Archive for January, 2019

Hospitals are now required to publish the rates they charge for services. Will this be helpful for patient’s health, for controlling costs, for lowering premiums? Let’s see.

January 24, 2019

This Federal legislative mandate is another fine example of Government wanting to help, thinking it can help, penalizing business and general community to do something it hadn’t before, then mucking it. It’s a mandate for hospitals to publish the rate they charge for the services it provides. The “no insurance coverage rate” or sticker price if you like.

Anyone who has ever purchased automobile understands what “sticker price” means. Simple, it’s the cost listed on the sticker glued to the car you’re looking to purchase.
Is that what every one pays? No.
Is it the starting point for negotiating. Yes.
Would the provider charge uninsured patients less if asked. Yes

If you are old enough you will remember the rate card nailed to the inside of every hotel room in America. The hotel and lodging industry referred to that as their “rack-rate”. It was mandated that the rate be displayed.

But, every time you looked at the rates on the card you would ask yourself “Does anyone ever pay that much?”. It was the hotel’s “not to exceed” rate but rooms would be priced based on supply and demand.

So, now patients and technically potential patients will get access to what a hospital will charge for the healthcare services, supplies and facility it provides for the treatment the patient seeks.

Of course this won’t be helpful to anyone and adds cost to the venders.

If insurance, Medicare or Medicaid is paying the bill then it will not pay anywhere close to the “rack rate” hospital’s post. In fact, even a person, uninsured, will not paid this amount.

So what good is this mandate?
Technically, a hospital can divulge what a service would cost under the coverage and discounts the member’s plan pays. They all have discounted PPO rates which could be used to divuge cost to a patient.
But insurers won’t like that and in fact would go nuts, then go to court. Insurers guard their negotiated discounts like the United States guards Fort Knox.

Insurers would hate to see their negotiated rates scattered among the internet for all competition to see. It goes along with the Insurer’s resistance to publishing claim experience or loss ratios publicly.

Your humble author has long advocated that Insurers be mandated to provide insured’s the loss ration on their plan for the year even if it be made available only at renewal time. Do you think it would be helpful for an employer, large or small, to be able to see that its loss ration is less than 100%. How  would an employer respond if its loss ration is 55% at the same time the insurer offers a 30% increase at renewal.

Posting rates will do little to improve healthcare outcomes, little to lower out-of-pocket cost and nothing to lower premiums.

So, this new mandate will not:

  • Lower out-of-pocket costs
  • Lower premiums
  • Improve healthcare outcomes

But, politicians can boast that they have done something. Just as the ACA caused a complete disruption to healthcare delivery and financing this mandate will provide a veil behind which insurers can hide. You’ll see.

Let me know what you think because we’re all in this together.

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

What if SCOTUS holds that the ACA is Unconstitutional? What can the GOP put in its place? You hold the solution, here!

January 10, 2019

Several years ago I jotted down a few ideas which, if implemented, would address at least the biggest issues in medical insurance and healthcare delivery: cost and access. With the recent Court decision deeming the ACA unconstitutional we need, that is the GOP, needs to offer betters solutions. The ideas below are a start toward that better solution.

You all know that I am an optimist trapped in a cynic’s body so my hopes of replacing the ACA with a workable solution are real but also guarded. But, what if you/we were asked for input to design a workable solution. Could you do it?

I have expanded the solutions, since jotting down my initial 12 points in prior posts, because I believe that there is an easier and less expensive means to address healthcare financing for the chronically poor, the uninsurable and the chronic uninsured. You may think that I have left a few issues untouched and if so let me know your thoughts.
However, I know that these ideas, if put in place, build the framework to address:

  • Those that want to buy insurance but are un-insurable.
  • Those who want to buy but who can’t afford the premiums charged for insurance.
  • Those who currently buy and pay for their coverage but are finding the increasing premium too much to pay. 
  • Those that don’t want to buy or will wait until they have a problem to buy insurance.
  • Guaranteed acceptance.
  • Pre-existing conditions.
  • How to push premiums lower
  • How to push unit cost of healthcare lower
  • Transparency (Total & Complete Transparency).

So, together we can develop the core outline of what Congress could build if it truly tried to bring about the best reforms for our system. Please give us your input to improve upon these points as well as address issues that we have not addressed or not addressed well.

It may be fun and interesting but who knows we might even make a difference.

Since Americans are used to the ACA mandates of kids to 26, unlimited lifetime, and wellness or preventive let’s leave those in. But,  let’s eliminate the Medical Loss Ratio (MLR) limits since no other industry in the world has its profit margin restricted like insurers are by the ACA. Other than that let’s assume we have a blank canvas upon which we can draw our ideas.

Here are the basic ideas to include in 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 prior coverage.
    Example – Pre-ex period: 12 months.
  3. Group plans of 2+ employees remain guaranteed issue with full take-over or “No Loss-No Gain” as it used to be called..
  4. Allow carriers a reasonable corridor for Risk Adjustment Factors (20%). Also, eliminate artificial pricing rules (such as 3:1 ratio) and let insurers determine pricing with their area rating factors based on their data and statistics.
  5. Tort reform: Loser Pays and/or Fixed Attorneys at 15%.
  6. Allow carriers and plans such as Association Health Plans to sell across state lines. (Possibly the most difficult of all.)
  7. Eliminate Essential Health Benefits and allow No new benefit mandates from states or Feds for five years. Allow insurers freedom to build plans as they determine.
  8. Mandate HRAs and MERPs permissible and available to implement on all plans.
  9. All insurers must publish and release statistics and experience data.
    It’s ok and can remain consistent with Hippa.
  10. Universal enrollment forms for all group plans and all individual/family plans.
  11. Health plan commission set at level 7% and does not increase as premium does.
  12. All Providers must post their rates per service. Hospitals must post their outcome statistics as well as infections, error rates, and other outcome data.
  13. State based or plan based re-insurance pools to assist Insurers in controlling premiums. If unlimited lifetime benefits are retained then Insurers and Plans need support to handle the increasing number of mega-claims. 
  14. Providing coverage for those who can’t afford to pay premium regardless of its cost:
  • Eliminate Exchanges. Allow people to be enrolled directly with the Insurer or Plan of Choice.
  • The IRS can maintain these enrollment records and disperse payments to Insurers and do so without adding fees to premiums.
  • That also eliminates the huge fees added to premiums by Exchanges to compensate the Exchanges.
  • Set the income levels for participation in subsidies (even use the current formula).
  • Eliminate the Medicare Expansion as it pushes people toward poverty.
  • Instead, keep these folks covered by the private market and allow them to obtain their coverage from private Insurers and Plans.

I also think we need to build incentives for employers to support wellness plans. If we want to bend the cost curve downward we must address behavior and expectations through affective wellness and benefit structure.

I do address coverage for the poor as I mentioned above. Setting a poverty level which assists folks in need but forces folks into Medi-Cal (Medicaid for outside Cal) is problematic as it may discourage folks from working their way out of their financial circumstances. Besides, those Medi-Cal plans “suck”. You would not want to be covered by one so why push these unfortunate folks into it.

So, this is our starting point. I encourage you to give this some thought and to give us your input. If we offer a worthwhile solution then who knows; we might make a difference. That’s what I mean when I say “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”.

U.S. Court rules the Affordable Care Act is unconstitutional. What should Americans expect?

January 3, 2019

So far, it’s amazing how little attention this Court’s decision is getting. Maybe there’s too many other headlines on which the Media must focus. Border security, N Korea, aggressive moves by both China and Russia, the 2,500 point reduction in the Dow, or the booming economy and threats of Fed interest rate increases, partial Gov. shutdown, or maybe even Christmas (Nah, probably not) are all getting headlines but the ACA being deemed unconditional is not.

Maybe the Media and the ACA supporters don’t want to highlight the Court’s decision for some political reason. The GOP doesn’t want to focus on it because it wasting of the best opportunity to Repeal & Replace. No, the GOP really has nothing to gain in bragging about this Court’s ruling.

To be fair and honest, there is nothing anyone on either side of the issue can do right now because the Court’s ruling will not be effective for at least a year and the Left will appeal the Court’s decision. Many believe this decision will be decided by the Supreme Court.

The Supreme Court (SCOTUS) is allegedly a “conservative” based court with a 5/4 advantage to conservatives. But, we can’t forget that it was Chief Justice Roberts who allowed the ACA to live based on his opinion that the non-compliance penalty was a tax and not a fine as the Dems had argued. 

That still seems surreal to remember that the Dems argued, even before SCOTUS, that the individual penalty was a fine and not a tax. Even the first sentence in Judge Robert’s opinion made opponents believe the ACA would be struck down but then cam the Judge’s second sentence which stated that the fine was indeed a “tax”. I can still remember where I was when I heard that and how fast the Media jumped on the initial statement believing the Court was striking down the ACA.
Geez, that was a bad day for American premium-payers!

So, what should we expect for the next 12 months? Not much really. The Politicians will try to use the Court’s decision to their own advantage regardless of which side of the opinion they stand. But, the only Republicans who may speak up will be the conservative group referred to as the Freedom Caucus. This handful of GOP reps fought hard for R&R but were unsuccessful due to the jello-filled backbones of the GOP leadership.

Heck, even reducing the penalty to zero, instead of repealing it completely, was weak. As you’ve read here before, your humble author has stated many times that setting a fine to zero does not mean a potential penalty is no longer in effect.

As of this moment, the partial Gov shut down is consuming the Media and the Left. They think this is an issue on which they can take the biggest political advantage so they will keep the Court’s decision in their back pocket, for now.

But, Republican, if they are smart, will introduce a replacement for the ACA that includes the features everyone likes but without the features that increase premiums. It is possible and you will read about it in next week’s post.

For now, sit tight. If you have coverage now, which I know you do, then you have nothing to worry about. People concerned about Pre-ex conditions also have nothing to worry about. In fact, the 10 million Americans covered by Exchanges who receive premium support have nothing to worry about either.

The fight will not be pretty and the Media will paint a picture of people suffering in the streets, of children not being immunized, of woman not getting prenatal care (or birth control pills) because they could not get the medical attention they need and deserve.

But, we’re in this together so let’s let people know that there is a better solution and it would increase benefits and lower costs. More to come.

Until next week.

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