Wednesday, October 22, 2014

ACA/Obamacare: Cancellations and Confusion in Colorado

“DENVER—The Colorado Division of Insurance announced Friday a surge in health-care policy cancellations in the wake of Obamacare, just what Democratic candidates in high-profile races didn’t need less than three weeks before Election Day.

In a letter to state Senate Republicans, Colorado insurance commissioner Marguerite Salazar said that more than 22,000 Coloradans received cancellation notices in the last month, and that 192,942 Coloradans will lose their policies at the end of 2015.

That would bring the total number of cancellations in Colorado to more than 550,000 by the time the Affordable Care Act has been fully implemented and non-compliant plans have been phased out. Ten Colorado carriers have opted to continue offering non-compliant plans through 2015, Ms. Salazar said.”

“A RAND Corporation report issued earlier this week found that there was “significant confusion and little understanding about Medicaid and private insurance subsidies through Connect for Health Colorado,” the state-run exchange.

Barriers to enrollment included “mistrust” of the system and “unfavorable attitudes toward the individual mandates,” despite the exchange’s $21 million marketing effort.” - Health care cancellation avalanche hits Colo. Democrats weeks before election, The Washington Times, 10/17/2014

Link to the entire article appears below:

Tuesday, October 14, 2014

ACA/Obamacare: The Affordable Care Act and the New Economics of Part-Time Work by Casey Mulligan

“Starting this year, the United States’ working population will face three major employment disincentives resulting from the very benefits the Affordable Care Act (ACA) provides: (1) an explicit tax on full-time work, (2) an implicit tax on full-time work for those who are ineligible for the ACA’s health insurance subsidies, and (3) an implicit tax that links the amount of available subsidies to workers’ incomes.

A new study published by the Mercatus Center at George Mason University advances the understanding of how much these ACA taxes will reduce overall employment, and why. It concludes that the reduction will be nearly double that projected by previous analyses. Labor markets ultimately will reduce weekly employment per person by about 3 percent—translating to roughly 4 million fewer full-time-equivalent workers.” - Mercatus Center, George Mason University, 10/07/2014

Link to the working paper by Casey Mulligan:

ACA/Obamacare: Covered California’s No-Bid Contracts

“California's health insurance exchange has awarded $184 million in contracts without the competitive bidding and oversight that is standard practice across state government, including deals that sent millions of dollars to a firm whose employees have long-standing ties to the agency's executive director.

Covered California's no-bid contracts were for a variety of services, ranging from public relations to paying for ergonomic adjustments to work stations, according to an Associated Press review of contracting records obtained through the state Public Records Act.

Several of those contracts worth a total of $4.2 million went to a consulting firm, The Tori Group, whose founder has strong professional ties to agency Executive Director Peter Lee, while others were awarded to a subsidiary of a health care company he once headed.”

“The founder of The Tori Group, Leesa Tori, worked under Lee when she was a senior executive at Pacific Health Advantage, a small business insurance exchange that failed in 2006. Lee was a longtime chief executive of Pacific Business Group on Health, which managed Pacific Health Advantage, and Tori also worked with him at the parent company.

Long before it opened its doors to the public last fall, Covered California awarded a small contract to Tori for her advice on designing a program to sell insurance to small companies. The $4,900 agreement in late 2011 was executed without rival bids.

The deal would mark the beginning of a lucrative and far-reaching partnership between the agency and the company Tori formed about two years ago, just as national health care reform took root across the U.S. An initial $150,000 contract with The Tori Group in March 2013 was executed by Lee, but later amendments that increased its value to $4.2 million were approved by Covered California's board, an agency statement indicated.

Nearly three years after her first, small contract went into effect, she and employees at her firm hold senior-level positions and work on issues ranging from enrollment to health plan design at Covered California.

At least five other people who are contracted to work at Covered California have ties to the now-defunct Pacific Health Advantage, four of them at The Tori Group, whose employees are paid through the consulting contracts. In all, nine people listed on the group's website, in addition to Tori, work at the exchange.

Yolanda Richardson, Covered California's chief deputy executive director who reports directly to Lee, was a vice president at Pacific Health Advantage. Before she was hired on staff, she received a 10-month, $176,500 no-bid consulting contract from the agency in 2011, about a month before Lee came on board, according to the records.” - AP Exclusive: California Gives No-Bid Health Pacts, 10/12/2014

Link to the entire article appears below:







Saturday, October 11, 2014

ACA/Obamacare: Schemes Tend to be Complicated and to Become More Complicate as Time Passes

Assume for a moment you are one of the many millions that have already procured an on-exchange health insurance policy through Yes, assume for a moment you were one of the persistent people that had the patience to pass through seventy six web-based pages of data collection on a highly glitch prone web site and acquired a health insurance policy. One would assume you weathered the storm, made a gallant effort and now there is nothing but blue skies ahead. Congratulations are in order, right? Maybe not so much. How so?

Now it’s renewal time and the yellow brick road forks. Here are several items one will encounter at the fork in the road known as open enrollment renewal:

(a) as one approaches open enrollment renewal, the directional sign is blank at the fork in the road . One will not be able to know plan prices or plan availability until 11/15/2014 which is the first day of open enrollment (and a politically convenient date falling after the mid-term elections), (1)

(b) one’s current plan selected on-exchange at, for a multitude of reasons, may no longer be available. Yes, do not pass go, do not collect two hundred dollars and merely start all over again by searching for a plan, (2)

(c) your plan may still be available but the price has risen in a substantial manner. If the price rise is extreme, merely start all over again by searching for a plan, (3)

(d) if one was/is receiving a subsidy then income must be projected again in regards to subsidy eligibility. One must further consider the change in price of the second lowest silver plan price now available upon the exchange, which is a determinant of subsidy, and then considerer the new price of the second lowest silver plan in relation to the plan one considers selecting, (4)

(e) one might do nothing. Huh? That’s right, if you already have an on-exchange health insurance policy through, and if the plan is continued, and you do nothing you are automatically re-enrolled. Sweet! An easy way out! Nada. The plan may continue and yes one is re-enrolled, but the price has likely changed upward. If one is receiving a subsidy and since one did nothing, one’s income was not re-projected and the new price of the second lowest silver plan in relation to the new price of the old plan you selected (automatically re-enrolled) still holds as a determinant, so your subsidy likely remains the same while your plan’s price rises substantially and one ends this zero effort exercise with a nasty premium increase, (5)

(f) meanwhile the process outlined above needs initiated between 11/15/2014 and 12/15/2014. Renewal open enrollment is a thirty day window and is not the same as the open enrollment period for new comers which is 11/15/2014 to 02/15/2015. (6)

Happy holidays! One might consider that holiday shopping after 12/15/2014 and don’t be late for Thanksgiving dinner!



(1) Next edition of is unveiled,, 10/08/2014



(2) ACA/Obamacare: Why Your Old Plan Got Cancelled and Why Your New Plan Is Likely to be Cancelled Too.



(3) (4) How Automatic Renewal Could Cost Obamacare Enrollees, WJS, 07/02/2014


(5) (6) Next edition of is unveiled,, 10/08/2014









Thursday, October 9, 2014

ACA/Obamacare: California Proposition 45

"Californians are split over a high-profile voter initiative that opponents say could complicate the future of President Barack Obama ’s health-care law in one of the states that has gone furthest to embrace it.

Proposition 45 would grant California’s insurance commissioner new powers to veto health-insurance premium increases for individual and small-group policies, a popular sentiment in a state that has seen large rate jumps in the past, though they have recently moderated.

Some prominent Democrats, including Sens. Dianne Feinstein and Barbara Boxer, have endorsed the measure, which would also grant citizens and outside groups the power to delay health-insurance rate increases by requesting a government review.

The measure is strongly opposed by health insurers, who have donated tens of millions of dollars to defeat it. Opponents say the measure could hamper efforts to further implement the health-care law in California, which spent more time and money than any other state building its insurance exchange, Covered California. They say Covered California’s power to negotiate with insurers on behalf of consumers would be weakened, and that federal subsidies could be hard to price for many of the low-income people who dominate the exchange.

“It starts to raise very serious questions about the certainty of what Covered California will be able to negotiate with the insurance companies…and even whether some plans will be available,” said Rep. George Miller (D., Calif.), one of the Affordable Care Act’s co-authors. “The problem is Prop 45 was written before we got to the final stages here” of the ACA.

Prop 45 was originally drafted for the 2012 election, but the measure failed to qualify for the ballot in time. Since then, Covered California has become the most robust exchange in the country, signing up 1.4 million people during the last enrollment period.

The new powers under Prop 45 would broadly enhance the influence of Dave Jones, the Democratic state insurance commissioner. Since taking office in 2011, he has said that a missing piece of the health law was the lack of authority to reject insurance rate increases."

- Californians Split Over Letting Official Veto Insurers’ Rate Boosts, WSJ, 10/09/2014
Link to the entire article appears below:




Tuesday, September 30, 2014

ACA/Obamacare: Employer Work-Around and Other Avoidance Techniques

“Take Advantage of Imperfections in the Minimum Value Calculator. In addition to being affordable, health insurance must meet a “minimum actuarial value” test. For self-insured companies, this means that the benefits can differ from the essential health benefits included in a standard plan, but the employer plan has to cover at least 60 percent of expected costs under a standard plan.

One official way to do that is to get a passing score on the Department of Health and Human Services’ “minimum-value” calculator, an online tool. And here is a surprise: an employer can actually meet this test without including hospitalization! (See the discussion at Kaiser Health News.) At the site, the visitor is invited to check boxes indicating whether certain benefits are included in the employer plan. In addition to hospitalization, mental health care, imaging (MRI and CT scans) ER visits and specialist services are other items that do not have to be included to meet the government’s test.

Pay the Fine. Employers can drop health insurance coverage altogether (or never provide it in the first place) and pay a fine equal to $2,000 per employee. That’s a stiff price to pay, but it’s less than the cost of health insurance. If the employer chooses this option, the employees will be eligible for subsidized insurance in the exchange.

By the way, this is a win-win choice. Economic theory tells us that the $2,000 fine will ultimately be paid by the employees – in the form of lower wages or reduced non-health care benefits. But most low-wage employees will get a subsidy that is worth much more than that and they will have generous health insurance to boot." - What Can Employers Do To Reduce The Cost Of Obamacare?, Forbes, 09/16/2014

Link to the entire article appears below: