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?
Affordable Care Act (ACA)
Health Wonks Tackle New Questions in Healthcare Reform
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.
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, 
working 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 […]
The New Individual Health Insurance Application Questions
For more than a decade now, we’ve been helping our clients complete individual health insurance applications. Before online applications were common, we would drive to our clients’ homes and help them fill out paper applications. These days, Jay spends many hours each week on the phone with clients who have questions at some point during… Read more about The New Individual Health Insurance Application Questions
Most Americans Might Not See Big Premium Hikes, But The Individual Market Is Different
One of our all-time favorite bloggers, Julie Ferguson of Workers’ Comp Insider, hosted the most recent Health Wonk Review – the “why hasn’t spring sprung?” edition. Maybe Julie just needs to move to Colorado… here on the Front Range, we’re definitely starting to see signs of spring – today was a beautiful sunny day,… Read more about Most Americans Might Not See Big Premium Hikes, But The Individual Market Is Different
Let Medicare Negotiate Drug Prices And The Government Can Afford Subsidies
Right in the middle of the sequestration mess seems like a good time to discuss the subsidies that are going to be a major part of the ACA starting next year. As of 2014, nearly everyone in the US will be required to have health insurance, and all individual health insurance will become guaranteed issue. There are concerns that premiums in the individual market might increase significantly, but for many families the subsidies enacted by the ACA will help to make coverage more affordable. The subsidies will be available to families earning up to 400% of the federal poverty level; the premium assistance will be awarded on a sliding scale, with the families on the upper edge of that income threshold receiving the smallest subsidies.
But how much will those subsidies cost the taxpayers? How will a government that is so cash-strapped that it’s curbing spending on programs like Head Start and special education be able to fund the subsidies called for in the ACA?
Last summer, the CBO estimated that the exchange subsidies will cost $1,017 billion over the next ten years. Undoubtedly a large sum, but probably necessary in order to make guaranteed issue health insurance affordable for low- and middle-income families.
That sum is partially offset by the CBO’s projections of $515 billion (over the next ten years) in revenue from individual mandate penalties (fines imposed on non-exempt people who opt to go without health insurance starting in 2014), excise tax on “Cadillac” group health insurance policies, and “other budgetary effects” enacted by the healthcare reform law.
That leaves us with $502 billion. Not an insignificant sum of money even when […]
Infographic – Affordable Care Act and How Individual Health Insurance is Changing in 2014
A quick overview of how individual health insurance will change in 2014 due to the Affordable Care Act (ACA).
Health Insurance Premiums Coming To A W2 Near You
I’ve noted many times on this blog that one of the difficulties faced by proponents of health care reform is the fact that a lot of Americans are somewhat shielded from the actual cost of health insurance because a portion of their health insurance is paid for by their employer. And when we talk about… Read more about Health Insurance Premiums Coming To A W2 Near You
The ACAs Looming Premium Hikes are Big – How We Can Lower Them
It’s been almost three years since the ACA was signed into law, and in that time, the implementation process has been both steady and plagued with difficulties. The major provisions of the law have largely adhered to the original scheduled time frames, but there have been numerous hiccups along the way, culminating last summer in a Supreme Court case that challenged the legality of several aspects of the law. Once SCOTUS ruled in favor of the ACA, the path was largely cleared for implementation of the health insurance exchanges (marketplaces) that are scheduled to be open for business this fall with policies effective next January. The individual mandate will also take effect in January, but the penalty for not having health insurance in 2014 will be very small ($95 per uninsured person, or 1% of taxable household income). This has caused some concern that the mandate might not be strong enough to avoid the looming problem of adverse selection: specifically, that people who are in need of healthcare might be much more likely to purchase health insurance than people who are currently healthy once all plans are guaranteed issue.
Last month I wrote an article about how the ACA will largely erase the differences that currently exist between the small group and the individual health insurance markets. Once that happens, it would be odd to expect to not see a corresponding change reflected in the premiums. I think it’s unlikely that the premiums will equalize via a drop in small group premiums (if anything, the requirement that small group plan deductibles not exceed $2000 might mean that the average small group premiums increase too). The individual market is poised to become more like the small group market once the policies become guaranteed issue, and the premiums in the small group market are currently significantly higher than the premiums in the individual market. There will likely be a price decrease for people at the upper end of the age spectrum in the individual market, since their premiums are going to be limited to a maximum of 3 times the premiums for young people. But there is a growing concern that those young people – and probably a lot of people in the middle too – might be in for some sticker shock.
Yes, the subsidies will help cushion the blow for people earning less than 400% of federal poverty level. But that still leaves a lot of people facing higher premiums and no subsidies. People who aren’t poor but definitely aren’t wealthy either – in other words, people who are middle class. Some of them are probably quite healthy. Some of them might have money stashed away in HSAs in order to pay for unexpected medical bills. Some of them might be happy to opt for higher deductibles and “catastrophic” health insurance plans in trade for lower premiums. But the way the ACA is currently written, they won’t be allowed to do that. The “catastrophic” plans will only be available to people under the age of 30 or people who meet the economic hardship qualifications. Everyone else will have to have at least a “bronze” plan that provides a broad range of benefits mandated by the ACA.
Please don’t misunderstand me here. I firmly believe that our healthcare system needed […]
Committee Kills Bill That Would Have Repealed Colorado Exchange Law
Colorado Representative Janak Joshi (R, Colorado Springs) is continuing his efforts to get government out of healthcare, but his latest bill died in a 9-2 vote in the House Health, Insurance and Environment Committee, with the no votes coming from both political parties. Joshi’s defeated bill would have repealed the 2011 law that created Colorado’s… Read more about Committee Kills Bill That Would Have Repealed Colorado Exchange Law
Are Marketplaces Duplicating Existing Health Insurance Comparison Sites?
[…] So although I agree with Senator Lundberg when it comes to what’s available in Colorado, I don’t think we can necessarily extend that generalization to all states. And the subsidies (only available in the health insurance marketplaces, aka exchanges) have to be taken into consideration too, since those are the overwhelming “carrot” that officials are hoping to use to entice millions of currently uninsured middle-income Americans onto the health insurance rosters. In a state like Colorado, we probably could have done just fine by adding subsidies to our current system. We already had a solid high risk pool (not all states did) and we’ve already been making progress in terms of general reform and access to care. So the changes brought by the introduction of the ACA and the health insurance marketplace in Colorado might not be as significant as they will be in other states. That perspective – as well as the idea that we’re all in this together as a country rather than a bunch of isolated states – is helpful in terms of understanding “why all the fuss” about setting up marketplaces that might seem to duplicate a lot of existing services. In some places, yes. In others, definitely not.
It’s a Health Insurance Marketplace, Not An Exchange
HHS has officially started referring to “marketplaces” instead of “exchanges” when describing the state-based online venues where people will be able to purchase health insurance and receive income-based subsidies starting in 2014. Some are calling this a sign that HHS is desperate to garner approval for the ACA-created system for purchasing individual and small group… Read more about It’s a Health Insurance Marketplace, Not An Exchange
Strengthening The ACA Individual Mandate
Many people have expressed concerns that the mandate portion of the ACA isn’t strong enough to balance out the expected sharp increase in premiums that will accompany guaranteed issue coverage starting next year. Open enrollment windows are a possibility, but I’m not the only person who has noted that compressing each year’s applications into a… Read more about Strengthening The ACA Individual Mandate
Individual Health Insurance Premiums And The ACA
Chris Fleming hosted the Inauguration Edition of the Health Wonk Review this week at Health Affairs Blog, and it’s an excellent compilation of articles. The article written by one of our favorite bloggers, Maggie Mahar, about health insurance premiums in 2014 and beyond caught my attention, because that’s an issue we’ve been watching closely for some time. It’s a question that’s on a lot of minds right now – especially for people who buy their own health insurance and are in the segment of the population that is most likely to experience changes (in coverage, premium, how policies are purchased, etc.) in 2014. Jay and I not only work in the individual health insurance industry, but we’re also policyholders – we’ve have individual health insurance since 2003. We’ve had two carriers and several plan designs over the last decade, and we’ve experienced double digit percentage rate increases nearly every year (somewhat offset by the fact that we’ve been willing to increase our deductible and out-of-pocket limits several times).
We currently pay just over $400/month (for our family of four) for an Anthem Blue Cross Blue Shield CoreShare plan with a $3500 deductible and another $3500 in coinsurance. We know that our rate will go up in the fall – it always does – but how much? How much will prices go up for all of our clients who are covered by all of the biggest health insurance carriers in Colorado?
I don’t know the answer to that question. And I don’t think that anyone really does. The post Maggie wrote references an article from Bob Laszewski that predicts rate increases of 25 – 50%, with some rates actually doubling, while Maggie’s prediction is more along the lines of a price decrease for people who qualify for subsidies, with an average price increase of just over 10% for those who don’t (anyone making more than 400% of FPL). The answers seem to change based on who’s doing the math, and it would be disingenuous to say that all of the numbers are objective. In general, I’ve found that the people who support the ACA are more likely to predict small rate increases and smooth sailing next year, while those who oppose the law are likely to predict large rate increases and general doom and gloom.
Here’s what I do know.
The MLR (medical loss ratio) has already been in effect for two years. Carriers have had to limit their overhead to 15 – 20% of premiums since […]
Tobacco Cessation And Health Insurance
[…] Although higher health insurance premiums do provide a financial deterrent to smoking, the number of smokers who try and fail to quit every year is testament to the powerful nature of nicotine addiction. Providing real support in the form of therapy and/or medication designed to help smokers kick the habit seems like a better solution. Including smoking cessation treatment in the list of preventive services that must be covered by all health insurance plans without cost sharing was a good provision of the ACA. But a study released last fall indicates that implementation of the provision has been inconsistent at best. Hopefully this issue will be fully resolved as new health plans are designed heading into 2014, and tobacco cessation will no longer be a grey area when it comes to health insurance benefits and provider reimbursement. […]
Downsides To Raising The Medicare Eligibility Age
[…] The wealthiest older Americans can probably easily wait until 67 for Medicare. In 2014, individual health insurance will be guaranteed issue, and if paying the premiums is not a problem, that’s a viable alternative for some people. But most Americans are not wealthy enough for those premiums to be easily affordable, even with premium subsidies. More than a few 65 and 66 year olds would likely opt to go uninsured until they reached the new Medicare age, and that brings it’s own host of problems – for the individuals and for taxpayers, hospitals and the entire healthcare system. For people struggling to make ends meet, an extra two years of either being uninsured or stretching to pay health insurance premiums could be a very big deal indeed. And as Maggie points out, it doesn’t even end up saving money.
The proposal to raise Medicare eligibility to 67 is short-sighted and based on the premise that Medicare is an “entitlement” (what about the fact that recipients have been paying into it for decades, to cover the cost of previous retirees’ care?). I suppose it makes sense – at first glance – that we can reduce the amount spent by Medicare if we make people wait an extra two years to enroll. But the practical realities would be a different story: people putting off medical care until age 67 (at which point illnesses might be more progressed and more expensive to treat), people going uninsured, higher premiums within the Medicare system without the younger members enrolled, higher costs borne by employers who cover the cost of healthcare for workers and retirees, and the list goes on. […]
Health Insurance Premiums Mirror Healthcare Costs
[…] Colorado has taken a much more proactive and transparent position in terms of the rate review process, and we’ve written about it several times. Although rate increases on health insurance policies are frustrating when they continue to far outpace inflation, they’re being driven largely by the increases in the cost of healthcare. But most of us are very insulated from the cost of our healthcare. Since the bills go to our health insurance carriers, many people don’t really know how much it costs to have any sort of significant medical treatment. We know how much our health insurance costs though, and when the price goes up, we feel it. Even though the price increase is directly linked to the increases in healthcare spending, we’re much more likely to focus on the health insurance premiums, since those are the bills we pay ourselves (this is especially true for people who buy their own individual health insurance, without assistance from an employer). […]
How the Affordable Care Act Affects You
For the first couple years after the Affordable Care Act was signed into law, everything seemed to be a bit up in the air. There was almost constant bickering about the subtle nuances of the legislation, along with uncertainty from both sides of the political spectrum insofar as whether or not the law would stand the test of time. The Supreme Court had to weigh in, and we also had a major election cycle midway between the signing of the law and the enactment of many of its main provisions.
Most of that has settled down now. SCOTUS upheld the law. And there was no election upheaval in Congress to tilt the legislative body towards a crowd that would be likely to repeal it. States – like Colorado – that had been working towards setting up a health benefits exchange can continue to do so without as much worry that their work might be in vain (there had been some concern that the law would be tossed after states had invested a lot of time and money in the exchange-creation process). We are just over a year out now from January 2014, when many of the major provisions of the ACA will go into effect; it seems relatively certain at this point that the ACA will continue to move forward now that some of the potential roadblocks are in the rearview mirror.
Several provisions of the Affordable Care Act – ACA have already been implemented over the past two years: Young adults can remain on their parents’ health insurance policy until […]
Individual Health Insurance After Donating A Kidney
This recent AARP article caught my attention last week. My father lost his kidneys in 2001 as a result of Wegener’s Granulomatosis, a rare autoimmune disease. In August, he was the recipient of a kidney generously donated by the family of a young man who had passed away. And this fall, for the first time in 11 years, he’s been able to go about his life without being tethered to a dialysis machine every evening. So I’m drawn to stories about kidney transplants, living donors, or families who choose to donate a deceased loved ones organs.
To sum it up, Radburn Royer is a healthy 57 year old who donated a kidney to his daughter four year ago, after her own had failed as a result of lupus. Prior to donating a kidney, Royer was covered by Blue Cross Blue Shield of Minn. It’s unclear what his health insurance status was in the interim, but last year he reapplied for coverage with them and was turned down. He’s appealed several times, but for now he’s covered by his state’s high risk pool (he has to pay $130 more per month for his coverage and has a higher deductible, both of which are common in high risk pools).
Individual health insurance in Colorado is underwritten just as it is in Minn., but underwriting guidelines usually vary from one state to another and from one carrier to another. So we contacted three of the top individual health insurance carriers in Colorado to see how they would underwrite an applicant who had previously donated a kidney. Cigna, Humana and Anthem Blue Cross Blue Shield all said that as long as the donor had been released from medical care and had normal blood pressure and blood lab results, the most likely underwriting outcome would be acceptance with a standard rate.
At first glance, this seems to be at odds with the situation experienced by Royer, but maybe it’s not. The AARP article notes that Royer underwent […]
[…] In the context of kidney donation, it’s important that potential donors not be inadvertently scared off by AARP’s article. Kidney donors are heroes – anyone who had received a transplant will attest to that fact – and they save lives. The study that I linked to above followed donors for 20 – 37 years after their transplants. While some donors did end up having kidney problems, the majority had normal kidney function 20 – 37 years out from surgery, and would likely not have a problem obtaining individual health insurance, even prior to it being guaranteed issue in 2014. Most people who are healthy enough to be accepted as a donor will continue to be healthy after they donate a kidney.
Election Thoughts – Healthcare Reform And Exchanges
[…] Tim’s article is an excellent primer on the implementation of healthcare reform, specifically in terms of the health benefits exchanges that need to be up and running by October 2013, when enrollment is scheduled to begin (health insurance effective dates wouldn’t start until January 1, 2014, but people should be able to start enrolling next October). That’s less than 11 months away, and there’s still a lot of work to be done. Colorado has been working on its health insurance exchange for some time now, and has made a lot of progress so far. We’re one of the states that has selected a benchmark plan for essential health benefits, and much of the groundwork for Colorado’s exchange has already been done. But in addition to the nitty gritty logistics of setting up the exchanges, there are still plenty of legal and administrative bumps that will need to be ironed out. When the ACA was signed into law in early 2010, the implementation of exchanges and the majority of the law’s “teeth” in 2014 seemed like a long way in the future. That is now just over a year away, with exchange enrollment beginning in less than a year. And there’s still plenty of work to be done, especially in states that haven’t made much progress on their exchange implementation yet. […]
2012 Obamacare Premium Rebates (Infographic)
Did you receive a health insurance premium rebate this year? If so, how much was it? We created a simple visualization of how the PPACA (Obamacare) health insurance premium rebates break down between the individual/family, small group and large group markets and how Colorado’s rebates compared to the national average.
Healthcare Affordability And Quality: Two Perspectives
[…] He notes that the problem of access to care has been well addressed: 30 million additional Americans will soon have health insurance coverage (although we have to bear in mind that health insurance coverage and actual access to care are not necessarily the same thing, especially if the health insurance in question is Medicaid or another public plan). But he goes on to point out that affordability and quality are areas with some wrinkles that still need to be ironed out.
What makes this post especially interesting is Maggie’s equally well-though-out response that she included in the HWR. Be sure to read what both of them have to say. Maggie references a couple of her previous posts and provides plenty of evidence to back up her premise that affordability and quality of care are both being addressed and that the solutions are working (or will be soon). Definitely an interesting collection of views from two of our favorite healthcare writers.
Healthcare Overutilization And General Physical Exams
[…] perhaps we need to consider at least some general physical exams to be overutilization of care. I know – that sounds blasphemous and counter-intuitive. But sometimes we have to abandon our preconceived ideas and look at what the evidence is telling us rather than just accepting what we assume we know to be true. I would say that further and more extensive studies need to be conducted before we make any radical changes as far as general physical exams and well-checks. But we definitely need to be taking a much closer look at healthcare over-utilization. Maybe that’s where we can do our “rationing”, and end up with a win-win for everyone: lower healthcare spending and better patient outcomes.
Health Insurance Premiums And The ACA
[…] We wrote a couple years ago about the Colorado Division of Insurance bulletin that laid out the reasons for rate increases in 2010 – almost all of them were the same factors that had been driving health insurance premiums for the previous decade; only 5% of the total premiums could be attributed to the ACA. […] The predicted long-term cost savings from the ACA are definitely not a sure thing. But we need to keep in mind that many of the substantial changes included in the law have not yet taken effect. And many of the changes that have been implemented are those that tend to increase short-term costs and/or utilization of care. […]
Individual Health Insurance Mandate From A Perspective Of Compassion
[…] I’ve usually addressed the issue of the individual health insurance mandate in terms of how guaranteed issue health insurance would impact premiums in the absence of an individual mandate. The mandate – regardless of its popularity – just seems like the most practical way to go if we’re in agreement that individual health insurance should be guaranteed issue.
Maybe we should also be looking at the individual health insurance mandate from a more compassionate, human angle too. There has long been a bit of a harsh undertone in the healthcare reform discussions when it comes to people who are […]
ACA Electronic Medical Records – Opposing Views
[…]Dr. Plested believes that the ACA will lead to rationing (it’s hard to say with certainty that this isn’t true, but Dr. Plested believes with certainty that it is true) and that the Obama Administration wants doctors to adopt the ACA electronic medical records so that treatment specifics can be sent to the Internal Revenue Service and federal health officials. He believes that doctors will then be instructed to pursue a treatment plan “that is preferred by the government.”
Dr. Bender notes that in his own practice, computerized medical records have alerted his office to the fact that less than half of their diabetic patients were being tested at least once every three months (standard of care, and a good way to lower costs since it reduces the number of patients with complications stemming from uncontrolled diabetes), Prior to the introduction of electronic medical records he had no idea that the number was so low. It’s now up to 85%. As far as records being transmitted to the IRS and other government officials, Dr. Bender notes that the IRS would need a subpoena to get his patients medical records, which are locked securely behind several firewalls. […]