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Health Care Reform

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[…]

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[…]

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 […]

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 […]

The New Individual Health Insurance Application Questions

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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

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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

Healthcare Social Media Review: Which Tools Work Best For Your Patients?

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Welcome to the HealthCare Social Media Review, where you’ll find all sorts of articles on the intersection of healthcare and social media.  Over the years, we’ve found social media to be an excellent way to interact with our peers, colleagues, and clients – first with our blog, and now increasingly through Google + (Jay, Louise), Twitter (Jay, Louise), and Facebook.  I relied heavily on Twitter when I was looking for articles to include in this HCSM Review, and all of the social media platforms we use are excellent resources when we’re looking for like-minded people or relevant, timely information on a particular topic.  We’re honored to be hosting this edition of the HCSM Review.  The blog posts included here are all written by people who have a strong social media presence, and we’ve included links to their Twitter, Facebook or Google+ pages so that you can follow them too.

To start things off, we have an excellent article from Nina Dunn (@Spector_health), explaining that we need to get back to basics with social media use in healthcare.  Rather than focusing on the negatives (it changes too fast!  There are no clear guidelines for how to use it!  HIPAA!, etc.), Nina encourages healthcare providers to focus instead on the ways that social media can be beneficial.  She notes that just because a platform exists doesn’t mean that you have to use it (ie, you don’t need to be on every social media channel all at once), and that it’s important to know your audience and target your social media presence accordingly.  Good content is king (that rule never changes), and social media marketing might require a different mindset when it comes to measuring success – but that’s not a reason to avoid it.  All in all, a great read, and a perfect tone for the Healthcare Social Media Review…

Healthcare and Social Media Tools

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David Harlow of HealthBlawg gives us a perfect example of how social media can be very useful in terms of gathering information and engaging people in real time to solve problems.  The Office of the National Coordinator (ONC) for Health IT issued a request for information (RFI) on interoperability, asking “What specific HHS policy changes would significantly increase standards based electronic exchange of laboratory results?”  The problem appears to basically hinge on the fact that labs receive no financial incentives to make their reports interoperable and compliant with EHR meaningful use standards (medical offices do have a financial incentive to do so).  Keith Boone (@motorcycle_guy) blogged about the question, and then the power of social media took over thanks to retweets and […]

Let Medicare Negotiate Drug Prices And The Government Can Afford Subsidies

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Medicare Negotiates Drug Prices And The Government Can Afford SubsidiesRight 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 […]

Will Marketplace Customer Service Be On A Par With Private Industry?

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One of our clients recently told us about a health insurance plan that was being marketed to him, and we were curious enough to want to look into the situation further.  In a nutshell, it’s not a discount plan, not a mini-med, and not a traditional limited-benefit indemnity plan.  All of those plans should be avoided in general, and the ACA has sort of skirted around them a bit:  numerous mini-meds have been granted temporary waivers in order to continue to operate, discount plans aren’t addressed by the ACA at all (and aren’t regulated by most state Division of Insurance departments either, since they aren’t actually insurance), and limited benefit indemnity plans are exempted from ACA rules (although people who have them will likely have to pay a penalty for not meeting minimum benefit requirements).

Anyway, the plan that was marketed to our client resembled traditional health insurance, but was very convoluted and sold with numerous riders to cover all sorts of different scenarios.  The brochure was 27 pages long and included numerous detailed examples showing how awesome the marketed coverage was when compared with “traditional major medical.”  It noted that the plan isn’t subject to ACA mandates, and the policy is still being marketed with a $5 million lifetime maximum.  When I spoke with an agent for the plan (a captive agent, of course – plans like that are never marketed by brokers who have access to other policies), he told me that the policy will not be guaranteed issue next year, and that they aren’t concerned about the potential penalties that their clients will have to pay starting in 2014 for not having ACA-compliant coverage.  His reasoning (and the marketing pitch that they’re making to their clients) is that their premiums will be so much lower than ACA-compliant plans that their clients will save enough money to more than make up for the penalty (currently their premiums were roughly the same as those of reputable health insurance policies).

In short, everything about this policy sounded sketchy.

health insurance marketplaces (aka exchanges) customer service vs private industryA rather lengthy Google search didn’t bring up much in the way of regulations pertaining to this sort of issue.  I remembered my efforts in the fall of 2011 to get specific details about regulations regarding mini-meds… and I wasn’t encouraged.  At the time, the Colorado Division of Insurance wasn’t aware of a solution to the problem our client was facing (although to give them credit, I was able to speak with someone as soon as I called them).  They referred me to HHS, where I had to leave a voice mail.  The outgoing message said that someone would get back to me within five business days, but that was a year and a half ago and I’m not holding my breath for a reply.  I also left a message for the National Association of Insurance Commissioners (NAIC) about the issue and never heard back from anyone there.  We ended up getting the client onto an Anthem Blue Cross Blue Shield plan, but we never heard back from any of the government agencies we contacted regarding his mini-med situation.

So back to our current questions about the sketchy-sounding health insurance being marketed to our client.  I contacted HealthCare.gov via Twitter but got no response.  I called the Colorado Division of Insurance and was told that I should send in an email with the specifics.  I did that on Wednesday and haven’t heard anything back from them yet.  I called them this morning to follow up, and they told me that they had received my email but didn’t know to whom it had been assigned yet – this is two days after I sent it, so I would assume that perhaps the employees there are overworked and understaffed.  I didn’t contact the national HHS office again, because I didn’t feel like wasting my time any further.  However, I did send an email on Friday morning to the regional HHS office in Denver, so hopefully I’ll hear back from them sometime soon.

I’m also hopeful that I’ll hear back from the Colorado DOI sometime next week.  They usually end up being a helpful – and local – resource, even if we have to wait a few days.  Once we get some more information, I’ll write a follow-up post about how an individual carrier is apparently able to operate entirely outside the regulations of the ACA.

But for now, I’m struck by how difficult it can be to obtain information from a government agency, or even speak with a real person as opposed to just leaving a message or sending an email that may or may not ever get read.  I know that private companies aren’t always shining examples of customer service, but I can’t imagine calling the claims or customer service number on the back of our Anthem Blue Cross Blue Shield card and being told […]

Health Insurance Premiums Coming To A W2 Near You

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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

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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.

How to lower the looming big ACA premium hikesYes, 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 […]