Obamacare Exchanges are as Broken as Ever


Let’s go into the Labor Day weekend with a reminder of something that the Administration would like us to forget: Obamacare’s exchanges are as broken as they ever were.

From October through March, the media enjoyed reporting on the countless glitches people were suffering as they tried to apply for Obamacare coverage at either healthcare.gov or a state exchange. Since the Administration announced that it had slightly exceeded its target enrollment, with 8.1 million people signed up, it decided to stop reporting subsequent enrollment in the exchanges.

Since April, these stories have receded from the headlines; but you don’t have to look very far to see that nothing has really been fixed in the exchanges. Here are a few stories from the last day or two:

Families USA Has an Excellent Report on Price Transparency — Really


Families USA, a leftist advocacy outfit often criticized in this blog, has published an excellent — not perfect — report on price transparency. Maybe it’s just because I’m feeling generous going into the last long weekend of the summer, but I think this report deserves a shout out from our side:

Prices for the same health care service can vary drastically across providers, and it is difficult for consumers to get information to compare providers based on both price and quality.

Making information on health care prices and quality accessible will help consumers compare costs, choose high-value providers, and anticipate their expenses.

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.

Where’s the Obamacare Health Spending Boom?


A version of this post appeared at Forbes.

The Bureau of Economic Analysis has released the second estimate of second quarter Gross Domestic Product (GDP). There is good news — especially for those of us concerned with health policy.

First, the BEA seems to have figured out how to measure health spending under Obamacare, no longer giving huge updates to initial estimates, like it did in the first quarter. The second estimate is little revised from the advanced estimate: Real GDP increased by 4.2 percent (annualized) versus an advanced estimate of 4.0 percent; and health spending accounted for just 0.05 percent of the increase, versus an advanced estimate of 0.08 percent.

Roche Take-Over of InterMune A “Rebuke” to FDA


The Wall Street Journal editorial board has an interesting take on Roche’s takeover of InterMune, calling it a “rebuke” of the FDA:

Amid this summer’s M&A fever, Roche’s agreement Monday to buy the San Francisco biotech InterMune ITMN -0.05% deserves special notice. The tie-up is an $8.3 billion guided missile into the fortified bunker that is the Food and Drug Administration.

InterMune has never turned a profit in 16 years of existence and other than its clinical expertise the company holds a single asset: an idea for treating a lethal lung disorder called idiopathic pulmonary fibrosis with no known cause, cure or approved therapy — at least in the U.S. An InterMune drug called pirfenidone that slows the progression of irreversible lung scarring is on the market in Europe, Japan, Canada and even China.

Federal Medicare, Medicaid, Obamacare Subsidies to Increase 85 Percent in Ten Years


On Wednesday, the Congressional Budget Office (CBO) released its Update to the Budget and Economic Outlook: 2014 to 2024

Annual net outlays for the government’s major health care programs (Medicare, Medicaid, the Children’s Health Insurance Program, and subsidies for health insurance purchased through exchanges) are projected to rise by more than 85 percent. Outlays for those programs would grow from 4.9 percent of GDP to 5.9 percent, CBO anticipates.

Spending for Medicare’s payments to physicians is constrained by a rate-setting system called the sustainable growth rate. If the system is allowed to operate as currently structured, the fees that physicians receive for their services will be reduced by about 24 percent in April 2015…If, instead, lawmakers overrode those scheduled reductions — as they have every year since 2003 — spending on Medicare would be greater than the amounts projected in CBO’s baseline. For example, holding payment rates through 2024 at current levels would raise outlays for Medicare (net of premiums paid by beneficiaries) by $131 billion (or about two percent) between 2015 and 2024.

Here’s Why States Can’t Make Money by Expanding Medicaid


Obamacare encourages states to expand significantly the number of their residents dependent on Medicaid, the joint state-federal program for low-income households. It significantly increases federal funding for expanding this dependency. However, the Supreme Court has declared that the states do not have to accept this expansion.

So, the Administration and its allies have been reduced to arguing that expanding Medicaid is sort of a profit center for states that do it. The President’s Council of Economic Advisers has enthused about how many jobs would be created if hold-out states just accepted the federal hand-out. (The Robert Wood Johnson Foundation has recently produced a report that beats a similar drum.)

Can Taxpayers Recover Hundreds Of Millions of Dollars from Obamacare Exchanges?


The Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services has just released a report on the contracts issued to private vendors to set up the federal pieces of Obamacare’s disastrous health insurance exchanges. This is only the first of a series of reports, and limits itself to describing the extent of the problem, not recommending solutions.

The OIG identified 60 contracts that started between January 2009 and January 2014. (That start date is a little mysterious, because Obamacare was not signed into law until March 2010.) The total estimated value of the contracts, when they were signed, was $1.7 billion.

Are Medicare Advantage Plans Overpaid and Corrupt?


Medicare Advantage consists of private plans in which Medicare beneficiaries can choose to enroll. They were made more popular by the Medicare Modernization Act of 2003, which also introduced Medicare’s drug benefit (Part D). If not for Medicare Advantage, beneficiaries would be stuck in the traditional Medicare Part A (physician) and Part B (hospital) plans, where the federal government determines how much to pay providers according to bureaucratic formulae. It’s sort of like Gosplan, the old Soviet economic pricing and planning mechanism.

To escape this fate, one third of Medicare beneficiaries now choose Medicare Advantage plans. Obamacare (“the ACA”) was supposed to squeeze those seniors out of their plans in order to finance Obamacare. However, when the time came, the Administration balked. Meghan McCarthy of Morning Consult explains this “Potomac Two-Step“:

The approach, two years in a row, has been that CMS issues a proposed rate in February with very tough reductions, a proposition that rallies insurers and members on both sides of the aisle to vehemently oppose the cuts. After much hand-wringing and commenting, the administration arrives at a much friendlier number in the final release.

Medicare Advantage plans are popular for a number of reasons. Most importantly, they provide better care than traditional Medicare. Joseph Newhouse and Thomas McGuire review this in an academic journal. It is ably summarized by Austin Frakt in the New York Times UpShot blog:

Medicare Advantage plans — private plans that serve as alternatives to the traditional, public program for those that qualify for it — underperform traditional Medicare in one respect: They cost 6 percent more.

But they outperform traditional Medicare in another way: They offer higher quality.

Medicare Goes Concierge – Sorta


Medicine Bag and StethoscopeOne of the great things about concierge medicine (also called direct practice) is the ability to contact your doctor at any time. Also, that your doctor will work with other caregivers and advocate on your behalf.

Yes, it costs you extra for the extra service, but that is how the doctors can reduce their case loads and free up the time to provide you with additional attention. Not everybody thinks the additional fee is worth it, but many do. Plus an argument can be made that the customized care saves money by reducing duplicative tests and hospitalization.