I recently attended a roundtable discussion that included Human Resource (HR) executives, chief financial officers (CFOs), benefits brokers, consultants and providers who discussed ways self-insured employer plans can lower their health care costs. The meeting was hosted by a state-of-the-art hospital that is part of a small chain of medical facilities, including emergency rooms, imagine, clinics, orthopedic hospitals.
The indemnity insurance model is alive and well thanks to a federal appeals court for the District of Columbia. So-called “fixed indemnity” insurance pays a fixed amount for a given claim – such as $500 per day for hospitalization or $50 for a doctor visit. Often, fixed indemnity plans only cover specific conditions, such as cancer.
In 2014 the Obama Administration ruled that only individuals who already had comprehensive coverage could purchase fixed indemnity. The reason the administration did not want fixed indemnity coverage available was because it was trying to prop up Obamacare. The administration thought a cheaper option would undermine the goal of “maximizing the number of individuals who have comprehensive, major medical coverage.”
Under the administration ruling, individuals buying fixed indemnity coverage had to attest on their application they already had comprehensive coverage with minimal essential coverage. The plaintiffs argued the 2014 regulatory ruling essentially destroyed the market for their products. The federal court and the appeals court agreed, ruling that the administration had overstepped its regulatory power. Fixed indemnity insurance has been exempt from federal insurance standards for 20 years. The appeals court explained the Affordable Care Act did not change that nor was there evidence Congress planned for the ACA to change that fact. Unfortunately, people who buy fixed indemnity coverage still must buy Obamacare coverage to avoid getting fined. But they can now at least make the choice.
In the New Republic, Adam Teicholz and Glenn Cohen discuss insurers whose provider networks run across the border:
Before dawn on a Wednesday in January, Cesar Flores, a 40-year-old employed by a large retail chain, woke up at his home in Chula Vista, California. He got in his car and crossed the border into Tijuana. From there, he headed for a local hospital, where he got lab tests — part of routine follow-up to a kidney stone procedure. He had his blood drawn and left the hospital at 7:30. He arrived home before 10.
But Flores’s situation isn’t medical tourism as we know it. Flores has insurance through his wife’s employer. But his insurer, a small, three-year-old startup H.M.O. called MediExcel, requires Flores to obtain certain medical treatment at a hospital across the border. In part due to cost-pressures generated by the Affordable Care Act, other sorts of plans that require travel have the potential to expand.
New research from The Fraser Institute shows that health costs in Canada increased 53.3 percent since 2014. During the same period, consumer price inflation increased 18.7 percent and cash incomes rose only 34.7 percent. And the taxes taken to fund the single-payer system have risen significantly:
Health care in Canada is not “free.” Canadians often misunderstand the true cost of our public health care system. This occurs partly because Canadians do not incur direct expenses for their use of health care, and partly because Canadians cannot readily determine the value of their contribution to public health care insurance because there is no “dedicated” health insurance tax.
Over at The Incidental Economist, Austin Frakt is publishing an interesting series on “job lock“. This is the idea that, because most of us get our health benefits from our employers, we are “locked” into jobs we don’t like because they offer benefits which we do like (or need).
We get our health benefits from our employer because they are non-taxable. If employees bought health insurance on our own, we would pay premiums with after-tax dollars. Given this government discrimination, the idea of job lock makes sense: If we got our homes from our employers we would surely hesitate to switch jobs, which would result in forced eviction from the current home to a new one.
But while there may be some job lock due to employer-based benefits, the problem has become way overblown in public discourse, with politicians like Nancy Pelosi claiming that ObamaCare would free the masses to pursue artistic dreams, free of wage slavery.
A new Health Affairs study:
re-ObamaCare, approximately half of low-income adults might have experienced a change of circumstances that caused churn between Medicaid and private coverage each year.Why is this important? Because people who are eligible for Medicaid are not allowed to get private, subsidized insurance in the exchange and vice versa.
Actuarial studies of plans sold through health insurance marketplaces in some states found that many make consumers responsible for as much as 50 percent of the price of specialty drugs, which can cost $8,000 or more a month…
Researchers also say the higher rates help insurers bankroll low monthly premiums to attract healthy young enrollees…
Obamacare caps those expenses at $6,350 for individuals and $12,700 for families. But patient advocates say the spike in cost-sharing means chronically ill people could reach those caps quickly, in some cases within the first months of coverage. (Reuters)
Premiums for 2014 individual plans sold by eHealth, the nation’s largest private insurance exchange, have spiked by more than a third since coverage requirements under the Patient Protection and Affordable Care Act took effect. For family plans, the increase is more than 50%, the Mountain View, Calif., company reports. The average monthly premium for individual coverage purchased through the company’s website was $274. That was up from an average monthly premium of $197 for individual plans that did not have to adhere to new coverage requirements under the ACA. For family coverage, the average monthly premium for 2014 plans sold through eHealth was $663 a month, compared to $426 for non-ACA compliant plans. (Modern Healthcare)
After an hour on the phone, most of which was hold time, a call center employee had entered the several pages of information (names, dates of birth, addresses, etc.) into an application on her computer twice without success. She suggested that it might be something to do with the fact that our street address has the word “North” in it, which could confused the system if it wasn’t entered to exactly match the records they had received. (So was it N? Or North? Or NORTH? So many options!) We consulted the company benefits office, which advised us to enter everything in all capital letters…
Three hours after beginning my second attempt, I succeeded, or so I thought. DC Health Link congratulated me on my enrollment and I thought a health insurance card would be making its way to my door soon…Once again, that assumption was incorrect. When we hadn’t gotten any information on our new health insurance plans by February 3, I called our new insurance company and see what was up. They said they had no record of our enrollment…
Eventually my family got a letter that did confirm our enrollment. While the letter confirmed that we had enrolled in something, it did not explain why our insurance company didn’t know who we were three days into the month our coverage was supposed to start. (More)
