Tag: "insurance"

Who’s Signing Up in the Exchanges?

The early signs are not good. Insurers privately admit that enrollment thus far is too low and the mix skews toward high-cost beneficiaries whose premiums won’t cover their care. The enrollment figures from the first month comport with no known industry standard, and only about a third of applicants qualified for subsidies.

This suggests they’re older people with more income but also more expensive chronic conditions. Many of them will be people who had their old plans terminated, not the new uninsured consumers the health industry is after. (WSJ)

Dec 03, 2013 | 10 comments | by

Can Obama Bailout the Health Insurers?

This blog’s readers are ahead of many other witnesses to the ObamaCare train wreck, having had the benefit of a November 11 blog post explaining the “risk corridors” by which the taxpayer will subsidize health insurers who lose money in the ObamaCare health-insurance exchanges.

bailout-money-540x286

That blog post argued that health insurers are in a pickle, because the Administration cannot indemnify them fully from the larger than expected losses that they will likely experience in the exchanges.

Now, it looks like the Administration will try anyway. When the President announced that he would not enforce the provisions of PPACA that caused insurers to cancel millions of policies, insurers reacted badly. Karen Ignagni, CEO of America’s Health Insurance Plans, the industry’s trade association, stated that “changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers. Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace.”

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Nov 26, 2013 | 15 comments | by

How Small Business is Reacting to ObamaCare

The International Franchise Association and the Chamber of Commerce have released a survey of companies representing 42 million jobs:

  • SixObamacareSmallBusinessImpactty-four percent of franchise and 53 percent of non-franchise businesses believe the health care law will have a negative impact on their businesses.
  • Twenty-nine percent of franchise and 41 percent of non-franchise businesses are already seeing health care costs increase due to the law.
  • More than 50 percent of franchise and non-franchise businesses are planning to make decisions, such as reducing employee’s hours, to comply with the law’s employer mandate.
Nov 22, 2013 | 12 comments | by

Rational Rationing

This is a Chris Conover post at another list serve:

87ssgs32-1366688517Garber and Phelps (1997) have demonstrated that the optimal cost-effectiveness ratio varies greatly by income and risk aversion. Interestingly, it did not vary that much by age, gender or discount rate. The optimal cost/QALY cutoff for Medicaid thus would be much lower than the optimum for Medicare patients. So what’s rational economically may be a tough sell politically, especially when you consider that Medicare by law is prohibited from taking cost-effectiveness into account when making coverage decisions!

In a perfect world, public programs would indeed set an upper limit on the CE ratio which would adjust up or down based on the amount of funds the legislature has been willing to allocate each year (essentially what Oregon Medicaid has done). In that perfect world, the threshold actually would be set pretty low (in Garber/Phelps, the optimum was just under 3 times per capita income and the figures roughly scaled with income, so for someone at poverty, that would imply a threshold of about $35K/QALY). The rationale is that in other domains of life, such families are presumably trading off at that rate — car purchases, housing location decisions, whether to buy smoke alarms. Setting such a cap would be a far more efficient (and arguably fair) way to allocate limited public resources than trying to rely on price controls or other micro-management of health care delivery to keep costs in publicly financed health plans “affordable.”

Nov 19, 2013 | 13 comments | by

Do We Really Want Mental Health Parity?

The final rules are out and it seems that the quest for mental health parity has been wholly successful. I’m convinced that almost no one understands what it means (see our previous post). Nonetheless, everyone is cheering.

Everyone that is, except for a few of us here at the NCPA. This is from a Health Alert I wrote six years ago:

Hebalancing-health-costsre’s the question: Would you want an insurance plan that had the same deductible and co-payment for every procedure? Need time to think about that? Then try this: Does it make sense to have the same deductibles and co-payments for chiropractic therapy as for setting a broken leg? Or from the mental health field, should the payment terms that cover bipolar disorder be the same as those that apply to marriage counseling (required coverage in some states)? Should pastoral counseling (also required in some places) be reimbursed the same way as coverage for schizophrenia? If you have any sense, the answers are: No, No, No and No.

One way to keep insurance costs down is through incentives. Patients should pay more of their bill when they exercise discretion and especially where patient discretion is appropriate. In mental health, this principle applies in spades because:

  1. the illness is often experienced subjectively,
  2. there are often no objective standards for diagnosis or treatment,
  3. doctors often exercise enormous discretion,
  4. patients also exercise a lot of discretion and
  5. patient cooperation is often crucial to any cure.

Unlike fixing a broken leg, these are precisely the conditions that make patient cost sharing highly desirable.

If I haven’t convinced you so far, consider this National Bureau of Economic Research study finding: 38 percent of all mental health patients ― representing 28 percent of all treatment visits ― are people who do not have any mental health disorder.

The NCPA has published three short analyses (here, here and here) that describe in more detail the case against mental health parity.

Nov 11, 2013 | 19 comments | by

Major Breakthrough; Timid Step Forward

This is something the Bush Administration never was willing to even consider

The Obama administration loosened rules governing health-care savings accounts known as flexible-spending arrangements, or FSAs, allowing consumers to roll over as much as $500 in unused funds each year. (WSJ)

health-savings-account-bankThis means the accounts will partially function just like Health Saving Accounts. Employers potentially will be able to put up to $500 in an account for every employee and let that integrate with an overall health plan with none of the restrictions that hamper HSAs.

This is 35 million people, in addition to the 30 or so million that already have an HSA or HRA.

But why only $500? Why not the full amount? $2,500 is the new allowable contribution.

Nov 04, 2013 | 15 comments | by

How Employer Provided Post-Retirement Health Care Affects Retirement

We find that, forretirement-signn state and local government employees, retiree health coverage raises the probability of stopping work by 5.1  percentage points (around 28 percent) between ages 60 and 64. However, we find no evidence that retiree health coverage influences state and local employees’ decisions to stop work at ages 55-59, or that such coverage has an effect on the probability of stopping work for federal and military employees.

John Shoven and Sita Slavov, NBER Working Paper.

Oct 30, 2013 | 15 comments | by

How Government is Backing up the Health Insurance Companies

It looks like the government will share in 50% of the profits and pay for 80% of the losses.

And the CBO (ignoring the possibility of a death spiral) scored this reinsurance agreement as budget neutral.

More from Adrianna McIntyre:

Insurers have a stake in ObamaCare’s success; that doesn’t magically disappear if 2014 enrollment is rockier than anticipated. The risk corridor program continues through 2016, which would allow plans to weather 2014′s uncertainty and probably keep the following year’s premiums relatively unchanged as the risk pool normalizes.

Oct 29, 2013 | 12 comments | by

Domestic Medical Tourism is Taking Off

Premera Blue Cross Blue Shield, Alaska’s biggest health insurer, started a program in January that will pay expenses for some of its members to fly to Seattle for some procedures that come with huge price breaks. For instance, a knee surgery that costs $27,100 in Alaska can be performed for $13,000 in Seattle, according to the insurer…

inbound_outbound_imageSome patients are deal-hunting on their own. The website Medibid, which launched in 2010, connects patients who are paying out of pocket with doctors who bid to provide care. The website’s founders say they’ve helped about 1,800 people find care.

Patients register with the site and pay either $25 per request or $4.95 a month for a year so they can post their medical needs on the site to solicit bids. Care providers, who register and pay fees of either $24.90 per month or about $250 annually, respond to patients with a bid.

Tom Murphy, AP.

Sen. Tom Coburn on this issue. See more stories here, here, here and here.

Oct 29, 2013 | 13 comments | by

ObamaCare Has Been Good for Insurance Companies

Over the last 12 months, shares of the top five publicly traded health insurance companies — Aetna, WellPoint, UnitedHealth Group, Humana and Cigna — have increased by an average of 32 percent, while the Standard & Poor’s 500-stock index has risen by just 24 percent. (The New York Times)

Oct 29, 2013 | 16 comments | by
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