Posts Tagged ‘sbc’

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
559-250-2000
mark@reynolds.wtf

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
559-250-2000
mark@reynolds.wtf

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
559-250-2000
mark@reynolds.wtf

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
559-250-2000
mark@reynolds.wtf

 

 

The need for Tort Reform is often associated with increasing healthcare costs and premiums. Is it possible to eliminate the affects of “defensive medicine” with tort reform legislation?

March 23, 2017

For the past 30 years we have heard the cry for Tort Reform. Is it true that providers practice “defensive medicine” out of fear of malpractice lawsuits and does it impact the cost and manner in which providers render care. Tort reform and malpractice awards in California have been somewhat contained because of Tort Reform legislation in 1987, often referred to as the “napkin bill” which refers to the initial process in which two CA legislators drew it up. But, has it helped hold down healthcare costs and premiums?

Don’t worry, this Post is not about that CA legislation or even potential legislative language that might be included in the new American Healthcare Act. Personally, I think it is possible to add straight forward language to the AHCA that would limit malpractice lawsuits but it might not control healthcare costs and thus might not help lower premiums.

Why would I suggest that we can create language in legislation to limit malpractice lawsuits without affecting healthcare costs? Because I am, as we all need to be, a student of human nature which helps us predict the effect of legislation intended to change behavior. Sounds silly but it’s a fact and let’s review why.

By human nature I am referring to the habits one establishes either knowingly or not in our every day life to gain or avoid a certain outcome. Providers fall into a unique category and regardless whether their actions are life-saving or preventive in nature a doctor’s practice will develop habits that may not be easily changed. In a doctor’s world a patient might be in pain plus someone else is usually paying the bill.

That isn’t to say that legislation can’t stop certain human activity completely simply by creating consequences to a certain action. For example, the risk of paying a $175 ticket and increased auto insurance rates for driving while talking on one’s mobile phone seems to have made an impact on that behavior.

However, we must also realize that a doctor’s request for more tests are often more than defensive. They may truly be diagnostic in nature to assist in treatment decisions which add a dimension not common in the habits for most of us in society. For years insurers, self-funded employers and other experts have complained that doctors run-up costs by over prescribing diagnostic tests and procedures, such as MRIs for example, simply to avoid malpractice lawsuits. This is why & where the term “defensive medicine” was  first muttered.

Doctors do have two additional variables affecting their decisions. One variable is the patient who may be expecting or even demanding a battery of tests that the attending doctor does not think are necessary. It’s  common for doctors to treat patients who are truly suffering and may have been for months or years. In those instance, how does a doctor say no to a patient’s demand or even pleading request for more diagnostic procedures. The patient wants the doctor to prescribe immediate pain-relieving treatment. Most of us will never be in that dilemma requiring us to decide the appropriate level of diagnostic cost necessary to determine the correct path of treatment.

The second variable is that in most cases a third party is paying for the doctor’s bill. Sometimes extra tests might seem worthwhile to a doctor if it makes the patient feel better emotionally. Who among us can honestly say we would not prescribe more evaluation even if the cost of that extra evaluation would not lead directly to a better decision. Saying “No” to a patient is not always easy and remember somebody else is usually paying the bill.

Imagine for a moment that you are a doctor who has been forced to practice defensive medicine for 20+ years. You’ve had your Malpractice Insurer scare you with tails of tort awards. You’ve attended countless industry seminars at which the fear of malpractice lawsuits is emblazoned on your brain. Or maybe you work for a large corporate practice that wants to avoid malpractice suits but also enjoys the extra revenues earned by extra diagnostic testing. Imagine any of those situations; then you go back to your practice Monday morning to see patients. How would you overcome the habit of practicing  “defensive medicine”?

But here’s a twist to this story about Tort Reform. I actually believe that after doctors have had time to practice their chosen “healing” profession, in a non-threatening legal environment, that the level of care as well as the cost and outcome of care would be better than it is now. I also think that, in time, patients would start to be more satisfied with the level of care they receive and may even learn to be more interactive with the doctor than they are currently.

I am sure this sounds odd coming from an admitted cynic of human nature. But, while human beings may be flawed in many ways I believe human nature, at least concerning our own healthcare, could begin to do the right thing.

We’ve discussed before that healthcare costs are the summation of the unit cost of care multiplied by the number of units of care consumed. When we talk about Tort Reform and the power of human nature it is easy to see that controlling the resulting value  of that equation is not an easy calculation.

It sounds naïve to state publicly that a solution to healthcare reform which combines patients and doctors and payers then adds big pharmaceutical & medical device companies, plus attorneys and legislators would be an easy system to reform?
However, I think it is possible as you have read in previous posts.

The hard part will probably be convincing legislators that they should want to make a difference and improve our healthcare delivery system rather than just making a difference for their own career or party. Sorry for that one last bit of cynicism.

We still need to discuss what Tort Reform language can be fashioned into the AHCA. We’ll tackle that over the next couple weeks.

Let me know what you think.
And remember, we’re all in this together!

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

 

Why is there opposition against insurers and health plans selling across state lines?

January 12, 2017

It’s easy to do plus it can improve quality and pricing while maintaining compliance.

From our last post, the idea of GI with a common sense approach to Pre-ex periods sparked some interesting emails. Newer brokers in the business for 5 years or so thought it was confusing. Experienced brokers in the business longer and certainly those prior to 1992 understand the logic and agreed with the idea for the most part.

In fact, many believe that if the Bush administration would have introduced GI with Limited Pre-ex at the same time that HSAs and HRAs were codified back in 2002 that we might never have heard of the Affordable Care Act. It wouldn’t have been needed!

Moving on, today let’s discuss the selling of health insurance across state lines. Many experienced insurance folks believe that this might be the toughest of all issues to address. It may sound easy to the non-insurance person but dealing with various state DOIs is never easy.

First obstacle many will say is that there is no proof that plans sold across state lines for example, from Iowa to California, will be any more competitive or appealing. But an even bigger obstacle is the political nature of multi-state DOIs “territorial-stay off my turf” attitudes that may feel obligated or find it opportunistic to interfere.

Some DOIs may argue that multi-state plans will not be consumer friendly or they will be wrought with trouble because of various issues such as specific state mandates and other regulatory rules.
To that attitude I say baloney.

Health plans can easily be sold across state lines in an internet connected shop-for-anything and buy-anything by smart phone world . Here’s why:

  • Brokers will still be the delivery system to insure quality and appeal
  • Individual states can still regulate brokers and carrier solvency
  • ERISA guidelines can be modified to overcome DOI objections
  • Plus ERISA (DOL) is quite capable of regulating compliance.
  • Just ask any TPA!
  • Plans would be built to serve the public not the political bureaucracy
  • It would all be GI so if a plan is not appealing it can be replaced
  • Eliminate wasteful mandates (last count there were over 1500)
  • Competition between insurers would increase driving premiums down
  • That’s just a short list and I know there are a few more details

The opposition may come from those determined to see a single-payer system. However, it is clear to see that the ACA is failing and did so mainly because it tried to takeover healthcare rather than just improve affordability and access to healthcare.

We need new ideas injected from people with real world experience like TPAs, brokers, consultants and smaller insurers. Make no mistake those opposed to fixing the ACA will object to selling plans across state lines and even some in favor of repeal may be opposed.

But if the goal is to deliver a real solution to our current high-price, low-quality, no-transparency healthcare system then we need to be guided by principles that deliver lower cost, better benefits and guarantee access.
We need to allow for the selling of health plans across state lines.

I am interested to hear your feedback on this idea because it’s complicated and controversial plus there are many details to work out. Let me know.

Next post will be either transparency or pricing ideas. Please stand by.
Remember, you have a new email at which to reach me.

Also remember, we are all in this together.

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

 

 

New Era for Healthcare Solutions

January 6, 2017

maddy-driving

She’s not exactly Employer Driven but certainly adorable.

January, 3rd 2017

We have seen Healthcare Reform, now we must fix the Reformed

Today, we start a new ERA in the life of this Blog. The intent has always been to help brokers and employers understand the changing healthcare market but now we have a renewed sense of excitement, direction and energy.
BTW, you have a new email at which to reach me- mark@reynolds.wtf

We know that with a new administration there will be changes to healthcare and we all remember how confusing and unsettling the years 2010-2014 were for everyone. Over the coming months we will address dozens of issues and ideas related to fixing healthcare and its financing. Since we know the ACA is in for some modification, if not repeal, then the discussion will center on its replacement.

In the coming weeks we will discuss replacement issues such as:

  • Plan designs
  • Premiums & pricing
  • Pay or Play mandates
  • Taxes & fees
  • Exchanges
  • PPOs
  • Transparency
  • Cross state plans
  • Pre-ex conditions
  • Group plans
  • GI for Individual Plans “IFPs
  • and much more

Today let’s address a topic that will be used or rather misused by some to make headlines, scare the public, and complicate any changes. It is the topic of “Guarantee Issue (GI) and pre-existing conditions” for IFPs (Individual & Family Plans). The ACA provided for GI but relied on the mandate for enrollment.

The mandate for citizens to get covered was supposed to push everyone into healthcare coverage which would theoretically make it easier for insurers to price and profit from their plans.  As you know, not only did premiums increase astronomically to the average person on IFPs, (and small employers too) but plans were built with “skinny” PPOs and benefit designs that left members with a lot of out of pocket.
Resulting in the opinion – “why pay for insurance that doesn’t pay anything?”

Plus, reports show that 20-25 million citizens still don’t buy health insurance. So, the individual mandate did little to help.

So, let’s agree that GI is absolutely required for IFPs. That means there are two ways to address affordability:

  1. Make the penalty for not being covered substantial such as $3000/yr or 9.5% of gross annual income. Would that be sufficient to drive citizens to buy a health plan?
  2.  Allow a common sense and reasonable Pre-ex condition. We can look back 25 years to see a model that can accommodate this goal. It’s simple and it’s defendable. Here it is:
  • Make all IFPs be GI, but with a reasonable pre-ex period for late enrollees.
  • First to clarify, if a citizen has coverage but changes to another plan there is no pre-ex period. As long as coverage has no gap longer than 60 days – No Pre-ex.
  • But for late enrollees, a one year pre-ex period which will allow insurers to stabilize premiums yet guarantee access to anyone wanting to buy a plan. Call it a 12/6 pre-ex.
  • If a citizen does not buy their own plan when first eligible s/he could still get GI at a later time but with a one year Pre-ex for illness treated during the previous 6 months. The illnesses would be defined so no carrier shenanigans can occur.
  • This is the way it was addressed before HCR in the 1990s. If those IFPs had been GI then the issue of access would never have been brought up.
  • This would address the human nature tendency to “buy insurance after your house is on fire”. It would also allow insurers to develop competitive pricing.
  • Last and maybe most important. It’s a defendable common sense approach. All Americans could support this approach as fair, especially when premiums are reduced and stabilized! Americans would get behind a policy that had teeth in it for to penalize those trying to slide by. It would also be a good talking point on TV News.

As we discuss these issues in the coming weeks I look forward to your feedback and your ideas. Please send me your ideas! We can’t trust Republicans to get it right any more than we trusted the Democrats in 2009 and 2010. Let’s make sure that the wisdom and working knowledge of brokers and employers is heard.

I look forward to starting up our discussions again.
And remember, we are all in this together.

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

Some Thoughts About Healthcare Financing And It’s Reform

January 16, 2013

October 15, 2012

Summary of Coverage and Benefits (SBC): makes one feel so comfortable and informed, doesn’t it…It may be well intended but misses the target by a longshot for HRA or MERP plans.

If I told you that I would send you a federally regulated, PPACA required outline of what your benefit plan covered to be called your Summary of Benefits and Coverage, you might expect to receive a document which would clearly and easily inform you of the benefits provided by your medical plan. Well….upon receipt you would be sorely disappointed.

PPACA’s intent of providing a document to help members understand their benefits and compare against other plans was well intended. The fact is that this document does just the opposite. For a society that gets its information from “Live with Kelly and Regis” and “Entertainment Tonight” the SBC is to long and too confusing, and in most instances…inaccurate.

Members are used to seeing a two, possibly three page HRA/MERP Schedule of Benefits with three columns on it. First column identifies the benefit i.e.: Office Visit, the second column states what the member pays, and the third column states what the plan pays. There are variations, of course, and RX, out of pocket, and out of network may be illustrated differently but members can easily identify their benefits and what their costs might be if they use their plan.

Since October 1st, our office has created several thousand SBC formulas and distributed hundreds of finalized SBCs to our web portal, EMPOWR™, to help our clients meet their PPACA SBC requirements.

Members require an easy to read and understandable outline of their benefits, which is why BEN-E-LECT will continue to create and distribute our standard Schedule of Benefits in addition to the SBCs.

Our advice to our Broker Partners is: don’t use the SBCs to explain the member’s plan and encourage the employers to not use the SBC as well.

Health insurance and medical plans always have and always will confuse folks so, while being compliant, we all still need to do what we can do to help members understand and access the benefits their employer provides.

Mark