Baldo

Apr 23 2014, 09:39 PM

This is the best work Laszenski has put out to date, though I do not agree 100%. It's easiest to insert my comments directly below the topics as Lewszenski reports them.

(Note! Bold lettering is from the author)

Obamacare Observations from the Marketplace
By Robert Laszewski

A few observations from my travels and conversations in the marketplace:

About half of the enrollments are coming from people who were previously insured and half are not. When I try to gauge this, I go to carriers who had high market share before Obamacare and have maintained that through the first open enrollment. Some carriers have said only a small percentage of their enrollments had coverage before but health plans only would know who they insured before.

By sticking to the high market share carriers who have maintained a stable market share and knowing how many of their customers are repeat buyers, it’s possible to get a better sense for the overall market. Other conventional polls have suggested the repeat buyers are closer to two-thirds of the exchange enrollees.
The count of the uninsured now covered is important. We need an explanation for how the 6 million cancelled was covered if we are to believe half of the enrollees are newly insured. We know the 8 million count is not accurate, so we're left with the mix of 6 million cancelled policies and 8 million Obamacare "sign ups" to sort out.

The number of those in the key 18-34 demographic group improved only slightly during the last month of open enrollment so the average age is still high. The actuaries I talk to think this issue of average age is made to be far more important than it should be. It is better to have a young group than an old group. But remember, the youngest people pay one-third of the premium that older people pay.

The real issue is are we getting a large enough group to get the proper cross section of healthy and sick?

The bigger concern continues to be the relatively small number of previously uninsured people who have signed up compared to the size of the eligible group. The recent report released by Express Scripts reporting on very costly pharmacy claim experience from January and February enrollees is far more concerning than the average age.

About 15% to 20% of new enrollees are not completing their first month’s enrollment by not paying their premium, according to my marketplace discussions. I note that the California exchange just reported their non-pay number was 13%. That makes sense to me because California did not have the information technology difficulties the feds did––many of the non-pays were caused by system related problems like duplicate enrollments and “834″ transactions that weren’t able to be processed.

California also appears to have a population more amenable to the new health law and therefore more likely to pay than the national average.

On the other hand, the Georgia insurance commissioner reported that only about half of those who enrolled had paid their premiums by March 31––although any enrollments between March 15th and April 15th have until April 30th to pay.

If California and Georgia can tell us the number of people who have completed their enrollment and paid for their coverage, why can’t the Obama administration? As I wrote on this blog recently, the carriers all have this data and can make it available to the administration in a matter of a few days––or even hours.
It is easy to get lost thinking about Obamacare as a large pool. That is not so. Think in terms of an average of 50 states with 10 companies offering 5 different plans each. That's more like 2,500 pools across the nation serving less than 8 million, or about 3,200 people in each pool. Then imagine what the risks are for costs of pre-existing and older enrollees in your pool of 3,200.

The back-end of HealthCare.gov, that reconciles enrollment between the feds and the health plans, is still not fully built and won’t be for months to come. The feds and the carriers are still talking about how parts of the reconciliation system will work.

While the Obama administration could easily poll all of the carriers to be able to report a more accurate enrollment, I don’t expect them to report the real enrollment numbers until after these last systems are built––and that could easily be months away.

When the back-end is finally built and tested, we will have the mother of all accounting reconciliations trying to clean up months of workarounds and patches. It may well be that the back-end of HealthCare.gov won’t be fully built until close to the first anniversary of the launch of Obamacare.

The administration would be doing themselves a favor to report the actual enrollment sooner rather than later. Every month, an individual health insurance block loses 2% to 3% of its members. Generally, the “change of life” adds about offset the deletes. But in this case, while people can buy coverage if they have a qualifying event, the general market cannot buy coverage until the next open enrollment period.

The upshot is that this first Obamacare block is likely to lose lots of people on a net basis as the people who simply let their coverage lapse can’t be offset by those who later simply become interested in being insured before the next enrollment.

The longer the administration waits to give us a solid enrollment number the farther they are going to be from eight million.
They're going to lose a much larger percentage than just 2-3%. The previously insured are faced with worse coverage and the higher deductibles will hammer all that use the coverage ....if they can.

There is a lot of dissatisfaction being communicated from consumers to insurance company call centers and their agents about the new health insurance plans, particularly compared to the plans people are used to. Many people likely signed up because having insurance is the right and responsible thing to do––especially if their plan was canceled. Many who had insurance before could now get a subsidy and sometimes a better plan for their out-of-pocket premium. Many also feared the fine.

Some have health problems and they can finally get insurance. But it would appear we shouldn’t confuse someone wanting to buy an Obamacare policy with an average Silver Plan deductible of $2,600, and the likelihood of a narrow network, with the person necessarily being pleased with the product.
There will also be enrollees that signed up merely to bump the numbers, and they'll drop out. Again, those deductibles, as he mentioned, will be a killer for the 80% or so getting subsidies to pay for their coverage.

There is a concern that the administration sees the recent flurry in enrollment as evidence Obamacare is working and therefore the plan offerings do not have to be improved. Without more attractive offerings there is concern that the currently poor penetration into the eligible market will not improve.
Not to mention the problems the insurance companies will encounter when the providers get stuck eating the bills of the 90 days coverage the 'no-pays' have until their Obamacare coverage is cancelled. That will be a cluster **** to work out and keep the narrow networks they presently have.

What will the 2015 rate increases be? 9.9%

There will be some variation in rate actions because the Obamacare enrollment outcome varies considerably among states. Also, some carriers’ rates turned out to be too high and others too low when compared to their competitors which will likely lead to some compression in the local markets as these outliers get closer to typical rates. This could produce a few significant increases or decreases for 2015.

But generally, I really do expect a lot of rate increases just below 10%. The carriers do not have, and will not have, claim data worth much by the time the 2015 rates are due between May 27 and June 27. All of the people who signed up in the last half of March, for example, have an effective date for coverage of May 1––we won’t know anything about their claims costs.

Health plans will have very little claim data on the new enrollees when they must complete their pricing analysis. Any rate increase of more than 10% is subject to regulatory review under federal guidelines. Ironically, if regulators challenge a carrier’s rate increase, no matter how concerned the health plan is with the enrollment demographics, the carrier will have very little hard claim data with which to defend the action.

Health insurers are also protected from most underwriting losses in 2015 because of the $20 billion reinsurance scheme. Simply, the carriers are worried about the Obamacare risk pool, they have no hard data to credibly project or defend a challenge from a regulator, and 9.9% is the most they can generally get unchallenged.
That 10% limit is new to me. It is certainly a limit that will force the insurance companies to use that 3-R's bailout to set lower premiums, which I wondered about here a few times. As for the May-June 27 deadline, as I understand it, it is for submittal to CMS of possible rate hikes (not exact hikes, though the 10% is evidently an issue) and exact rate increases must be approved by the states (each state is different). The HHS/CMS may be slow on sharing information, but state info is public and it has been tracked by Kaiser or some company that had it published on the web.

Will any health plans exit the Obamacare exchange markets in 2015?

No. The program is so immature at this point that no one’s original strategic calculus over Obamacare has changed. Health plans do not expect Obamacare to be repealed. They expect it to evolve. The current or future Obamacare represents all of the individual and small group health insurance market in the U.S. You can’t be in this substantial market without going along for this ride.

That their losses are minimized through 2016 by the $20 billion Obamacare reinsurance scheme is no small issue in their calculations.

Many health plans are a lot more concerned about their Medicare Advantage payment rates than their Obamacare results right now.
So far it is a market of less than 8 million (+some out of exchange plans) spread across 50 states, so dropping out of any or all states is not that major when the 3-R's is gone. When June 2016 gets here, we'll have premiums increases for the non-3-R's market available prior to the election ...along with employer mandate problems on the horizon and in the minds of many.

When will we finally have a good handle on Obamacare’s claims experience?

Years. In a year we will have some pretty good data on the 2014 enrollments. But, then we will have just had the 2015 open-enrollment and there will be questions about the impact these new people will have on the overall program.

In addition, the 2015 open-enrollment will again have millions of relatively healthier cancelled policyholders signing up for Obamacare because their one year extensions will be running out (don’t count on a lot of carriers extending these policies further).

Really, we won’t have a good handle on Obamacare’s costs until the program’s enrollment stabilizes so that the group’s final composition can be accurately measured, and we then get at least a year of claim data from that point.

Also, at the end of 2016 “the training wheels will come off” as the $20 billion reinsurance scheme ends.

It seems that every time there is a snippet of news––an insurance company is entering the market for 2015 so that means it’s working, or an insurance commissioner reports lots of people aren’t paying their premium so it’s not working––people try to make something of it.

This is going to take years to play out.

The politics of Obamacare will likely be more volatile than the health plans’ near term rate actions.
He again strikes me as one that wants Obamacare, IMO, FWIW. Using Laszenksi's theory on how the premiums will come about, we're looking at increases of 9.9% announced in mid-2014, 9.9% announced in mid-2015 and an even larger increases announced in mid-2016 (just prior to the POTUS election, unless Congress changes the law somehow).

"Robert Laszewski has been a fixture in Washington health policy circles for the better part of three decades. He currently serves as the president of Health Policy and Strategy Associates of Alexandria, Virginia. You can read more of his thoughtful analysis of healthcare industry trends at The Health Policy and Marketplace Blog, where this post first appeared."

http://thehealthcareblog.com/blog/2014/04/23/obamacare-observations-from-the-marktplace/#more-72722

We have 320 million citizens, of which about 46 million were not insured. The best-case-scenario from the CBO is that 10 years later we will still have 30 million uninsured for a cost of $1.8 trillion before you figure in what it costs us to keep employer sponsored insurance and economic losses from the overall costs. It's hard to imagine why anyone would be enthusiastic about this law, but I suspect we'll hear that a 9.9% premium increase is a success ...it could have been worse, if not for the 3-R's Barry charged us for.

kbp

Apr 24 2014, 03:26 PM

http://www.vox.com/2014/4/24/5641356/if-you-like-your-health-plan-you-might-lose-it-again

Quote:

 

If you like your health plan, you might lose it. Again.

The Obama administration is quietly trying to stamp out some of the skimpiest health plans, a decision that industry officials say could trigger yet another wave of cancellation notices.

The administration is targeting a type of coverage called fixed benefit or indemnity insurance, which give patients a fixed sum of money whenever they visit the doctor or land in a hospital.

These plans are less expensive than regular medical insurance because they are less robust. And new federal regulations would make it illegal for insurers to sell these plans as stand-alone insurance coverage. Instead, the Obama administration only wants to allow people to buy fixed-benefit plans as supplemental insurance to a more comprehensive medical plan.

It's worth being clear that even now a fixed-benefit plan doesn't satisfy the individual mandate. The new rule would mainly affect people who had chosen to pay the individual mandate, or who were exempt from the mandate, and who bought a fixed-benefit plan as a stopgap. The Obama administration is saying that they can't do that unless they also buy a more comprehensive plan.

This change has been lauded by consumer advocates, who say the whole point of health reform is ensuring Americans into better health insurance plans. But its been criticized by insurers and some regulators for eliminating a source of coverage for those who can't afford a true medical plan.

"We're going to have another public outcry about, 'if you like your health plan, you can keep it,'" says Pat O'Neill, general counsel at US Health Group, which sells fixed-benefit plans. "Not as long as its fixed benefit, you can't."

Fixed-benefit plans don't provide the kind of health-expense coverage most people are used to. Instead, they pay the patient directly a set amount when they use health care services. Some might, for example, pay out $100 for each day spent in the hospital or $50 for a trip to the doctor.

Unlike traditional health insurance, payouts from these plans aren't tethered to which doctor a subscriber sees. There are no networks; patients can see whichever doctor they want. This is very different from traditional health insurance, where networks have been shrinking.

Fixed-benefit plans tend to offer more freedom – but they're also much less robust coverage. Because they're not considered medical insurance, fixed benefit plans are exempted from most Affordable Care Act requirements.

Fixed-benefit plans are not required to accept all consumers — insurers can decline applications from sicker people who they think will have costly medical bills. Where Obamacare requires medical plans to cover a core set of medical services, like hospital stays and preventive care, fixed-benefit plans are free to pick and choose their services.

And buying a fixed-benefit plan doesn't count as medical coverage for purposes of the individual mandate; people with this type of plan would still be fined for not carrying insurance.

"On their own, they're not comprehensive coverage that protects people against risk," says Judy Solomon, vice president for health policy at the Center on Budget and Policy Priorities. "They have the potential to mislead consumers, who think they're getting actual protection."

A fixed-benefit plan that pays $100 per day spent in the hospital, for example, will fall far short of the average cost of a one-day hospital stay: $4,293

Quote:

 

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/04/17/the-nations-largest-insurer-thinks-obamacare-exchanges-are-doing-just-fine/

The nation’s largest insurer thinks Obamacare exchanges are doing just fine

After taking a pretty cautious approach to the launch of the health insurance marketplaces in 2014, the nation’s largest insurer said it’s looking to expand its Obamacare footprint in 2015.

UnitedHealth Group, which is participating in just five public exchanges this year, said it’s likely to join more insurance marketplaces in 2015 but didn't offer specifics. Executive vice president Gail Boudreaux, on an earnings call with investors Thursday morning, said the company “has a bias to increase” the company’s participation in Affordable Care Act exchanges in 2015 after seeing encouraging trends in the program's first year.

“The size of the overall market is positive,” Boudreaux said. She said consumers’ large interest in “silver” health plans – mid-level insurance plans in which insurers cover 70 percent of the care costs – is another positive sign for the young exchanges. Almost two-thirds of customers selecting health plans through the exchanges have chosen silver plans.

Chief executive Stephen Hemsley cautioned that the insurer is still evaluating the insurance marketplaces, noting that it won’t have to make a final decision until September. “We have time to see how this plays out a bit,” he said.

Though UnitedHealth has limited participation in exchanges this year, its health-care technology division, Optum, has emerged as a major player in the marketplaces. It helped repair HealthCare.gov, as well as a few broken state-run exchange Web sites. The company said the unit saw revenue rise 29 percent from this quarter a year ago, and it expects to take on more business as a result of its work to rescue HealthCare.gov.

Still, the insurance giant saw its earnings fall 7.8 percent this quarter, which the company partially attributed to Medicare Advantage cuts and Obamacare taxes. The change driven by the health-care law has been “immediate and significant,” Hemsley said.

snip

kbp

Apr 24 2014, 03:26 PM

http://www.vox.com/2014/4/24/5641356/if-you-like-your-health-plan-you-might-lose-it-again



I'll hit on this later...

Quote:

 

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/04/23/they-signed-up-for-obamacare-now-how-to-keep-them-enrolled/

They signed up for Obamacare. Now, how to keep them enrolled?

Millions have signed up for new health-care plans under Obamacare. The next trick: keeping them enrolled.
With the health-care law's first enrollment period closed, health insurers, policymakers and advocates are pushing to make sure the newly insured become reliable customers for the health plans. That will be crucial to keeping down the uninsured rate and will help determine how insurers will view the individual market under the sweeping changes made by the Affordable Care Act.

According to early independent estimates, one-fourth to one-third of the 8 million people who signed up for coverage on the Affordable Care Act exchanges had been previously uninsured. Millions more, including some previously uninsured, got new individual and family coverage outside of the insurance marketplaces.

So far, 80 percent to 90 percent of people signing up through the exchanges have paid their first month's premium and completed enrollment, according to accounts from insurers and the state-run exchanges. How the payment rate holds up during the year will be closely watched.
[That's not 80-90% of the 8 million, only those who are signed up with insurance companies direct.]

[...]

Exchange enrollees are allowed a 90-day grace period to keep their insurance without payment before they’re dropped from coverage. Insurers are required to pay for the first 30 days, but not the last 60 days – a policy that has doctors worried they could be left on the hook for uncompensated care.
[That's the $ worry I mentioned a post or two ago.]

[...]

About one-quarter of people expected to qualify for premium subsidies, who earn between the federal poverty level and up to 400 percent FPL, don’t have bank accounts, according to Jackson Hewitt.

[...]

LTC8K6

Apr 21 2014, 07:32 PM

http://twitchy.com/2014/04/19/people-really-need-this-much-hand-holding-government-reminds-citizens-to-pay-their-premiums/

‘People really need this much hand-holding?’: Government reminds citizens to pay their premiums

Baldo

Apr 25 2014, 05:24 PM

Cover Oregon officially calls it quits, becomes first casualty of ObamaCare

...Cover Oregon was partially financed by a 2.5 percent premium tax on insurers selling the exchange, Cover Oregon technology chief Alex Petit said Thursday.