Archive for July, 2018

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  • We also hear that the Individual Mandate (IM) has been “repealed” while premiums increase double-digit yet enrollment for members on non-subsidized plans has remained constant or increased a bit.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”.