Archive for the ‘healthcare reform’ Category

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

What would the consequences be if the GOP passes NO legislation to Repeal & Replace? Let’s look at the impact on insurance coverage.

July 27, 2017

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:
    a. Premiums for individual plans increase double-digit (20% or more) and be projected to continue for the next few years.
    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.
    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.
  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?
  3. To summarize: fewer insurers offering fewer choices with few participating providers all at premiums increased each year.
  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?”

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.

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.
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?”
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.

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.

Well, we’ll see what happens this week and together we will address it.
Because, we’re all in this together, right?
Let me know what you think.

Until next time.

Mark Reynolds, RHU


The Cruz Amendment, what would it do for Healthcare Reform? Maybe, just maybe, it would provide options.

July 20, 2017

As I write this Post today, the Senate’s two attempts at HCR are on hold for voting purposes. Initially, the public reason given for the delay is that they are waiting for Senator McCain to be released and back at work. Please join us in wishing the Senator a speedy and full recovery!

Now, we hear that Leader McConnell is pulling the bills back all together.

In the interim let’s discuss the possibilities of the passing the BCRA (Better Care Reconciliation Act), or any Reform or Replace legislature, with the Cruz Amendment (CA) included. The opposition argument against the CA is some what logical and makes for good debate even though the opposition is too scripted and predictable to be conclusive. Their argument is that the CA will cause premiums to increase dramatically on full service standardized or ACA type of benefit plans. What’s wrong with that argument? Plenty!

For one, it makes us accept (or forget) that premiums haven’t already increased dramatically (over 100%) and done so to the point of being unaffordable.

Two, the opponent’s argument conveniently forgets to acknowledge that the ACA Bronze Plans and even Silver Plans leave members with such high out-of-pocket costs that the plans provide no real benefit for basic primary care or for higher cost care such as diagnostic care for most Americans covered by those plans. Who can afford to pay a $6,500 deductible before their plan pays anything?

Three, their argument neglects the fact that insurers are so regulated and handicapped by the ACA that the insurers have skinnied down PPOs to the point that finding a doctor to accept your Bronze/Silver plan is nearly impossible. In addition, by eliminating 50% of the providers in your area the opportunity for you to even receive care is reduced.
You might have a Health Plan Id card in your pocket but you have no providers at which to use it.

The opponents of the Cruz Amendment want you to forget that the ACA has allowed or even forced insurers to offer high-priced, high out-of-pocket, skinny network plans that people would not want to purchase unless they were forced to do so. And could not afford the richer Gold and Platinum plans available.

And don’t forget the subsidies paid to insurers which further drive up the costs of the ACA plans because we all pay those subsidies don’t we. Those subsidies also skew the pricing assumptions that insurers usually make.

Remember that the Cruz Amendment would require insurers to offer standardized HCR metallic-like health plans before they are permitted to make other plans, with less benefits, available. It is not a license for insurers to offer only stripped out benefit plans. It’s a chance for insurers to offer more options from which individuals and small employers can choose.
So, what could the Cruz Amendment create?

The obvious goal is that it could create a menu, with more options, from which Americans could choose the benefits important to them.
For example.


  • Young healthy men or woman(or older) might select benefits with limited  or no maternity coverage.
  • Older men or woman might select plans with richer Rx benefits than younger folks.
  • Young people might be more willing to buy catastrophic coverage with a deductible of $10,000, for example.
  • Certainly, many people would not want to pay for built-in pediatric dental that is forced on current ACA plans.
  • There are dozens of examples of how plans could be built and priced for more choice.

Small Employers:

  • Could purchase low-cost catastrophic plans then implement an HRA to enrich their employee’s benefits. (Thousands of employers would do this.)
  • Provide multiple options so employees can choose from more than a couple options
  • The employer’s HRA plans would provide employees with better choices so that they might include their families. It’s be nice to be able to afford to include their kids on the parents plan.
  • Employers could lower the cost and improve benefits for their employees.

The argument against the Cruz Amendment uses the well-tested tactic of fear to gain support for the opposition. Yet the opponents must rely on our faulty memories to forget that premium have increased by over 100% while out-of-pocket costs have increased and provider access is scarce, since the ACA went into play March 23rd, 2010.

What the Cruz Amendment needs is a solid national promotion campaign with an articulate spokesman to lay out the facts. The GOP must tell America that having more options from which to choose does not guarantee poorer benefits or higher premiums.

I recognize that I am being pretty basic here and that there are a few more details to address such as subsidies for those that need them, Medicare expansion, logical pre-ex provisions and more. But all of that can be resolved when we let competition take hold.

Fortunately these types of health plans and the solutions they bring are part of a solution for which your author has some experience. I challenge anyone to debate this issue with us. That is, if the opponents use facts and real experience.

What do you think?
Remember, we’re all in this together!

Mark Reynolds, RHU

Why are some Republican Senators suddenly so opposed to their own Senate Healthcare Reform bill? Follow the money!

July 13, 2017

Money, that’s it, that’s the reason why a handful, but growing number, of GOP Senators are opposing the Senate’s current R&R effort. (Please forgive me for referring to it as R&R since we know it’s not either.) But the point is, their opposition is not about their concern for the poor or any other human related issues. It’s about the money attached to Medicare Expansion.

The creators of the ACA understood human nature and politicians so they knew that if the ACA could get states hooked on and depentant upon the billions of Federal dollars committed for ACA enrollees created by the Medicare Expansion then those states, or more appropriately those politicians, would be reluctant to give up those dollars. Actually, the ACA proponents knew that Politicians would be unwilling, actually unable, to give up those Federal dollars; as if those dollars were an addiction.

You’ve read in previous Posts how the Medicare Expansion works. It promised states that the Feds would pay 100% of the costs for those enrollees initially then reduce to 90% after a few years. Meaning the states had to come up with no more than 10% to cover the millions of newly enrolled healthy working age citizens getting their health coverage from Medicaid.

You will remember that Medicaid was originally created for the young, the disabled or pregnant citizen and that the Feds matched the state’s spending on a graduated scale based on each state’s average “prosperity rating”. So richer states like California and New York received only a 50% match while poorer states such as Mississippi received up to 75% match. These figures and factors have applied for years and as you can see are much lower than the Federal match for enrollees under the ACA’s Medicare Expansion.

Bottom line is that  which means a “political” problemthe 31 states, that accepted the Medicare Expansion, are hooked on the higher reimbursements from the ACA.

Some GOP Senators from states that excepted (swallowed) the Medicare Expansion pill now are getting pressure from their home states to keep the funding for Medicare Expansion in place. The reason is that to reduce the matching funding would cause these states a budgeting problem.

The current GOP Senate bill retains the concept of Medicare Expansion but starts to reduce the matching % in 2021. Then, by 2024, (6 years from now) the matching % would level off and be the same % as the state’s Federal match for regular Medicaid enrollees. Seems fair doesn’t it but to Governors of those states hooked on the Federal ACA match it creates a budget issue and therefore they have a “political” problem.

For the past 7+ years the GOP used the “Repeal and Replace” mantra as its campaign slogan which worked and added thousands of Republicans to every level of government office from your local representatives in city, county and state positions to Congress and Senators including a bunch of Governor’s seats. So all of a sudden the success of the GOP to unseat Dems from all of these seats has put many Republicans in a position of responsibility over budgets and caused the GOP a political problem. Now it appears that many have forgotten their pledge to Repeal & Replace the ACA which helped get them elected. Funny how quickly some politicians forget their promises, isn’t it?

Make no mistake about the magnitude of this issue. We’re talking about hundreds of billions of dollars that the states will see reduced over the coming few years. Those state politicians will be faced with citizens (voters) that will fear that ( and be told by Dems) that their public subsidy (premium or benefits paid by Government) are being reduced or eliminated. The Governors and Senators of the Expansion states fear the back-lash from those healthy, often young, able-bodied and often working citizens who are currently covered by Medicaid who that their subsidy will be reduced or eliminated.

Do you think the Dems will exaggerate or try to capitalize on this in their campaigns?

So, that’s it! It’s not about a better healthcare reform package or helping the poor or the disabled. It’s about the money, the money to which these Expansion states are now addicted. Of course the cynic in your author assumes that the politicians in those Expansion states are more concerned about their own re-election than on what’s good for America. I pray that I am wrong about this.

As I write this Post we are hearing that the Senate will introduce a new R&R bill this week that will be “better” than the Senate’s current Better Care Reconciliation Act.
I wonder; Better for Whom?

Let me know what you think.
Also let me know what you think would happen if the GOP does nothing about R&R but simply props up the ACA for another year? Let me know.

You know I believe that we are all in this together and by being together we will overcome any obstacles facing us. However, when one sees politicians act or react for their own benefit it makes a person wonder.

Until next week.

Mark Reynolds, RHU

It’s often said that by looking back we can more clearly see our way forward. Instead of Healthcare Reform let’s discuss the significance of the 4th of July.

June 29, 2017

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.
Maybe we can get back to thinking America first because we are all in this together!!

Until next week.

Mark Reynolds, RHU



How many Government sponsored “projections” do we need to see before we learn NOT to trust them? Let’s look at just a couple.

June 22, 2017

It’s one of the oldest and most proven opinions or statements about government and that is concerning government projections and their accuracy. In a speech in the 1980s President Reagan reminded us all of one of the scariest statements known to citizens: “Hello, I’m with the Government and I’m here to help.”?

In our current situation concerning the ACA we can identify many examples of how the Government said it was going to help us but actually did not and too often made things worse. One thing the ACA did accomplish, which I’ve addressed before, was to make coverage guaranteed issue with no pre-ex for individuals. To many that is/was the only improvement to America’s healthcare financing system.
ACA proponents would add the expansion of Medicaid as a positive. But then, if you make something free, even if it is not good coverage for folks, aren’t the proponents always going to crow about it.

The real focus of this post is the failure of projections concerning the utilization of Emergency Rooms if everyone is covered but first let’s remind ourselves of a few other missed projections. Such as:
* If you like your Doctor you can keep your Doctor.
* If you like your plan you can keep your Plan.
* Premiums will drop by $2,500 per year.
* The ACA exchanges will cover 25 million people
* People will stop using ERs as their primary provider.

That last one is where we will focus because not only is it another incorrect projection but it is one that has dramatic impact on the healthcare system in both cost and access.  Statistics reveal in California, courtesy of Ca’s Office of Statewide Health Planning and Development, that ER visits by Medi-Cal members increased 75% over the 5 year period from January 2012 through December 2016. The 1st quarter of 2012 reported 800,000 ER visits while the 4th quarter of 2016 reported 1.4 million visits.

That means that Emergency Rooms in California had/have to accommodate 600,000 more patients per quarter which one can correctly assume are not really people in an emergency situation. This outcome and missed projection clearly impacts California’s ERs ability to provide emergency service to the folks truly in need of an ER.

Plus the cost of ER services are generally higher per unit cost that non-emergency care rendered by local primary care Doctors. The result then is more visits and higher cost per unit of service while clogging an already overloaded ER environment for those in true need of ER services. That probably explains as well as anything could the impact of well-intended but misguided government intervention.

Why are the ERs seeing these overwhelming numbers? Again, much is conjecture but in this case it is well founded.
*  Many primary Docs (lots of them) don’t accept Medi-Cal (Medicaid) patients so the newly covered folks under the ACA Medicaid expansion have fewer providers to see than members under private coverage. Medicaid/Medi-Cal reimburse private Doc far less so can you blame them for not wanting to clog their own waiting rooms?

* Prior to the ACA folks not covered still had access to care and could use their local ERs because those providers can not deny care to anyone who enters through their doors. Most ERs are associated with hospitals and those hospitals can not turn people away so the ERs have no choice but to provide care to everyone even for just a cold or the flu.

The purpose of this post is just to be a reminder that as we see the CBO and others make projections about the outcome and by-products of the Republican AHCA 2.0 that we should use our own knowledge and common sense.

As you read here a couple weeks ago, the CBO projection that the House version of the AHCA 2.0 would result in 24 to 26 million fewer people with coverage is baloney. Yet, that is what the Press will run with day after day. It’s probably good for their advertising rates on the networks and papers to support dire predictions even when they are knowingly false.

Some are reporting that the Senate is working toward a vote on its version of the AHCA 2.0 before the end of June. No one has seen its language but I won’t bet against its probability.
Let’s just remember that as Nay-Sayers make their doom-n-gloom, old people and babies are going to die predictions, that we must not fall victim as so many did in 2010.

I liked the idea of keeping the plan I had with the doctor I had and premiums going down, didn’t you. But, we knew then it was baloney so don’t listen to the opponents of AHCA 2.0 without a healthy dose of common sense. Sorry for the dopey metaphor.

Hey, projections by the Government are like the statement President Reagan made 30+ years ago. What we need is for the Government to do is get the heck out of the way.

Anyway, we’ll see how it goes because we are all in this together!
Until next week.

Mark Reynolds, RHU



Press reports coming from Internet news sources proclaim that many Senate GOPs are not hopeful about Healthcare Reform in 2017. In spite of those reports, let’s look at one issue that may hold promise. That being the Federal Invisible Risk-sharing Program.

June 15, 2017

The Federal Invisible Risk-sharing Program has been talked about by many as a tool to help hold down premiums in a future that includes AHCA 2.0. Usually pundits and authors refer to reinsurance as applying only to high risk pools that were implemented by several states to help provide coverage for the high costs associated with many insured’s. Maine, for example, has a re-insurance program that is often cited as a risk sharing program that acts like true re-insurance for insurers and available to help insurers cover the sickest or most costly members in Maine’s covered population.

Maine’s re-insurance program steps in to reimburse insurers on a sliding scale, if a member, previously declared as high risk under the program guidelines, has claims exceed a certain threshold which was set at $7,500. Then the Re-insurance association (pool) reimburses the insurer 90% of the claim cost until the claims exceed $32,500. At that point the re-insurance association reimburses the insurer 100%.

In Maine’s program the insurer would cede (pay) to the state’s re-insurance program up to 90% of the premium collected for the designated member. Maine has guidelines for designating a member both at initial enrollment as well as at later  times plus rules for members coming and going or changing plans. It is a mechanism that is administered much like what insurers experience in typical reinsurance programs available today.

The key objective is to provide a mechanism by which insurers can reduce what they would otherwise establish as their base rates in a guarantee issue, no pre-ex, and no real penalty for not signing up environment. It makes sense since insurers will be able to actuarially determine what its rates should be without the fear of one or two members killing (sorry for the pun) their actuarial assumptions.

It could be argued that Maine, while implementing a reasonable solution, set its attachment point (the $7,500 figure) to low. But given the potential covered enrollment, based on Maine’s overall population, that figure does make pretty good sense, too.

Insurers are quite familiar with re-insurance as many, if not most, re-insure their own plans. The attachment points when appropriate might be set considerably higher, such as $100,000 to $250,000 or even $500,000, for the larger carriers, the “big boys” in the market, such as the BUCAs.

This re-insurance model might be more appropriate than what many states use as “substandard or high risk pools” because in those models every covered member is charged more thereby increasing premiums for all. Also those models often provide different benefits for members covered in the high risk pool than what other members might enjoy.

The Maine model helps an insurer keep rates lower because it can set its rates for every member with the knowledge that the claim cost for high risk individuals would be ceded off to the Federal Invisible Risk-sharing Program. Plus, those members, whose claim cost is ceded off, will enjoy the same benefits as those not ceded off because they remain in the same plan as healthy members.

After all, isn’t the main objective of AHCA 2.0 suppose to be: bring down premiums and improve benefits?

So, the FIRSP could potentially lower premiums and improve benefits for more people. It would also allow more insurers to take the risk of offering plans and thus increase competition for the “big boys”. For example, a smaller regional insurer might negotiate a lower more appropriate attachment point than a BUCA but in the end still provide competition and more plan choices for citizens.

One final thought, which is out of my normal comfort zone, is how do we get people to enroll and make any healthcare reform solution equitable to  all including insurers? At least give the insurers a fighting chance to offer good plans and be profitable at the same time. It needs to be addressed either through meaningful penalties or, by my preference, of reasonable Pre-ex provisions.

Normally I would be against the Play or Pay mandates but I am “evolving” on this mater. If we set up mechanisms, methodology and rules by which insurers, providers, TPAs, brokers and the government must comply; is it wrong to set up a rule for our citizens?

Granted by all is the fact that the penalties for no coverage under the ACA were not effective and actually laughable. So, if we build a better system to provide benefits at lower premiums it should be worth while to consider either reasonable pre-ex provisions to protect insurers from those who would game the system or by mandating coverage but with meaningful consequences.

Here is a quick starting point idea for penalties:
* Individuals – Income $20,000 to $75,000 = 5%/income or $3,000 which ever greater
* Individuals – Income $75,001 to $150,000 = 5%/income or $6,000 which ever greater
* Businesses  – $2,500 penalty for 10 to 24 FTEs
Businesses – $5,000 penalty for 25 FTEs or greater

As I stated above, I am more open to this idea than before and I am not one to normally support government mandates. You have read in previous posts my opinion on addressing pre-ex. But, I also think that the past 3 years have provided proof that at least 10% of our population just won’t sign up so the consequences must be real.

Though not related, I think everyone should also pay a share of their income in Federal income tax. If one makes $5,000 or $250,000 we all should put something into the kiddy. If the folks in the lowest income levels were to pay a 5% tax then they would be more concerned about the decisions made by politicians on their behalf and maybe more engaged in the process.
Just a thought!

So, that’s the current position on the Federal Invisible Risk-sharing Program and how it may just be a good provision to support the overall goal of better coverage at lower cost.

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

Mark Reynolds, RHU



This week I want to discuss an American trait seemingly lost in our current society. That is the human trait of personal sacrifice and service to others without regard to the benefit to one’s self.

June 8, 2017

Current American society and our daily news is filled with examples of self-exorbitance and self -centered actions meant only to serve the individual. We see this sad fact every day in our politicians, entertainment, government employees, maybe our co-workers and sometimes even within our own families.

When we see a citizen recognized on TV for doing something above and beyond one’s duty or at great risk to one’s safety we seem amazed. But, in reality, there are many people among us who go about their life everyday with the benefit of others as a priority. It’s in their character not a one-time action.

Allow me to introduce you to one such individual in this week’s post.
Stacy Morris is an example of what many of us wish we could be. She is an example of how a woman can be a great mother and spouse while being a great leader for her company and its staff through some of the toughest times in an industry and company’s life.

Over the past year Stacy has been the Chairman of the Board for the Visalia Chamber of Commerce in addition to her duties at her company and with her family. Stacy’s company and as well as its industry is under attack and consumed with unknowns yet she has managed her company to grow and be a better place to work.

Stacy takes her leadership role in the Chamber as well as her company in stride making it look easy.  Most people would be overcome by the load this young woman carries but for Stacy there is no choice but to meet all challenges head on and overcome them. She has lived this way her entire life!

Today, Stacy will pass the gavel, as Chairman of the Visalia Chamber of Commerce, to the next in line. I promise you and all Chamber members that the Chamber is in better shape now than ever before and the duties of future Board Chairmen will be easier because of the decisions Stacy made and actions she has taken.

Please join me and her entire BEN-E-LECT family in thanking Stacy for her leadership, her compassion for others, and for her life-long commitment to serve others before herself. It is an honor to know her and a privilege to have worked with her.

Thank you, Stacy!!

Until next week.

Mark Reynolds, RHU