Archive for the ‘affordable care act’ Category

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

Last July, our Post heading was “What would the consequences be if the GOP passes NO legislation to Repeal & Replace? Let’s look at the impact on insurance coverage.” Were we RIGHT?

April 19, 2018

Below is a re-Post of July 27th 2017 with a few comments highlighted in Red. With midterms only 6+ months away, will the decisions made by the GOP last year come back to bite? Read on to see if we were close.

 As I write this post, the Senate has voted to open hearings and take amendments for the Senate’s R&R bill. Basically this is the Senate’s last effort do accomplish anything  for now on Repeal & Replace. Without being pessimistic, I would wager that the smart money will be bet on nothing coming of this.

Regardless of one’s political leaning everyone must agree that action is needed to either replace the ACA (with something better) or make repairs to the ACA (that will keep it alive). I realize that is a big summation but if we are honest then we must conclude that the ACA is failing so one way or another action is needed. Either for the benefit of the millions of Medicare Expansion subsidized enrollees or for the tens-of-millions of premium paying citizens and employers, the ACA needs either fixed or replaced.

So, what would the consequences be if our House & Senate don’t do anything. That is, if they don’t provide or modify the subsidies for the insurers and all of the other ACA issues that need changed to survive or don’t replace the whole darn thing, then we will see a number of absolutely predictable results.

Of course, the Politician’s thoughts will immediately turn to their own future and the 2018 elections (probably have been already) but I want to focus on the impact to all of us, the hard-working premium paying, mortgage paying, car payment making, tax paying citizens. It won’t be good but let’s look at it:

  1. Regardless of whether or not the subsidies of the ACA are paid to insurers we will see: (Correctly so, they’re not paid, yet.)
    a. Premiums for individual plans increase double-digit (20% or more) and be projected to continue for the next few years. It’s happening!
    b. The Counties without an insurer for the individual ACA plans will continue to increase. It’s projected that as many as 1/3 of all counties will have no individual ACA plan available. In the more rural states we could see the number of counties with no individual plans exceed 80% of the counties within those states.
    YEP, that’s what’s happening!
    c. The number of insurers willing to even offer plans anywhere in the country will decline, including those insurers offering plans outside the ACA Exchanges for both group and individual plans. Sadly, for rural areas this is true.
  2. Medicaid enrollment will continue to rise. Even though Medicaid plans provide lower benefits and there are fewer providers, most people don’t realize those facts until it’s too late. Besides, the idea of “free insurance” will become more and more appealing as premiums continue to rise for the tens-of-millions of premium paying citizens that use very little or no healthcare each year. “Why should I pay premium when I never use my plan and those folks are getting it for free?”. Right?
    This is happening plus a few states are trying to expand further.
  3. To summarize: fewer insurers offering fewer choices with few participating providers all at premiums increased each year. That is correct, Madam.
  4. Of course, the result of # 1, 2, and 3 above will lead to another crisis because there won’t be enough money to pay for all of the Medicaid claims and insurer’s subsidies. Which will lead to:
    a. Increased taxes or create new taxes on benefits to generate more funds.
    b. Decrease the benefits at either the plan benefit level or utilization level. That means the IPAB “Independent Patient Advisory Board” or Death Panel will decide what gets authorized and covered and what does not.
    Your 90-year-old mom may need a new hip but will the IPAB authorize it?”
    Luckily, as you read in previous Posts the IPAB is dead, not your 90-year-old mom.

We could go on and on because it is clear that the entire healthcare finance and delivery system will feel the impact of our Congress doing nothing. There is some hope though due to the President’s EOs for AHPs.

One additional concern is the “overly optimistic political corrected” desire to pass a “skinny bill” that would simply repeal the Play or Pay mandates. That could be catastrophic to insurers and to premiums that would need to be increased.

I don’t understand politics and have the scars to prove it but I do try to understand human nature. Human nature will drive most politicians to look out for themselves in their own individual voting district throughout the healthcare debate. This is already occurring in many districts.
Sad thing is that the GOP seems to be immobilized from taking action on R&R  due to the criticisms from people who wouldn’t vote for them regardless of any action taken.

Makes you want to ask, “So, a small percentage of people in your district, who wouldn’t vote for you under any circumstances, are preventing you from doing what’s right for tens of millions of American?” See this example before, haven’t we?
As I said, I don’t understand politics.

Sorry for the negative outlook concerning our Congress and especially its leadership. But, since neither the House nor Senate bills actually repeal the ACA there seems to be little to ignite optimism. And of course, times and circumstances change the immediate need of the population so all help is on hold.

I think we can point to the children’s book “The Emperor’s New Suit” as the beginning of the GOP’s downfall.  You can’t tell people it’s an ACA repeal bill, while leaving the core foundation of the ACA including taxes, and expect the people to embrace it. Reducing the Play or Pay penalties to zero and calling it repeal  does not repeal the Play or Pay core fear of the ACA. It only increases premiums.
I didn’t like that book when I was a kid, and I still don’t!

Well, we’ll see what happens this week and together we will address it.
Because, we’re all in this together, right?
It’s because we suffer with these political blunders together that makes it more frustrating. Together, we are fed up and should do something.
I know – vote.

Until next time.

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

 

Sometimes, don’t we need to take a step back to look at where we could have gone. That’s really true these days for Healthcare Reform!

March 22, 2018

Starting back in 1992 and repeated over the past 10 years we’ve written about the core issues to address in order to control and lower healthcare costs both from premium and from providers. But, as the calendar turns weeks into months and months into years it’s easy to lose sight of the fundamental issues and bedrock ideas, which when implemented, can make a difference.

These days the political discussion in Washington DC stays clear of “repeal & replace” for a number of reasons, mostly partisan reasons, actually. But if you listen carefully and follow closely to can see various congress folks trying to implement their own ideas to address some specific issue important to their own constituents, or their re-election.

Lately, we hear tell of “shoring up the markets” to control premium increases. We hear discussion about financial support in states that heavily adopted public exchanges. We hear about states longing for Medicaid expansion because the ACA is eating their state’s budget alive.

These discussions are really no more than scratching where it itches for those specific congress-folks. The actions those congress-men/women promote don’t really address the inherit problems caused by or neglected by the ACA . So, they won’t be more than a band aide on an elephant’s bruise. You thought I would say something else, didn’t you?

But you know that I am an optimist trapped in a cynic’s body so my hopes of replacing the ACA with a workable solution are still real although I admit guarded.
If you were asked for meaningful input in designing a workable solution. Could you do it? I bet you could and you’d come closer to a workable solution than the ACA did or the GOP has offered to date.

We first published the 12 ideas below in 2006. I think it’s worth dusting off these ideas to see which would still make a difference. What do you think?

  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 condition period for no prior coverage.
    Pre-ex period: 12 months would encourage participation.
  3. Group plans of 2+ employees remain GI with No Loss-No Gain Take over.
  4. Allow carriers a reasonable corridor for Risk Adjustment Factors (30%). Also let insurers determine area rating factors based on their data and statistics.
  5. Tort reform: Loser Pays and/or Fixed Attorneys at 20%.
  6. Allow carriers and plans to sell across state lines. (Maybe the AHPs??)
  7. No new benefit mandates from States or Feds for five years plus allow insurers freedom to build plans that the market demands. That the people demand!
  8. Mandate HRAs permissible and available to implement on all plans.
  9. All insurers must publish and release statistics and experience data.
  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. Providers must post their rates per service. Hospitals must post their outcomes.

We are all used to the ACA mandates of kids to 26 and wellness or preventive, so let’s leave those in place.
But, let’s eliminate Unlimited Lifetime levels and return to $5M per insured
Also let’s eliminate the Medical Loss Ratio (MLR) limits since no other industry in the world has its profit margin restricted like insurers do. 

Then let’s go crazy and build in incentives for employers to support wellness plans. If we want to bend the cost curve downward we must address member behavior and expectations through real wellness and benefit structure.

With the brief outline above we can provide solutions for:

  • Those that want to buy insurance but are un-insurable
  • Those that don’t want to buy & wait until they have a problem to buy insurance.
  • Guaranteed acceptance
  • How to push premiums lower
  • How to push unit cost of healthcare lower
  • Total transparency of statistics and outcome data.
  •  Improving benefits with lower out of pocket limits.

So, there is a quick review. I encourage you to give this some thought and to give us your input. If we put something together worthwhile then who knows; we might make a difference. There’s an election this Fall, remember.

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

Until next week,

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

Trump Administration releasing new standards for Short-term Medical Plans. Is this good, bad, no big deal? Let’s discuss.

March 8, 2018

President Trump’s administration has released “new rules” which will allow Short Term Medical Plans (STM) to be offered for up to 12 months. This is good news for tens of thousands of Americans but it will cause ACA advocates to go crazy. Which is kind of fun to watch, actually.

In the past I’ve not talked about STMs as they were restricted by the ACA and certain states which prevented STMs from being a long-term or even intermediate term solution for reforming our healthcare issues. STMs had been designed:

  •  As temporary coverage, lasting for a few months. while
  • For workers  between jobs.
  • To provide limited protection.
  • Portions of hospital or doctor bills.
  • Not to be long-term coverage us it made sense to member.

But, premiums have increased 300% over the past 7 years and out of pocket limits on ACA compliant plans have increased to a point where they can cause financial ruin. No one, who avidly or rabidly supports the ACA, wants to admit or acknowledge that the increase premiums are paid primarily by un-subsidized population of American. Stated more clearly, people who don’t received subsidies pay the brunt of these increased costs.

 “We want to open up affordable alternatives to unaffordable Affordable Care Act policies,” said Health and Human Services Secretary Alex Azar. “This is one step in the direction of providing Americans health insurance options that are more affordable and more suitable to individual and family circumstances.”

STMs could add more options at potentially a fraction of the premium of ACA plans. STMs would help healthy folks, strapped financially by ACA plans, in both big city and urban areas but certainly in the rural areas of the country.

Opponents will argue at least three issues for the downside of STMs. The first is that STMs will dilute ACA compliant plans as the premium paying healthy folks seek out and obtain coverage from a lower priced STM. If you were healthy and could slash your health plan premium by 50-75%, would you try it? Heck, Yeah!

Currently, under the ACA, STMs are offered generally for only 90 days at a time then must be renewed. Generally speaking their benefit designs are “crap” as one would honestly describe. One can’t blame an insurer for a low cost “crappy” plan when it knows its customer could use the plan then be gone in less than 90 days. Insurers could never sustain a reasonably designed plan with Rx copays and high limits on coverage because a single episode of care would wipe out reserves.

But, we have not yet seen what the market will demand of STMs when they can be offered for up to 12 months. An insurer then could assume that members would retain coverage for a longer period and thus may be able offer plans a bit richer in benefits while still a fraction of ACA plan prices. We’ll see about this.

There are reports from folks at CMS (Center for Medicare and Medicaid Services) estimate that these STMs might attract up to 200,000 members nationally. That estimate could be dead-on accurate or wildly off. But, since the majority of working Americans receive their benefits through their employer it may in the ballpark.

I said above that opponents would argue three issues. The second is that acquiring coverage requires folks to answer health related questions on the application, and insurers can reject applicants with preexisting medical problems.  ACA plans cannot underwrite applicants and cannot refuse coverage even if an applicant is in an ambulance heading for the hospital. 

The third issue opponents will absolutely hate is the benefit design of these STMs. STMs will certainly not include the Essential Health Benefits or pediatric dental, or maybe even wellness/preventive benefits. STMs will be designed and be appealing to healthy folks

Opponents will argue that citizens will be uninformed about the plan benefits and be buying plans that do not provide the coverage that our citizens require. Opponents will not give these healthy premium paying Americans and credit for wisdom or discernment.

Those are three very important objections and they must be addressed because there will be some states, such as Ca, that will not like STMs and will fight there presence in the state’s market.

But, the primary objectors will be:

  • Rabid ACA supporters who actually want the ACA to morph into single-payer plans, but are intellectually dishonest about their motive.
  •  Insurers who have been collecting huge premiums and reporting record profits will fear losing healthy members who are paying their ACA inflated premiums.

Will STMs be “skinny plans” which applicants need to clearly understand, yes. But, American shoppers are pretty savvy plus they can access insurance professionals to help.

What do critics say, “the proposed regulations for offering ACA non-compliant plans along with the alleged elimination of the individual mandate by Congress could render the Affordable Care Act even less viable”.

 Others will state that these plans won’t include critical benefits such as mental health coverage which in in the news so much lately due to the apparently mentally impaired man in the Florida school shooting.

These objections shouting “buyer beware”, “there are no benefit” these plans will cause death” will be replayed by the liberal media so much you will wish you could listen to a “ZYPPAH” commercial.

One by-product could be that if the ACA compliant plans are impaired, due partially to eroding healthy membership, it might accelerate the death of the ACA or creation of more alternatives. That would take time but if Congress won’t do the job then maybe time and circumstances will.

Robert Lasewski an industry consultant says, “If consumers think Obamacare premiums are high today, wait until people flood into these short-term and association health plans.” He adds, “The Trump administration will bring rates down substantially for healthy people, but woe unto those who get a condition and have to go back into Obamacare.”

Remember what we’ve said in previous Post, the ACA punishes the many to provide benefits for the few. The opponents of these plans fail to understand or at least empathize with the millions of Americans paying huge premiums each month for benefits they don’t or can’t use but get not subsidy. Let’s help those folks once in awhile.

Christopher Condeluci, a benefits attorney who also served as tax counsel to the U.S. Senate Finance Committee states, “While these plans might not be the best answer, people do need a choice, and this new proposal provides needed choice to a certain subsection of the population.”

Comments like that make me realize that I’m not alone in thinking the American people deserve options. They deserve our support and they deserve a break, for once.

To summarize, STMs will:

  • Offer alternative for healthy Americans.
  • Be a fraction or premiums charged by ACA plans.
  • Provide fewer benefits than ACA compliant plans.
  • Include underwriting that could reject applicants request for coverage.
  • Be very profitable for insurers.

But STMs may:

  • Take healthy members away from ACA plans.
  • Leave ACA plans with more unhealthy than healthy members.
  • Cause ACA plan premiums to increase further.
  • Still be profitable for insurers.

The piece by piece dismantling of the ACA is not a perfect scenario. But if you remember, the ACA piece by piece dismantled all of the great aspects of American healthcare plans starting in 2010. If the piece by piece process is the only way that America can be offered better options then it is a worthy endeavor. The ACA can be slowly eliminated which would give us the time to adjust and improve.

What do you think? We’re in this together so let us know.

Until next week.

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

 

 

 

 

 

 

 

 

 

Remember the ACA’s Independent Payment Advisory Board or “IPAB”. The so-called “Death Panel” is dead! Why is no one talking about this?

March 1, 2018

It’s often difficult to remember things that occurred yesterday, let alone 7 years ago, but do you remember when the ACA was signed in 2010 and its provisions started taking “root”? I know, I know, you think I’m wrong  because everyone thinks the ACA took effect in 2014. But, it actually began its insidious spread across American healthcare in 2010 by imposing taxes, fees, reporting requirements, pricing regulations, speculation and the formation of new agencies and processes including the Independent Payment Advisory Board (IPAB). 

Well, IPAB is dead and credit goes to the Tax Cuts and Jobs Act of 2017 that Congress passed and President Trump signed in December 2017. It’s demise received no fanfare, in fact, I’ve only seen one article about it and no TV commentator has mentioned it to my knowledge. Why is that?

Everyone remembers Governor, turned VP candidate, Sarah Palin calling out the IPAB as a “Death Panel”. Heck, even today when commentators speak of Governor Palin they bring up her comments about IPAB. Calling IPAB the “Death Panel” was not a totally inappropriate synonym for the IPAB given the political nature in Washington. But, that does not mean that the concept of IPAB was necessarily evil.

The concept of IPAB is/was not necessarily a bad one, that is until it gets combined with politics and the politicians in Washington.  Its intended goal was to control, lower, and eliminate cost for Medicare and specifically Medicaid. So, if something could lower costs then it would be good. But if its goal was to eliminate services for Seniors…”What would people like you and me call it? “Death Panel”! 

However, IPAB did not have regulatory or enforcement authority. It could only make suggestions to HHS, other governmental agencies and the commercial markets. IPAB could only recommend lower reimbursement levels for specific services, suggest lower frequency of treatments, or treatment protocol of a specific service can be used for treating “this” condition but not “that” condition. IPAB could only make recommendations.

Did you ever wonder why no politicians, from either party, ever talked about IPAB over the past several years. Democrats, especially, did not want their names connected with IPAB. Why was/is that?

The reason is that IPAB was created to be a scapegoat. It was designed to provide political cover for jelly-spined politicians from either party if allowable treatment protocol for medical services were altered, reimbursements to providers lower, or benefits cut back on Medicaid and Medicare recipients.

Stated more directly, if IPAB did its job, the result of which cut benefits or services to Seniors, then politicians could blame the IPAB people or ACA or Government in general and escape blame for themselves. You must admit that’s clever.

Some will remember that in 2013 the IPAB published new recommendations for “lady check-ups” for women over 40 years of age. Specifically, it stated that the frequency for the exams women, over 40, needed could be less frequent than what was in practice and recommended at the time by every healthcare organization in the free world. 

Of course, that news met with loud protests so Secretary Kathleen Sibelius, of Health and Human Services, quickly released statements clarifying that IPAB was an “independent board” and did not speak for the Government and the IPAB suggestions would not be implemented by Medicare or Medicaid. Whew, dodged a political crisis, right?

Again, stated more clearly, IPAB could only suggest ways to reduce costs. But if the IPAB suggestion was not politically expedient or cast dispersion on the ACA then it might reveal potentially harmful  political result, caused by the ACA. Plus, President Obama’s reign in office had not ended so the Dems could not have an independent board established by the ACA actually start reducing benefits to older Americans and especially not to woman.   

The GOP does not get off scott-free here either. The GOP always states that Medicare and Medicaid costs must be lowered so the GOP was/is perfectly willing to allow an independent board make decisions that would be political suicide for any party in the majority. The GOP was also perfectly willing leave the IPAB in place with no acknowledgement what so ever. Hold it in reserve, so to speak.

But, if the GOP is serious about controlling healthcare costs then why eliminate the IPAB in the 2017 Tax Cuts and Jobs Act? Spending trends in healthcare must be controlled, some how, right? Granted healthier life styles and lower utilization is preferable but that ain’t happening. 

Remember the Military Base closures in the 1990s? There were dozens and dozens of Military bases around the country that could have been moved or closed all together as a byproduct of the Cold-war ending. But, to close a base in a politicians district did not help in the politician’s re-election process. So, Congress formed an independent board to identify and suggest to Congress bases and facilities that could be closed. Hundreds of facilities were closed or relocated to reduce cost but the politicians did not have to take direct responsibility for the closure decision. Another scapegoat to the rescue.

The IPAB and its objective is worthy and one might say absolutely necessary given America’s out of control healthcare system. But, when someone is 65+ years old the trend for their healthcare cost-line may already be determined by their life’s previous choices or DNA. So, to reduce or eliminate the service these American most certainly need seems heartless and wrong. However, we need to reduce cost so there in lies our dilemma.

If we’ve seen anything consistently out of Washington it is that it can not solve these kinds of dilemmas. They can’t have reasonable discussions or debate. They can’t introduce creative ideas because politicians refuse to take risks that could end a political career. UGH!

IPAB was a good scapegoat, a good talking point during elections and maybe a good way to make suggestions about healthcare delivery and its costs. But, it’s gone.

We have loads of examples of the hypocrisy of politicians as they dodge responsibility and accountability. Eliminating the IPAB with no fanfare or the slightest public discussion is one we all recognize. Let’s hope the ideas our Posts discussed previously can make a difference some how.

Let me know what you think.
And remember, we are all in this together.

Until next week.

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

Big-news announcement from Jeff Bezos, Jamie Dimon & Warren Buffet concerning their firms aligning to solve the healthcare crisis. Can they make a difference.

February 22, 2018

Recently the heads of Amazon-Citibank-Berkshire Hathaway announced that their three firms are planning a joint venture attempt to provide appealing lower cost health care benefits for their employees. This announcement could actually affect dozens of firms, if they include all the companies they own, and provide coverage for nearly one million people. 

With that many members in a covered population the results would be actuarially credible and provide statistics upon which the partnership could rely. These are three pretty smart business people, who can afford to hire the expertise required, and I believe their objective would be to lower cost but not  do so at the expense of their member’s benefits or access to care. It dose make one ask:

  • Will they be able to build a health care program or system that improves delivery at lower cost? 
  • Will they be able to make a difference for the million lives covered?

The answer can easily be YES, but the process, in the beginning as well as for years to come, will need to remain “OCD like” focused on a few basics.

In previous Posts we’ve discussed how to lower cost (both premium and OOP) while improving benefits and access to those benefits. A single set of members covered under the same focused effort can achieve better outcomes than we’ve witnessed from the ACA over the past 7 years. It’s especially possible when there are a million member lives involved, managed by the brilliance of these three firms/CEOs.

Plan offerings, PPOs, HMOs, managed care, pre-service review, post service review and value based payments will all be included but will that be enough? We should expect major innovation and reliance on technology.
But, unless there is innovation involved in a number of “human'” areas the probable outcome is predictable. As the plans are offered and members make their selections utilization then occurs. That’s a big component.

Remember, the overall cost of healthcare is equal to unit costs times number of units consumed. Controlling unit cost is far easier than controlling the number of units consumed.
How can a plan affect utilization?
How can a plan affect the choices members make?

So let’s ask – What are the two biggest factors impacting the cost of healthcare in America? Don’t say political stupidity, selfishness, or laziness although you would not be far off. If you suggest the seemingly unrestricted increase in Rx cost or the high cost of other treatments you would be closer, but it’s simpler than that.
 
The two issues that impact our health care finance and delivery system are: smoking and obesity. I’m not trying to be insulting, critical or overly clever here. The fact is that more health care dollars are spent on members and by members as a result of these two factors than any other five factors combined.

So, how will the new health care partnership of Amazon-Citibank-Berkshire Hathaway address these issues? Don’t be a cynic about this because these issues can be addressed and outcomes improved with plans designed to encourage change.

Can these two factors be mitigated without appearing too mean-spirited?

  • If you’ve ever smoked two or more packs of cigarettes per day or know someone who has then you know this habit is a killer to overcome. (Pun intended)
  • How can obesity be addressed when 40%+ of the American population is classified “morbidly” obese.

I am looking forward to watching the efforts by these three corporate giants and the plans, policies, and promotional output they make.  There is real potential that, if successful, these efforts by “Private Enterprise” could be a turning point away from the Liberal’s focus on “single payer” plans as the only solution for health care finance and delivery.

You know this can be done, especially if you read our previous Posts, so let’s be attentive and supportive as these three behemoth conglomerates set forth their ideas into reality.

We’ll watch together because, well, you know why!

Until next week.

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