Wednesday, November 26, 2014

Narrow Networks and the 2015 Version of ACA

"More directly, Obamacare is eliminating access to many of the best specialists and best hospitals for middle-income Americans. To meet the law's requirements, major insurers all across the country are declining to participate in the exchanges, or only offering plans that exclude many of America's best doctors and hospitals. McKinsey reported 68% of Obamacare insurance options only cover narrow or very narrow provider networks, double that of one year ago." -If you like choice in health care, look to Republicans, Scott Atlas, CNN

Atlas is correct, the vast majority of the choices on the ACA exchange are that of narrow networks regarding the 2015 offerings (effective 01/01/2015).

Last year, James and Jane Goodfellow would have had a tough time discerning what was a broad or narrow network of providers as insurers used their pet names regarding what was broad or narrow. This go around, after the insurers pet name appears, regarding PPO's (preferred provider organizations), there is inserted the term "board network" or "limited network" as a clarification for consumers.

However, once you get outside the PPO, the HMO (health maintenance organization) offerings do not explain or add a clarification what an HMO is and how it functions. One might say the HMO was/is the original narrow network (only those inside the HMO are one’s providers).

CMS and 1600 Pennsylvania Avenue are stating that one can keep one’s premium level (current ACA policyholders) or with a slight increase by switching insurers i.e. buy one of the new offerings. They fail to point out the particulars of their claim of level or slightly increased price. By switching to a more narrow network or from old insurer narrow network to new insurer narrow network, one might keep premium increases modest. However a secondary and as important phenomena is at work regarding the claim of modest price increase by switching insurers: anti-selection. How so?

Consider 10/01/2013 and the initial availability of ACA with effective date 01/01/2014. Crowded at the starting line, like a group of marathon runners awaiting the starting pistol, were hundreds of thousands of chronically ill people. This group, the existence thereof caused by a variety of reasons, wanted to obtain coverage immediately and so they did. Hence the initial group of insurers that appeared on the ACA exchange for the 2014 offering ended up with large numbers of chronically ill insured’s. Stated alternatively, rather than attracting a wide variety of homogeneous exposure units spread over a wide geographic area they attracted an inordinate number of chronically ill exposure units.

The initial group of insurers offering ACA products, attracting the chronically ill, suffered losses that that drove up loss ratios and hence premium increases were called for to offset losses.

Now comes the 2015 offerings and a new set of insurers appear. The new insurers have the knowledge that anti-selection has already occurred regarding the initial insurers. They also know that the chronically ill are less apt to change insurers for a lower price but healthy insured’s, face with a price increase yet having made no claims are very apt to change insurers based on price. The new insurers offer a slightly lower premium rate to attract the healthy away from the initial insurers. Hence the new insurers attract the healthy exposure units while the initial insurers, in the main, lose the healthy but retain the chronic.

The entire process ends with the initial insurer faced with few new entrants into their plan due to spiraling price increases and an ever increasing exodus of healthy insured’s must close the book of business regarding the offered plan and transition the remaining insured’s to a new plan or merely exit ACA.

Friday, November 21, 2014

ACA/Obamacare: Spending Figures Released on the Medicaid Component of Obamacare

‘WASHINGTON (Reuters) - One part of the Affordable Care Act is going according to plan, with U.S. states receiving and spending more money on the Medicaid health insurance program, a report released by the National Association of State Budget Officers on Thursday showed.’

‘"The large increase in federal funds to states in fiscal 2014 was almost solely due to additional Medicaid dollars, mainly resulting from the expansion of Medicaid in a majority of states under the Affordable Care Act," the association found. "While federal Medicaid funds to states increased $41.8 billion in fiscal 2014, all other federal funds to states are estimated to have declined $3.4 billion."‘

‘Medicaid spending rose the most of all states' budget areas, increasing 11.3 percent in fiscal 2014, but the federal government shouldered most of the burden. Federal funding for Medicaid increased 17.8 percent, and state dollars directed to the program only grew 2.7 percent, according to NASBO.’ - U.S. states get more, spend more on Medicaid under Obamacare: report, 11/20/2014, yahoo

Link to the entire article appears below:

Thursday, November 20, 2014

ACA/Obamacare: Revisiting Interstate Commerce and Buying Health Insurance Across State Lines

“The second open enrollment period for health insurance under the Affordable Care Act is underway, and the law is more unpopular than ever. According to Gallup, a record-high 56 percent of Americans now disapprove of the 2010 law.”

“Republicans in Congress — less inclined than some deep thinkers to sneer at "the stupidity of the American people" — unanimously opposed the Affordable Care Act when it was enacted, and were rewarded in the 2010 midterms for their steadfastness. In the ensuing four years, Republicans repeatedly called for replacing Obamacare with alternatives expanding choice, competition, and market reforms — and the voters just rewarded them again.

Of course, even with their new majorities in Congress Republicans will have to contend with President Obama's veto pen. So a bill "repealing every last vestige of Obamacare," as Senator Rand Paul of Kentucky exuberantly proposed on Election Night, isn't in the cards anytime soon. But that doesn't mean there is nothing to be done, particularly since the Supreme Court has agreed to hear a new challenge to the law, one that could potentially cause Obamacare to topple under its own weight.”

“One way or another, changes in the law are coming. Not all of them have to be bitterly controversial, or provoke cries of Republican overreaching. Here's a suggestion: Allow individuals to buy health insurance from out of state.

In an age when consumers can purchase almost anything from vendors almost anywhere, government policies protecting insurance companies from interstate competition are indefensible. Lawmakers would be laughed out of office, rightly, if they insisted that the only CDs, cellphones, or ceramics their constituents could buy were those manufactured in the state where they lived. All sorts of financial products are routinely acquired without to state borders proving an impenetrable barrier: life insurance, service warranties, stocks and bonds, bank accounts, credit cards. Why should a medical plan be any different?

There is no good reason to deny freedom of choice to Americans when it comes to buying health insurance. Yet licensing rules in virtually every state effectively prevent individual residents from shopping for health plans in any other state. Consequently, there is no national market for health insurance. There are only autonomous state markets, many dominated by near-monopolies that can get away with offering lower quality insurance at ever-higher premiums.

As Michael Cannon of the Cato Institute points out, it isn't only insurance companies that are sheltered from the rigors of competition. Insurance regulators are insulated too. State governments, inveigled by special interests, can burden health insurance policies with more and more mandatory benefits, driving up premiums to cover services that many consumers would never willingly choose.

In Massachusetts, for instance, health insurance policies must cover at least 49 specifiedtreatments and types of providers, among them midwives, infertility treatments, hair prostheses, and chiropractors. But what if all you want is a plain-vanilla health plan akin to those sold by insurers in New Hampshire (only 38 state-required health-care mandates) or, better yet, in Michigan (24) or Idaho (13)? Tough luck. That's what it means when interstate commerce in health insurance is blocked.” - Buy Your Health Insurance Out of State, Jeff Jacoby, 11/19/2014,

Link to the entire article appears below:

Wednesday, November 19, 2014

ACA/Obamacare: To Gruber Or Not To Gruber, That is the Question…..

“Grubergate: The lies are getting pretty thick these days. The president claims that he never misled anyone about ObamaCare and that Jonathan Gruber was just "some adviser." In fact, Gruber was a key player in the deception.

When Fox News' Ed Henry asked Obama on Sunday if he'd misled the American people "in order to get the bill passed," Obama's answer was "No, I did not." Space prohibits listing all the ways Obama did, in fact, mislead the public.”

“Actually, Gruber played a central role in a coordinated campaign to deceive the public — a campaign that arguably proved instrumental in getting ObamaCare enacted. To see how he did it, let's turn the clock back to Nov. 4, 2009.

At the time, the White House was in a frantic push to get ObamaCare through the Senate before the year was up. Democrats, who held 60 seats at the time, could not afford to lose a single vote against unified GOP opposition. And they were rightly worried that a January special election in Massachusetts would deny them their filibuster-proof majority if voters elected Republican Scott Brown.

That day, the White House touted a research paper that Gruber had issued, describing it as an "objective analysis" that showed how "reform will help small businesses (and) lower premiums for American families." Later that month, Nancy-Ann DeParle — director of the White House Office of Health Reform — said that another Gruber study "confirms" that the "Senate health reform bill reduces costs and improves coverage."

“In fact, the existence of Gruber's fat $400,000 contract didn't emerge until after the Senate passed ObamaCare — when a blogger for the left-wing website Daily Kos posted a link in early January 2010 complaining about Gruber's "sole source" contract for "technical assistance in evaluating options for national healthcare reform." The contract claimed that Gruber was the "only one responsible source" available for such help.” - Gruber Was Key to Getting ObamaCare Passed, Investors Business Daily, 11/17/2014

Link to the entire article appears below:

Monday, November 17, 2014

ACA/Obamacare: ACA is Creating More or Less Relative Health-Care Cost Savings? Answer: Less.

"1) Slower growth in health care costs is reducing the projected cost of the ACA’s coverage expansion (good). On this, we have the numbers: CBO provides them. For example, in 2012 CBO had projected that by 2021, the gross cost of these coverage provisions would be $242 billion annually. By 2014, however, CBO had lowered that estimate for 2021 to $208 billion.

2) Slower growth in health care costs is reducing the savings projected from the ACA’s cost-containment provisions (bad). We don’t have post-2012 CBO numbers on this effect; SBC estimates that these provisions will save $132 billion less through 2024 than previously estimated. SBC’s qualitative conclusion is clearly correct even if the precise number is unknowable. Basically, the less health spending there otherwise would have been, the less credit the ACA can get for cutting costs. Accounting for this effect is necessary for consistency; since the ACA is credited for its coverage expansion provisions costing less as health care inflation comes down, we must also recognize that its cost-cutting provisions will save less.

I will elaborate on this point because there appears to be some dispute about it. Paul Van de Water, an analyst I respect, has argued that the SBC results are wrong because they are “assuming that health reform had nothing whatsoever to do with the substantial slowdown in health care cost growth in the past few years.” In effect he argues that the ACA should be credited with additional savings based on the assumption that it is at least partially responsible for the cost slowdown.

I disagree with that criticism for a couple of reasons. First, it doesn’t square with CBO’s methodology, which is what the SBC study is intended to reflect. CBO is explicit that when general health inflation slows, less relative savings can be attributed to the ACA. For example, in 2012 CBO explained how recent changes in health spending assumptions affected its re-scoring of a proposal to repeal the ACA:

“CBO’s current projections of Medicare spending are lower than those in the January 2011 baseline. In aggregate, therefore, the projected increase in spending from repealing the Medicare provisions of the ACA is also smaller.”

This is another way of saying that the ACA’s Medicare growth cuts are saving less money than previously projected. As this graph shows, when health spending projections were lowered from 2011 to 2012, the ACA’s Medicare/Medicaid savings dropped by $63 billion over 2013-21 (notably, $59 billion of this reduction was in the last five years of 2017-21, a roughly $12 billion change per year).

Health spending projections have continued to come down since 2012, so we’d expect CBO’s estimates of cost savings due to the ACA to continue to decline as well. SBC’s estimate that the further savings reduction would equal $132 billion from 2015-2024 is reasonable, as it amounts to an adjustment of $13 billion a year.

The second reason we can’t assign the ACA extra credit for the national health spending slowdown is that the evidence is mounting pretty conclusively that the ACA has little if anything to do with it. A striking graph (Figure 4-1) in the White House’s Economic Report of the President shows that the cost slowdown began well before the ACA was passed. Another compelling graph shows that the slowdown occurred throughout all OECD nations, and thus can’t be attributed to US legislation. Finally, the CMS Medicare actuary’s office has found that the ACA’s net effect so far has been to increase costs rather than decrease them.

3) Also, many of the ACA’s cost-savings provisions are not being enforced as originally assumed (bad). Examples include the ACA’s individual/employer mandate penalties, scheduled Medicare Advantage cuts that have been rolled back, and others. If this continues it will further worsen the ACA’s fiscal effects; the SBC analysis did not even take this into account.

4) CBO has since found that various ACA provisions (including its health insurance subsidies, Medicaid expansion, and new taxes) will significantly reduce labor force participation (bad). CBO sees the ACA removing the equivalent of 2 million full-time workers from the workforce by 2017, resulting in slower economic growth and smaller federal tax revenues. CBO writes that “CBO has now incorporated into its analysis additional channels through which the ACA will affect labor supply, reviewed new research about those effects, and revised upward its estimates of the responsiveness of labor supply to changes in tax rates.” In other words, the 2010 analysis that appeared to show the ACA reducing the deficit failed to take into account what CBO now believes about its adverse effect on employment. SBC projects on the basis of CBO information that this effect will lower federal tax revenues by roughly $280 billion through 2024; Van de Water argues that the effect will be less, noting that wages and salaries represent only 70 percent of adjusted gross income. But either methodology should show enough of a revenue loss in combination with other updated information to find the ACA worsening federal deficits."
- Budget Committee Report Confirms the ACA Worsens the Deficit, The Manhattan Institute, 11/03/2014
Link to the entire article appears below:

Sunday, November 16, 2014

ACA/Obamacare: And Then There Is Jonathan Gruber

‘WASHINGTON — Three years ago, as President Obama fought for re-election, his team was more than happy to have Jonathan Gruber, a well-known Massachusetts Institute of Technology professor, mouthing off.

Mr. Gruber, a health care expert who helped develop Mitt Romney’s health care plan in Massachusetts and later was a consultant for Mr. Obama’s Affordable Care Act, was no stranger to the pundit circuit, and repeatedly called attention to the similarities between the two plans — a politically helpful fact for the Obama 2012 campaign.

“They’re the same bill,” Mr. Gruber declared once, adding an expletive before the word “bill.”

But now, Mr. Gruber’s bluntness is clearly less appreciated by those in the West Wing, thanks to the emergence of a series of videos that show Mr. Gruber calling the American public “stupid” and suggesting that the president’s health care law passed by fooling Americans about how it works.

“This bill was written in a tortured way to make sure C.B.O. did not score the mandate as taxes,” Mr. Gruber said in October 2013, referring to the Congressional Budget Office. “Lack of transparency is a huge political advantage. And basically, call it the ‘stupidity of the American voter’ or whatever, but basically that was really, really critical to getting the thing to pass.”’

‘White House officials rejected the idea that Mr. Gruber was the “architect” of the Affordable Care Act. They noted he was never employed by the White House or any federal agency, though he was paid close to $400,000 as a consultant to the Department of Health and Human Services during 2009 and 2010.

But Mr. Gruber had become a high-profile booster of the president’s signature domestic achievement and participated in its development. During the contentious debate in Congress, top Democrats frequently cited his analysis of the law’s impacts. An invitation to a different October 2013 panel discussion listed him as: “a key architect of the A.C.A., Dr. Jonathan Gruber.”’ - Affordable Care Act Supporter Ignites Fury With a Word: ‘Stupid’, New York Times, 11/14/2014

Link to the entire article appears below:




Thursday, November 13, 2014

ACA/Obamacare: The Low Hanging Fruit is Gone

“WASHINGTON—Millions fewer people will enroll in private health plans under the Affordable Care Act next year than the Congressional Budget Office had predicted, the Obama administration said Monday.

The developments are the latest sign that the law, which Democrats passed in 2010 to provide near-universal health insurance, is struggling to reach that goal quickly. Attracting new enrollees to the health law’s insurance exchanges has proven more difficult than advocates had predicted, and a slice of those who do sign up for plans haven’t kept up with premiums.

Health and Human Services Secretary Sylvia Mathews Burwell said the administration was aiming for 9.1 million paid-up enrollees by the end of 2015, though the range could extend to 9.9 million, according to a new analysis conducted by her agency.

The exchanges, which reopen Saturday for the law’s second year of insurance enrollment, were expected to have 13 million people enrolled in private health plans under the law in 2015, according to an April 2014 projection by the nonpartisan CBO.

Around 7.1 million Americans currently have private coverage through the law’s exchanges, the administration said Monday. That is down from the 8 million the administration said had picked plans as of this spring, and from a figure of 7.3 million paid-up enrollees in mid-August.”

“Mike Perry, a pollster who conducts research for supporters of the law, said recent focus groups with people who were uninsured after the first year of sign-ups made clear they were a “harder group to reach” now. “They know their budget, and their budget has no room,” he said.”

“HHS officials also released new figures on their efforts to clear up data problems from the first sign-up period. They said they had cut off tax credits for December for 120,000 households that hadn’t responded to requests for more information about their income.

Another 112,000 people have had their coverage terminated because the federal government couldn’t confirm they were legally residing in the U.S., they said. That number is down slightly from an earlier announcement that the government was cutting off 116,000 people over immigration and citizenship status issues.” - Health-Law Enrollment in 2015 Won’t Meet Forecast, WSJ, 11/11/2014

Link to the entire article appears below:





Sunday, November 9, 2014

ACA/Obamacare: So Obamacare Wasn’t an Election Issue? Tell that Tale to the Missing U.S. Senators that Voted for ACA.

“On Dec. 24, 2009, the Democratic-controlled Senate passed President Obama’s healthcare law with a filibuster-proof 60-vote majority, triggering a massive backlash that propelled Republicans to control of the House the following year. On the Senate side, going into Tuesday’s elections, 25 senators who voted for Obamacare were already out or not going be part of the new Senate being sworn in on January.

To be sure, it isn’t fair to attribute all of the turnover in the chamber to Obamacare. Many senators voted for Obamacare and lost re-election battles in which they were hit hard for their support for the law, and other Democrats were forced to retire because they had no hope of getting re-elected given their support for the law. But in some cases — such as John Kerry leaving his seat to become secretary of state, or Robert Byrd passing away — Obamacare clearly had nothing to do with it.

Additionally, some outgoing pro-Obamacare votes were replaced by new Democratic senators.

That having been said, as of this writing, 15 Senators who voted for Obamacare either failed to win reelection or declined to run for reelection and had their seats turned over to Republicans. That number is likely to grow once the results are in from the Senate runoff in Louisiana, which Mary Landrieu is expected to lose.” - 29 senators who voted for Obamacare and won't be part of new Senate, 11/06/2014,


Note: The link below is to the entire article that produces the exact breakdown of the missing Senators.

Saturday, November 1, 2014

ACA/Obamacare: When Political Constituency Building Schemes Backfire

‘Most Americans don’t want to get rid of Obamacare. They just don’t share its fundamental goal of universal coverage anymore.

And not only did the political benefits that Democrats thought the 2010 law would eventually bring them not materialize, opposition has only grown, according to an analysis of multiple polls taken between 2010 and last month.

“There have been backlashes, but never like this,” said Robert Blendon, a professor at the Harvard School of Public Health and co-author of the analysis released Wednesday by the New England Journal of Medicine.

That backlash doesn’t appear directed at the mechanics of the law but at its underlying core principle.

Only 47 percent of Americans agree that it’s the government’s job to make sure everyone has health coverage, down from 69 percent in 2006, the analysis found. That shift is particularly pronounced among likely voters. Of those who are most likely to show up at the polls on Nov. 4, one in four believe in this principle.

The study includes a new poll of likely voters by the Harvard School of Public Health showing that while only 31 percent want to see Obamacare repealed, 23 percent want it scaled back. This coalition of Republicans and independents could represent a mandate for congressional efforts to diminish the sweeping overhaul four years after it was enacted — and with millions of people now covered under its provisions.

The debate is now “about whether or not you believe you want to get everybody covered,” Blendon said. “Something happened on the way to the forum here that made that a much more controversial value.”’ - Obamacare brings Democrats backlash, not benefits,, 10/29/2014

Link to the entire article appears below: