Posts Tagged ‘employer driven health plan’

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

Why do Legislators rely on CBO estimates? Let’s take a look at the “holes” in the CBO report on the AHCA 2.0 and why their projections are so flawed.

June 1, 2017

Like so many things in Wash DC, it was a process that started with good intentions but then turned upside down and ruined by efforts for political gain! Today legislators applaud or criticize CBO projections depending on which argument it’s projections supports. So, the answer to the rhetorical question above is “The CBO is used for political advantage”.

Without casting stones let’s just look at where the CBO estimates are skewed by incorrect assumptions and projections. To support my point I will call upon several facts from a recent report issued by Doug Badger of the Galen Institute. Mr. Badger does a much more thorough examination of the facts and is more articulate laying the foundation for explaining the mistakes with in the CBO report.

Even in the most balanced effort (which seldom occurs) it is impossible to determine the outcome on the process of repealing a gigantic metastasized piece of legislation like the ACA and replacing it with any solution, even one drastically needed. To be successful the recipe to replace the ACA will take three parts “good” legislation and two parts communication. To date, the Repub’s attempts have gotten the mixture wrong on both policy and communication. But the ACA must either be truly Repealed & Replaced or it must be fixed.

The News reports last week about the CBO estimates was dominated by the headline of CBO’s projection that 23 million fewer people will have coverage by 2026 than would be covered under the ACA, if left intact. Without casting blame or bias, the CBO’s numbers are flawed and it is pretty clear to see where the CBO’s numbers went off tract. Why the CBO did not or does not correct its errors is not the purpose of this post. You can judge that! 

The CBO’s numbers start with inaccurate enrollment data for the state exchanges which creates an inaccurate baseline of enrollment projections. Then it makes its projections from that point. For example, the CBO states that the exchange enrollment as of December 2016 was 10 million members but then uses the figure of 15 million lives covered in the exchanges for 2017. That means the baseline of 15 million, from which CBO starts its projections, is already misstated by 5 million lives or 50%.

If you recall a bit of history, the CBO originally projected that over 24 million lives would be covered by state exchanges in 2014 however that clearly not true since, as reported above, the CBO states that Dec. 2016 enrollment at just 10 million lives.

But, to make matters worse, the CBO estimates that that over 18 million lives will be covered under ACA in 2018 which would be an 80% increase from Dec 2016 actual enrollment. So, the CBO used ACA enrollment numbers, incorrect by 80%, to project covered lives compared against the AHCA 2.0. The CBO projects  that 8 million fewer lives would be covered in 2018 by AHCA 2.0 simply because it starts with the flawed baseline that 18 million lives would be covered by the ACA in 2018.

Power of the Mandate overstated.
The CBO estimates that 4 million Americans will drop off their Medicaid coverage in 2018 because the penalty or Mandate to be insured is reduced to zero by AHCA 2.0. To clarify, the Mandate won’t be repealed just the penalty for no coverage would be reduced to zero under AHCA 2.0.
The question Mr. Badger raises is “Why would 4 million people covered by Medicaid suddenly torch their Medicaid cards if their eligibility and coverage under Medicare still exists”. Pretty good question, don’t you think? 

The CBO also projects that 2 million lives will give up their employer sponsored coverage in 2018. I have trouble believing this but employees will have choices to make. However, they also may choose to re-enroll once they experience life without coverage or discover that their employer’s plan was actually a better deal.

The following  shows how weak the mandate was in making Americans sign up for coverage. The IRS reported to Congress the effects of the Mandate for 2015:
* 6.5 million uninsured paid the penalty
* 12.7 million uninsured got an exemption from penalty
* 4.2 million uninsured ignored the penalty
That’s 23.4 million uninsured Americans in 2015

So, the CBO estimates rely heavily upon the power of the employee Mandate. But, it is clearly obvious that the Mandate did not get enrollment close to full coverage.

Let’s add the Press and Pundit’s misrepresentation of the AHCA’s impact on enrollment by Medicare expansion. In 2018 the AHCA 2.0 does not reduce or impact the enrollment in Medicaid caused by the Medicare expansion. Those enrollments are still valid and states that expanded their Medicare eligibility will continue to receive those “extra” Medicare support for at least 2 more years.
In fact contrary to reports by opponents of AHCA 2.0 the Federal government will continue to fund the Medicare allotments for all states at the levels in existence prior to the enactment of the ACA. Instead of the 95% funding under ACA the states will receive the percentage of funding for their Medicare folks at the levels  already in place for the past 50 years.

If you add the currently uninsured numbers to the false baseline of 8 million fewer covered by the state exchanges as well as the skewed reporting on Medicare expansion, it is easy to see that the CBO is fodder for the opponents of the AHCA 2.0.

Once again, why should anyone rely on the CBO estimates when those estimates are clearly flawed? It’s political of course.
The CBO is in a no-win situation though when it comes to making its projections. No one can project who will waive coverage or why when the decision is made by Americans who either demand choice and quality or who are honestly dependent on support by the government to survive or who feel entitled and choose to live off the effort of others. That is not meant as a criticism. It’s merely stating the obvious as we have all seen how a entitlement mentality can impact government programs. 

To close, I don’t know if we have ever seen so many distractions in Wash DC. Most seem like deliberate attempts to fragment the efforts to improve healthcare, lower taxes and improve national security for political gain. But some is caused by the inaction of the controlling party that does not seem willing or capable of governing.

So, let’s keep watching and talking because I know we all hope for better outcomes than we are getting currently.
And, because we’re all in this together.

Talk soon,

Mark Reynolds, RHU

AHCA 2.0 – Why can’t we see the text of the bill and its revisions? Will it even get written into “bill form”?

May 4, 2017

What happened to the serious, more like whimsical, promise by the GOP leadership that we would have time to read and debate each bill proposed? The biggest problem the GOP faces on their efforts to Repeal & Replace the ACA is that they are too proud to trashcan the first version and start over. If you want a race horse but all you own is a pig: putting a saddle and jockey on the pig won’t make it any better.

Sorry for the swine reference but in a way it fits, doesn’t it? The GOP railed for 8 years that the Pres Obama made one bad deal after another because getting a signed deal was more important than the content of the deal. Well, the GOP effort in the House is no better.

We have not seen the revisions in their entirety but the Pre-existing condition issue is getting bantered around and probably misleading everyone. Your author is in favor of a smart 6/12 pre-ex clause to help keep prices down and people covered. Remember that AHCA 1.0 had no enforcement mechanism to make folks get covered. It had a provision to allow insurers to charge a bit more for late enrollees but no increase could cover the adverse selection that policy would battle.

So, it’s May 2nd, they are suggesting a vote is possible by May 4th and everyone is leaving Washington on May 5th for another extended vacation. Again, the process is rushed and very few in DC ever show courage to stand up for their values or promises so its anyone’s guess what we might see if they try to ram it through on Thursday.

On another note, some how a continueing resolution was concocted which is just now being flushed out. The initial opinions are that the Dems gave up nothing and the Repubs funded Planned Parenthood, Endowment for the Arts, the ACA subsidies and got nothing but a small increase for defense. Maybe the President is right: “maybe it is time for a government shutdown”. If the GOP can’t help President Trump with the border wall and healthcare reform then why does he need to sign off on a continuing resolution that makes Conservatives appear weak.

Actually every GOP member that campaigned on repeal and replace, strong immigration enforcement, tax relief, and national security should be ashamed. Sorry but it’s a fact and I bet we don’t see a vote before this week’s break!

What do you thing?
It’s a mess but we’re all in this together!

Mark Reynolds, RHU

Do current discussions about Repeal and Replace of the ACA sound mythical to you? Like Unicorns- everyone’s heard of them but no one has ever seen one.

April 27, 2017

Repealing and Replacing the ACA may be more serious than Unicorns but if Republicans continue to talk about make-believe actions with make-believe deadlines they may soon cause results which likely will be negative. They may lull us all into a make-believe trance that causes us to forget just how hurtful the ACA truly is to America and our citizens!

As of this writing we have seen noting in writing from the Republicans about AHCA 2.0. We’ve heard about an “invisible reinsurance system” but no details and certainly nothing that would lead even the most avid supporter of ACA to think that the ACA is in any danger of change.

Your loyal author is trying to contain his cynicism regarding this Republican AHCA effort partly because I don’t like cynics but also because we still have tax reform and the border wall in flux which could lead to a cynic over-load. So I guess it’s healthy to maintain our optimism about the changes to our healthcare delivery system.

One of the most frustrating aspects of this matter of repeal and replace is that it just does not seem complicated to me. We’ve listed the specific items which need addressed to correct, improve and set the American healthcare system back on solid ground. If the Republicans were smart they would throw the AHCA bill in the shredder and start at least with a new title which includes “Repeal and Replace.

So, this week you won’t need to read too long because as of today I honestly believe that R&R will not regain center stage until this Fall. My theory is that then the Republicans will see the Insurer’s rates and coverage for 2018 and the elections of 2018 will flash brightly telling them they better get on it.

That’s it for this week.
Let us know what you think.
Though it is often frustrating, we are still in this together!

Mark Reynolds, RHU

Federal Invisible Risk Sharing Program. Is this a smart amendment to the American Healthcare Act? It may be, let’s discuss and see!

April 13, 2017

The Federal Invisible Risk Sharing Program (FIRSP) appears, at first read, to have provisions that would allow insurers to reduce premiums from current levels and keep them lower in years to come. It lacks some detail that the Secretary “shall” determine but let’s discuss what it could provide. BTW, is it interesting to you that when the Government offers to reinsure the plan they call it “invisible”? Just wondering, that’s all.

The FIRSP amendment Sec. 2205, at its core, would establish a stop loss level for insurers offering health insurance products in the Individual market. The stop loss coverage would reimburse an insurer for claim costs exceeding $1,000,000 on any individual. It would act as re-insurance for insurers so that insurers could set premiums knowing that claim costs for individuals above $1M and costs for members with certain health conditions likely to exceed $1M could be passed off to the “government’s” high risk pool. It would tend to lower and contain premiums as the insurer would not be subjected to claims associated with catastrophic illness or accidents.

This should make pricing plans easier for insurers because, pre-ACA, insurers would often purchase reinsurance for their products to pass off  a portion of their risk, above a certain threshold. Insurers are familiar with the costs associated in these reinsurance arrangements which should help as they negotiate with the government’s actuaries on pricing.

The amendment states that a portion of the premium collected by insurers would go to the government’s pool to cover the government’s risk of paying for claims above $1M. The percentage that a plan will pay to access this reinsurance will need to be determined but it will give the government a taste of what insurers faced trying to price plans with unlimited lifetime maximum benefits. Pre-ACA insurer’s plans would have lifetime limits ranging from $2M to $6M depending on the region. That’s one reason the ACA’s unlimited lifetime benefit was so scary to offer for insurers.

What about the GROUP MARKET
Initially, it appears that FIRSP does not apply to employer sponsored plans in what’s referred to as the group market. The group market has traditionally been divided into 2 or 3 group sizes; small group (2-50EEs), mid-size (51-100EEs) and large employers having 100+ employees.  I would suggest that FIRSP is shortsighted if it only covers individual market and should be expanded. The average size of employers in the small group market is under eight (8) employees per group but employers with less than three (3) employees is common.

The FIRSP would help keep the premiums lower and stable in this market segment and therefore should be included. Of course actions to help in this market segment could cause employers to purchase their coverage directly from insurers and stay away from their state-run exchanges.

If FIRSP does not accommodate the group market then it would lead one to believe that the authors are not supportive of the small group market. That would lead one to believe that it is just a ploy to take a step closer toward single payer because the government would still be controlling the strings.

To include the small group market in FIRSP the reinsurance stop loss level could be increased above the $1M in the individual market and could be negotiated based on region of the country, size of insurer, PPO vs HMO and so forth. Again, a one size fits all approach does not need to apply.

The first draft of FIRSP leaves much to the states which is the Republican narrative these days but also suggests someone is saying “I don’t want to deal with it”. Leaving decisions to the states could be problematic for large populations like those in California or New York. It would be easy for the Feds to establish the means and manner in which reinsurance claims could be paid and thus avoid the liberal minded states tendencies toward single payer. Heck, let a good TPA handle it for the Feds and problem solved.

Your author thinks that FIRSP makes sense but at this point it is just a band aid on the overall flawed AHCA. Any amendment, all by its lonesome, is like a bolt-on accessory for your crappy car. If your car engine does not run then bolting on fog lights and flashy decals won’t help much.
Sorry for over using the metaphors.

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

Mark Reynolds, RHU

Should expanding ERISA be a part of Repeal and Replace? Let’s discuss it!

April 6, 2017

The Employee Retirement Income Security Act of 1974, known as ERISA,  was enacted on September 2, 1974, and set the rules to establish minimum standards for pension plans for private employers. Probably due to in part to its name including “Retirement Income Security” people often think that ERISA regulates only pension plans, not true. ERISA also provides for the rules that impact employer sponsored employee health  benefit plans.

While its often misinterpreted, especially by legislatures and insurance departments, ERISA also included guidelines for individual employers designed to protect the member’s interests in their employer sponsored health plan. The term ERISA is often overused and misunderstood but ERISA could present a huge opportunity in the effort to reform (improve) our US healthcare delivery & finance system. To do so, it needs clarified, simplified and expanded.

Basically, ERISA made/makes it possible for individual employers to self-fund their employee benefit plans because it provides the regulations for “employee welfare benefit plans” which of course include employer-provided health care plans. Those employer benefit plans are designed to provide, through the purchase of insurance or in this case self insurance medical, surgical,  hospital care and other benefits caused by sickness.

ERISA’s overly broad and general language has made it difficult  for courts to apply the ERISA preemption provisions and provide clarity to employers, insurers, and state regulators. Basically, the preemption authority that ERISA provides says it “shall supersede any and all State laws insofar as they . . . relate to any employee benefit plan.”  There’s more and  I could go on but you get the point which is ERISA has “broad preemption” authority over state insurance commissioners and legislatures that could be both simplified and expanded to help resolve the dilemma of selling across state lines, lack of competition in many regions, cost and access for small employers.

The policy-wonks in Washington, at the direction of HHS, (and us) could easily “wordsmith” the ERISA language to overcome the pitfalls or obstacles that individual state insurance departments and legislatures have created. Here are just a couple ideas for the “wonks” to ponder:

  • Limit individual state’s authority through ERISA to simply monitor insurer financial stability and little else.
  • Prevent individual states from implementing burdensome regulations that stifle competition such as setting minimum or maximum stop loss deductibles.
  • Prevent individual states from regulating how re-insurers determine Aggregate factors in their stop loss plans.

An example of how expanding ERISA could help would be to overcome legislation such as California enacted known as Senate Bill 161. SB161 was created to stifle self-funding for employers with fewer than 100 EEs and push those employers toward the state-run exchange. SB161 mandates both the minimum Specific deductible (minimum of $40,000) and the Aggregate stop loss calculation ($5,000/covered member or 120% which ever is greater) both of which caused stop loss plans to be over priced and not competitive. SB 161 completely shut down the use of self-funding with stop loss on health plans for employers with fewer than 100 EEs. Therefore those employers no longer have access to lower cost opportunities for their employer-sponsored health plans.

There are ERISA experts, far wiser than your author, who may nay-say the ERISA expansion idea. But, why should it be difficult to modify a small piece of IRC code enacted 43 years ago. The healthcare delivery system has changed dramatically since 1974 so let’s simply add a few lines of code specifically aimed at solving the issues we face today.

Expand preemption language and other aspects of ERISA so:

  • Small employers are not arbitrarily restricted access to competitive alternatives.
  • Smaller insurers can compete with the big insurers.
  • More insurers are competing in areas where there’s just one insurer now.
  • Allow fully insured plans to easily sell across state lines.
  • Competition has a serious chance of lowering premium and overall costs

Let us know what you think. It’s a big subject that’s been misunderstood by many for 40+ years, including the courts and scholars, so there is room for discussion.

As I always say, we are all in this together, even though the conversations we hear coming from Washington DC seem to argue against that sentiment.
However, I remain confident that common sense has a chance to prevail because the premium paying public is fed-up with the current status and politicians will need your support in 2018.

BTW, thanks for the emails and positive comments. Talk soon.

Mark Reynolds, RHU