Senator Jeanne Shaheen, New Hampshire Democrat, sent a letter to Health and Human Services Secretary Kathleen Sebelius asking HHS to address issues facing agents and brokers that are preventing agents from signing people up via the Health Insurance Exchanges. This article is from the Washington Times.
Archive for the ‘Health Care Reform’ Category
Although I typically blog on Medicare matters for agents, I wanted to weigh in on week one of the Affordable Care Act’s first ever Open Enrollment. The Open Enrollment will last for 6 months from October 1st, 2013 through June 30th, 2014, although those looking for coverage effective 1/1/2014 will need to apply by 12/15/13. There were a couple main tenants of the ACA which stuck out in my mind:
- Shopping for Health Insurance will be as easy as comparing airline prices on Kayak. Not so much. I think this generalization was always a bit of a stretch, however, the current “glitches” in the healthcare.gov website look problematic. Will they be resolved? Eventually, but it’s hard to say if this will occur in days, weeks or months.
- If you like your Insurance, you can keep it. Maybe. However, many individual policies are being terminated and many employers are eliminating coverage for part time employees or employee spouses and driving them to the exchanges. We may see the same impacts on the small group market over time, as well.
- You can keep your doctor. Possibly. Most plans are keeping their costs low by using “narrow networks”. The lower than expected premiums on the exchanges are likely a result of these narrow network plans. As a result, access to care or keeping your doctor may not be an option if you opt for one of these plans. For example, in Washington state, Seattle Children’s Hospital is suing the DOI for approving plans that exclude them from the network. Five of the seven plans in Washington state do not include SCH and SCH is the only local hospital that performs many complex surgeries for children. In Dallas, only one of three plans include Baylor Hospital. Expect these narrow networks to become a bigger story as the ACA rolls on. Look forward to more lawsuits as hopitals find themselves locked out of certain markets.
- The ACA will bend the cost curve. Almost a definite no, in current form. The ACA was constructed with an 80% mandatory minimum loss ratio and many of the low income shoppers are price insensitive (meaning, their premium, regardless of what the insurance company charges, is capped by their income). Therefore, a plan with a higher premium and broad network (although perhaps not appealing to a non-subsidized shopper), could look quite good to a shopper who’s premium is capped based on income. This provides an incentive for the insurance company to charge higher premiums, pay out strong reimbursements to providers to ensure broad participation, to maximize the premium per enrollee and therefore maximize the 20% that they are allowed to keep. The additional premium is invisible to the shopper with a cap on premium and therefore simply gets passed onto the taxpayers. Frankly, I’m a little surprised there aren’t more high premium, broad network plans to attract the price insensitive shopper, but maybe I’m missing something here??
All in all, it will be interesting to see what the coming weeks unfold. There are certainly benefits to the ACA for many Americans, but there are also issues in the law that will cause “unintended consequences”. Unfortunately, while it would be preferable to see some of these provisions improved, it seems that there is little appetite to improve the law and the options are to keep it as is or to repeal it.
Now, back to Medicare!
Another provision of the ACA was delayed until 2015. The ACA intended to limit the overall out of pocket spending for individuals and families. However, since employers and insurers were not able to make their computer systems track total out of pocket spending (medical and prescription were tracked in different computer systems), HHS gave a one year grace period on this provision.
The story is covered by the New York Times.
The Affordable Care Act mandated that Medicare advantage plans maintain an 85% loss ratio for claims and “activities that promote member health”. CMS issued proposed rules on implementing this ACA requirement. Here is a link to the press release from CMS. Here is a link to the proposed rule.
This rule would impact both Medicare advantage and Medicare Part D plans. The proposed rule indicated that CMS would grade the 85% loss ratio requirement on a “contract” basis (this is the “H” number or “S” number assigned by CMS), as opposed to a county/state/regional basis which is what is being used for the commercial, small group and individual markets.
Of the 605 MA and PDP contracts (544 MA contracts and 61 PDP contracts), CMS is estimating that approximately 14% would be required to pay remittances based on proposed regulations. They estimated that $717 million would be due from MA plans and $141 million would be due from PDP plans, based on historical data.
HHS has closed enrollment to it’s Pre-Existing Condition Insurance Plans. This was a high risk pool for individuals who were denied coverage in the individual market. Congress allocated $5 billion to fund this in the Affordable Care Act, however, HHS is closing enrollment 10 months early due to high claims experience. This is in spite of the fact that the plan has only enrolled about 25% of the membership it had originally projected to enroll (about 100,000 compared to a projection of 400,000).
Plans have until March 2nd to enroll new members.
Here is the story as reported by Robert Pear of the New York Times. Scott now joins 6 other Republican governors who have decided to accept the Federal Government’s subsidies to expand Medicaid in their states. A massive expansion of Medicaid was a cornerstone the Affordable Care Act to cover more of the low income population with Health coverage. The Supreme Court ruled that the states have the option of rejecting the Medicaid expansion subsidy without losing ALL of their Medicaid funding which was initially the hammer to force Medicaid expansion.
The downside of accepting the expansion is that the federal subsidies decline over time, leaving the states with more financial responsibility to fund the expansion going forward. In the early years, the federal subsidy is extremely generous, which makes it difficult turn down. Currently, there are 22 states who have accepted the subsidy, 17 who have rejected it and 11 who are undecided.
Here is a link to the article in Forbes. The article highlights the alliance announced late last year between Blue Cross and Blue Shield of Montana and Health Care Services (a non-profit which holds Blue Cross plans in IL, TX, NM and OK). The article also discusses Blue Cross Blue Shield of Michigan’s plans to move to a Mutual non-profit. The Michigan legislature passed enabling legislation recently to allow for this.
Currently, there are 38 independent Blue Cross Blue Shield organizations which operate in the United States and Puerto Rico.
In unveiling his budget, PA Governor Tom Corbett revealed that PA will not participate in Medicaid expansion in its current form, but seemed open to compromise on this issue. Here is the story for the Patriot News in Harrisburg, PA.
Snyder is the sixth Republican governor to support the expansion of Medicaid in their state. The other states with Republican governors who supported expansion include: Ohio, Arizona, New Mexico, Nevada and North Dakota.