MVNHS© Update

It's been a while since we've checked in with those fun-loving rascals running the Much Vaunted National Health Service©. Last time we checked, those silly pranksters were busy ignoring the desperate pleas of a woman left to die by her "caregivers."

But that was then, and this is now, and they've moved on to much more productive things.

Such as denying necessary (if not urgent) surgeries, including hip replacements and cataract procedures. It's not they're they're being intentionally negligent, it's just that - get this - they've run out of money.

Hunh.

If you're a government-run health care system and you go broke, that's a problem, no?

But no worry, it'll never happen here.

But it's not just "routine" procedures getting tanked, ER's are taking hits, too:

"Shortage in emergency doctors leading to A&E crisis ... We have reached a crisis point"

So say the folks in charge of United Lincolnshire Hospitals.

Oh, those rascally nationalized health "care" schemes.

[[Hat Tip: FoIB Holly R]

So Much Stupid: A Love Story

One of the most significant problems with ObamaCare is that, at its heart, it's not really 'insurance.' The definition of insurance is that it's a method for assessing, and then minimizing, the pain of risk. And yet, the Rocket Surgeons in DC© who designed it managed to remove all but one risk factor (tobacco use). Couple that with the fact that folks with subsidies aren't even paying their own premiums (a necessary pre-condition of "spreading the risk") and, well, you can begin to appreciate the scope of the problem.

But it gets worse: plans also include any number of so-called "first dollar" benefits: services and products that are paid for regardless of whether one has met the out-of-pocket limit (thus "free"). These include, for example, mammograms and birth control convenience items, pap smears and the like.

Notice, though, that there is not one single male-oriented bennie to be found. Zip, zero, nada.

And yet the Top Brains at The Commonwealth Fund have the audacity to claim that ObamaCare hasn't really been that great for women:

"[G]aps in women’s health coverage persist. Insurers often exclude health services that women are likely to need."

Right.

Here's my favorite:

"Six types of services are frequently excluded from insurance coverage: treatment of conditions resulting from noncovered services"

Are you kidding me?!

What part of "noncovered services" do you not understand. Of course noncovered services aren't ... covered.

And the rest of this drivel goes on in similar vein.

My friend and colleague David W offered this assessment:

"Start with the idea of "insurance" is to pay for everything. That's not insurance, that's an entitlement or a prepaid health plan[ed: as noted above]. Move on to what that costs, when insurance is already too expensive and going up, and when you move to specifics, note that 5 of the 6 "uncovered" procedures were covered by 80% of the plans, and 6th by 60% of plans. Finally, consider "choice" vs "control" and understand that, at its core, this is a pathetic attempt to force other people to pay for services that they want - they just don't want to pay for them."

Indeed.

About that end game

Shot:

Chaser:

Single-Payer Healthcare System Projected to Send Colorado Off a Financial Cliff 

[Hat Tip: FoIB Holly R]

Arizona Central Strikes Out

How can Arizona Central newspaper, part of USA Today, call themselves journalists? Their #Obamacare fluff piece alerts the readers that premiums will rise as health insurance carriers leave the Arizona market.

Five insurance companies that had offered coverage in the Affordable Care Act marketplace have told state regulators that they will opt out or scale back coverage when the next open season for Affordable Care Act coverage begins Nov. 1. 

There will still be coverage, but with fewer providers, experts say costs will likely go up “much higher in 2017 than they had in the past couple of years.”- AZ Central

Costs will likely go up.

No kidding.

They even have the gall to reference a report that has nothing to do with reality in Arizona.

A national estimate by the Kaiser Family Foundation predicts that premiums for one of the lower-costs plans could rise as much as 9 percent next year, compared to 2 percent this year. In Arizona, those higher premiums could hit more than 100,000 people.

Nine percent? How about 19% to 122%?

Rates filed with the Arizona Dept of Insurance have been reviewed and (presumably) approved. Note that some of the "final" rates are higher than the carriers requested.

Click to view report.

How do you like those apples?

Shame on you Arizona Central. You should have your press pass revoked.

And now for something completely different: Gaming edition

Our friends at Fat Dragon Games have partnered with Bundle of Holding to offer some incredible discounts on industry-leading FDG terrain sets! Part of your payment will be donated to Doctors Without Borders as well, so get some awesome terrain for your game at an amazingly low price, and help a wonderful charity, too!

Death of a Salesman

After more than 40 years in the health insurance industry, I never thought this day would come. The advice offered based on years of experience and hearing almost everything under the sun from (literally) thousands of clients is now going silent.

#Obamacare has replaced insurance agents with "navigators" who have been given a week of training, mostly on how to use their computer to find health insurance plans and rates. These reps are nothing more than faceless voices at the other end of an 800 number.

Because they are unlicensed, and nameless, they are not accountable for the advice they give.

Got a problem? Who did you talk to? Tamika? Tamika who?

It really doesn't matter because whoever you talked to before, and the one you are talking to now, really doesn't care about your problem. Why? Because there is no accountability.

Mary Jennings is (was) a health insurance broker in Connecticut. Mary is 29 and has held an insurance license for 2 years. She is approved to help people find health insurance on the Connecticut insurance exchange, Access Health CT.

Her two year career is about to end, thanks to Obamacare.

Jennings is one of more than 250 brokers certified to help customers navigate the state exchange, Access Health CT, and find the plan that best fits their needs. But next year, she said, she won’t be helping customers anymore if the health insurers on the exchange decide to eliminate the already-low commissions they pay to brokers like her. 

As state regulators consider rate proposals for next year, both of the carriers set to remain on Connecticut's exchange – Anthem and ConnectiCare – could eliminate their commissions for brokers in 2017, creating uncertainty as brokers and customers plan for the coming year. Anthem said earlier this year it would eliminate broker commissions while ConnectiCare has yet to decide. - CT Mirror

Connecticut is not the only state where agent commissions have been cut to zero. Carriers have been decreasing commissions for the last 3 years with major cuts in the last 18 months.

Most of the health insurance agents I know have completely left the insurance business or shifted to other areas like Medicare. Working with folks age 65 and up who are entering Medicare is where my focus has been since 2011. Two years ago I completely abandoned the under 65 health insurance market and suggested my clients get used to dealing with healthcare.gov.

No one is happy with that decision but for me, health insurance is not a hobby. It is my paycheck.

According to the CT Mirror article, 40% of those who bought health insurance on the CT exchange did so with the help of agents.

What happens in 2017 when there are no agents to offer advice and guidance? No doubt they will still buy insurance if for no other reason than the fact the government has told them they must buy insurance or else .....

But who will they turn to when they have a complaint or question? Will Tamika still be there or will they talk to someone who was asking if you want fries with your order the week before?

Obamacare has brought about the death of a salesman and that is truly a loss that cannot be replaced.

Reverse Robin Hood: Obamacare's Transitional Reinsurance Program

Written in Obamacare, transitional reinsurance is a fee disguised as a levy on insurance companies that is passed through to all consumers. It is a temporary program that cost each covered person a set annual dollar amount. In 2014 every insured person was charged $63. This reduced to $44 in 2015 and is set for $27 in 2016.

All group plans - self funded and fully insured - as well as individual plans pay this fee. But, the only ones who benefit from the fee are insurers who have high claimants in Obamacare compliant individual plans.

The original design assumed consumers would pay $12 Billion in 2014, $8 Billion in 2015 and projects for $6 Billion in 2016. $10 Billion would pay off insurance companies who incurred loses and $2 Billion would go to the U.S. Treasury to reduce debt. In 2015 there would be $6 Billion to pay off insurers and another $2 Billion for the U.S. Treasury. For this year there would be $4 Billion to fund insurance company losses and $1 Billion to the Treasury.

The way that insurers would get money back was based on a formula for large claims. The government determined a base dollar amount and a cap they would pay for claims an insurance company incurred. There was also a coinsurance percentage associated with it. The original floor for claims was set at $60,000 ($75,000 in 2015 and $90,000 in 2016)
with a cap of $250,000. The coinsurance was set for 80% in 2014 and 50% in 2015.

Here's an example of how the program should have worked. Assume an insurer has a large claim of $210,000. They pay the first $60,000. The remaining $150,000 would be split with the insurer paying $30,000 (20%) and the government paying the insurer $120,000 of money you paid into the reinsurance program. Once all of the claims were paid out the remainder would go as a payment to the U.S. Treasury for debt reduction.

The outcome is much different. Like most government programs, this one over-promised and is under-delivering.

First, the actual collection numbers were $9.7 Billion in 2014 and $6.5 Billion in 2015 - more than 20% lower than projected. While this is an important development, it is what the Obama administration did next that really cheats you as a taxpayer.

Insurers only requested payments of $7.9 Billion for 2014. At a coinsurance rate of 80% the amount that HHS should have distributed was $6.3 Billion. This would have left $3.4 Billion and resulted in the U.S. Treasury receiving their $2 Billion contribution and allowed the program to carry over $1.4 Billion.

What happened? The Obama administration chose to "change" the law in final regulations. They lowered the floor (attachment point) to $45,000, down from $60,000. Then, instead of a coinsurance rate of 80% they upped the ante to 100%. Doing so gave insurers an additional $1.6 Billion in payments leaving $1.7 Billion which one would assume would be a payment to the Treasury. Except they didn't. They took the full $1.7 Billion and rolled it into the 2015 program leaving the U.S. Treasury with nothing.

Which brings us to now.

CMS recently released the 2015 payments and data. The first interesting point was the increase in payment requests. The requests totaled $14.3 Billion. Yet HHS estimates on reinsurance payments projected it would go down as the years go forward. They believed that the first year would be the worst and then the market would correct itself. Obviously that's not happening and it appears that it is getting worse. The collections total $6.5 Billion. Taking the current $6.5 billion and adding the $1.7 Billion that rolled over gives HHS a cool $8.1 Billion to play with for this year.

At a coinsurance rate 50% on $14.3 Billion in requests the CMS should be paying out $7.1 Billion and give the Treasury $1 Billion. But of course they didn't. Instead they upped the coinsurance rate to 55.1% and paid out $7.8 Billion. The remaining amount of roughly $500 Million is going to the Treasury.

The first two years is proof that there is no method to the Obama administration's madness. They simply do what they want regardless of their responsibility to follow the rules of a law they championed.

The Obama administration lied and stole from you the taxpayer. All for the benefit of the insurance companies - who were supposed to be the ones paying the tab.

(ED NOTE: Image above is a summary of Transitional Reinsurance Program before and after)

Aetna Does Self-Funding

Patrick's had a couple recent posts on "alternative arrangements" such as MEWAs and self-funded plans (here and here), and I thought I'd throw in my 2¢ on the matter.

[ed: click here for a more detailed explanation of self-funding under the ACA]

Recently, Aetna's been pushing its version pretty hard, with emails like this:

"Are your clients looking for more options? Think bigger with Aetna Funding Advantage ... Aetna Funding Advantage plans are self-funded, which means they aren’t subject to all of the same rules as an ACA plan. And, they could help save your clients as much as 24%*."

That little * is to alert one to the fact that YMMV.

Be that as it may, it's pretty interesting that carriers are finally developing these products for the small group market (although they're literally 10 years late to the game). One presumes that this is simply recognition that there really is a market for these products, as employers struggle to stay afloat while offering (and helping pay for) group health plans.

And speaking of which, they didn't just scale down a large group product, but apparently built one specifically for smaller companies. From their online toolkit:

"Aetna Funding Advantage [is] similar to the self-funded plans traditionally offered to larger companies, but designed with smaller clients in mind."

They even have a helpful video to help explain the benefits and process of self-funding for smaller groups.

Very cool.

Medicaid Expansion Woes

Jonathon Gruber and his band of merry men and women at CMS keep finding new surprises in the cost and true impact of #Obamacare.

Recently we discovered that the man credited with counting on the stupidity of the American voter underestimated the popularity of the free health care program known as Medicaid. Instead of 12 million new Medicaid enrollees we have 15 million.

No big deal. As they say in DC, a million here, a million there, before you know it you have some serious numbers.

Now it seems that not only have Medicaid ranks expanded like my waistline during the holiday season, but these folks are costing more than anticipated.

The Department of Health and Human Services just "found that the ACA's Medicaid expansion enrollees cost an average of $6,366 in (fiscal) 2015--49 percent higher than the $4,281 amount that the agency projected in last year's report." - Maciver Institute

How can they miss by that much?

Consider that the Transcontinental Railroad covered 1776 miles. Constructed between 1863 and 1869 the two rail lines met at Promontory Point, Utah. While many facts contribute to the story, one that amazes me is that the teams started at two different points and met in the middle. One team started in California while the other in Iowa. Yet they managed to meet at a precise point.

So if two teams of laborers can travel that much distance and hit their mark with precision, why can't the high paid goofballs in DC make accurate predictions of how much #ObamacareFail is supposed to cost?

Empire State Skyrockets

Those 3000% rate decreases keep on comin':

"The Cuomo administration on Friday announced that health insurance rates on the individual market would increase by a weighted average of 16.6 percent ... Rates in the small group market will increase by a weighted average of 8.3 percent"

That individual plan hike, by the way, represents "the largest individual market hike since the [Un]Affordable Care Act began"

It's what happens when regulators try to impose caps on rates for years on end, until (eventually) the lid comes off.

It's simple physics, really.

ObamaCare #Fail?

The headline is inviting:

"ObamaCare Is Failing Exactly The Way Critics Said It Would"

And for those that are focused on the (long since broken) promises of "if you like your plan" and "3000% rate decreases" there's no small measure of satisfaction seeing "Aetna's decision to abandon its ObamaCare expansion plans" and "UnitedHealth Group's decision to leave most ObamaCare markets" and the like.

One of the great lies touted by ObamaCare supporters is that 20 million previously uninsured folks now have coverage. The lie of omission is that it fails to take into account all the folks that have lost (and who are about to lose) their coverage, and those who can't afford to use the coverage they now have.

But I would argue that these are all very tangible ObamaCare successess if one understands that the entire point of the exercise was to usher in Single Payer (ie Government-run) health care. You know, to be run by the same competent, friendly, prompt folks who run the DMV and IRS.

You're welcome.

[Hat Tip: Holly R]

Welcome to Walmart, ObamaCare-style

Via email from The Rocket Surgeons in DC©:

"Last year during Open Enrollment 2016, agents and brokers enrolled consumers in Marketplace plans at a variety of retail locations, including Walmart stores across the country. The opportunity to be in Walmart stores will be available again this year during Open Enrollment for 2017"

Can't wait.

From the agent's perspective, this may make some sense: Walmart provides the overhead (literally and figuratively) and the foot traffic. And since ObamaPlans are guaranteed issue, there's no field underwriting problem. From Walmart's point of view, it's space they already own, and having agents on-site may be a draw, bringing in folks looking for more than just a policy.

From the government's viewpoint it's also win-win: there's zero cost to HHS, and the potential for signing up additional victims insureds.

If you're a licensed agent who's completed the 2017 Marketplace training and would like more info just click here.

Oh, and please pick me up a pack of paper towels. Thanks!

The Obamacare Cheese and Meat Plate

Obamacare promised us government cheese.

New customers would get huge subsidies for insurance from the government which would give insurers millions of new paying customers. Customers would be able to keep their plans and doctors and insurers would be protected from excessive losses. The best part of all, Obamacare won't add "one dime" to the federal deficit.

Obamacare delivered us unicorn meat. 

Customers are receiving huge subsidies but premiums are rising. Many "would be" customers are still have trouble affording insurance. They can't keep their plans and in many cases they aren't able to keep their doctors either. It's been a nightmare for insurers too. They haven't been able to avoid excessive losses, even with the beloved 3 R's trying to help. The worst part of all, not one dime turned in to billions increasing the deficit.

From the Mailbag: Rules for Thee, Not for Me

Reader Brian J offers some interesting insights into the double standard between those who toil in government and ourselves:

On a related topic about this failure of taxpayer-subsidized health insurance (i.e., Obamacare), I’m surprised that no one has brought up the fact that everyone in the U.S. who is employed by the federal government – from the President, Congress, Supreme Court, and all-related branches, all the way down to the local federal civil-service worker – has affordable taxpayer-subsidized health insurance;  everyone who is employed by State governments, County governments, local governments, defense contractors, anyone retired from any of those afore-mentioned levels of government/contractors, and every company (that offers health insurance) doing any type of work for any level of government, all have taxpayer-subsidized health insurance.  (Not to mention tens of millions of more people covered under Medicare, Medicaid, etc.)

With all these employers/entities – with their grand total of many scores of millions of covered employees – providing affordable taxpayer-subsidized health insurance, how is the individual person/small business owner to seek out -- in what’s left of our so-called “free market” -- affordable health insurance coverage on his/her own?

How, indeed?

Thanks, Brian!

ObamaTax #Fail (Part 2,693)

Context:



Counterpoints:

■ "Illinois Insurers to Increase Premiums as High as 45%"

The Prairie State's Blue Cross affiliate (by far the most popular - for certain values of "popular") is asking for rate increases from the low 20's to the mid-40's (no word on the windchill factor).

And Coventry Health Care is seeking a 21% rate hike.

■ "Health plans sold on Michigan's insurance exchange could see an average 17.3% increase next year"

Wolverine State denizens must use the 404Care.gov site to purchase on-exchange plans; folks who buy from carriers directly (and/or through agents) should also expect to dig deeper in '17.

■ "America’s Third-Largest Health Insurer Says It Is Losing $300 Million A Year On Obamacare"

Aetna, still in the thralls of the latest merger mania kerfluffle, is seriously considering curtailing its 2017 Exchange offerings. Instead of expanding them, the carrier's now looking at seriously reducing its participation nationwide.

#Winning!

[Hat Tip: Ace of Spades]

Flag on the Play

The few health insurance carriers that still remain in the Obamacare market have stepped up to the line for 2017 and called an audible. Change of plan. They don't like what they see. Time to reconsider.

Four of the five major health insurance carriers are currently in discussions to trim their losses and merge.

In the interim, the Dept. of Justice has stepped in as referee and thrown a flag on the play. Presumably illegal procedure is the penalty.

Link to view video

Carefully considered my butt.

DC thinks they can control the behavior of individuals and business by regulation and intimidation. The DOJ believes they can preserve what little competition left in the health insurance market by blocking mergers.

It has not occurred to them that the reason why some carriers are willing to be bought (merged) is because they want OUT of the Obamacare market.

If the DOJ prohibits the merger they will simply withdraw from the market leaving only 3 major health insurance carriers in the 2017 game.

Which is precisely what the merger was intended to do. Remove weaker players from the game and leave the stronger ones in play.

The DOJ referees are doing nothing to preserve the market and increase competition. This move just continues to prove how incompetent they are and how little they understand about the health insurance game.


#ObamacareFail

Costly Carrier Tricks

We've written before about the 'contestability clause ' in life insurance contracts. Briefly, these allow the insurer a (brief) window of time to "review a recently approved policy to see if there were any misstatements or misrepresentations, or if relevant information was omitted." Recently, the Principal National Life Insurance Company (PNL) was "caught out" on the invocation of this clause:

"A Connecticut federal judge has ruled that it was wrong for an insurer to refuse to pay out a $10 million life insurance policy on a Hartford lawyer who died of brain cancer."

Contestability clauses generally run for the first two years of a policy (carriers may choose a shorter run); in this case, the poor fellow expired only 15 months in, from a rare but aggressive cancer. When the beneficiary (in this case, a trust) submitted the claim, the carrier chose (as is its right) to invoke the clause. This offered them the opportunity to make sure that all the i's were properly dotted, and the t's properly crossed.

What they found, though, was a bit of an issue:

"Principal learned that Coassin had seen an ear, nose and throat specialist who treated his dizziness symptoms at a visit only nine days before they issued Coassin the life insurance policy. Principal did not know about this visit when they [it]."

So they denied the claim, and the legal fireworks took off.

Here's the rub: as FoIB (and carrier rep) Brian D points out, "even for The Principal a $10 million policy takes more than 9 days to underwrite. Therefore the appointment was probably conducted while the policy was in underwriting. There was no diagnosis that was troubling. What did he lie about on the app?"

Indeed. The decision really rested on the fact that none of the doc's Mr Coassin had seen had any inkling about the cancer [ed: as an aside, one wonders when the malpractice suits will be filed]. Since the doc's didn't know, they couldn't inform Mr C, and thus he didn't materially misrepresent (aka "lie") about his health, and so the judge ordered PNL to pony up.

Lagniappe: There's also a little-discussed practice called "statement of good health" that is often required when delivering a policy that's been in underwriting a long time. Basically, it's a form the insured signs upon delivery of the policy stating that there's been no change in health, nor any doctor's visits, during that time. The article doesn't speak to this, so one presumes it wasn't utilized here, but one wonders if things might have turned out differently for PNL if they had required one to be signed and returned.

Obamacare Takes a Toll and Centene Rolls

Most health insurance carriers that allowed themselves to get sucked into the hope and change pitch

have regretted ever getting involved in Obamacare. Some of the larger carrier groups, like Anthem are cautiously optimistic while United Health Care has essentially washed their hands of this mess.

Anthem said it now believed it would see a "mid-single-digit" operating margin loss on its ACA plans in 2016, due to higher-than-expected medical costs. It expects better results next year, because it is seeking substantial premium increases.

(Double digit premium increases, in some cases above 30%).

UnitedHealth Group Inc. recently confirmed it is withdrawing almost completely from the ACA marketplaces in 2017, amid mounting losses. Humana Inc. recently said that in the wake of its own losses, it will also pull back sharply. Humana now expects to sell individual plans next year in 156 counties across 11 states, at most, down from 1,351 counties in 19 states this year. - NASDAQ

Meanwhile, back at the ranch, Centene continues to sound more like Brer Rabbit in the briar patch.

On Tuesday, Centene Corp., which like other Medicaid-focused insurers continues to see strong results from its own ACA plans, alarmed investors by booking a $300 million reserve fund partly due to projected problems with the legacy exchange business of Health Net Inc., which Centene recently acquired. Centene said it would pull back the former Health Net exchange presence in Arizona to one county, among other efforts to resolve the issues

In spite of the indigestion caused by swallowing Health Net, Centene should continue to do very well in the shark infested Obamacare pool.


#ObamacareLosses

Debt of Gratitude

I spent the past week out-of-town and effectively offline, and as usual, my co-bloggers stepped up in a big way to make sure there was new content all week long. In case you missed them, Patrick wrote about how he helped a 1st time small group client navigate the twists and turns of ObamaCare, and Mike alerted us to some major changes underway in the Feds' long term care insurance plan.

Bob had several wonderful posts, including two extremely Medicare-related ones (here and here).

I continue to be blessed with the very best co-bloggers, and am extremely grateful to them for holding down the fort.