collected is per member per month, so if you have a family of five on a RMHP policy, your bill will reflect a charge of $20.60/month starting in July).  If you have coverage with another carrier, you’ll still be paying the fee (some carriers […]

Networks And Carriers Are Part Of The Big Picture With Exchanges

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[…] Aetna, United and Cigna are all absent from the CA exchange, and Dan looks into several reasons why some of the bigger carriers might have opted not to sell in the exchange on day one, and why some large provider networks are not going to be covered by plans sold in that state’s exchange.

Connect for Health Colorado Exchange Marketplace and networksHere in Colorado, Aetna stopped selling individual policies a couple years ago, so we weren’t expecting them to be in the state’s exchange, Connect for Health Colorado.  United Healthcare has been a mainstay in the Colorado individual market, and while they submitted numerous plans to the DOI for small group products, they are all to be sold outside of the exchange and there don’t appear to be any individual plans in their new lineup.  Cigna, however, will be selling individual plans both inside and outside of the exchange in Colorado.

We’ve heard from carrier representatives – who are familiar with multiple state exchanges – that Connect for Health Colorado has been particularly great to work with, and that is no doubt part of the reason Colorado will have a large number of carriers and policy options available within the exchange.  We’re happy to be in a state that has been actively working on healthcare reform for several years, and that moved quickly to begin building an exchange and implementing the ACA as soon as it was passed.

Comparing Individual Marketplace Premiums to Small Group is Disingenuous

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After a lot of confusion late last month regarding 2014 health insurance rates in Colorado and information about which carriers would be offering policies in the exchange (Connect for Health Colorado), off the exchange, or both, a lot of the dust started to settle late last week and more information has become available both in terms of rates (although they won’t be finalized for another couple months) and carriers.  The Colorado Division of Insurance has released a full list of the carriers that submitted rates for next year, including details regarding whether each plan will be for individual or small group, and sold on exchange, off exchange, or both.  Detailed rate information is available from some carriers on the Colorado Division of Insurance website, although there will likely be a lot of change between now and October.

As soon as rate data started becoming available in a few states, both supporters and opponents of the ACA jumped on the info and used it to paint two very different pictures.  HealthBeat’s Maggie Mahar (who has astutely and accurately rebuked a lot of political spin and fear-mongering from opponents of the ACA ever since it was signed into law) called out Avik Roy for his critical view of the new rates, noting that he was comparing “apples to rotten apples” in his Forbes article about rate shock.  But Roy did make a very good point is his article, which was based on the release of rates in CA.  He noted that

“The rates submitted to Covered California for the 2014 individual market,” the state said in a press release, “ranged from two percent above to 29 percent below the 2013 average premium for small employer plans in California’s most populous regions.”

That’s the sentence that led to all of the triumphant commentary from the left. “This is a home run for consumers in every region of California,” exulted Peter Lee.

Comparing Individual Marketplace Premiums to Small Group is DisingenuousRoy went on to point out the key words there, which might have gone unnoticed by people who aren’t in the health insurance industry or paying very close attention to the details:  The rates for the new individual market are being compared to the existing rates in the small group market.

It is not at all surprising that the new individual rates are looking similar to existing small group rates.  Earlier this year I wrote about how difficult it was going to be for the individual market to be priced significantly lower than the small group market once medical underwriting was no longer a factor.

But I’m not sure that most people (other than business owners) are completely aware of how high small group health insurance premiums are.  As we’ve noted many times, people who have employer-based health insurance are often insulated from the true cost of the coverage, thanks to the fact that at least a portion of the premium is paid by the employer.  Some people started […]

Doctors Moving Away From Independent Practice – What That Means For Patients

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A recent thought-provoking article in the Fort Collins Coloradoan delves into the future of independent medical practices and the pros and cons of hospital mergers and “closed” healthcare systems like Kaiser Permanente (Kaiser opened for business in northern Colorado last fall) moving into the area.  The article notes that the split between employed physicians and… Read more about Doctors Moving Away From Independent Practice – What That Means For Patients

No Colorado Health Insurance Rate Information Yet

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May 15th was the deadline for health insurance carriers in Colorado to submit rates for new plans that will be sold in the individual and small group markets in Colorado, both in and outside of the exchange/marketplace (Connect for Health Colorado).  Much has been said about today – May 22nd – being the date when those rates are available to the public, and there has been a lot of anticipation about getting to find out what health insurance premiums are going to look like next year in Colorado.  We know that in the Pacific Northwest, rates have come in lower than expected, attributed partially to the “heavy competition” in the WA and OR marketplaces (9 and 12 insurers, respectively).  Colorado has even more competition than that, with 19 different carriers submitting rates for plans to be sold through Connect for Health Colorado and on the open market (I’ve seen other reports that say 17 carriers, but either way, it will be a robustly competitive market – just as we’ve always had in Colorado).

No Colorado Health Insurance Rate Information YetThere has been much speculation about what the new rates will look like.  9News did a piece last week that highlighted the concerns that rates – particularly in the individual market – could be much higher next year.  Over the last year or so, in talking with knowledgeable representatives from the various health insurance carriers (who are themselves talking with knowledgeable actuaries), we’ve heard predictions that range from rate decreases for older policy-holders to rates more than doubling for younger insureds… and just about everything in between.  So we are very curious to see how things look once the DOI releases rates.

Today’s the day that those rates are scheduled to be made public, but I doubt that things will be particularly clear anytime soon […]

ACA – We Need Solutions Instead Of Repeal Votes

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By now it’s probably not surprising to anyone to hear that the House voted – yet again – to repeal the ACA yesterday.  This is the 37th time in the last three years that they’ve voted to repeal and/or defund all or part of the law.  They are fully aware of the fact that their vote will – as usual – end with them, as it’s highly unlikely to get through the Senate.  But they continue to focus a rather significant portion of their (taxpayer funded) time on this issue.

It’s understandable that there are objections to the ACA.  To say otherwise is to be blind to some of the obvious problems that are inherent in the law.  We’ve written numerous posts in support of the ACA over the past few years, but we’ve also noted several concerns that we have, and I think ACA - We Need Solutions Instead Of Repeal Votesthey’re valid ones.  Premiums in the individual market might end up being higher after full ACA implementation for a lot of people who receive little or no subsidies (we’re expecting to see rates published by the end of this month for policies that will be sold in the Colorado health insurance exchange.  The deadline for carriers to file them was Wednesday).  New restrictions on age-banded rate ratios might end up making younger, healthier people (the ones who are most needed in the health insurance pool in order to stabilize premiums for older, sicker insureds) less likely to obtain coverage.  This problem might be exacerbated by a less-than-robust individual mandate, at least for the next year or two.  We’ve also wondered whether the exchanges will be capable of providing a high level of customer service, given the complexity of the enrollment process (assuming an applicant qualifies for subsidies) and the fact that many of the applicants will be applying for health insurance for the first time.  Will the exchanges have enough staff to rise to the customer service level provided by private industry, or will contacting a knowledgeable representative during the open enrollment period be on a par with getting a hold of a knowledgeable representative at the IRS between January and April?

The concerns that we have about the ACA are outweighed by the positives though:  More people with health insurance, guaranteed issue individual plans, better preventive care, and numerous[…]

Freedom Of Religion And Workers’ Comp In The Cav

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I’m sure a lot of people would have an opinion on this based on religious and/or business beliefs. Jon’s take on this situation is probably far more informed than the average person’s would be, given his knowledge of the workers’ comp system. I cannot imagine going without health insurance, or employees going without workers’ comp, but I recognize that my viewpoint is based on my own experiences in the secular business world – where money (and expensive healthcare) is very much a necessity. It will be interesting to see how this plays out in a Supreme Court appeal. Jon mentioned that there’s a lot of legal precedent in favor of religious exemptions from workers’ comp coverage, so maybe the court will side with the Hutterites. In terms of the unfair competitive advantage that the Hutterite workers have over secular contractors who are paying workers’ comp premiums, I would say that the small number of Hutterite laborers (when compared with the number of non-Hutterite laborers) could possibly be a reason for ruling in favor of the Hutterites: can they really present that much of an unfair business advantage with such a relatively small number of workers?

Comparing CEO Compensation in Various Healthcare Industries

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Joe Paduda of Managed Care Matters did an excellent job with the most recent Health Wonk Review – be sure to stop by his blog and check it out.  I thought this article from Dr. Roy Poses was especially interesting.  Writing at Health Care Renewal, Dr. Poses shines the spotlight on UnitedHealth Group’s CEO Stephen Hemsley’s oversized compensation.  Roy notes that while the increase in CEO compensation does mirror the company’s overall financial success of late, it must also be considered in light of the fact that the company has made some missteps in terms of fulfilling its stated mission to provide health care “at an affordable price” and “expand access to quality health care.”  Roy’s article cites several examples of allegedly unethical behavior, and concludes by noting that “Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.”

Comparing CEO Compensation in Healthcare - Health Insurance vs Pharmaceutical CompaniesI definitely do not disagree with Dr. Poses, and we’ve noted in the past that UnitedHealth Group has had issues with large executive compensation and backdating stock options (that was with a previous CEO, however).  But I do want to use this as an opportunity to remind our readers and clients that most health insurance companies have CEO compensation packages that are far lower.  Forbes compiled a list of the 498 highest-paid CEOs in 2012, and I scrolled through the first 150 on the list.  UnitedHealth Group is there on the first page, ranked number 8 (they’re also ranked number 31 in Fortune 500 total profits, so as Roy said, the CEO salary is at least in the same ballpark with the company’s financial performance).

But you have to click through several pages of the CEO compensation list to get to the next health insurance carrier.  Humana was the next one I found, ranked at […]

Balance Billing From Non-Network Providers Who Work At In-Network Facilities

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We recently heard from one of our clients who is dealing with a balance billing issue resulting from a NICU stay.  For her baby’s birth, she chose a large hospital in Denver that was on her Humana health insurance network.  Her OB/GYN was also on the Humana plan, and she figured she had all of her ducks in a row.  But complications necessitated an emergency transfer to the NICU, where her new baby was cared for by doctors who are contracted with the hospital, but are not part of the Humana network.

When patients are treated by out-of network providers, there’s no contractual obligation between the doctors and the health insurance carrier.  The patient will usually be responsible for a higher deductible when using a non-network provider (although this is not typically enforced for Balance Billing From Non-Network Providers Who Work At In-Network Facilitiesemergency care), but even after the deductible is met, the provider is not obligated to accept the “reasonable and customary” payment from the health insurance carrier.  The provider can choose to bill the patient the shortfall between what was originally billed and what was paid by insurance.

Our client has been balance billed over $5,000 by the NICU doctors.  Humana paid the doctors their in-network amounts for the NICU stay and counted it as an in-network expense (ie, no additional out-of-network deductible was charged) because it was an emergency situation.  But the doctors refused to accept the insurance reimbursement as payment in full, and billed the family for an additional $5,000+.  I suppose it could be worse – this family ended up with a $50,000 balance bill from their baby’s NICU stay.

But it could also be better.  People who are recovering from an illness or injury don’t need to also be finding out that an in-network facility where they were treated also has providers who are not […]

Colorado Health Insurance Exchange Won’t Be A Train Wreck

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When Max Baucus predicted that the implementation of key aspects of the ACA could be a “huge train wreck coming down“, his comments were met with a lot of “see, I told you so!” comments from the right, and some surprise from the left, given how instrumental Baucus was in drafting the legislation.  Now Harry Reid has stated that he agrees with Baucus.  Reid noted that there is still much work to be done, and that significant Colorado Health Insurance Exchange Won't Be A Train Wreckadditional funding is needed in order to make the remaining implementation of the ACA successful.  HHS Secretary Kathleen Sebelius pointed out that her requests for additional funding were rejected in a recent short-term funding plan, but she’s optimistic about the ACA implementation, saying “…we are on track to fully implement marketplaces in January 2014 and to be open for open enrollment.”

I would say that the job Sebelius has in front of her is a monumental one, no doubt made harder by the propagation of misinformation and outright lies (there are no death panels!).  In addition, a majority of the states opted to either have the federal government run their exchanges (26 states) or partner with the state on a joint exchange (7 states).  Only 17 states plus the District of Columbia have taken sole responsibility for running their own health insurance exchanges (Colorado is in this category).  So although HHS will likely be able to implement very similar exchanges in the 26 states where they will be fully responsible for running the exchange, making economies of scale work in their favor, the fact remains that they face a significant task: getting exchanges going in more than half the states, often in places where resistance to the ACA […]

Healthcare For Cultural Minorities In Colorado

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You probably already knew that a Caucasian in Colorado has a life expectancy of almost 80 years.  But did you know that an American Indian’s life expectancy is 45 years?  This article from the Colorado Health Foundation, written by Sandy Graham, is a must-read for anyone interested in healthcare for minorities, specifically American Indians.  The article focuses on the work that Marguerite Salazar is doing as Region VIII director of HHS, based in Denver (In addition to Colorado, Region VIII encompasses UT, WY, MT, SD and ND).  Prior to working with HHS, Healthcare For Cultural Minorities In Rural ColoradoSalazar was President and CEO of Valley-Wide Health Systems, a rural community-based healthcare program that served 40,000 people in Southern Colorado, including many migrant farm workers.

I particularly liked the focus on “culturally competent” healthcare – a concept that can be vital for the health of any minority group that doesn’t have the same heritage and traditions as the majority of healthcare providers in an area.  And I liked this description from the article of work that Salazar did at Valley-Wide:

“…she [Salazar] and her staff had to explain to non-Hispanic providers that, yes, this person could not afford care, but had a cell phone – because he had to be able to hear from the field boss when agricultural work was available. And yes, the family drove a new truck – because they needed dependable transportation to get to the next farm job and that was most likely all they owned.”

It’s a perfect anecdote for anyone who has ever been frustrated by the internet meme describing how a patient in the ER has a cell phone (with a fancy ring tone!) and various other bling – and is on Medicaid.  It seems to be circulated in an effort to show righteous indignation towards people who would dare to have anything more than a cardboard box and a blanket if they’re using “entitlements” to pay for things like food or healthcare.  Salazar’s understanding of the healthcare needs of low-income families and cultural minorities comes[…]

HWR – Private Public Health Insurance Conundrum, Sequestration Cuts and More

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The latest edition of the Health Wonk Review is over at InsureBlog – don’t miss it!  Two of my favorite posts in this edition come from Peggy Salvatore and Joe Paduda.  Peggy, writing at Healthcare Talent Transformation, brings us a trip down health insurance memory lane, comparing where we’ve been to where we’re headed.  She addresses the conundrum of maintaining private health insurance while also placing numerous government-style restrictions on the health insurance marketplace, both from a vendor and consumer standpoint.  Insurers will be Private Health Insurance with Government Regulationsrequired to accept all applicants and compress age-banded premiums into a 3:1 ratio, while consumers will have no choice but to purchase coverage.  There will be no more voluntary business arrangement on either side, and yet the plan is to continue to have health insurance be largely private.  Definitely some good food for thought in Peggy’s post.  I’m generally a fan of regulation, and especially when something as important as healthcare is on the line, I believe regulation is needed in order to advocate for the consumers.  But I’m as curious as everyone else to see how this health insurance experiment will look five years down the road.

Joe Paduda, from Managed Care Matters, wrote a piece about the real-life impacts of sequestration on healthcare.  Sequestration probably seems like an abstract concept to a lot of people, and appears to be used rather casually by politicians who aren’t likely to be directly impacted by many of the spending cuts.  But in case you were curious as to how healthcare sequestration spending cuts are stacking up, Joe’s article is an eye-opener.  One important thing to note is that government spending cuts disproportionately affect lower-income and older Americans.  People who rely on free and low-cost healthcare, Medicare and Medicaid beneficiaries, the uninsured, people who benefit from public health programs… these people – often the least able to withstand cuts – are the ones who feel the sequestration squeeze first.

Many thanks to Hank for hosting, and for all the excellent articles that were contributed.

The Impact Of the Colorado Sexual Orientation Non-Discrimination Regulation

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Last month, Colorado became the third state to prohibit health insurance carriers from denying claims based on sexual orientation and/or gender identity.  At first, we were puzzled when we saw the headlines in the news, since they mostly mentioned discrimination based on sexual orientation or discrimination directed at LGBT insureds.   We were thinking mainly in terms of gay, lesbian and bisexual clients, and we couldn’t remember ever dealing with a claims denial issue based on sexual orientation.  We also had never seen any questions on a health insurance application regarding sexual orientation.

The only issue we had ever come up against in terms of LGBT discrimination had to do with same-sex partners who wanted to apply together for family health insurance policies in the individual market.  Although individual health insurance for two people was the same total price regardless of whether they were on one policy or two, it was often inconvenient for families to have to have two separate policies, and in the case of HSA-qualified plans, it was also financially detrimental to have to split up the family for health insurance purposes.

But we never had any issues with applications being rejected or claims being denied based on sexual orientation.  I posted last month on Google+ that although I’m always in favor of expanding equality, I was a bit perplexed by this new regulation, given that we weren’t aware of any carriers using sexual orientation as an initial underwriting and/or claims issue.

Then I started discussing this issue with Dede de Percin, Executive Director of the Colorado Consumer Health Initiative, and Ashley Wheeland from One Colorado, and I’ve learned a lot more about it in the last few days.  As far as I’ve been able to tell, the DOI bulletin, titled “Insurance Unfair Practices Act Prohibitions on Discrimination Based Upon Sexual Orientation” is primarily a response to broad exclusionary language in health insurance policies that allowed for claims to be denied if the insured was transgender.  The claims Impact Of the Colorado Sexual Orientation Non-Discrimination Regulationexclusions could range from specific treatment related to gender transitioning, to onerous exclusions for just about any medical care at all: De Percin notes that one transgender person was denied coverage for a broken arm because the health insurance carrier determined that the hormones the person was taking weakened the bone and thus led to the break.  This is absurd, and it does sadden me to learn that such broad exclusions were being […]

Age-Banded Premiums And The ACA – Solving One Problem While Exacerbating Another?

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This Contingencies article about age band compression under the ACA is an interesting look at potential future premiums based on the ACA’s 3:1 age band ratio rule.  [Contingencies magazine is published by the American Academy of Actuaries – it’s not a special interest publication, so I tend to trust their articles more than something coming from… Read more about Age-Banded Premiums And The ACA – Solving One Problem While Exacerbating Another?

Health Wonks Tackle New Questions in Healthcare Reform

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Welcome to the Health Wonk Review!  It’s an honor to host the HWR, and the posts in this edition are excellent, as always.  We’ve got a wide range of topics today, but most of them are at least loosely associated with some aspect of health care reform, so here’s a brief visual summary for you.

Health Care Reform brings new questions in healthcare

Now that you know where we’re heading, here are the nitty gritty details.  There’s something for everyone in this edition of the HWR, so keep reading!

Roy Poses, writing at Healthcare Renewal, explains how doctors are pushing back against corporate bosses who put profits above all else.  His article describes two recent lawsuits filed by physician groups alleging that the hospital systems they worked for were sacrificing patient welfare in the name of profit.  The details are sickening to read:  One hospital group encouraged its docs to exaggerate the severity of patient conditions and needlessly admit patients from the ER to hospital beds in order to bill more for their treatment.  Another hospital group that owns three hospitals and also partially owns an ambulance company was making patient transfers (using their own ambulance company despite slower response times) a top priority – to the extent that a doctor’s transfer rate was a factor in bonuses and performance reviews.  An admin email stated that “the performance we are looking for are transfers.”  Wow.  Transfers just for the sake of racking up revenue – patient welfare had nothing to do with it, and was likely compromised when the slower ambulance company was used in cases where the transfer was actually warranted.  These lawsuits are in their early stages and nothing has been settled in court yet, but they hint at some very serious problems brewing in for-profit (and even some non-profit) hospital systems.

Duncan Cross brings us an emotionally compelling article about Arijit Guha that is a must-read for anyone interested in the problem of under-insurance.  Being under-insured might not be quite as bad as being uninsured, but while the uninsured know that they don’t have health insurance, people who are under-insured might not be aware of the specific short-comings of their coverage until they actually have a serious, ongoing medical condition.  Arijit was a grad student at ASU, and he recently passed away from colon cancer.  During his fight with cancer, he also had to battle his insurance carrier (Aetna) and raise money selling t-shirts in order to fund his treatment.  He had a student health insurance policy, and those have long been notorious for having low coverage limits.  Duncan has an insider view of some of the medical issues that Arijit had to face, and he, too, attended grad school for a while, Spring in Coloradoworking on campus at a job that afforded him faculty health insurance rather than student coverage.  He notes that a major problem that wasn’t often addressed in articles about Guha is that the university was the organization responsible for choosing a health insurance plan for its students – Aetna just provided the coverage that the school requested.

Maggie Mahar‘s article at Health Beats will be appreciated by NPs and PAs.  Her post A Doctor Confides: “My Primary Doc is a Nurse” is a great look at the increase in the number of PAs and NPs who are providing primary care, and the myriad issues that accompany this change.  Maggie delves into topics like turf war and resistance on the part of MDs to accept NPs as quality primary care providers.  She also addresses patient and provider satisfaction, patient safety, the cost of primary care, and the shortage of MDs who are choosing primary care versus the willingness of NPs to […]