Archive for August, 2017

Compassion with Action: why are the people of the United States never properly acknowledged for their compassion. And more importantly the actions they take to help others both home & abroad!

August 31, 2017

Is it a dopey question or do I identify a fact that all Americans know is true. This week we’re taking a break from healthcare reform out of respect for those suffering and assisting in the catastrophe of South Texas and Louisiana. I want to acknowledge and praise the great people of the United States for their consistent history of being there when others need help. Our people are always willing to help but seldom are they properly acknowledged.

Over the past 100 years, you can’t name a catastrophic event across the globe in which Americans did not lead the efforts to help the poor souls suffering from it. Often our own US media does not acknowledge our citizen’s efforts and too frequently it’s because of political reasons. Also, we don’t often hear other nations acknowledge our nation’s compassion and heroic actions to assist.

To name just a couple; the relief in Indonesia and SE Asia for tsunamis victims, earth quakes in Italy, Pakistan or Turkey, drought, starvation and disease in Africa, volcanoes all over, and of course the countless times our military has stepped in to provide relief, protection or freedom. That’s the short list but you know what we mean.

But at home, here in the US, we consistently rise up to help each other as well. We saw the American spirit during countless hurricanes and tornadoes, earth quakes in Ca, perennial blizzards and sub-zero temperatures in the northern states, Spring floods in the mid-west and east coast, wild fires across the West, poverty in rural  areas and inter-cities, and of course national crisis such as 911.

The point is that it’s the honest hard-working compassionate American citizen that steps up to lend a hand. Politicians usually just make speeches and pass out money, or at least low-interest loans, and too often try to take credit or cast blame.

But when you look close its the average citizen stacking sandbags, handing out food, water and blankets, donating desperately needed money and materials, and wading through waist-high flood-water to reach fellow citizens stranded by circumstances.

It’s hard not naming scapegoats and culprits while looking at these natural or man-made disasters. But not today, because we want to praise the good folks of our United States of America who are always willing to step up when the need is greatest.

Everyone cares, it’s human nature to care. But people taking action when action is needed is what makes the citizens of the United States so great and why the rest of the world relies so heavenly on us.

People who put others ahead of self and sacrifice their own comfort to help others are the backbone of the United States. I don’t wish to imply that people around the world in the UK, Europe, Asia and further aren’t willing.  But if one looks at the ledger of history and does a tally from where the most aid and comfort comes, one will see that the United States of America is the leader by far. Both in volume and percent of aid America sets the example to which all others should strive.

Anyway, this was on my mind. I hope you agree.

Next week, God willing, we’ll be back to offering our thoughts on the repeal, reform or repair of the American healthcare finance and delivery system.

Until then, please donate your time or treasure and say a prayer each day for all those in need. They are in Texas and Louisiana now but there are also people in need right there in your own neighborhoods.

It’s always true; but Hurricane Harvey is life’s proof that we’re definitely all in this together!

Until next week.

Mark Reynolds, RHU


We should not let Congress dismiss the concept of “Skinny Plans”. They may be just what every small employer in America needs. Here’s why!

August 24, 2017

The term “skinny plans” was being floated, promoted, applauded and battered about in Washington DC several weeks ago but politicians and pundits alike were missing the key point. And as usual, attaching a name that promotes a negative connotation to a reasonable idea has caused the facts to get obscured.

No one has pointed out the potential advantage Skinny Plans bring for tens of millions of Americans who get their health insurance through their employment. Nor has anyone promoted how this idea of a “basic coverage” could provide the means for small and medium size employers to provide better benefits at lower costs. Certainly lower cost than is available through ACA qualified Metallic Plans.

Employers could utilize these so-called Skinny Plans as platforms upon which to build plans with better benefits than ACA Platinum Plans but at lower cost than ACA Silver or Bronze plans.
Are you kidding?

Nope, it’s been done before and “skinny plans” could provide the be-all save-all solution to the crisis facing every small employer: the prohibited cost of providing a health plan for its employees.

The rhetoric surrounding the healthcare reform debate and specifically this issue of Skinny Plans ignores the fact mentioned earlier that the majority of Americans get their health insurance provided to them by their employer.

Small and medium size employers provide group health plans for their employees for a number of reasons. It’s critical to remember that the most compelling reason why employers bare this cost is that they must provide a group health plan in order to compete for and retain good employees. Without good employees no employer can stay competitive nor will it stay in business.

So, how can these Skinny Plans be helpful for employers? It’s pretty simple actually!
Employers will implement an HRA (Health Reimbursement Arrangement) to enrich the benefits of the Skinny Plan or provide benefits not covered by the Skinny Plan. It’s been done for years for employers and was perfected in California.

A qualified TPA can lead any employer through the process of choosing a Skinny Plan (or ACA Bronze plan now), which lowers the premium costs 30-50%, then implement the HRA with the extra benefits the employer wishes to provide.

The key to the HRA Plan’s success (by success we mean reducing the employer’s costs while providing rich benefits) is that most people in America don’t actually use much healthcare in a given year. A few years ago, the Kaiser Foundation released an extensive study demonstrating that 85% of covered people incur less than $1,000 per in in healthcare expenses per year. Look around you at the people you know and you will see that their study’s outcome makes sense.

In addition, the data analysis from a prominent TPA, in California, proves that fewer than 5% of any group of people will incur enough charges in a calendar year to meet the high deductible plans sold as Bronze plans today. Interesting, isn’t it?

So, the result of buying a Skinny Plan and adding an HRA is:

  • Premium costs would be 30-50% lower.
  • Employers will only incur HRA claim costs if a claim is incurred.
  • Employers can offer richer benefits with HRAs.
  • All employees, and their dependents, will enjoy richer benefits.
  • Employees are better able to afford adding dependents to their plan.
  • Providers will get paid by TPA on behalf of the employers.
  • Providers will then be happy which is important for members.
  • The TPA will make it easy for employers & employees.

Starting in 1996, way before the ACA, small employers in Ca. enjoyed success with this type of health plan and actually saw their healthcare costs reduced and stabilized.

The Skinny Plan with HRA concept will work so don’t be fooled by the opponents who argue that Skinny Plans will increase premiums for everyone else. They will not!
The viability of the Skinny Plan idea is in the small and medium size employer market so they would be available only in employer sponsored group plans.

The individual plans have been causing all of the hoopla for the media with the need and affects of guarantee issue and no pre-ex on premiums and insurers. So, if you hear the doom and gloom rhetoric from opponents of the Skinny Plans don’t be alarmed because now you know there is a solution, an employer driven solution, actually.

Plus, let’s be honest, the GOP probably won’t be able to get anything passed anyway.
Sorry for that editorial comment. But, if the GOP does fail with its R&R effort then it could circle back around with a simple bill, to amend the ACA, that would allow insurers to offer Skinny Plans. I know, its simple, right?

We know this approach will work because it worked so well lowering premiums in California that a number of carriers tried to restrict Employer’s access to HRAs forcing one TPA to take legal action. We’ll talk more about that in the future.

Let me know what you think because as you’ve heard, we’re all in this together!

Until next week.

Mark Reynolds, RHU

Have you ever felt the need for a good rant? I mean a real kick-in-the-a__ good old fashion rant.

August 17, 2017

If one thinks about our politicians and how they should fix our healthcare finance and delivery system it can lead a person to a good rant. I’m sure you agree.
But first, let’s make sure we’re all on the same page here. So, just for clarity’s sake, let’s define what I mean when I say “rant”.

Definition: Rant

  1. speak or shout at length in a wild, impassioned way:
    “she was still ranting on about the unfairness of it all”
  1. a spell of ranting; a tirade:
    “his rants against organized labor”
There, now we can read on without fear of missing the point of my tirade, diatribe and fulmination. Besides, sometimes don’t you just need to say “WTF”?
I’ve promised before that we could resolve the whole healthcare reform issue in 45 minutes if you just put me in a room with 4 other people I know and let us map out the steps to increase access, improve benefits and lower the cost of healthcare without leaving any citizen behind. OK, Maybe 90 minutes.
I realize that sounds brash and vain but in the absence of political pressures I believe that statement is 100% true.  Give us a policy wonk to write it all up in proper form and it would be done.
We know that won’t happen, of course? So, let’s take a few moments to identify some of the dopiest, self-serving, and even cruel aspects of what we have witnessed from our politician’s approach to helping America improve its healthcare financing and delivery system.
7&1/2 Years – Just by stating 7 & 1/2 years you know exactly what I mean. If you had over 7 years to plan something would you have a better action plan than the GOP did on Repeal & Replace? Of course you would because you aren’t a politician with no accountability.
Think of what one can achieve given 7&1/2 years:
* Graduate from High School and finish 4 years of college.
* Meet, court, and marry the mate of your dreams.
* Plus get divorced if you follow the national averages for marriage.
* Give birth to 4 kids-one at a time. Crazy but achievable.
* Join the military and do 3 tours in some hell hole location.
* Find your dream job, tire of it, quit and move to another state.
* Vote for your Congress-person 3 times
* Note for your Senators once
Overall outcome – Our country is getting screwed by the vary people we elect to make our lives better and safer!
Individual mandate – to appease the insurance industry for forcing it to accept anyone regardless of health without any wait for covering pre-existing conditions this mandate was promised to get every citizen covered. But, instead of making it workable the penalty was set so low that no one worried about it. The result, as expected, was that only the very sick and people who would have bought insurance anyway actually bought insurance. Then to make it worse add a rule so that people who did not buy could buy later after the Doctor delivered a costly diagnosis.
Overall outcome – premiums for individual plans increased over 100% since 2013.
3:1 Premium ratio – The promise was that changing this ratio from the traditional 5:1 ratio that insurers would lower the cost of premium for older folks in their 50s and 60s. The problem was, of course, that with GI and no pre-ex the insurers naturally increased the rates they thought they needed to cover the folks in their 50s & 60s. Then the simple affect of 3:1 math  kicked in increasing the premiums on the least costly, least likely to use their plans and on those most likely to go without coverage. That being young healthy people in the 20s and early 30s.
Since the penalty for no coverage was less than a month’s worth of Starbucks for some people and the youngsters knew that they could buy insurance later, if they needed to, anyone could have projected the result.
Overall outcome – premiums increase for younger folks as well as older folks.
Insurer Subsidies – Since insurers were being forced to accept everyone, regardless or health or previous coverage, and pay for almost everything, and I mean everything, this provision was included to “insure” the insurers that they could make money in the new world of ACA. Of course, insurers rely on actuaries and actuaries need to CYA which meant that they would price and build plans with the premiums they thought they would need. In addition they developed the idea to slash 50% of the doctors fro their PPOs to further reduce the potential for members to incur claims.
Overall outcome – Premiums increase as though there were no subsidies promised. Plus, now insurers are unsure if President Trump is going to release the subsidy payments so rates are being increased even more.
* Footnote: many health insurers are showing huge profits and the price of their stock has increase 30-50%. Check out the rise in stock price over the past 2 years for UHC, Anthem, Aetna, and Centene. Insurers have increased premiums and changed their plans/networks so much that it can be argued that they don’t actually need the subsidies.
We should call this a “corporate entitlement program”.
Subsidies in State Exchanges – the concept of a market place where individuals could shop for the best coverage for their families sounds like a noble idea. But, when you pair that with premium subsidy for enrollees who have incomes higher than Medicaid enrollees the idea loses its merit. It is reported that 90% of citizens covered in State Exchanges have their premium paid by the ACA. This causes several problems. The insurers can theoretically charge whatever they desire because they know the ACA is paying for it. But at the same time insurers must overcome the GI and no Pre-ex provisions. Add to that, limited choices, few insurers participating, narrow networks, and poor marketing to really damage a good idea.
Overall outcome – Covered members are “hooked” on their subsidy yet get very little choice in their coverage. Many states have no insurers while states with functioning Exchanges offer very limited choices. On top of that the premiums for these plans continue to increase by double digit.
SB 161 – this is a California law but other states have similar legislation. SB 161 effectively eliminates Self-funding with Stop Loss re-insurance as an option for employers with fewer than 100 EEs. Self-funding could be effective at maintaining rich benefits and  lowering cost for both employer and employee but SB 161 eliminates that potential. California implemented SB 161 specifically to eliminate competition to its ACA Exchange for group plans, called Covered California. Very few employers have purchased their group plans through Covered California so the effect was detrimental to small employers.
Overall outcome – Employers with fewer than 100EEs lost because they no longer have self-funding as a reasonable alternative for the increasing cost of fully insured plans. The insurers no longer worry about the competition to their plans from employers self-funding with stop loss. Big loss for small employers!!Expanding Medicaid – since we’ve written about this so recently I won’t bore you with too much. Medicaid expansion was promised to be the means for poorer citizens to get coverage because they could not afford to pay premium regardless of the price of the premium. It was designed as an entitlement program. Clearly this has affected the Repeal and Replace efforts of a spineless Congress as well as Governors unwilling to give up the 90% Medicaid reimbursement..
Overall outcome – it has made it politically risky and therefore impossible for the GOP to keep the promises it made over the past 7+ years. It means that middle-class Americans are screwed for the foreseeable future, doomed to see their benefits erode as their premiums and out of pocket costs increase.

I could go on for a while, maybe for hours, but you can see by the subject matter that things are mucked up. I always get some good feedback to our Posts so if you can add anything to my list I will appreciate it.
Alright, that’s my rant. I can’t say I feel any better but I know I’m not alone in my opinions or emotions.
I know we’re all in this together so I hope it helped you a little.
Until next week.
Mark Reynolds, RHU

The Expansion of Medicaid was one of the biggest obstacles to Repealing, Replacing or even Repairing the ACA. Let’s dig into it & understand why.

August 10, 2017

As usual, the national discussion to repair nearly any Federal program often obscures the important issues that could actually help make a difference. In addition, the media likes to lock-on to buzz words or sound bites to ignite hysteria.  Therefore, attention is on the wrong issues that are actually hyped up in an effort to gain viewers.

Plus, Politicians get side-tracked, either intentionally or not, but they focus on the wrong issue because they all fear the potential of giving their opposition ammunition for their next re-election. Cynical I realize, but am I wrong?

There were at least two such issues obscured by these efforts during the recent GOP efforts to R&R the ACA.
One issue was the promotion of the number of citizens covered under individual plans, either through Exchanges or direct to insurer. That promotion often misstated the variance in the number of citizens covered under individual plans prior to and after the ACA as well as the vast difference in benefits.

But the second issue, that the Press and the GOP either ignored or misjudged, was the impact of the Medicaid Expansion which is what we will discuss today. We’ve talked about Medicaid Expansion before but let’s “expand” that discussion to look at some real numbers. Then, we’ll see why the Dems were so clever with Medicaid Expansion and why so many Governors and GOP Senators are reluctant to give it up.

Nationally, Medicaid enrollment is 73,421,500. Of that total, 14,409,000 are due to the Medicaid Expansion. That’s a growth in Medicaid of over 20% nationally. The reason for the explosion was, of course, the Federal subsidy for ACA Medicaid is 90% so the financial impact is huge.

I’ll use California as an example because its numbers really expose the issues caused by a Governor’s acceptance of the Medicaid Expansion. First, two comments. First,  the California Governor responsible for accepting expansion was Republican Arnold Schwarzenegger (alleged Republican anyway). The second is that if I were from one of the 49 other states I would be PO’ed that Ca has so many people on Medi-cal (Ca calls it Medi-cal instead of Medicaid).

California has roughly 40 million residents. Based on stats from Jan-Mar 2016 Ca had 13,107,000 residents on Medi-cal. That’s 1 out of every 3 residents is covered by Medi-cal, a government entitlement program. Holy cow, does that amaze you? Disturb you?
But, the numbers get worse.

Of the 13,107,000 covered by Ca’s Medi-cal in the Spring of 2016, 3,541,700 are due to Ca’s Expansion of Medicaid. They are called “Newly Eligible”. Stated by percentage, Ca’s Medi-cal population increased 37% from 2014 to 2016. Does that amaze you?

A few weeks ago we discussed the Federal reimbursement share under the standard Medicaid program compared to the Federal share under the ACA. You will remember that the subsidy is structured based on the financial prosperity of each state. For example, under standard Medicaid subsidy, in existence for 50 years, Ca gets about 50% of its Medi-cal cost paid by the Federal government but Mississippi gets 75% paid. Theoretically, I guess Ca is a more prosperous state than Mississippi.

But, as you remember, the ACA subsidy for Medicaid expansion started at 100% then dropped to 90% where it will continue unless changed. There is your first clue.

California gets 50% reimbursement for its regular Medi-cal enrollees but it receives 90% reimbursement for its ACA Medicaid (Medi-cal) enrollees. If the ACA goes away or the subsidy is changed or lowered, then how does Ca cover those 3,541,700 residents that are currently covered by Medi-cal. Those folks get their coverage for free and the ACA is paying for it. Granted, Medicaid, even if it’s called Medi-cal, is not the best insurance but it is free.

Of the 31 states that expanded Medicaid, 14 of them have Republican Governors. Many of those states such as Alaska, Arizona, Kentucky, Maine have GOP Senators. The point is those 14 Governors must balance their budgets each year, unlike US Senators or Congress-folks, therefore, some of those Governors leaned on their Senators to oppose any reform that lowered or eliminated the state’s subsidy for Medicaid expansion.

Back to California, sorry. You can see by the numbers that if the Medicaid subsidy were lowered by any amount that the great State of Ca would have a huge budget issue. Now, Ca could eliminate the coverage provided by Expansion but then those covered residents, some of whom are actually legal and may vote, might stay home on election day.

Or, Ca could maintain the coverage for the “newly eligible” 3,541,700 Medi-cal folks and Ca could pay for the difference between the current 90% subsidy and the 50% paid under standard Medi-cal reimbursements. I don’t even need to do the math for you on that calculation(even if I could do the math) because it will be a staggering number for the Ca legislature to address.

So, when the GOP returns to Repeal &Replace “or Repair” it must do a better job of promoting its intent for this population of people. No question that these covered folks can’t have the proverbial “rug” pulled out from under them. It wouldn’t be fair even if the GOP was willing to accept the political fallout.

The House bill would have allowed for folks to use their subsidy to buy their own private insurance outside of an Exchange and directly from an insurer. Is that a good idea?

So, that’s one reason why so many US Senators and Congress-folks were reluctant to support either the House or Senate’s attempt at R&R. I think a few Senators and Congress-folks opposed these R&R attempts out of contempt for the President while others could not resist the support they receive from special interest group such as Planned Parenthood. Both bills were not good products so it made it easier for opponents to resist even if their reasoning was self-centered or vengeful.

For now, you know the importance of the Medicaid Expansion so that what ever comes out in the coming months you will be informed. At least I hope this helps.

Let me know what you think because we are all in this together.
Until next week.

Mark Reynolds, RHU


Surprise-surprise, the Senate failed to pass anything for Repeal and Replace. Now, What? Here’s an idea for the White House to consider.

August 3, 2017

You have read it here before that I think creating a real solution for reforming healthcare is simple and straight forward.  I know that sounds naïve given the complexity of healthcare financing and delivery as well as the influence of political correctness and our politician’s drive for self-preservation.

But for the Trump Administration, now would be a perfect time to submit to Congress a complete package of reform to replace the ACA with a reform package created from real world workable solutions.

I’ll outline the ideas below but to set the table we suggest that the title and first line of the bill should be, in legislative speak, “The following repeals entirely the Patient Protection and Affordable Care Act including all of its subsequent regulations, etc, etc, etc. & so forth”.

That title does not mean that we will not implement or retain certain portions or aspects of the ACA such as kids to 26, guarantee acceptance, and so on. But, we will abandon all of the taxes, the mandates, the public exchanges, restrictive rating rules such as 3:1 premium ratio and the Minimum Loss Ratio.
But, we begin with a framework that will meet the intent of all good Americans.

After you read the Basic 12 we’ll talk about the folks included under the Medicaid Expansion.
Here are 12 basic ideas that frame a bill to replace the ACA:

  1. Make health insurance premium 100% tax-deductible for anyone who pays it.
  2. Make all fully insured plans for individuals and families guaranteed issue but with a reasonable Pre-existing period for no coverage for prior 63 days.
    * Pre-ex period: 6/12 months, which means no coverage for that specific condition    for 12 months if treated within previous 6 months.
  3. Group plans of 2+ employees remain guaranteed issue with No Loss-No Gain Take over. This would follow the Pre-ex explained in #2.
  4. Allow carriers a reasonable corridor for Risk Adjustment Factors (+or- 15%). Also let insurers determine their area rating factors based on their data and statistics.
  5. Tort reform: Loser Pays and/or Fixed Attorneys at 15%.
  6. Eliminate mandated benefits such as the Metallic Plans
  7. Allow carriers and plans to sell across state lines. (Expand ERISA preemption)
  8. Re-insurance Pools designed to help insurers price their plans without the detriment of people “gaming” the system or to others in the system.
  9. Make HRAs and MERPs permissible and available to implement on all plans.
  10. All insurers must publish and release statistics and experience data.
  11. Health plan commission set at level 7%, does not increase as premium does and use universal enrollment forms for all group plans and all individual/family plans.
  12. Providers must post their rates per service. Hospitals must post their outcome statistics as well as infections, error rates, and other outcome data.

You see that I did not include the Medicaid Expansion coverage above.
I would leave the current Medicaid Expansion with Federal subsidy in place for two years following enactment. Then, starting January 2020 for example, reduce the Federal match for the Expanded coverage by 15% per year until it equals the Federal match standard for each state’s traditional Medicaid population: the disabled, the poor, and pregnant woman.

Each state then has a few years to determine for its own citizens if or how it chooses to provide subsidies for the able bodied working age folks that sought coverage on Medicaid under the ACA. States may even decide to let their folks use the state’s subsidy to pay for the plan the citizen chooses instead of forced enrollment on a crappy Medicaid plan. Folks on Medicaid would appreciate that freedom.

We also need to allow employers to build incentives to support wellness plans. If we want to bend the cost curve downward we must address behavior and expectations through real wellness and benefit structure.

So, that can be the Trump Administration’s starting point.  It would eliminate mandated benefits and dopey pricing rules that automatically increase premiums. It would eliminate mandates, taxes, and guidelines that choke off competition.

It would retain the perks implemented the first 3 years of the ACA such as kids staying on parent’s plans, guarantee issue and no penalties for pre-existing conditions. Plus, it would encourage competition by giving insurers an incentive to participate and compete which will bring down premiums and keep the benefits we all know we want.

So that you don’t think I’ve gone completely crazy I should say that I don’t think any of the above will happen. To be sure, there will be lots of hand-wringing and belly-aching about the failure of the ACA but no real action will be taken.
Remember, I’ve previously confessed that  I’m an optimist trapped in a cynic’s body.

And sorry for that opening in the title “Surprise-surprise”. I was not trying to imitate Gomer Pyle. (Maybe that’s too dated for you younger readers). It was my attempt at sarcasm for having any hope that Congress could get anything meaningful accomplished.

Well, that’s it. Let me know what you think and what you would add to make it work.
After all, we are all in this together!

Next week we’ll have a suggestion for Congress in lieu of repeal and replace.
Until next week,

Mark Reynolds, RHU