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Health Insurance Exchanges

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 […]

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[…]

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 […]

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

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 […]

Committee Kills Bill That Would Have Repealed Colorado Exchange Law

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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

Value Based Health Insurance Plan Design Pilot Program Shows Promise

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[…] With HSA-qualified plans, there have long been concerns that policy-holders are more likely to avoid necessary as well as unnecessary treatments, in an effort to save money. This is because the plan structure usually doesn’t cover any costs except preventive care until the insured has met the deductible. With the sort of value-based plan design being tested in the San Luis Valley HMO program, care that has a high level of evidence-based backing might be covered with no cost-sharing, while other treatments require some financial contribution from the patient. So it’s not the same as an HSA-qualified plan’s structure that just relies on a high deductible to deter a patient from seeking excessive care. And instead of putting all of the burden on the patient, the value-based insurance design incorporates a team approach, with involvement from patients, doctors and health insurance carriers. All in all, it seems like an excellent idea.

Are Marketplaces Duplicating Existing Health Insurance Comparison Sites?

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[…] 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

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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

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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

Tobacco Cessation And Health Insurance

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[…] 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. […]

Open Enrollment For Individual Health Insurance Plans Starting in 2014

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Ever since the PPACA was first being discussed, the individual mandate has been touted as a buffer to protect health insurance carriers – and in turn, policyholders – from adverse selection that would otherwise certainly occur in a guaranteed issue individual market.  It seemed that as long as people were required to maintain health insurance coverage, adverse selection would be minimized and people would be unlikely to purchase health insurance only during periods of sickness. But there was still enough concern about adverse selection that HHS issued a proposal for open enrollment periods in the individual market starting next year.  This proposal was released at the end of November, and the specific details regarding the open enrollment period are on page 70595 of this Federal Register.

Open Enrollment For Individual Health Insurance Plans Starting in 2014To sum it up, they’re proposing an initial open enrollment period for individual/family health insurance that starts in October 2013 and runs through the end of March, 2014 (a six month window in order to accommodate the large influx of initial applications), and then open enrollment periods that mirror Medicare’s: October 15th until December 7th each year.  Beyond that window, only “qualifying event” applications would be allowed for […]