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http://kaiserhealthnews.org/news/obamacare-co-ops-cut-prices-turn-up-heat-on-rival-insurers/

Obamacare Co-ops Cut Prices, Turn Up Heat On Rival Insurers

When Anna Duleep went shopping recently for 2015 health coverage on the Connecticut insurance exchange, she was pleasantly surprised to find a less expensive plan.

To get the savings, the substitute math teacher had to change from for-profit giant Anthem Blue Cross and Blue Shield to a fledgling carrier she’d never heard of. Still, Duleep, 37, liked saving $10 on her monthly premium of about $400 and knowing that her new plan, HealthyCT, is a nonprofit governed by consumers. She also liked that all her doctors participate. “I just figured, ‘why not change?’” she said.

HealthyCT, which cut its 2015 premiums by an average of 8.5 percent, is one of at least a half dozen co-ops created through the Affordable Care Act that have lowered 2015 premiums in a bid to boost membership in their second year of operation. But those low premiums are upsetting so-called “legacy” insurance plans like Blue Cross and Blue Shield affiliates that have traditionally dominated insurance markets.

co-op 570Idaho Blue Cross CEO Zelda Geyer-Sylvia said that while she welcomes competition, it’s not fair to have to compete against a carrier getting millions in low-interest federal loans.

“It’s unfortunate, because this is going to be very disruptive to the market,” Geyer-Sylvia said about Montana Health CO-OP, which moved into Idaho this year and undercut competitors’ rates.

The co-ops say that’s just what Congress intended when it tucked them into the health law to mollify those seeking a government-run insurance plan. “Lower prices for consumers are very good news,” said Jan VanRiper, chief executive of the National Alliance of State Health CO-OPs (NASHCO), a trade group.

Two dozen co-ops, which received $1.9 billion in federal loans, were designed to compete with established carriers and lower prices. For 2015 at least, co-ops are offering the lowest-cost silver plans in all, or large parts of Arizona, Connecticut, Colorado, Idaho, Illinois, Maine, Maryland, New Mexico and New Jersey, according to NASHCO. The silver-tiered plans are the most popular type of plan on the federal and state insurance exchanges.

VanRiper disputes that co-ops are competing unfairly, saying they have to pay back their start-up loans in five years and could not have met state solvency requirements for insurers or paid claims before generating premiums without that money.

Lagging First-Year Sign-ups

Nationally, about 450,000 people are enrolled in co-ops in 26 states — far fewer than the 575,000 the government had projected for their first year. “Last year co-ops priced a little blindly because they did not have any claims experience and this year some are pricing more competitively,” VanRiper said.

But co-ops with low sign-up numbers in their first year have taken steps to lower their costs — and premiums. In addition to HealthyCT, other co-ops that cut their rates for 2015 include Meritus of Arizona, Evergreen Health Co-op of Maryland, Oregon’s Health CO-OP, Colorado HealthOP, Land of Lincoln Health in Illinois and Health Republic Insurance of N.J.

Blue Cross’ Geyer-Sylvia argues that Montana Health CO-OP’s low rates are “unsustainable” because they won’t get enough premium revenue to pay claims over the long run. In the meantime, they could pull consumers away from Blue Cross and three other carriers on the Idaho exchange.

Consumers may not realize, she said, that the lower premiums will mean reduced government subsidies for everyone who is eligible for them. That’s because the subsidy is pegged to the second-lowest-cost silver plan. That cost is decreasing in Idaho because the co-op has introduced lower-priced plans than its competitors. As a result, consumers enrolled in more expensive options, such as Blue Cross’ plans, will have to pay more since they must cover the difference between the premium and the government’s financial help. On the flip side, consumers would save money by switching to the co-op’s plans.

Here’s how those price differences would play out for a 48-year-old man in Eagle, Idaho: He can get a silver plan for as low as $266 a month with the Montana Health CO-OP, which markets itself as Mountain Health CO-OP in Idaho. The lowest-cost Blue Cross plan is $303. The Mountain Health CO-OP plan also has lower deductibles — $3,650 compared to $4,000 for the Blue Cross plan.

Sabrina Corlette, senior research fellow at Georgetown University, said many co-ops are increasing competition and driving down costs, as Congress intended. “There’s no question in many markets, co-ops are really driving some price competition and making legacy carriers more competitive in their pricing,” she said.

Corlette cautioned that the long-term financial health of the co-ops is uncertain because their first-year enrollment lags projections and they must repay their loans. Low enrollment could hurt the plans if they don’t get enough premium revenue to pay their medical claims. Higher-than-expected enrollment could result in budget-breaking health costs, she said.

Brendan Buck, spokesman for America’s Health Insurance Plans, the industry’s trade group whose members do not include the Obamacare co-ops, is also dubious about their viability. “These plans do not offer the kind of stability that consumers are looking for,” he said.

Making Inroads?

Despite difficulty getting traction in some states, co-op officials say that they are gaining ground.

The experience of Land of Lincoln Health, the Illinois co-op, may be illustrative. After attracting just 3,800 members this year, the co-op slashed premiums by an average of 20 to 30 percent, making it the lowest-priced silver plan in large portions of the state for 2015, company officials say.

As a result of those changes, President Jason Montrie said he expects enrollment to surpass 50,000 next year. The co-op, which was started by a Chicago-based hospital trade group, was able to drop premiums by partnering with large hospitals systems, he said. If enrollees use providers affiliated with those systems, they will face lower costs, but if they go to other doctors and hospitals they will have to pay more.

Like Land of Lincoln, other co-ops said they lowered premiums without resorting to narrow networks that exclude many hospitals and physicians. Monthly premiums are only a portion of consumers’ costs— co-pays and deductibles usually apply. But premiums are usually the first thing potential buyers look at when they go to the online insurance exchange, Montrie said.

HealthyCT CEO Ken Lalime said his plan also decided to offer more competitive rates for 2015 to increase enrollment. “Bringing increased competition to the market was not an instantaneous thing to happen,” he said.

Co-ops that did price competitively in their first year saw robust enrollment. The Maine Community Health Options Co-Op grabbed 83 percent of the exchange market in 2014, largely because it offered the lowest-cost silver plans. Before 2014, Anthem was the dominant player in Maine’s individual market.

“It just goes to show you can do well by people and do well financially,” said CEO Kevin Lewis.

Montana Health CO-OP spokeswoman Karen Early — a former spokeswoman for Blue Cross of Idaho — said her plan will save consumers money without sacrificing care or service.

But she does agree with her old boss on one thing: “We will disrupt the market,” she said.

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http://dailycaller.com/2014/12/09/obamacare-chief-stays-mum-after-giving-congress-false-enrollment-totals/print/

Obamacare Chief Stays Mum After Giving Congress False Enrollment Totals
Posted By Sarah Hurtubise

Obamacare chief Marilyn Tavenner showed up to face a congressional committee Tuesday for the first time since giving them false information, but this time refused over and over to give out much information at all.

Tavenner faced the House Oversight and Government Reform Committee to answer for putting out falsely boosted Obamacare enrollment numbers. As administrator for the Centers for Medicare and Medicaid Services, Tavenner testified to the Oversight Committee in September that 7.3 million people were enrolled in Obamacare plans nationwide. But that number was inflated by stand-alone dental plans — and the ”mistake” was only uncovered by the Oversight Committee in November.

Tavenner apologized and brushed aside the “inadvertently” boosted numbers, but was tight-lipped about new information. CMS did release 19,000 pages of documents to the Oversight Committee Tuesday morning, just before the hearing — but did not provide the committee time to read the documents and receive Tavenner’s testimony on the contents.

Tavenner’s interactions with the committee have typically been icy, and Tuesday was no different. When asked to confirm the number of uninsured Americans before Obamacare launched last year, Tavenner claimed she didn’t know — never mind that she touted a drop in the uninsured rate in her written testimony.

And when asked about the number of customers whose premiums increased after Obamacare’s first year, the subject of an HHS report just last week, Tavenner also claimed that she didn’t know. (RELATED: Obama Admin Finally Admits Obamacare Premiums Are Rising)

Later on in the hearing, Tavenner again declined to give an enrollment update on the number of sign-ups in this year’s open enrollment period — although the administration has pledged to be more transparent about Obamacare this year.

She said she had not been briefed on federal spending on cost-sharing in Obamacare exchanges in 2014 and that she didn’t know the numbers for fiscal year 2015; she did not have information on who negotiated an out for insurers if federal Obamacare subsidies are overturned by the Supreme Court next year. When asked whether she’d provide the contracts, Tavenner said she’d first need to consult an attorney.

“You and Mr. Gruber don’t need to sit beside each other because it is wearing off,” Collins said, apparently referring to Tavenner’s former request that she not be forced to sit next to non-government officials, including former Obamacare adviser and current pariah Jonathan Gruber, at the hearing.

“You actually do work for the government. You do work for an agency that is under the jurisdiction of this committee. … Why would you even have to hesitate to on providing contracts that public money was spent on to this committee?” Collins charged.

“Once again, I will go back and try to get you the information,” Tavenner tiredly told Rep. Collins — a refrain she repeated many times throughout the hearing.

“It seems that when we get here, we only want to answer questions that we want to answer, not questions that are part of your regular job,” Collins said.

Tavenner’s silence extended specifically to Obamacare customers as well. Rep. Jim Jordan tackled the issue of the upcoming Supreme Court case on whether Obamacare restricts subsidies to state-run exchanges alone. The Obamacare chief was unconcerned about the King v. Burwell lawsuit, dismissing the challenge because she doesn’t find it “a close case,” despite the Supreme Court’s decision to take up the question.

The Court will rule whether the law bans subsidies to HealthCare.gov customers next June, but the Obama administration is not warning customers who are now purchasing year-long policies that their premiums may skyrocket come June, despite what the federal government is promising today.

Tavenner frostily told Jordan that nothing had changed for consumers, refusing outright to inform new customers that it’s possible the prices on HealthCare.gov may not be the same in just six months.

LTC8K6

Dec 10 2014, 07:03 PM

Well we are apparently going to fully fund Obamacare, so I guess it's here to stay.

Why are we having any hearings about it if Boehner wants to fund it?

kbp

Dec 10 2014, 07:41 AM

http://www.nytimes.com/2014/12/09/us/politics/half-of-doctors-listed-as-serving-medicaid-patients-are-unavailable-investigation-finds.html

Half of Doctors Listed as Serving Medicaid Patients Are Unavailable, Investigation Finds

Large numbers of doctors who are listed as serving Medicaid patients are not available to treat them, federal investigators said in a new report.

“Half of providers could not offer appointments to enrollees,” the investigators said in the report, which will be issued on Tuesday.

...Among the providers who offered appointments, the median wait time was two weeks. (The number of providers above the median is the same as the number below it.)

“Over a quarter of providers had wait times of more than one month, and 10 percent had wait times longer than two months,” the report said.....

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http://kaiserhealthnews.org/news/many-obamacare-plans-set-out-of-pocket-spending-limits-below-the-cap/

Many Obamacare Plans Set Out-Of-Pocket Spending Limits Below The Cap

Consumers shopping on the health insurance marketplaces will find many plans with out-of-pocket spending limits that are lower than the maximums allowed under the health law, according to an analysis by Avalere Health.

Seventy-four percent of 2015 silver level plans’ out-of-pocket spending caps are below the $6,600 spending limit allowed for individual plans and $13,200 maximum for family plans, according to Avalere, a consulting firm. The average out-of-pocket maximum for 2015 individual silver plans will be $5,853, says Caroline Pearson, a vice president at Avalere. Silver was the most popular plan type this year, selected by about two-thirds of enrollees.

stop out of pocket costs 570After a policyholder reaches the out-of-pocket spending limit during the year, the insurer pays all the bills, unless, for example, they involve doctors and hospitals not in the health plan’s network.

The vast majority of other plans also feature lower limits on out-of-pocket spending—which includes deductibles, copayments and co-insurance, but not premiums. Seventy-one percent of bronze plan spending limits were below the allowed maximum (with an average spending limit for single coverage of $6,381), as were 94 percent of gold plans (average limit, $4,458) and 98 percent of platinum plans (average limit, $2,145).

Avalere said the average spending limits for single coverage were in most cases close to those for 2014 plans: bronze ($6,330); silver ($5,877); gold ($4,443) and platinum, $2,795.

Avalere’s analysis included plans sold on the federal marketplace that serves 37 states, as well as data from the California and New York state marketplaces. Consumers have until Feb. 15 to enroll.

The tradeoff for lower out-of-pocket spending maximums may be a higher deductible, says Pearson. The average deductible for silver plans will increase 7 percent in 2015, to $2,658. Other metal-level average plan deductibles are increasing as well.

Higher deductibles are likely helping keep premiums low, and low premiums are what consumers are looking for, Pearson says.

For people who are generally healthy, a lower premium may be more attractive than a lower deductible. They’re never going to meet their deductible anyway, so they’d prefer to save on monthly premiums.

But for people with chronic conditions, “the lower out-of-pocket maximum helps you because you’re going to exceed your deductible no matter what,” says Pearson.

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http://www.nytimes.com/2014/12/12/us/affordable-care-act-deadline-nears-many-not-seeking-cheaper-health-plan.html

Many Choose Not to Save in the Health Marketplace

(Random excerpts only, as I skip past the parts included to touch our hearts...)

...Across the nation, millions of people who bought insurance through the exchange in this inaugural year of coverage under the health care law must decide by Monday whether to switch plans for 2015 if they want a new plan starting Jan. 1. If they do nothing, most of the 6.7 million people who remained enrolled as of last month will automatically be re-enrolled in their current plans or similar ones. More often than not, the premiums for those in the most popular plans will increase, according to a New York Times analysis of data from the McKinsey Center for U.S. Health System Reform.

...At the same time, the availability of less expensive “benchmark” plans means that the federal subsidies that help many lower-income [enrollees] pay their premiums will go down, because subsidies are pegged to those plans. That means customers who stay in more expensive plans will have to pay a larger share of the price. Another potential problem is that subsidy recipients will receive the same amount in 2015 as they did in 2014 unless they ask for a recalculation. That means some people could be required to pay back part of their subsidy at tax time.

...As of Dec. 5, only about 720,000 customers had returned to the federal exchange serving 37 states to re-enroll or switch plans, according to the Department of Health and Human Services.

...“I’m concerned about the confused,” said Kathleen Oestreich, the chief executive of Meritus, a new insurer, which, after dropping its rates by 23 percent on average, is offering many of the lower-priced plans here for 2015. “That natural inclination to simply not change because it’s too much effort: How will it affect the population of low-income people in particular

...In one case, Ms. Cardenas said, a couple learned the amount of their subsidy would drop by $66 because of the availability of new lower-cost plans that influence the calculation.

...The big question is whether people who have not yet shopped around will flock to the online exchanges by Monday in a last-minute crush — and whether those who do not will later regret it. They can switch until Feb. 15, when open enrollment ends, but their new coverage will not begin until February or March if they wait past Monday.

chatham

Dec 12 2014, 08:51 AM

so I'm just baffled how anyone figured this helps much.

Ask the MIT economist