Tag: "health insurance"

Ted Cruz and Health Reform

CruzSenator Ted Cruz has won the Iowa Republican caucuses. Over the weekend, Chris Wallace of Fox News challenged Mr. Cruz on his proposal “to sell health insurance across state lines,” citing research published by NCPA that concludes federal action to mandate this would be ineffective. The research in question is on this blog, here and here.

We got quite a bit of feedback yesterday on this topic. As a think tank, we endorse policies, not politicians. Nevertheless, some of our audience took Mr. Wallace’s question to reflect opposition to Senator Cruz.

In fact, Senator Cruz’ proposal to sell health insurance across state lines does not appear in his presidential campaign platform. It is in a Senate bill he proposed last March, in anticipation of the Supreme Court’s decision in King v. Burwell.

Trouble Paying Medical Bills: 2015 Versus 2005

iStock_000007047153XSmallAfter having read my colleague Devon Herrick’s Health Alert discussing the New York Times’ survey (conducted with the Kaiser Family Foundation) of adults having trouble paying medical bills, I had a look back and compared the 2015 results to those a similar survey from 2005. The results are almost exactly the same!

Despite a large decrease in the proportion of working-age people categorized as “uninsured” (even though many have actually become dependent on Medicaid, a joint state-federal welfare program, instead of actual insurance) one quarter of us still have trouble paying medical bills.

  • In 2015, 15 percent spent “all or most” of their savings on medical bills. In 2005, it was 12 percent.
  • In 2015, 10 percent “borrowed money from friends or family” and nine percent “increased credit card debt.” In 2005, eight percent reported “borrowing money or taking out another mortgage.”
  • In 2015, 32 percent “put off/postponed getting health care you needed.” In 2005, 29 percent of adults report “they or someone in their household skipped medical treatment, cut pills, or did not fill a prescription in the past year because of the cost.”
  • In 2015, three percent declared personal bankruptcy because of medical bills, the same as 2005.

Health Insurers’ Collapsing Obamacare Consensus

Marilyn Tavenner, CEO of AHIP

M. Tavenner, CEO of AHIP

The health insurance industry is undergoing a crisis of consensus on how to respond to the failure of Obamacare. That is the only way to interpret the departure of another large, national carrier, Aetna, from America’s Health Insurance Plans (AHIP). This follows UnitedHealth Group’s departure from the industry’s trade group last June:

Those misgivings manifested most recently during the debate over ObamaCare when the so-called “big five” — UnitedHealthcare, Anthem, Aetna, Humana and Cigna — formed their own informal coalition.

Another healthcare executive, who asked for anonymity in order to speak freely, said that, for some, “there’s a sense that AHIP has become a one-trick pony for the Obama administration,” referring to the goal of advancing ObamaCare.

With the country’s first- and third-largest health insurers gone from its ranks, the insurance group could see problems arise from the divisions between large and small companies.

(Peter Sullivan & Megan R. Wilson, “Aetna departure a major blow for insurers group,” The Hill, January 5, 2016).

Understanding Why Employer Benefit Costs Are Rising Slowly

Aon Hewitt, a leading actuarial consulting firm, has reported extremely good news about the cost of employee benefits:

2015 Records Lowest U.S. Health Care Cost Increases in Nearly 20 years

– Rate of increase was 3.2%

– Average health care cost per employee topped $11,000

– Employees’ share of health care costs have increased more than 134% since 2005

After plan design changes and vendor negotiations, a recent analysis by Aon (NYSE: AON) shows the average health care rate increase for mid-size and large companies was 3.2 percent in 2015, marking the lowest rate increase since Aon began tracking the data in 1996. Aon projects average premium increases will jump to 4.1 percent in 2016.

Aon Hewitt’s 3.2 percent rate of growth includes only premium. When employees’ out-of-pocket costs are included, the reason for the slow growth becomes apparent.

Hillary Clinton Profits from Big Pharma, Big Insurance

Chris Jacobs of the Conservative Review has an interesting review of Hillary Clinton’s business income from health insurers and pharmaceutical manufacturers:

At the end of this campaign’s first debate for Democratic presidential candidates, Hillary Clinton claimed that she counted the pharmaceutical and insurance industries as her enemies. Since that time, various reports have focused on the way in which her campaigns, as well as the Clinton Foundation, have profited from contributions by drug and insurance companies. However, few have reported how Bill and Hillary Clinton personally profited from insurance and drug company largesse.

To call it mere profit would be an understatement. As the below spreadsheet shows, financial disclosure records filed by the Clintons demonstrate that since Bill Clinton left office in January 2001, he and his wife have received more than $9.3 million in honoraria for speeches before groups associated with health care, and a whopping $3.4 million for speeches paid for by groups in the drug, device, and insurance industries (bolded in the spreadsheet).

(Readers can download the spreadsheet at Mr. Jacob’s article.)

My own conclusion is that the health insurers will get what they paid for, if Mrs. Clinton is elected President, whereas the drug-makers will be reminded of the old adage that “you cannot buy politicians; but only rent them.”

Another Day, Another Obamacare COOP Closes

Did the sun come up this morning? That must mean another Obamacare COOP has closed. This time, it is in South Carolina:

CCHP

High-Deductible Health Insurance Crushes Health Spending

A new working paper published by the National Bureau of Economic Research (NBER) shows how much high-deductible health plans reduce spending:

We study consumer responsiveness to medical care prices, leveraging a natural experiment that occurred at a large self-insured firm which forced all of its employees to switch from an insurance plan that provided free health care to a non-linear, high deductible plan. The switch caused a spending reduction between 11.79%-13.80% of total firm-wide health spending ($100 million lower spending per year). We decompose this spending reduction into the components of (i) consumer price shopping (ii) quantity reductions (iii) quantity substitutions, finding that spending reductions are entirely due to outright reductions in quantity. We find no evidence of consumers learning to price shop after two years in high-deductible coverage. Consumers reduce quantities across the spectrum of health care services, including potentially valuable care (e.g. preventive services) and potentially wasteful care (e.g. imaging services).

(Z.C. Brot-Golberg, et al., What Does a Deductible Do? The Impact of Cost-Sharing on Health Care Prices, Quantities, and Spending Dynamics,” NBER WP No. 21632, October 2015.)

Colorado Health Insurance COOP Closed

CO COOPLast Friday, Colorado’s Division of Insurance ordered the state’s Obamacare COOP not to offer policies in the state’s Obamacare exchange next year. Obamacare’s COOPs are cascading into collapse quite quickly. NCPA has been studying them since last June, and our research has been prescient.

Obamacare COOPs were specifically stood up by the Affordable Care Act with government loans. They cannot hide their Obamacare losses like larger, incumbent insurers (for which Obamacare exchanges are small parts of their businesses) can.

To show how fast the fall of this COOP has happened, I’ll share three stories:

Jeb Bush Health Reform: Innovation and Patient-Centered Care

Bush2(A version of this Health Alert was published by The Hill.)

By avoiding sound bites and respecting voters’ ability to understand issues, Governor Jeb Bush’s health-reform proposal demonstrates strong leadership. Repeal and replace Obamacare? Sure, Bush is for that, but no Republican politician should win points simply by regurgitating what many citizens fear has become little more than a slogan.

Peak Obamacare? We’re Almost There

money-burdenThe administration has released a report estimating that enrolment in Obamacare will reach only 9.4 million to 11.4 million at the end of 2016. Back in 2010, when the law was passed, the Congressional Budget Office estimated exchange coverage would be 21 million next year (Table 4).

Why the come down? Obamacare has a miserable take-up rate: Few who do not get significant subsidies sign up. Even worse, many of those who sign up at open enrolment cannot afford the premiums and drop out. Indeed, 15 percent of Obamacare beneficiaries who signed in 2015’s open season (which ended in February) were gone by the end of June. (The New York Times has just published interviews with some struggling to pay their premiums and maintain coverage.)

One year ago, I coined the term “Peak Obamacare” to describe this phenomenon. Although the administration’s cheerleaders have twice celebrated very high Obamacare enrolment during open season, the administration has finally decided to accept reality: We are on the verge of Peak Obamacare.