Will the GOP succeed in suspending penalty payments for the ACA’s Employer “Play or Pay” Mandate? Is it a wise move?

August 16, 2018

As you read this in August I’ll need to remind you that during the week of July 23rd the House Ways and Means committee voted 22-15 to approve the Bill H.R. 4616 which would suspend the employer penalty payments for the period after December 31, 2014 up to January 1st, 2019. Yes, you read that correctly. For years, 2015 through 2018 the employers affected by “play or pay” would not be required to make the penalty payments. I’m sure it’s some clever GOP move to throw off logic.

The Bill can advance now but since the House is in its Summer recess for 5 weeks it won’t go to far. But, will it have a chance once the House is back in session and in light of the activity everyone will focus upon this Fall namely the mid-term elections? Doubtful.

But is it a good idea in the first place or just a political gimmick by politicians so that they have bragging points as they campaign for reelection? We know from the Individual Mandate that they won’t repeal it outright but rather they will  simply reduce the penalty to zero. Jeez, that’s a cowardly way to legislate.

I won’t continue with that issue but instead focus on the simple question – is the employer “play or pay” mandate a good idea or should it be eliminated? And what effect will it have on the thousands of employers and hundreds of thousands of employees who have participated already?

I am a free market, let the private sector resolve it and keep the Government the hell out of it kind of guy. But, this issue is a complex one because as I mentioned tens of thousands of employers have already taken steps to comply. Those employers stepped up to do what was required, those employers purchased the plans that complied with the law and spent money that the non-compliant employers did not. It would be unfair for noncompliant employers to avoid the penalty while other employers have already spent untold fortunes with no hope of getting that money back.

I would wager that many employers, who bit the bullet and complied, will maintain their plans thus continuing the expense they incur. The elimination of the penalty will make it so that noncompliant employers will be allowed to continue not providing benefits, not spending those funds and may think they have a financial advantage in the market against competitors.

For example:
If Company A and Company B both bid on the same project they would both include all of their operating and legacy costs in those bids. Therefore, if Company B provides no health plan, because it was and is noncompliant, then its costs might be lower thus allowing it to submit a lower bid and possibly win a project over Company A which does provide benefits.

Personally, I think an employer who provides benefits is probably a better run company and certainly tries to take care of its staff. So, that employer should have an advantage but money is money which means the buyer may take the lower bid. That sucks but happens.

The other side of this is the employee’s. Hundreds of thousands of employees have been offered and enrolled on a health plan, possibly for their first time. What happens to them if their employer discontinues a plan because it’s no longer required legally? Many would go without coverage simply due to affordability.

Let’s face it, the ACA has caused premiums to increase astronomically over the past 7 years on individual plans (all plans really). These employees, pushed off an employer sponsored plans, would be required to go into that ACA Individual Plan jungle, and I do mean jungle as it is a freakin mess in that market. Would those employees want to pay those high premiums – could they afford those premiums? Probably not.

In addition, the health plan landscape, that is alternatives and access, varies greatly state by state. Many states, like California, are not allowing any of the Trump administration’s new ideas to come to California. California says No AHPs, No to skinny plans on top of what California had already implemented to harm small employers with its stop loss killing legislation known as SB 161.

So, against my human nature and all that helps one develop values I don’t think the “Play or pay” mandate should be eliminated for large employers. In fact it should be enforced. The IRS has had difficulty identifying which employers should or should not be Playing and less success in getting noncompliant employers to pay. Big deal – get it done so that the law is applied equally.

So, even though the House will be in recess as you read this, you will be informed. Together we need to stay focused on healthcare issues like this. Can you think of a single big government bureaucracy that has ever not fouled it’s intended objective? No, so when we identify issues that need attention or fixed or eliminated we should shout for it.

That way they’ll know that we’re all in this together.

Until next week.

Mark Reynolds, RHU
559-250-2000
mark@reynolds.wtf
It means “Walk the Faith”.

 

Covered California premiums for ACA Individual plans projected to average 8.7% increase for 2019. Many are cheering but I wonder, have they forgotten the effect of compound interest?

August 9, 2018

That’s right, articles are every where announcing the good news of the projected 8.7% increase in premiums, which is  smaller increase than we’ve seen since the ACA was created. ACA supporters hail this as a sign that the ACA is working, that Insurers are getting used to the ACA requirements and that it’s smooth sailing from here on.

One must remember that the writers of these countless articles expressing glee at the 8.7% probably don’t pay for their own insurance and others are subsidized by the ACA. Otherwise they would scream, “Are you kidding me, another freaking increase”.

It’s almost like they forget the effect of compound interest. What other product or service would one consider an 8.7% increase as good news? It’s been 105 degrees in the San Joaquin Valley for the past 10 days. Would an 8.7% increase in the unit rate on your electric bill be agreeable. Probably, NOT!

Plus, what other goods or services, that you use, have had unit rates increased 300% plus over the past 7 years? So, we see again that the supporters of the ACA are searching and clawing for any tidbit of a subject on which they weave a positive story about the ACA.

For instance, seven years ago, pre-ACA, the insurance rate for a single person 30 years old might have been as low as $100. If you multiply $100 times 8.7% you get $8.70 bring the premium to $108.70.

But in the real world that 30 year old rate is now $300 so when 8.7% is calculated it equals $26.10 bringing the premium a member will be asked to pay up to $326.10. So, the “compounding effect” on premiums in this example yield a huge difference between $8.70 and $26.10. Since the authors of all of the “happy” stories don’t pay premium or are subsidized they exclaim that this is good news.

If you use the premium change of  a 50 year old the impact increases in magnitude. A 50 year old 7 years ago, pre-ACA, might have paid $400 for a decent plan. But now a 50 year old would pay closer to $1,000. Again, 8.7% of $400 equals $34.8 verses $1,000 times 8.7% equaling $87.00 for a $52.20 increase in the difference.

You know what I mean. The problem, as usual, is that the majority of premium paying voting Americans are not paying attention or have assumed the attitude that there is nothing they can do. I can’t blame them for feeling that way because they are busy working, raising their family, paying the electric bills, their cable bills, their car payments etc. and just don’t have the time to even think about this issue.

As I’ve written over the past several months, we are in a period in which people just are not paying attention to much other than their jobs, their families and every day life. That’s why it’s up to us who do pay attention to this and can see what’s happening to raise our voices.

There are things that can be done. In California voters could make a difference by voting for the correct candidate for Governor and Insurance Commissioner. Those two position would yield huge results that could lower premiums, increase options and improve access to providers. You can bet on it so vote on it!

Sorry to post on such a simple subject matter this week but frankly, it just pissed me off. Over the next few Posts we will discuss Rx costs, Insurer subsidies, impact of HRAs, and the power of Employer Driven Plans.

As always, we’re all in this together, so if you get a chance, tell a friend about the best healthcare blog you’ve ever read.

Until Next week.

Mark Reynolds, RHU
559-250-2000
mark@reynolds.wtf
It means “Walk the Faith”.

Lot’s of talk about the suspension of the ACA’s Risk Adjustment Payments to Insurers. Is this critical or just another scapegoat?

August 2, 2018

I’d bet you lunch, anywhere in town, that 99% of Americans have no idea what this risk adjustment program (RAP) is or what it does or why it was implemented by the ACA. I’d also wager that 99% of Americans are unaware of the inequities and issues the RAP created.

So, for the 99% of us – what the heck is this Risk Adjustment Program?
The idea was hatched, during the creation of the ACA, as Insurers voiced their fears that Insurers would be inundated with new applicants who had no prior coverage and whose potential healthcare cost (in other words amount of new claims) was impossible to determine. Couldn’t blame the Insurers for their concern, especially when it could be $$billions of dollars in claims on members who had no previous coverage. Plus, the ACA needed a way to entice Insurers to the table.

So, to offer some comfort for planning, the ACA created a complex formula primarily applying to individual plans, that was supposed to level the playing field, so to speak. If one insurer got hit with an inordinate amount of claims while other Insurers did not then the RAP was designed to equal out the pain.

For example: suppose there are just two Insurers offering and accepting applicants in an area, Insurer #1 and Insurer #2. Also, to make the example easier to understand let’s assume that both Insurers  end up covering 1,000 individuals. But, for what ever reason, Insurer #1’s members are all healthy people under 40 years old while Insurer #2’s members are all above 40 years old with a bunch of 60+ and the entire lot is unhealthy.

Obviously, the claim costs for Insurer #2 would be expected to be much higher than Insurer #1. If the claims experience for #2 exceeds 100%, thus loses money, then the loss would have been shared by #1 making payments into the RAP program. Theoretically, every plan should have had this potential cost factored into its plans so that it was a pass through.

Now, the Courts has ruled that the ACA’s RAP payment methodology is flawed which has caused any movement by the Feds to issue RAPs to be suspended. Actually, I don’t think this is a bad think for a couple reasons. One is that Government methodology in almost every initial program is often flawed but seldom corrected. This provides a chance for correction.

Another reason why this halt may be good is that some Insurer’s planning and pricing for initial their plans may have been skewed in an attempt to “game” the RAP.  Your humble author can report on this matter directly. I had conversations with more than one Insurer representative concerning this matter. It was widely agreed that pricing individual plans for the ACA was extremely difficult but more than once I heard “it really does not make a difference because if we’re priced too low and lose money the Gov will make us whole”

The first couple times I heard that sentiment it confused me. I thought, “How could an Insurer not be worried about underpricing their plan?”. The it hit me.

The ACA was designed to be an entitlement plan. Most folks agree that it is an entitlement for the people subsidized under the state run Exchanges. But, did you ever consider that it was an entitlement for the Insurers, too?

How else could the ACA convince Insurers to offer Individual plans with GI and no pre-ex to people who had no prior coverage or worse had been decline for previous coverage.

Now, 7 years in to the ACA and we can see a clearer picture. The big Insurers, you know them, are making money, even though they plead poverty, because they have increased their premiums 300% to as much as 900% in some areas. But, small Insurers and regional Insurers have not done so well because the RAP may have taken money from them to give to the bigger national Insurers.

Of course the battle cry, incited by the ACA supportive Press, is printing headlines about premiums increasing because of the Trump administration’s decision to suspend RAP payments. We should remember:

  1. The Trump Team did not make the decision, the Court did. The Trump folks may not be supportive of the ACA or these RAPs but the Court decided that the RAP methodology was flawed.
  2. The carriers are raising rates anyway, often just because the ACA provides cover, and ACA supporters depend on un-informed readers forgetting that premiums have already been increased a zillion percent.
  3. Finally, as stated above, it’s good to suspend a government program once in a while, at least, to verify its accuracy if not its effectiveness.

We’ll hear more about this as we head toward the Fall and the mid-term elections.

But, you and I won’t be fooled because we’re all in this together.

Until next week,

Mark Reynolds, RHU
559-250-2000
mark@reynolds.wtf

 

Wait- Are the ACA’s State Exchange Plans working for everyone or not? Well, that depends on what you read and the author’s perspective!

July 26, 2018

We’re constantly reminded that one must be cautious about believing what one reads or hears about the success or failures of the Affordable Care Act (ACA). Never more true than what has been printed and dispersed over the past month or so concerning the ACA Exchanges being managed by various states. Hear are a few samples of the confusion:

  • We hear enrollment is down in the exchanges but that Insurers are supporting these ACA plans more than ever.
  • We hear premiums are up double-digit “again” yet the enrollment of subsidized members dropped 3%.
  • We also hear that the Individual Mandate (IM) has been “repealed” while premiums increase double-digit yet enrollment for members on non-subsidized plans has remained constant or increased a bit.

We all know that:

  • Premiums have increased over the past 7 years and are projected to increase again in 2019.
  • Some people will pay for their insurance, themselves, because they know they need it for their family and it’s the right thing to do.
  • Some people won’t take steps to keep themselves covered even though it costs them little if anything to do so.

I could go on and on, but the gist is that right now people who support the ACA, regardless of facts available, are searching for justification for the ACA. You’ve read it here before that the 80% to 90% of the folks enrolled on the ACA Exchanges get subsidized for their premium and out-of-pocket costs. Yet their enrollment drops.
How can that be?

On the other hand, the enrollment for Americans not subsidized for premium or out-of-pocket expenses remains constant or increased slightly. Who are these people and why are they acting like they are responsible citizens? It’s too bad the ACA has not assisted these hard-working folks by controlling premiums as well as improving benefits and increasing access to quality providers and care.

Over the past 9 months, since the “repeal” of the IM, supporters of the ACA have predicted dire consequences. These experts projected that millions would go uninsured, that thousands would put-off care, and our citizens would feel catastrophic results.
Whoops, that didn’t happen. Makes one wonder, doesn’t it?

So to summarize, analysis of actual enrollment shows that people responsible for their own expenses remain enrolled, paying ever-increasing premiums, while many who receive subsidies dropped off their coverage, even though their out-of-pocket remained unchanged.

Is there any chance that this is another example of why entitlement programs ultimately fail, always? Maybe it’s the old proverb: Teach a man to fish and he’s never hungry again, give a man a fish and he just makes a mess and your house smells like dead fish for a week. I improvised but you get the picture.

As we’ve discussed in previous Posts, the ACA caused higher premiums with lower benefits for 300 million so that 10 million can be insured at little or no cost to the insured. And from those previous Posts we all know that there are better ways to make coverage affordable with better benefits and greater access to care. If not for politicians we could get it done.

To the average citizen the headlines are misleading as is much of the text in the articles. Supporters of the ACA try to make lower enrollment and Insurer satisfaction sound good to the uninformed ear.  BTW, why are Insurers involved with these subsidized plans so happy these days? That’s an easy one.

But we know the truth, don’t we, based on experience and also because we know that we’re all in this together.

Until next week.

Mark Reynolds, RHU
559-250-2000
mark@reynolds.wtf
It means “Walk the Faith”.

Are Politicians and the Press trying to make Folks nervous about losing the ACA guidelines on “pre-existing conditions”? Should they be? Let’s discuss it.

July 19, 2018

According to a Poll by the Kaiser Family Foundation, about 65% of likely voters say a candidate’s support for continued protections for people with pre-existing health conditions is either the “single most important factor” or “very important” to their vote in the upcoming midterms elections.
That’s significant and important!

The KFF Poll also reports that 57% of the voters in the poll say that they or someone in their household has a pre-existing condition of some sort. Critically important!

Additionally, 76% of the public say it is “very important” that the law continue to prohibit insurers from denying coverage because of a person’s medical history. Finally, 72% say it is “very important” that the law continue to keep insurers from charging sick people more for coverage. 

Once again, I say thank you to the KFF team for compiling these numbers which demonstrate how important the issue of “pre-ex” is to our citizens. I would add that this issue has always been the foundation on which every healthcare reform project has either thrived or failed. It’s really a no-brainer so why are the Press and certain Politicians stoking the fire of fear in our citizens.

In 1992, California’s healthcare reform bill, referred to locally as Ab 1672, provided for guarantee issue (GI) and full take-over for small group plans. It included a “pre-ex” clause for new enrollees who had no coverage during the previous 60 days. If a new enrollee had not had coverage in the previous 60 days then anything for which the new member had received treatment  in the previous six months would not be covered by the new plan until the member is covered under the new plan for six months. At that point coverage was full for any benefits covered under the plan. Pretty reasonable, right?

I remember the hysteria in the Press as well as brokers and industry pundits about how much premiums would increase due the GI and no pre-ex. Here’s what happened. Premiums increased initially about 6% to as much as 12% during the first year or so. Then in the second, third and fourth year the insurers actually started reducing premiums. No one organized any parades nor did the Press praise the results about the premiums coming down, but we in the industry knew it and employers appreciated it.

The failure of Ab 1672 was that it did not address individual and family plans (IFP), those plans not sponsored by employers. That error or purposeful neglect of leadership is where the crisis began yet no one in California had the vision or courage to address it.

So, let’s fast forward to the bantering we here today by the Press and Politicians as they try to scare up support for themselves and chip away at the efforts being made to improve healthcare pricing, benefits, and access.

As we continue, remember that the problem they’re projecting is for the State Exchange members covered by Individual and Family Plans (IFPs). We know that only about 8 million Americans have coverage on these plans but that 80-90% of those receive subsidies making their coverage be free or nearly so. But the fear is legitimate and fare; but the hysteria is not helpful.

There is a rather simple solution but it won’t happen because no Politician is going to take the risk and endure the public criticism of providing a workable solution.

So, I will.
A few simple steps:

  1. IFPs continue to be GI with its timely enrollment guidelines unchanged.
  2. New enrollees, not covered by any IFP or group plan for the preceding 60 or 90 days, would not have coverage for any pre-existing condition for which treatment had been received with in the previous 6 months. 
  3. Once the new enrollee is covered continually for 6 months then coverage is provided for all benefits provided by the plan. 
  4. During the period in which pre-existing conditions are not covered the enrollee would have coverage for all other benefits under the plan.
    Example: If pre-ex is treatment for diabetes but the enrollee breaks a leg or develops cancer during fist 6 months on plan, the broken leg and cancer is covered.

The time frames above could be adjusted but the result would be significant:

  1. It would encourage continuous enrollment, without a IRS implemented fine as demanded by the ACA, especially if one has an on-going condition which according to the KFF poll 57% of families do.
  2. It would stabilize premiums. The current mandates and guidelines of the ACA actually push premiums higher. Plus, Insurers have no incentive to control premium and as long as Insurers get reimbursed for 85% of covered enrollees the Insurers won’t have any incentive to control premiums in the future.
  3. Citizens would no longer need to fear being without coverage or not being able to acquire coverage and best of all, premiums would be lower.

That’s pretty easy.
Next, we add in the new Association Health Plans approved by President Trump and  we would see a revival of stability, faith and confidence in our healthcare delivery and finance system.

Of course we still need to deal with the core cost issues such as smoking, obesity and drug usage to really get the job done. But that’s for another day.

If we could encourage a healthy life style that is rewarded by a health plan while addressing the Unit Cost of Care” we will have made our healthcare system great again.
Sorry, that’s a dopey closing statement, but we could get it done.

That is if, we’re all in this together.
Until Next week.

Mark Reynolds, RHU
559-250-2000
mark@reynolds.wtf
It means “Walk the Faith”

Why are so many Americans deferring healthcare or going broke because of it? Wasn’t the ACA supposed to fix that problem?

July 12, 2018

The easy-simple-uncomplicated-straight forward solvable answer is that premiums have increased so much that people can’t afford premiums for anything but bronze plans. That means out of pocket cost for a single person of as much as $8,000 plus premium.

There is a solution to this and it will help all employers control costs while maintaining a healthy-loyal staff while reducing cost for both employer and employee.

Health Reimbursement Arrangements (HRAs) are a popular type of employer sponsored plan that can be used to reimburse an individual for qualified medical expenses and certain types of health insurance. HRAs are funded by the employer, and cannot be funded via employee salary reductions. Technically, HRAs are not a health plan, as we commonly think of plans, but rather they are an ACA and IRS supported method for employers to reimburse their employees for healthcare expenses. And they work!

In fact, HRAs worked so well for small employers that certain Insurers in California
threaten punitive actions against brokers to prevent brokers from showing HRAs to their clients.

The Court in a recent anti-trust lawsuit in California decided in favor of the Plaintiff and small employers when it issued an injunction preventing the Insurer from restricting access to these employer/employee friendly programs called HRAs. For years, Insurers in California threatened broker’s commissions and contracts if their clients implement HRAs. That is, until one TPA had seen enough. Now, Insurers no longer threaten brokers to restrict HRAs; but more about that in a future post.

The regulations and guidance issued under the Affordable Care Act, make it difficult for HRAs to be offered on a stand-alone basis, other than for retiree-only groups. The most common means for implementing HRAs, and the safest for employers, is to integrate the HRA with a group health plan that already complies with the standards of the ACA.

The Trump Administration issued an Executive Order that directs the DOL and the Departments of Treasury and Health and Human Services to consider proposing regulations or revising guidance to increase the usability of HRAs It also directs them consider means to expand employers’ ability to offer HRAs, and to allow HRAs to be used in conjunction with non-group coverage.

HRAs are under-utilized in today’s market so the Trump EO may be a shot of adrenaline to insurance brokers to look at HRAs as a creative way to help their clients lower cost and improve benefits.

The point is that HRAs have a 15 year track record of proven results for small employers that demonstrates how HRAs can work effectively to reduce costs. That 15 year track record also shows why it is that HRAs improve benefits every time they are implemented. The track record was accomplished in CA and we all know that CA is one of the most expensive states for healthcare premium and unit cost.  That’s a pretty good state to set an impressive track record.

The HHS may expand HRAs in a manner to give larger employers the freedom to reimburse employees for premiums on their individual plans (non-group) through an HRA. This idea of “premium reimbursement for individual plans” may prove disruptive to the group market as often happened with defined contribution plans over the past 20 years. If employers commit to provide a benefit plan then employers will benefit if they choose to maintain the integrity of the “group” plan to assure proper pricing in future years.

We’ll keep an eye on the market but in the interim, every employer with 2 employees to 2,000 employees should demand that their broker present them with an HRA option. That’s not advice, its common sense!

HRAs work for everyone, including Insurers, which once again proves that we’re all in this together.

Until next week.

Mark Reynolds, RHU
559-250-2000
mark@reynolds.wtf
It means “Walk the Faith”.

July 4th is a “uniquely American date” as the Celebration of our Independence. Let’s look at it’s history.

June 28, 2018

Let’s take a day off from our normal healthcare reform discussions.

Next week we celebrate the 4th of July which at its core is why we have the freedoms we enjoy and for which so many have fought. No where in the course of history on this planet has any nation achieved what the USA has or is trying to retain. So, let’s take a moment to remember why we have the freedoms to debate and disagree.
Please enjoy the brief history and interesting facts to follow:

Have you ever wondered why we celebrate the Fourth of July or the risk our original Founders took to make July 4th significant to us? Many people think we celebrate the Fourth of July because it is the day we received our Independence from England on July 4th 1776.  Not true because it would be another 7 years before we would gain our independence because the war with England to gain independence did not end until 1783.

When the original 13 colonies were first settled, and before we were called the United States, England pretty much allowed the colonies to develop freely without much interference. But starting around 1763 Britain decided that they needed to take more control over the colonies(which means money) and that the colonies needed to return revenue(taxes) to the mother country. England’s reasoning was that it provided protection to the colonies so the colonies needed to pay for their defense.

But the colonies did not agree and felt that since they were not represented in Parliament (Congress) that they shouldn’t have to pay taxes to England, which gave origin to the phrase “no taxation without representation”. But England continued to tax which led the colonies to form the First Continental Congress with the intent to persuade the British government to recognize the rights of the colonies. Of course England did not so a war was declared, which we call the American Revolution.

Most folks forget that the American Revolution (the war) lasted for nearly 10 years. Failing to get satisfaction at first, the leaders of the 13 colonies organized a second Continental Congress. It is this group that adopted the final draft of the Declaration of Independence. The first draft of the Declaration of Independence was written by Thomas Jefferson, it was revised by Ben Franklin, John Adams, and Thomas Jefferson before it was sent the Continental Congress for approval.

The Declaration was finished and ready for signature on July 2nd but was not voted upon and approved until 2 days later. All thirteen colonies stood behind the Declaration of Independence and adopted it in full on July 4, 1776.

The Fourth of July is known as Independence Day because that is the day that the Second Continental Congress adopted the full and formal Declaration of Independence. Even though we had declared that we were independent, the American Revolution was still being fought, which meant that we were still not independent.

After the war ended in 1783 the Fourth of July was celebrated for its importance and shortly thereafter became a holiday. We celebrate the Fourth of July as the most patriotic holiday celebrated in the United States.

Maybe our political leaders from both parties and at every level of government from local school boards to the US House and Senate would be wise to remember how it is that we celebrate the 4th of July to this day.
Below are some interesting facts you might enjoy.

Let’s all remember why we love the USA as well as how brave and wise our Founders must have been.

Did you know:
The Fourth of July commemorates the adoption of the Declaration of Independence. It was initially adopted by Congress on July 2, 1776, but then it was revised and the final version was adopted two days later.

  • As Thomas Jefferson penned the Declaration, Britain’s army was on its way toward to New York Harbor. It began:
    “When in the course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.
  • The Declaration of Independence was signed by 56 men representing the 13 colonies. The moment marked the beginning of all-out war against the British. The American Revolutionary War is said to have started in 1775, however. The Declaration was signed more than two years after Boston officials refused to return three shiploads of taxed tea to Britain, fueling colonists to dump the tea into the harbor in what became the infamous Boston Tea Party.
  • Several countries used the Declaration of Independence as a beacon in their own struggles for freedom. Among them, France. Then later, Greece, Poland, Russia and many countries in South America.
  • “Yankee Doodle,” one of many patriotic songs in the United States, was originally sung prior to the Revolution by British military officers who mocked the unorganized and buckskin-wearing “Yankees” with whom they fought during the French and Indian War.
  • The “Star Spangled Banner” wasn’t written until Francis Scott Key wrote a poem stemming from observations in 1814, when the British relentlessly attacked Baltimore’s Fort McHenry during the War of 1812. It was later put to music, though not decreed the official national anthem of the United States until 1931.
  • We’ve grown up: In 1776, there were about 2.5 million people living in the newly independent United States, according to the U.S. Censure Bureau. Today there over 330 million  citizens in the US so let’s hope all of us as Americans will celebrate Independence Day.

We hope you enjoyed the brief respite from the frustrating conversations concerning the reform of the US healthcare system. I wish to thank the folks at LiveScience for their research and insight.

Next week will be off in honor of Independence Day.
Maybe then we can get back to thinking America first because we are all in this together!!

Until  we talk again.

Mark Reynolds, RHU
559-250-2000
mark@reynolds.wtf
It means “Walk the Faith”.

 

 

Will elimination of the Individual Mandate hurt or help. Will Insurers benefit, they always seem to. But, how will our citizens benefit? Maybe it’s time to implement reasonable Pre-ex standards.

June 21, 2018

Jeez, I hate long titles, don’t you? But, sometimes one can’t help it.
Most Americans are not aware that there are 20 GOP-led states suing the Untied States to eliminate portions of the Affordable Care Act. Specifically, the suit argues the Individual Mandate is unconstitutional since the penalty for non-compliance has been reduced to zero.

Opponents of the suit fear that this will lead to the elimination of certain critical
protections. Their fears are that the provisions within the ACA that guarantee access to coverage as well coverage for pre-existing conditions, without exception. These two provisions are critical for individuals seeking coverage. But, they were also a catalyst leading to the huge-unprecedented increases in premium levels. Not the only reason for premiums increasing but certainly a big part of it.

The Press is being a little misleading about this or at least jumping ahead to conclusions that can’t honestly be made. Many reports state that if the GOP lead suit is successful then it “may” also cause similar issues for people covered on small group plans. I don’t agree with those conclusions because small employer plans were already regulated in every state to be GI and full take-over for previous coverage.

In small employer plans, pre-ACA, an employee signing up for his/her employer’s plan was provided guaranteed issue (GI) and if the employee had coverage within the previous 90 days was granted full take over. Full take over means no pre-existing conditions would be denied.

An important additional provisions was that small group plans, pre-ACA, included very reasonable provisions for new enrollees with no previous coverage. Generally these provisions stated that if a new enrollee, with no coverage in previous 90 days, had been treated for something in the past 6 months, the new plan would not pay for treatment for that condition until covered on the new plan for 6 months. Smart pre-ex provision that help control premiums and it prevented people from “gaming” the system.

We have discussed GI with reasonable Pre-ex provisions in a number of previous Posts, so you know what should be considered. Without a mandate, with teeth, the Insurers will be “gamed” if GI remains in place for individuals. Why pay for something now if the law says you can buy it later when you need it?

Maybe the result of the battle will be that Individual and Small Group Plans will remain GI but return to the reasonable pre-ex provisions most states mandated for the past 20 years. Specifically, if you sign up now, but had no coverage within the past 60 days, then you are accepted for coverage, except the plan is not required to pay for that which you’ve received treatment during the past 6 months until you have been cover for 6 month on the new plan.

If the new plan is replacing a current plan then the new plan is GI with full take over of coverage for all benefits covered under the new plan. Simple, smart, protects all Americans equally while providing protection for Insurers, too. It also protects those Americans, who always maintain their coverage, from those few Americans who try to “game” the system. The “gamers” cost Insurers but they also cost the rest of us since our premiums include an actuarial estimate for the Insurers cost of providing coverage to the “gamers”.

A reasonable provision for GI and Pre-ex conditions is an example, once again, of why we’re all in this together.

Until next week.

Mark Reynolds, RHU
559-250-2000
mark@reynolds.wtf

 

 

Premiums projected to increase by double-digit again in 2019. The only visible actions we see on healthcare premiums is to cast blame.

June 14, 2018

The headlines about premium increases are not getting the attention that the they produced just 2 years ago. Why is that? Projections across the country are for premiums for Exchange Plans will increase by 8-10% in the West to 19% to 59% in the East. Our minimal math skills tell us that these increases are not good but when compounded on previous increases then premiums reach staggering levels.

Why are Insurers increasing these premiums? Data which we’ll discuss below reflect 2017 as the best year for insurers since they signed on to the Exchanges.

But the blame game is in full swing and that may be partly why the headlines don’t command the attention they did in previous years. The American people are a lot smarter about these news stories than most politician give them credit. When citizens see Insurers cast blame and politicians cast blame and no one doing anything to help; they become skeptical if not down right cynical about the news. That cynicism is something with which I can relate.

The biggest “excuse” and most “blame” is that the Trump administration has refused to make the subsidy payments to insurers that the Obama administration had made in prior years. Remember those subsidy payments? The ones that allow members below certain income levels to pay little or no premium as well as lower the out-of-pocket cost for members. The burden of these payments was not authorized by Congress, say the GOP folks, plus the original ACA called for states to be weaned off Federal subsidies.

But now the bill comes due and everyone has their hands in their pockets as they pass the check around the table to see who will bite. Reminds me of a friend of mine.

Let’s talk about the insurers which are crying poverty. They state that the ACA requires them to accept all enrollees without consideration of current or past health status and cover any pre-existing health issues. In 2014, this was a valid concern. No one could accurately project what the cost of guarantee coverage with no pre-existing waivers would be, without a crystal ball. But, the Insurers sold policies, paid claims that were probably astonishing, received their subsidy payments then raised premiums again and again, anyway.

Now Insurers are looking at year 5 of the ACA. Insurers have increased premiums several hundred percent over the past 7 years and while their membership count maybe the same or even lower overall their revenues are much higher.

A recent article by the Kaiser Family Foundation included excellent analysis finding that Insurers in 2017 had their best financial year selling individual market health insurance since the Affordable Care Act began requiring guaranteed access to coverage for people with pre-existing conditions in 2014.

This analysis finds insurers posted their strongest performance in the individual market using two different financial indicators:

  • The average share of health premiums paid out in claims (or medical loss ratio) fell to 82 percent in 2017 from 96 percent in 2016 and 103 percent in 2015.
  • Average premiums collected in excess of claims (or gross margins) reached $79 in 2017 per member per month, up from $14 in 2016 and -$9 in 2015.

One can look at the reports by many Insurers that show enrollment down, some by as much as 40%, yet revenues have sky rocketed. Can you imagine if your business serviced 40% fewer clients but your revenues were higher than ever? Hard to digest isn’t it?

Anyway, the point is that the press can see that putting the “Premiums to increase dramatically” stories on Page One no longer compete with the other stories of the day. And I don’t even want to get started on what the other news is that they focuses upon, give me a break.

If you’re on a group plan sponsored by your employer you’ll be better off than if you were on your own. If your employer provides an HRA to tie with your group plan you will be in great shape. With employment numbers soaring it means that more people could be covered by employer sponsored plans. That’s good.

I hate the frog in the hot water analogy but that’s a bit of what we have here. Next week we’ll discuss the efforts by 19 state’s Attorneys General to void the “No pre-ex” portion of the ACA with actions that state “if the individual mandate is out then the no pre-ex is gone” which presents an interesting argument. Can’t wait.

These are confusing political times but we must remain committed because we are all in this together.

Until Next week.

Mark Reynolds, RHU
559-250-2000
mark@reynolds.wtf

Yes it’s true: California Voters have a chance to lower healthcare costs plus improve access. But it will take the proper “Vote” in the June 5th Primary and again Nov 6th in the general election.

May 31, 2018

As much as I hate to repeat a Post, I just can’t help it today because the subject is too important. California’s health plans are the most expensive in the land with killer high out of pockets and “way too skinny” PPO networks.
That’s not News, so why is that important?
Because, with your vote June 5th, you have a chance to set forth the real possibility of changing the healthcare delivery and plans available in Ca. Be sure to VOTE!

It’s true and for certain, California voters have a chance to start taking back control of the crazy out-of-control,  high-premium, low-benefit healthcare system in California. Premium increases exceeding 300%, since 2010, have literally destroyed our citizen’s access to the healthcare we need.

To lower premiums, improve benefits, increase access to more providers and get more health plan options – Voters just need to vote:

 Insurance Commissioner  –  Steve Poizner

For Governor  –    Travis Allen or John Cox
(Current polls show Cox in 2nd place trailing Gavin Newsome)

It’s that simple, REALLY!

Then, we can begin introducing the solutions that you have read about in previous Posts. Can you imagine a California in which you have:

  • Dozens of high quality health plans available.
  • Plans with benefits that fit your need – not the Government’s.
  • Rich plan benefits or narrow plan benefits.
  • Plans with huge provider lists.
  • Plans with narrow provider lists.
  • Premiums that are affordable and 50% lower!
  • Reasonable reimbursement for providers.
  • Transparency and better control.
  • Most of all: available when you need it!

I know what you’re thinking. How can two elected positions create such possibility for change? The truth is that it will take effort and a little time but my bet is that Ca. citizens would start seeing a difference within nine to fifteen months after these men take office.

Reports are starting to emerge projecting insurer premiums for 2019. Estimates are that premium may increase from 15% to as much as 100% depending on the state or region of the country. In Ca. we will see increases on employer sponsored group plans in the range of 10% to above 50% with further push toward Silver and Bronze plans.

Of course, we all know that the premiums we pay for Silver and Bronze don’t buy us first dollar benefits and leave huge out of pocket risks. If they do provide copays then those copays range from $50 to $250 which of course means people defer their medical care.

Regardless if you are Republican, Democrat, Independent, Libertarian or Green; we all have been hurt by the changes brought about by the ACA. This Fall’s election, the so-called mid-terms, provide Ca. citizens a chance to make a difference.

And isn’t that something we all crave, “a chance to make a difference”?

I could spend another 10,000 words outlining the potential improvements that might become reality if we vote wisely June 5th and Nov 6th.
But I’ll save that for future Posts.

Certainly we can all agree that elections provide a time when truly “we’re all in this together”.
Let me know what you think.

Until next week.

Mark Reynolds, RHU
559-250-2000
mark@reynolds.wtf
It means “Walk the Faith”.