Breaking: Silver State HIX Plot Thix

Wednesday, May 13, 2015
LifeHealthPro's Allison Bell tips us to this interesting news, thus far flying under the radar:

"The #Nevada exchange, @NVHealthLink, has canceled a meeting that was scheduled to take place tomorrow"

Last time we checked in, Nevada's Exchange was having trouble paying commissions on policies written through it by agents.

Was that a portent of things to come?


Obamacare (full Monty version) is not even 2 years old and already the riptide
effect is being felt as carriers such as Assurant are leaving the market.

There has been speculation as to which carrier will be the next to leave the dance and party talk has focused on Cigna, Aetna, Coventry (now owned by Aetna) and to a lesser extent, Humana.

Apparently this is more than just backroom talk.

Leerink’s Ana Gupte wouldn’t be surprised if Aetna (AET) merged with either Humana (HUM) or Cigna (CI):
Consolidation remains likely, with CEO Mark Bertolini asserting that government business is the focus for inorganic growth, while compatible cultures for post-merger synergies were viewed as the driver in all transactions, with cheap debt making either Aetna-Humana and Aetna-Cigna meaningfully accretive possibilities and imminent. - Barrons
The next few months could be interesting. How many carriers will actually go to the 2016 prom?

This is looking like a bad remake of Carrie.

Stay tuned.

Your Genes vs Your Job

Every once in a while, the question of genetic testing in the workplace - and especially as relates to employer-based health insurance - rears its (ugly?) head.

We've covered this several times over the years; in fact, our very first year we reported that "40 percent of people already undergoing genetic testing are worried that participation might affect their future insurance coverage.”

At the time, this seemed kind of a stretch, inasmuch as health insurance companies were forbidden to use these results in their underwriting process (and since group insurance has been guaranteed issue for almost 20 years, it was moot to begin with).

On the other hand, you really can't be too careful, and so we got the Genetic Information Nondiscrimination Act of 2008 (GINA), "which prohibits genetic information discrimination in employment" (the law went into effect the following year). In fact, the law goes even further, in that it also forbids the use of this information as regards benefits (including insurance).

And yet:

"Big companies are considering blending genetic testing with coaching on nutrition and exercise to help workers lose weight and improve their health before serious conditions like diabetes or heart disease develop."

At first glance, this specific use seems to skirt the letter of the law, so it's probably "kosher."  As long as the results aren't used to, for example, determine premium contribution or subsidy levels (ie how much of the premium the employer pays*), this seems to be a legitimate use of the data.

Now, the efficacy of using the information in the manner being proposed may indeed be questionable:

"[E]mployee benefits experts have doubts that such a novel approach will gain momentum. It first has to conquer steep challenges like ... employer skepticism about its effectiveness."

That is, whether or not there's actual value there, and whether it's worth the cost of implementation (these tests aren't necessarily cheap, and one presumes that the employer will be footing the bill).

A potentially more serious concern arises as to who will have access to this information, and how secure it will be. But that's another post.

[*For illustrative purposes only; regular IB readers know that employers actually pay 0% of the premium]

ObamaCare Aloha

Tuesday, May 12, 2015
Here's co-blogger Bob almost exactly a year ago:

"Hawaii Medical Services Association posted losses of $30.1 million in the first quarter and said it recorded $46.1 million in fees related to Obamacare."

Fortunately, the success of O'Care has helped immensely...

Wait. What?

"The Hawaii Health Connector has prepared a contingency plan to shut down operations by Sept. 30 after lawmakers failed to pass legislation to keep the state's troubled Obamacare insurance exchange afloat."

Looks like ObamaCare #Fail from sea to shining sea.

Under the plan, Aloha State residents will be cut off from enrolling in new plans at the end of this week, and be completely shuttered by the end of next February (costing another 73 hard-working Americans their jobs). It appears that Island citizens will be transitioned to the site for Open Enrollment Season v3.0 beginning this fall.

Chalk up another one to the Unaffordable "Care" Act.

MassCare unraveling

Monday, May 11, 2015
We've been covering the Massachusetts health insurance Connector since it was merely a gleam in Johnathan Gruber's eyes. So it comes as less than a surprise to us that it continues to implode under the new ObamaTax regime. Thanks to the intrepid Josh Archambault (senior fellow at the Foundation for Government Accountability), we learn that the noose is tightening. Turns out, Bay State Brahmins:
■ Failed to execute a contract with CGI, the vendor hired to build the site, that would track the progress of the project and ensure on-time delivery of a product that included all required features

■ Failed to implement a governance structure that would ensure ongoing quality of the project

[And worst of all:]

■ Attempted to conceal these shortcomings by misrepresenting the progress of the health insurance exchange to a number of stakeholders including the Centers for Medicare and Medicaid Services [among others]
Major no-no there. In fact, their behavior was so egregious that the Feds "have subpoenaed records related to the commonwealth’s ‘connector’ dating to 2010.”

In other words, this is now a criminal matter, with actual fines and (hopefully) jail time potentially on the table.

One wonders which of the other 57 states will be next...

Bob G on O'Care

Friday, May 8, 2015
Our good friend Bob Graboyes (senior research fellow for the Mercatus Center at George Mason University) has some key insights into the failed ObamaTax roll-out. Among them:

"Other than “more people with insurance,” the law’s goals were never clearly stated, so there are few objective metrics on which to judge it. More are insured, but there’s no increase in supply of health care to meet any new demand."

As our own Bob Vineyard pointed out some years ago, this is an utterly predictable result of inelasticity:

"The economics of goods and services can be reduced to simple demand and supply. Health care is no different. It follows economic theory just like every other consumer good.At either extreme you have inelastic price curves and elastic curves. Most consumer items track a bell curve but some things are totally elastic or totally inelastic."

That is, more people may have insurance (although this remains unproven), but the supply of actual health care remains steady (or is, in fact, falling). So how valuable is your ObamaPlan if you can't find a provider who accepts it?

Then there's the little problem of administering your plan if you're fortunate enough to be able to afford and are successful in actually buying one:

"[T]he back end is still dysfunctional. It’s very difficult for a consumer to conduct a transaction as you would with, say,, that results in verifiable coverage. Pen, paper, and processing time are still required"

And how does one track changes made this way?

There's lots more, all of it good, all of it important.

Read the whole thing.

Health Wonk Review - Grumpy Cat edition

Thursday, May 7, 2015
Steve Anderson hosts this week's compendium of health care policy and polity, channeling negative vibes into positive outcomes.


Hey Brother, Can You Spare a Dime?

During the Great Depression when 1 out of 4 were out of work a song made
popular by Bing Crosby was everywhere on the airwaves.

The song tells the story about a beggar that lost his job and strikes back at "the system" that contributed to his job loss.

They used to tell me I was building a dream
With peace and glory ahead
Why should I be standing in line
Just waiting for bread?

Once I built a railroad, I made it run
Made it race against time
Once I built a railroad, now it's done
Brother, can you spare a dime?

The tune was based on a Russian-Jewish lullaby sung by composer Jay Gorney's mother when he was a child.

Today we have our own challenge, except this one is about health insurance.

Obamacare has turned the health care, and health insurance system on its head. Premiums today are anything but affordable, except to the extremely poor or extremely wealthy.

Everyone else is screwed.

Yesterday I had a call from a woman who would be losing employer group health insurance at the end of the month. They had coverage through her husband's job but that is going away and he will become self employed.

The family of 5, all in good health, are looking for something affordable to replace their group health plan.

Accustomed to paying $200 per month for a good plan that included dental and vision, they needed to get an idea of what was available.

Projected income is over $100,000 so they will not qualify for a subsidy.

Sounds odd doesn't it?

The new system says if you earn less than $100,000 you are poor and need a government handout to afford your affordable health insurance plan.

To replace their existing health insurance plan they will need to come up with $1,115 per month, and that's just for the Gold health insurance plan.

Add another $100 for dental and vision.

That's disgusting.

Comparable coverage before Obamacare would be less than $500 per month.

Hey brother, can you spare a dime?

ObamaCare ka-boom

Wednesday, May 6, 2015
As if we needed them, two more reasons why the ObamaTax is imploding. One we've already covered:

"Almost half of the insurance exchanges set up by states are struggling financially"

Again, this should surprise exactly no one.

But the Daily Caller article then posits an interesting possibility:

"[O]fficials are considering raising fees on insurers, asking the state for more money and working with other states to improve their exchange. Connecticut plans to sell advice and strategy to struggling states."

Given its history, seems like the only bit of Connecticut's advice of any value would be on how not to set up or run an Exchange.

But what's remarkable to me is how many folks still don't 'get' that insurers don't pay these fees, and that states don't have money: customers pay the fees, and tax-payers provide the funds.

So the only thing they're going to accomplish is higher premiums (so fewer folks buying or keeping plans) and raising taxes (same same). Where do they think all this money's coming from?

Oh yeah, us proles.

[Hat Tip: FoIB Holly R]

Three sides of a coin

Tuesday, May 5, 2015
When one considers insurance, the majority of claims are paid to 3rd parties. For example, life insurance proceeds are paid to one's beneficiary, auto claims to the body shop, medical claims to a doctor or hospital, and so on.

But three types of plans, all of which are fairly similar, actually pay benefits to the insured. These are  (in no particular order) critical illness (CI), long term care (LTCi), and disability insurance (DI).

We've blogged on LTCi many times (most recently here). Thanks to FoIB Sandy M, we learn that Fidelity (of investment fame) has produced "a pretty cool chart of US and various sorts of health care" including a very useful interactive map of how much long term care costs around the US.

We haven't blogged much on Critical Illness coverage, which is a shame, because these plans also pay the insured cash benefits for things like heart attacks and cancer. These plans can be particularly useful if one has a high deductible (HSA) plan or one of the newfangled ObamaPlans with sky high out-of-pocket exposures. By providing a quick injection of cash, these plans can mitigate a lot of financial pain.

Finally, the fine folks at the Council for Disability Awareness remind us that May is Disability Insurance Awareness Month. To that end, they're sharing the results of their 2014 consumer survey. Among the key findings:
  • 57% of working adults report having no private disability insurance
  • One third would consider buying disability insurance if they knew more about it
  • 41% would consider buying it if it were less expensive, but perceptions about costs vary considerably
That last is important: many (most?) folks think disability coverage is unaffordable, but seldom check to confirm that by asking for a quote. So if you're one of the 57%, why not check with your employer about a short or long term disability  group plan or - better yet - ask your professional, independent agent for a quote.

You may be surprised by just how affordable coverage can be.

So, How's That Obamacare Working For You?

Monday, May 4, 2015
POTUS made a lot of promises about Obamacare. Lower premiums. More
people covered. If you like your plan..............

And, Obamacare was supposed to REDUCE ER visits.

Three-quarters of emergency physicians say they've seen ER patient visits surge since Obamacare took effect — just the opposite of what many Americans expected would happen. - USA Today
No real surprise there,

So why did it happen?
In addition to the nation's long-standing shortage of primary care doctors — projected by the federal government to exceed 20,000 doctors by 2020 — some physicians won't accept Medicaid because of its low reimbursement rates. That leaves many patients who can't find a primary care doctor to turn to the ER — 56% of doctors in the ACEP poll reported increases in Medicaid patients.
Isn't that special?

Assuring Clarification

We're not generally in the habit of carrying water for insurance companies, but last week's news about Assurant Health has engendered some confusion. Briefly, Assurant Health is (was?) a subsidiary of a larger company that also owns Assurant Employee Benefits (which sells group non-medical coverage, such as dental and disability).

Unlike its sister company, Assurant Employee Benefits continues to enjoy robust growth and financial stability. According to the carrier:
"Assurant Employee Benefits (AEB) is not exiting the benefits market ... By approaching the sale of Assurant Employee Benefits in this public manner, it allows for us a faster process.  The public announcement allows us to be transparent and control the process.  We expect to know within a few short months who our new parent company will be."
I've been fortunate to work with some great folks there over the years, and know them to be a solid company. Someday I'll have to tell you about my first death claim with them....

Who'da thunk it?

As Bob reported a week or so ago, the Golden State's health exchange is fast approaching room temp. But they're not alone:

"Nearly half of the 17 insurance marketplaces set up by the states and the District under [the ObamaTax] are struggling financially ... wrestling with surging costs, especially for balky technology and expensive customer call centers"

That's right: the much-touted call centers don't work, but we'll keep throwing money at them anyway.

Makes sense (if you're in DC).

On the other hand, even Ms Burntwell (et al) may have begun to see the value that professional agents bring to the party:

"The agency that runs the public exchange system in the states has given navigators, certified application counselors (CACs) and other nonprofit assisters a webinar on how to work with insurance agents and brokers."

Unlike these "counselors," agents must be vetted for prior criminal activity, licensed by their state, have strict continuing education requirements, and carry malpractice (Errors & Omissions) insurance.

Nice that DC finally got a clue.