Category: Health Insurance

When Will Obamacare Enrollment Close?

When I last wrote about Obamacare’s open enrollment (on January 23), I promised readers that I would not write about it again until open season had wrapped up.

I thought we’d be there by now. After all, it was supposed to close on February 15.

No such luck. First, because of glitches in the website and other hassles, the federal government and some states extended open season by one week.

Now, the Administration has been caught by surprise by April 15, tax day. The problem seems to be that six million Americans will be required to pay the (unconstitutional) fine for not having bought Obamacare insurance in 2014. Unfortunately, 40 percent of adults are unaware of the penalty.

Are Employers Who Dump Workers Onto Medicaid Corporate Welfare Queens?

There have been a lot of predictions about the future of employer-based health benefits under Obamacare. Reports suggest that increasing numbers of small businesses are dropping health benefits and sending their employees to Obamacare’s insurance exchanges, where they are partially subsidized.

Other businesses have found a bigger cost-shifting approach. BeneStream, a new benefits advisor, advises employers how to make their workers dependent on Medicaid, a welfare program fully funded by taxpayers. And businesses are taking advantage of its advice.

So: Are these employers corporate welfare queens?

Gallup’s Easily Misunderstood Health Insurance Survey is Out

For many months, I have struggled with the Gallup-Healthways survey of health insurance, which I criticized in a previous entry. Of all the surveys of health insurance it is the least informative, and I wish the Gallup folks would give their results better context. Unfortunately, because it is the timeliest, the media get excited about it, especially since Obamacare started.

The latest survey, which covers the 4th quarter of 2014, reported that the “uninsured rake sinks to 12.9 percent”. Just look at the graph: What a nosedive in the number of uninsured Americans! Well, not so fast.

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Obamacare’s Effect on Uninsured is Trivial

At the end of 2014, Jason Furman and Matt Fiedler of President Obama’s Council of Economic Advisers published an analysis of the uninsured in the first half of 2014. The two economists boasted that “2014 has seen largest coverage gains in four decades, putting the uninsured rate at or near historic lows.”

Their own graph shows how exaggerated and misleading this claim is.

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CROmnibus and Cronyism for Blue Health Plans?

Despite the end of Obamacare’s “bailout” for health insurers, some of our friends who seek to repeal and replace Obamacare insist on finding a crony capitalist under every bed and in every closet.

Yuval Levin, at National Review Online, appears to have been the first to identify an adjustment to an insurance regulation, buried in the CROmnibus, as “cronysism” for non-profit Blue Cross and Blue Shield health plans. This has been picked up by Louise Radnofsky at the Wall Street Journal and Timothy P. Carney at the Washington Examiner.

Mr. Carney notes that there is “no clear right or wrong in this matter,” but criticizes the adjustment for “providing Obamacare relief for exactly one corporation.” However, the relief does not apply to “exactly one corporation.” It applies to all Blue Cross and Blue Shield plans.

Consumer-Driven Plans Continue to Grow

Consumer-driven health plans seized five more points of market share in the employer-based benefits market, according to Mercer’s latest report:

  • Mercer survey finds average total health benefit cost per employee rose 3.9% in 2014;
  • Enrollment in high-deductible, consumer-directed health plans (CDHPs) jumps from 18% to 23% of all covered employees following a surge of new implementations;
  • Nearly half of large employers (48%) now offer a CDHP, up from 39%;
  • Private exchanges used by 3% of large employers, with 28% likely to make the shift within five years.

Figure 4 shows that consumer-driven plans are poised to continue their growth. The growth of private exchanges is also good news.

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On the Wrong Side of Wall Street?

It looks like I am zigging when the smart money is zagging. I’ve written that Obamacare will struggle to reach the Administration’s target of 9 million in 2015. At last week’s “Wall Street Comes to Washington” roundtable, sell-side analysts Carl McDonald of Citi and Ralph Giacobbe of Credit Suisse predicted that 2015 enrollment in Obamacare exchanges will reach 11 million:

But the analysts noted continuing challenges for insurers, from improving what McDonald called a “pretty poor” first-year effort to inform consumers about which doctors and hospitals are in their networks, to controlling spending as high-priced drugs hit the market.

Insurers are also projecting that this year’s enrollees will be younger and healthier than those who signed on in 2014, when the average age was 41, McDonald said.  That was a problem for insurers who based this year’s premium rates on the expectation they would see younger customers, he said.

“Unprecedented”: 3 in 4 Insurance Brokers Saw Clients Drop Group Coverage

In yesterday’s Health Alert, I noted that employers which offer health benefits are not yet rushing to the exits. That might change quickly, according to a new survey of brokers:

An unprecedented number of employers stopped offering group health benefits this year, according to a recent survey of over 1,000 insurance brokers conducted by Benefitter. In 2014 alone, more than 3 out of 4 brokers had employer clients who dropped health coverage and instructed their employees to purchase their own insurance on the public exchange. Early signs indicate this trend may only accelerate in 2015, as 17% of brokers expect at least 25% of their clients to drop coverage in the coming year.

“As we enter open enrollment for the public market, it’s becoming more apparent that individual rates are often much more affordable than group rates. It’s no surprise that many business owners are responding to continued group rate increases with their feet,” says Benefitter CEO, Brian Poger.

Health Insurance without an Expiration Date

Hangsheng Liu and Soeren Mattke have written a useful short article at Health Affairs, promoting “health insurance without an expiration date,” criticizing the one-year term of most U.S. health insurance, which features open enrollment at the end of each calendar year:

Moreover, when consumers know they can change plans if their health worsens, they lose at least one incentive to adopt healthy lifestyles. Insurers, too, have few incentives to invest in their enrollees’ health through wellness and disease management programs because those investments, studies show, may not pay off for up to three years. By then, enrollees may have moved on to another insurer. Thus, a greater role for exchange plans and price competition might inadvertently counteract current efforts to shift the payment system toward one that rewards providers for providing long-term health care management for their patients.

HSA-Eligible Plans are Widely Available in Obamacare Exchanges

(Nota Bene! HSA plans are not necessarily consumer-driven!)

Paul Howard and Yevgeniy Feyman of the Manhattan Institute have conducted a thorough examination of plans available on Obamacare’s exchanges:

The report finds that, far from becoming obsolete under the ACA, high-deductible plans are widely available — 98 percent of uninsured Americans have access to at least one HSA-eligible plan. Moreover, these plans also make up about 25 percent of total offerings on Obamacare exchanges. We also found that they remain significantly less expensive than traditional plan designs, offering savings of about 14 percent, on average.

Nonetheless, our analysis indicates that it remains difficult for consumers to identify HSA-eligible plans and that much more could be done to simplify their administration and educate exchange consumers on their advantages and limitations.