“Humana became the latest health insurer to serve notice that it might leave some Affordable Care Act exchanges next year, creating more uncertainty for customers ahead of this fall's enrollment window and presidential campaign, during which the law is sure to remain a hot debate topic. The insurer, which is being acquired by rival Aetna, said Wednesday that it expects to make a number of changes to its business for 2017, and that may include leaving some markets both on and off the exchanges or changing prices. Humana Inc. sold coverage in 15 states this year. "We do not take these changes lightly," spokesman Tom Noland said in an email. "We are striving to avoid unnecessary coverage disruption wherever possible." Several insurers say they have struggled with sicker-than-expected customers and had a hard time attracting younger, healthy people to the coverage they sell on the ACA's state-based public insurance exchanges, which opened for enrollment in the fall of 2013. Some also have been hurt by temporary government support programs that haven't delivered as they were initially advertised. UnitedHealth Group Inc., the nation's biggest insurer, said last month that it was chopping its participation in the exchanges down to only a handful of states in 2017 after expanding to 34 for this year. Aetna Inc. has said it lost more than $100 million last year on its exchange business, but it still sees potential in the new market.” - Humana Might Leave Some ACA Exchanges Next Year, insurancenewsnet.com, 05/04/2016 Link to the entire article appears below: http://insurancenewsnet.com/oarticle/change-is-in-the-works-for-humana-aca-exchange-participation
“The health insurance market is changing. And the changes are not good. Even before there was Obamacare, most insurers most of the time had perverse incentives to attract the healthy and avoid the sick. But now that the Affordable Care Act has completely changed the nature of market, the perverse incentives are worse than ever. Writing in the New York TimesElizabeth Rosenthal gives these examples: When Karen Pineman of Manhattan sought treatment for a broken ankle, her insurer told her that the nearest in-network doctor was in Stamford, Connecticut – in another state.
Alison Chavez, a California breast cancer patient, was almost on the operating table when her surgery had to be cancelled because several of her doctors were leaving the insurer’s network.
When the son of Alexis Gersten, a dentist in East Quogue New York, needed an ear, nose and throat specialist, the insurer told her the nearest one was in Albany – five hours away.
When Andrea Greenberg, a New York lawyer, called an insurance company hotline with questions she found herself speaking to someone reading off a script in the Philippines.
Aviva Starkman Williams, a California computer engineer, tried to determine whether the pediatrician doing her son’s 2-year-old checkup was in-network, the practice’s office manager “said he didn’t know because doctors came in and out of network all the time, likening the situation to players’ switching teams in the National Basketball Association.” But aren’t these insurers worried that if they mistreat their customers, their enrollees will move to some other plan? Here’s the rarely told secret about health insurance in the Obamacare exchanges: insurers don’t care if heavy users of medical care go to some other plan. Getting rid of high-cost enrollees is actually good for the bottom line.” - How Obamacare Is Destroying Health Insurance, John Goodman, townhall.com, 02/21/2015 Link to the entire article appears below: http://townhall.com/columnists/johncgoodman/2015/02/21/how-obamacare-is-destroying-health-insurance-n1960029
“House Republicans floated the idea Friday of demanding that the White House agree to end programs designed to assist insurance companies selling policies as part of the new health-care law in exchange for raising the debt ceiling for one year, according to a GOP lawmaker and senior leadership aides.” “Under one scenario discussed Friday morning at the House GOP's annual policy retreat held on Maryland's Eastern shore, Republicans would agree to extend the debt limit for one year, but demand that there be "no bailouts for insurance companies under Obamacare," the lawmaker and aides said. House Majority Leader Eric I. Cantor (R-Va.) and House Budget Committee Chairman Paul Ryan (R-Wis.) described to colleagues how this scenario could play out and conservative lawmakers in the room seemed supportive of the idea, including Rep. Michele Bachmann (R-Minn.), who spoke up in support and offered to help whip up support for the plan among Republicans.” “Concerns about a so-called "Obamacare bailout" have emerged in recent days, especially on conservative op-ed pages. The term is generally used to describe three programs in the health-care law — two temporary and one permanent — that make it less financially risky for health insurance plans to sell on the new exchanges. The term also is sometimes used to refer to one specific program in the health-care law known as "risk corridors" that limit both the amount of money that a health insurance plan can make and lose during the first three years it is sold on the new health-care exchanges established by the law.” - House Republicans might propose canceling ‘Obamacare bailouts’ to raise debt limit, Washington Post, 01/31/2014 Link to the entire article appears below: http://www.washingtonpost.com/blogs/post-politics/wp/2014/01/31/house-republicans-might-propose-canceling-obamacare-bailouts-to-raise-debt-limit/
Kathleen Sebelius testified in front of the ways and means committee 02/29/2012. What did she say?
“Well again, congressman, what you’re seeing, it wouldn’t have mattered if we had passed the Affordable Care Act or not,” she said. “The private market is in a death spiral.” - Health and Human Services Secretary Kathleen Sebelius, 02/29/2012 (1)
“Later on Tuesday, in an address to the American Cancer Society’s Cancer Action Network, Sebelius discussed the “broken” health insurance system that Obamacare aims to fix.” (2)
Examining Sebelius’s Insurance Credentials
One might want to examine Sebelius’s implicit vast experience in the field of insurance to determine what credentials she has for making such a notional assertion. How about those insurance credentials?
Abridged Secretary Biography[directly from the H.H.S web site]
“Kathleen Sebelius was sworn in as the 21st Secretary of the Department of Health and Human Services (HHS) on April 28, 2009. Since taking office, Secretary Sebelius has led ambitious efforts to improve America’s health and enhance the delivery of human services to some of the nation’s most vulnerable populations, including young children, those with disabilities, and the elderly.
As part of the historic Affordable Care Act, she is implementing reforms that have ended many of the insurance industry’s worst abuses and will help 34 million uninsured Americans get health coverage. She is also working with doctors, nurses, hospital leaders, employers, and patients to slow the growth in health care costs through better care and better health.
Under Secretary Sebelius’s leadership, HHS is committed to innovation, from promoting public- private collaboration to bring life-saving medicines to market, to building a 21st century food safety system that prevents outbreaks before they occur, to collaborating with the Department of Education, to help states increase the quality of early childhood education programs, and give parents more information to make the best choices for their children.
Secretary Sebelius served as Governor of Kansas from 2003 until her Cabinet appointment in April, 2009, and was named one of America’s Top Five Governors by Time Magazine.” (3)
Hmmm. No insurance experience. Lets drill down deeper:
Sebelius is the daughter of former Democratic Ohio GovernorJohn J. Gilligan, and thus they became the first father/daughter governor pair in the United States after her election.[3] Following passage of the Health Care and Education Reconciliation Act of 2010, she pointed out another father-daughter connection: her father had been in the House of Representatives when Medicare was originally passed in 1965.” (4)
Hmmm x 2. No private insurance industry experience but a life long politico complete with a political science degree and a masters in public administration. And that insurance commissioner position? Its an elected position. More succinctly: "Sebelius served as executive director and chief lobbyist for the Kansas Trial Lawyers Association (now Kansas Association for Justice) from 1977–1986. She was first elected to the Kansas House of Representatives in 1986. In 1994 she left the House to run for state Insurance Commissioner". And the responsibilities of the elected insurance commissioner position in the state of Kansas? "Regulate and review companies, educate consumers, assist consumers and license agents". We are not talking actuary science, we are talking bureaucrat position.Born and trained politico, with little or no private industry insurance experience. Go figure!(5) (6)
Hence we have the political science major making notional propositions about private insurance, a field of study that she has not experienced. Her vast private insurance industry experience boils down to quasi-experience as an elected position, that of insurance commissioner of the state of Kansas, which was the role of politico-bureaucrat regulator.
Returning to Ms. Sebelius’s notional proposition of the private market for health insurance is a “death spiral” Upon further review, one might want to take Ms. Sebelius’s notional proposition of a “death spiral” regarding private health insurance and agree with her proposition. Yes, for a moment let us agree with the queen of the death spiral.
Examining the proposition one has to first realize that “insurance”, and the cost thereof, is merely a reflection of what particular underlying risk is insured. That is, say one insures private commercial vehicles, the related characteristics of commercial vehicles, frequency and severity of claims regarding commercial vehicles, operator characteristics, cost of administration, area the vehicle operates, etc. yield a cost to insure. Stated alternatively, the cost of insurance is merely a reflection of the cost to insure the underlying risk. However, the underlying risk is by no means insurance and insurance is conversely not the underlying risk. This is, one must never assume the underlying risk is insurance as the two are related but by no means the same phenomena. Insurance is merely a transfer of pure risk for a consideration [premium]. The pure risk on the other hand is the pure risk. The pure risk may or may not be insurable.
Therefore, if Ms. Sibelius notional proposition is deemed as being fact, which it is not, then that means the insurance is a “death spiral” meaning the underlying risk has characteristics of “death spiral”. That is, the pure risk in and of itself is un-insurable [death spiral]. Consequently, the availability of insurance and the cost to insure the underlying risk if in death spiral mode means the pure risk itself is in a “death spiral mode”.
Hence, unbeknownst to Ms. Sebelius she is asserting the underlying risk, which is health-care, is in a death spiral. Therefore, restating Ms. Sebelius’s notional proposition: “The private health-care delivery system is in a death spiral.” Its not the “insurance” its really the “risk”. Ah, the evil of it all!
Sebelius and her ‘….“broken” health insurance system that Obamacare aims to fix.” ‘
Later in the same day Sebelius makes a separate assertion regarding fixing a private insurance system with a public or collective action system. That it’s the insurance that needs fixed and merely moving the insurance from private to public will fix the “insurance”. That is, social insurance such as Medicare, Medicaid, and Social Security “fix” problems in the realm of insurance. That is, Sebelius is engaging in political dupery. There is grand evidence that social insurance supplanting private legal reserve insurance results in disaster.
Stepping back for a moment, we know that insurance is merely a reflection of the cost of insuring the pure risk. That the pure risk and insurance are related but by no means the same concept. Hence changing the insurance delivery system has little to do with the underlying risk. Be it private delivery health insurance or a scheme such as ObamaCare neither is changing the underlying pure risk in any significant fashion. That is, Sebelius is engaging in nitwitery.
Summary and Implication
The insurance mechanism is related to the pure risk. However, insurance and pure risk are separate concepts. Purposefully confusing risk and insurance, as being one in the same, is Sebelius’s attempt to put forth the concept of: political dupery, under political nitwitery, and in government mysticism we trust.
The underlying risk which is health-care is the concept that needs examined. Changing insurance model/delivery system will not change the pure risk or the health-care delivery system in any meaningful fashion.
Likely Sebelius, political notional-ist at large, implicitly assumes price fixing schemes aka ObamaCare will “fix” the underlying risk. Unfortunately, not one single price fixing scheme in all of recorded economic history has succeeded.
"Then, on Dec. 21, Ms. Sebelius announced that insurance companies seeking rate increases of 10% or more in the individual or small group market must publicly justify the hikes under standards set by her department.
Insurance regulation has traditionally been a state responsibility, and 43 states must already approve proposed insurance-rate increases. ObamaCare does not authorize HHS to deny rate increases, but the agency said that if a state "lacks the resources or authority" to conduct the kind of review the agency wants, it will conduct its own." - Karl Rove 01/06/2010 (1)
Rove makes a grand point. Sebelius has decided to have the gun fight at the OK corral with health insurers. Only problem is, the OK corral is owned by brothers Pat and Homer.
The McCarran-Ferguson Act is a federal law that was enacted on 03/09/1945. The act had the co-sponsors of democrat Pat McCarran of Nevada and republican Homer Ferguson of Michigan. (2) (3) (4)
The law gives insurers a very narrow exemption to anti trust laws. It allows "the business of insurance" to share loss data, jointly develop insurance forms and allows for the standardization of policy language. It more importantly allows states to regulate and tax insurance. (5) (6) (7)
Moreover, the "business of insurance" is otherwise subject to all other aspects of federal anti-trust. (8) (9) The business of insurance is subject to state level anti trust laws as well. (10)
