Category: Health Insurance

60 Percent of Health Plans that Could Meet Obamacare’s Essential Health Benefits are Illegal

According to Obamacare’s regulations, a health plan must pay at least 60 percent of the actuarial value (AV) of its costs. That means that if the cost of your health care for a year is expected to be $8,000, a plan which pays 60 percent (called a bronze plan in Obamacare), will cover $4,800 of the costs. You’ll be expected to pay $3,200 in deductibles and co-payments.

Our colleague Linda Gorman defines AV as “the average amount a plan with a given set of benefits is likely to pay given a standard population.” I’ve also discussed that because Obamacare’s regulations define AV relative to a “standard population” health insurers can design plans that cause the sick to have extremely high out-of-pocket costs.

Professor Bob Graboyes, in the compelling and entertaining video presented below, explains another big problem with Obamacare’s AV regulations: They outlaw 40 percent of possible AVs above the 60 percent minimum. That is because the AVs defined as floors in the law for the four “metallic” plans (60 percent for bronze, 70 percent for silver, 80 percent for gold, and 90 percent for platinum), are interpreted in regulations as narrow corridors of 4 percentage points.

Are There 1.3 Million More Uninsured in 2014?

Kudos to Joe Antos of the American Enterprise Institute for discovering a datum that the government neglected to promote: By one of the government’s own measurements, the number of uninsured Americans increased by 1.3 million during February through April 2014 versus the same three months of 2013.

I previously wrote about the estimate of the uninsured generated by the Centers for Disease Control (CDC). However, I did not discuss the Census Bureau’s Current Population Survey, because its concurrent press release covered only 2013. Antos discovered 2014 data that was quietly posted on a government website.

The two results contradict each other: CDC estimated a small reduction in the uninsured, whereas the Census Bureau’s estimated an increase. That is confusing, but contradictory and incoherent information about Obamacare’s effects is something we are getting used to.

32 Percent of Employers May Move to Private Health Insurance Exchanges within 3 Years

Mature Businessman Seated at a TablePricwaterhouseCoopers has released new results from its 2014 Touchstone survey of employers. The major take-away is that one third of employers are considering moving their active employers to private health insurance exchanges in the next three years.

I have been excited about private exchanges for a while now. Private exchanges are a way for us to solve a problem that we’ve been beating our heads against for years: Employers’ monopoly control of our health dollars is the “original sin” of U.S. health care. Nevertheless, it is so deeply embedded in our culture and business practices that anyone who threatens it by advocating individual choice in health benefits faces fierce blowback.

Number of Uninsured Americans Aged 18-64 Down 2 Percentage Points

The number of uninsured Americans, aged 18-64 has dropped by two percentage points from the first quarter of 2013 to the first quarter of this year, according the Centers for Disease Control (CDC).

As shown in figure 2, that brings the proportion of uninsured down to where it was about ten years ago. In other words, Obamacare has not managed to overcome the results of the recession that began in December 2007. Plus, much of the reduction in uninsured is a result of more people becoming dependent on Medicaid, which is welfare, so should not be viewed as the same type of benefit as individually owned or employer-based health insurance.

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Employer-Based Health Insurance Costs Up 3 Percent, Share of Covered Workers in High-Deductible Health Plans Steady

The annual Kaiser Family Foundation/Health Research Education Trust Employer Health Benefits Survey has been released. As many expected, the increase in employer-based health costs from 2013 to 2014 was moderate:

In 2014, the average annual premiums for employer-sponsored health insurance are $6,025 for single coverage and $16,834 for family coverage. The average family premium rose 3% over the 2013 average premium. Single coverage premiums rose 2% in 2014 but are not statistically different than the 2013 premium amounts. During the same period, workers’ wages increased 2.3% and inflation increased 2%. Over the last ten years, the average premium for family coverage has increased 69% (Exhibit A).  Premiums have increased less quickly over the last five years (2009 to 2014), than the preceding five year period (2004 to 2009) (26% vs. 34%).

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Only 2 Percent of Small Businesses Have Checked Out Obamacare’s Small Business Exchanges

business-dealAs well as health insurance exchanges for individuals, which have suffered much criticism for their failings, Obamacare created exchanges especially for small businesses: Small Business Health Options Program (SHOP).

SHOP is a bigger failure than the exchanges for individuals. SHOPs were supposed to open up nationwide on October 1, 2013, alongside those exchanges. However, the deadline was deferred, and only 15 states currently have SHOPs.

People Are Not Very Satisfied with Their Health Plans

The Employee Benefit Research Institute (EBRI) has just released a survey of beneficiaries in traditional health plans, high-deductible health plans (HDHPs), and consumer-driven health plans (CDHPs). EBRI defines a CDHP as a HDHP with a Health Savings Account or Health Reimbursement Arrangement. What is interesting about the results is that satisfaction in traditional plans dropped significantly in 2010 and has never recovered. Although satisfaction with HDHPs and CDHPs is worse than with traditional plans (because of higher out-of-pocket payments), they have not suffered the same drop. However, having an HSA or HRA really improves satisfaction: Last year, 47 percent of CDHP beneficiaries were satisfied, versus only 40 percent of HDHP beneficiaries. On the other hand, only 58 percent of beneficiaries in traditional plans were satisfied.

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Direct Primary Care Has Exploded Since Obamacare

doctor-with-patientThe goal of Obamacare is to increase the number of people with health insurance. Remarkably, its passage has coincided with an explosion in the number of primary care physicians who do not take health insurance, according to Daniel McCorry of the Heritage Foundation:

W‌ith new concerns over the effects of the Affordable Care Act (ACA) on access to care and continued frustration with third-party reimbursement, innovative care models such as direct primary care may help to provide a satisfying alternative for doctors and patients. Doctors paid directly rather than through the patients’ insurance premiums typically provide patients with same-day visits for as long as an hour and offer managed, coordinated, personalized care. Direct primary care — also known as “retainer medicine” or “concierge medicine” — has grown rapidly in recent years. There are roughly 4,400 direct primary care physicians nationwide, up from 756 in 2010 and a mere 146 in 2005.

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The Health Insurance Bureaucracy Lives!

You know it never died. But in the health policy world, it is so easy to get caught up in the lingo used at conferences and in journals — Accountable Care Organizations, Pay-For-Performance, Population Health Management — that it’s easy to delude yourself into thinking that things have actually improved for the doctors and patients. So, it is valuable to get kicked back into reality by an actual practicing physician who takes the time to put pen to paper and write about her experience. Here’s Dr. Danielle Ofri:

The letter in my hand concerned one of my patients, Mr. V., who suffers from stubborn hypertension. His chart is a veritable tome, documenting the years of effort it took to find the combination of four different blood-pressure medications that controls his hypertension without upsetting his diabetes, kidney disease and valvular heart disease or making his life miserable from side effects. We’ve been on stable ground for a few years now, a state neither of us takes for granted.

But Mr. V. had changed insurance companies, and now one of his medications required a prior authorization. The last thing I wanted was for him to be turned away at his pharmacy and have his blood pressure spiral out of control, so I called right away to sort things out.

Obamacare’s Newly Insured Can’t Use It

Even though Obamacare will spend billions of taxpayer dollars subsidizing health insurers to enroll more people, many of the newly insured can’t use their new policies, according to the New York Times:

“I’ve had one doctor appointment since I got this insurance, and I had to pay $60,” Ms. Shabazz told Daniel Flynn, a counselor with the health network, the Health Federation of Philadelphia. “I don’t have $60.”

Mr. Flynn spent almost two hours going over her Independence Blue Cross plan, which he explained had a “very complicated” network that grouped doctors and hospitals into three tiers. Ms. Shabazz, who has epilepsy, had not understood when she chose the plan that her doctors were in the most expensive tier.

“None of that was explained when I signed up,” she said. “This is the first I’m hearing it.”