Well-known insurers could lose competitive edge in exchanges

August 2, 2013 | By Dina Overland

The big-name players in the private insurance industry shouldn’t let their guards down as they enter the homestretch before the health insurance exchanges begin open enrollment in October.

Sure, name recognition for companies like Aetna, Cigna, UnitedHealth and WellPoint could help boost their sales. But among the many unique characteristics of this new consumer group shopping for coverage through online marketplaces is that they haven’t had insurance for a long time, if ever. In other words, mainstream insurers won’t be able to easily sway some people by name alone. They don’t care if you’re the industry behemoth or a newcomer.

That’s good news for small companies, especially those specializing in Medicaid plans. Although they’ll be entering new territory by selling policies on the exchanges, Medicaid-based insurers have many advantages that will let them successfully compete with big-name commercial insurers.

“There has never been a better time to be a Medicaid health plan with the opportunities in front of us,” Lisa Rubino, president of Molina Healthcare of California, told AIS Health, including “the exchanges and the expansion of Medicaid.”

Several Medicaid insurers participating in exchanges say they’ll focus on uninsured individuals with low incomes plus the parents of children who already have Medicaid coverage. “They’re already tapped into those family units, so this is a way to bring the whole family together. [Medicaid carriers] really do see exchanges as an opportunity,” said Jeremy Palmer, a principal and consulting actuary with Milliman, AIS Health noted.

Massachusetts-based Network Health is one such Medicaid insurer forging ahead with plans to compete and vie for consumers on the exchanges despite–or perhaps because of–its smaller size.

Network Health and other Medicaid-based insurers will have some key competitive advantages like experience with a sicker population, making them better prepared for consumers shopping on exchanges who likely will have multiple chronic conditions. They also will have brand recognition among the low-income population. “They feel like their brand among the lower-income population is very strong,” Palmer said.

Plus, Medicaid insurers have leaner margins since they’re used to operating with lower profit margins. “We are very frugal in how we spend the government’s money,” Rubino said. And they have existing relationships with essential community providers as required by the reform law. “We didn’t have to go out and forge new relationships like many commercial carriers,” she said, adding that Molina maintains a culturally sensitive staff.

With the opening of exchanges this fall, the healthcare industry is ushering in an entirely new way of doing business. No longer will insurers operate primarily within the business-to-business market, where they make deals with big employers to obtain several hundred new members, for example. The online marketplaces officially introduce the business-to-consumer market, forcing insurers to reach out directly to individual people to obtain their business. The very newness of this market puts every company on even footing.

Who will become the new big players in this fresh market? Only time will tell. But I would venture to guess if a company can work hard, market to the right audience and offer competitive prices, it’s anyone’s ballgame. – Dina (@HealthPayer)

Source URL: http://www.fiercehealthpayer.com/story/medicaid-insurers-could-have-competitive-edge-exchanges/2013-08-02

Quinn signs Illinois Medicaid expansion bill

By Peter Frost Tribune reporter

11:31 a.m. CDT, July 22, 2013

http://www.chicagotribune.com/business/breaking/chi-illinois-medicaid-expansion-20130722,0,1415406.story

Gov. Pat Quinn on Monday signed a bill that will expand Medicaid coverage to about 342,000 low-income adults in Illinois, one of the central components of President Barack Obama’s health care overhaul law.
Illinois is one of 23 states, plus the District of Columbia, that is moving forward with the Medicaid expansion, aimed to extend coverage to 17 million Americans starting in 2014. Twenty-one states have opted out of the program, which the U.S. Supreme Court deemed optional in a 2012 ruling that upheld other parts of the law.

Under the law, the federal government will pay the full cost of covering newly eligible people — including childless adults — on Medicaid from 2014 to 2016, then gradually reduce its share of the funding until it reaches 90 percent in 2020 and the years following. Illinois officials expect the federal government to contribute more than $12 billion toward the expansion between 2014 and 2020.

Now, the federal government pays an average of 57 percent of states’ Medicaid expenses.

Starting in January, Illinoisans who make up to 138 percent of the federal poverty line — about $15,860 for an individual or $32,500 for a family of four — will be eligible for the subsidized coverage.

“In the home state of President Obama, we believe access to quality health care is a fundamental right and we proudly embrace the Affordable Care Act,” Quinn said.

The law also will extend subsidies to those who make 138 to 400 percent of poverty level wages to help defray the cost of purchasing coverage on so-called health insurance marketplaces, online exchanges where individuals and small businesses can begin shopping Oct. 1 for coverage that begins in January.

Most of those who don’t carry coverage will face a penalty, starting next year at $95 or 1 percent of household income, whichever is greater.

In Illinois, nearly 1 million residents will be eligible for subsidized health insurance next year, under the Medicaid expansion or via tax credits through the Illinois Health Insurance Marketplace. State officials expect only about half of them to sign up.

Those eligible for subsidies will be able to chose from among up to 165 health plans offered by six insurers, according to the state, which has until the end of the month to review the offerings and recommend approval to federal regulators.

Insurers that have submitted plans for consideration are Blue Cross and Blue Shield of Illinois, Humana Inc., Aetna Inc., Coventry Health Care Inc., Land of Lincoln Health and the insurance arm of the Carle Foundation.

pfrost@tribune.com

Copyright © 2013 Chicago Tribune Company, LLC

Local business owners preparing for Affordable Care Act mandates, despite delay

By Chloé Morrison

Published Monday, July 22nd 2013

 

Even though employers now have until 2015 to provide health insurance for employees under federal law, some local business leaders are doing their best to prepare for the mandate, even though they aren’t exactly sure how it will impact their businesses.

“There just seems to be so many unanswered questions,” said Mike Monen, who—along with this wife, Taylor—owns restaurants Community Pie, Urban Stack, Taco Mamacita, and Milk and Honey. “I feel like the delay is proof that some people might not be able to sustain through this type of expense. I think it proves the point that there are so many unanswered questions.”

April Wortham, market analyst with HealthLeaders-InterStudy, said that people have been confused and overwhelmed about the Affordable Care Act since it became law in 2010.

President Barack Obama’s Affordable Care Act will provide health care coverage to 30 million people.

Last summer, the Supreme Court ruled that the core of the health care reform act was constitutional. Some of the act’s requirements have already been implemented, and others will continue to be rolled out in coming years.

Because of the act, online exchanges are being created. Exchanges are where individuals and small business owners can shop for health care insurance.

Enrollment for the exchanges starts in October, and coverage will be effective in January 2014.

One of the requirements of the act is that employers who don’t already do so provide health care for their employees.

Last week, the House of Representatives voted to delay the requirement that employers provide health insurance, something Barack Obama’s administration was already doing, according to CNN.

Wortham said that—on a practical level—the delay won’t have a huge impact because the mandate impacts employers with more than 50 employees. And many employers with that many workers already offer health insurance.

According to the National Conference of State Legislatures, 98 percent of employers with more than 200 employees offer health insurance, as do 94 percent of employers with 50 to 199 employees.

But one group of businesses that is being impacted is the restaurant industry.

The Wall Street Journal recently ran an article about how some restaurant owners are starting to rely more on part-time employees in an effort to avoid the potential for higher health care costs under the federal insurance law.

But Monen, whose restaurants each have at least 50 employees, said he’s gone over details with his accountant and insurance broker and that he doesn’t think there are many good options to avoid the cost of the new mandate.

“Cutting serving or wait staff down to below 30 hours is one option, but I think that’s the most unfair thing to do,” he said. “That’s not a strategy I’ve been willing to take … We care about our employees and have always offered full-times jobs. I think that’s what everyone needs.”

And restaurants that do start cutting hours to employ more part-time workers are then forced to deal with workers who might have to work two jobs, Monen said. That brings on a new set of problems because then the employer is dealing with people who might have conflicting work schedules.

Another local restaurant owner, Mike Robinson of Fork & Pie and Brewhaus, said he already offers health insurance to employees who want it. He said he thinks that is part of creating a strong team and good work environment.

Preparing for the unknown 
Monen and Robinson are both preparing for Affordable Care Act requirements, even though there is an element of uncertainty.

“We are definitely preparing—lots of proactive meetings with our accountants and tax people,” Robinson said. “I think all my friends with small businesses are putting together a tentative game plan. It’s such a massive amount of information.”

So there are still a lot of questions that many business owners need answered.

For example, is it cheaper to just take the financial penalty instead of offering insurance? Robinson said he thought it might be.

The penalty for business owners per year is $2,000 for each full-time employee or the equivalent. So part-time employees add up and count toward the total, Wortham said.

And penalties can add up, she said.

The Chattanooga Area Chamber of Commerce will soon start working with its members to educate them on the Affordable Care Act’s requirements, said Robert Bradham, vice president of public strategies.

“We are actually in the process of putting together something for our members,” he said. “It’ll be later this year.”

The chamber will host educational speakers from the insurance industry to speak to area small business owners, he said.

Wortham said that part of the reasoning for the delay in the employer mandate is that there are still a lot of unanswered questions and confusion for business owners.

But the delay doesn’t mean that business owners should put off educating themselves.

“The temptation is going to be for employers—large or small—to sit back and say, ‘We’ve got another year; we can chill out,'” she said. “But I would not advise that. There is plenty that businesses still have to do, regardless of this delay. It gives them another year to figure out those questions.”

Updated @ 8:24 a.m. on 7/22/13 for clarity.

 

Article Link: http://www.nooga.com/162595/local-business-owners-preparing-for-affordable-care-act-mandates-despite-delay/

TN, KY are miles apart on Medicaid

By: Tom Wilemon, The Tennessean

Source Link:  http://www.wbir.com/news/article/281301/2/TN-KY-are-miles-apart-on-Medicaid

Deanna Piotrowski wound up on the wrong side of the Kentucky-Tennessee border.

She suffers from chronic conditions, cannot afford her medicine and is without health insurance. If she had settled 10 miles up the road, she would be getting Medicaid coverage.

“That’s ridiculous,” Piotrowski said. “That’s really a shame.”

Portland, Tenn., where Piotrowski lives, is not that different from Franklin, Ky., the next town up along a two-lane highway that runs past cornfields and modest homes.

Kassandra Clark says she’s lucky to live in the Kentucky town. Uncertain of prospects for health coverage at her new job, she’s grateful politicians in her state have given her a backup option.

“It shows that they care about their people, that they are there for them,” Clark said.

Kentucky has accepted federal funding from the Affordable Care Act to expand the government insurance program for the poor. Tennessee, where political opposition to “Obamacare” runs strong, has not. Kentucky is an anomaly in the South. Most Southern states have taken actionsto either block or hinder the implementation of the federal health law. Supporters of the law say it is foolhardy of politicians to refuse generous federal funding for ideological reasons, but the law’s critics say the money comes with a hefty financial hitch.

The federal government will pick up 100 percent of the costs of insuring new people brought onto state Medicaid rolls through 2016. It then phases down to a permanent 90 percent matching rate in 2020.

Joseph Smith, executive director of the Kentucky Primary Care Association, said politicians there made a pragmatic decision.

“It’s a silly decision based on ideology to refuse health care coverage to the citizens of any state,” Smith said.

Kentucky will expand coverage to an estimated 308,000 state residents with its decision.

‘We don’t have that kind of money’

But a decision about whether to expand Medicaid in Tennessee is a bit more complicated after the numbers are crunched, the state’s TennCare experience is considered and the political reality confronted. Tennessee expanded Medicaid in the 1990s, then learned it couldn’t handle the cost and had to scale back, forcing people off the program. It is a state with a larger population, which means about 100,000 more new enrollees would be eligible for its Medicaid program. And, unlike in Kentucky, Republicans are firmly in control of state government.

Fiscal responsibility matters to Republicans, said Rep. Glen Casada, who argues that Tennessee can’t afford the 10 percent match the state would have to provide beginning in 2020.

He said estimates run between $198 million and $250 million, which he believes is the closer mark. Democrats in the legislature, however, say Medicaid expansion would ultimately save the state money by lowering its cost for uncompensated care by as much as $1.6 billion.

“We’re talking probably $250 million in year four,” Casada said. “That’s a lot of money. We don’t have that kind of money just sitting around. So the question is: Do we raise taxes or what do we cut?”

And he doubts the federal government will stand by the 90 percent commitment.

“The federal government is fast approaching insolvency,” Casada said. “They cannot continue to spend money like they are spending because either the country will collapse or they will have to start cutting. The first place they are going to start cutting is the sweet deal of a 90-10 match to the states on Medicaid.”

John Graves, a Vanderbilt University professor who formerly worked for the Obama administration on health care reform, said Tennessee could protect itself from any possible future decline in matching money.

“Some other states have considered a ‘circuit breaker’ option that limits their downside risk,” Graves said. “That is, these states say they will expand for now, but if the federal government suddenly reduces its share in the future, that would immediately discontinue the expansion.”

Haslam’s plan

Gov. Bill Haslam has been trying to find a way for Tennessee to use the federal money for a state-tailored plan that would prevent a repeat of the prior TennCare expansion, when thousands of people were added to the rolls and quickly racked up medical bills. Haslam favors a plan similar to a private insurance model, in which shared costs curb the overuse of benefits. Instead of expanding TennCare rolls, the money would be used to help poor people buy private insurance, with some co-payments on medical visits and procedures. Adults on TennCare currently have co-pays only for prescriptions.

Haslam’s path is a difficult one. He has to get his plan past the Obama administration and then before the Republican-controlled state legislature.

Arkansas Gov. Mike Beebe, a Democrat, got the Republican legislature in his state to pass an expansion plan that has some similarities to what Haslam has proposed. Federal officials are working toward approving it as a demonstration project. Under the plan, the state would use federal money as “premium assistance” to buy private coverage for people eligible for Medicaid.

Kentucky Gov. Steve Beshear, also a Democrat, envisions Medicaid expansion in his state as a job creator, not a financial drain. He projects expansion will have a $15.6 billion economic impact and create nearly 17,000 jobs between 2014 and 2021.

Hospitals will take hit

The problem with boiling down the Affordable Care Act to any kernel of fiscal certainty is that the recipes differ, according to whoever is mixing the numbers.

However, one certainty is that hospitals in Tennessee will lose money without some form of Medicaid expansion. The federal law reduces special payments to hospitals that treat a disproportionate share of the poor and uninsured. Those patients were supposed to gain coverage in every state through Medicaid expansion. The law had language that would have effectively forced states to expand coverage by cutting off Medicaid funding to those that refused. But the U.S. Supreme Court struck down that portion of the law.

Vanderbilt University Medical Center, which provides more care to the uninsured than any other hospital in the region, announced last week that it is cutting expenses and eliminating jobs. The Tennessee Hospital Association has warned that small rural hospitals might be forced to close without some type of Medicaid expansion.

Renard Murray, the regional administrator for the Centers for Medicare and Medicaid Services (CMS), said there is no deadline for Tennessee to make a decision.

“That option is always on the table for a state,” Murray said, noting that when Medicaid was first created in the 1960s, some states delayed offering the optional program.

“But after several years, several decades have passed, every state now has a Medicaid program,” Murray said. “Medicaid expansion is no different.”

Kentucky is the only one of the eight states in CMS region 4that has agreed to expand its Medicaid program. Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina and Tennessee have not.

2 women, 2 scenarios

Piotrowski, who moved to Portland, Tenn., from Michigan this summer, knows little about Tennessee politics. She does know she can’t afford her medicine. A doctor in Michigan who had treated her family for generations charged her only $30 a visit and gave her drug samples for hypertension, diabetes and depression.

She left that medical arrangement and came to Tennessee so her children would have better job opportunities and live in a place with less crime. She applied for TennCare coverage and got denied.

She is trying to connect with community health centers and faith-based clinics in the area that treat people regardless of their ability to pay.

“Everything else in Tennessee I love,” Piotrowski said. “I really was disillusioned. I know there’s a lot of people that are worse off than me, but my health issues could be serious.”

Up the road in Franklin, Ky., Ashley Austin, a part-time job juggler without health insurance, smiled as she helped children with the Boys and Girls Club sell vegetables they had raised at the farmers’ market.

“I also work at Hobby Lobby,” she said. “If we are a part-time employee, our hours got cut because they do not want to provide insurance for us.”

Austin had been on her mother’s plan until she lost her job. But come Jan. 1, she’ll have health insurance because she lives in Kentucky.

Contact Tom Wilemon at 615-726-5961 or twilemon@tennessean.com.

 

Source Link:  http://www.wbir.com/news/article/281301/2/TN-KY-are-miles-apart-on-Medicaid

Health Insurance Changes Coming Your Way Under the Affordable Care Act

The YouToons Get Ready for Obamacare: Health Insurance Changes Coming Your Way Under the Affordable Care Act

2014 is coming–are you ready for Obamacare? Join the YouToons as they walk through the basic changes in the way Americans will get health coverage and what it will cost starting in 2014, when major parts of the Affordable Care Act, also known as “Obamacare,” go into effect.

This cartoon was written and produced by the Kaiser Family Foundation. Charlie Gibson, former anchor of ABC’s World News with Charlie Gibson and a member of the Foundation’s Board of Trustees, narrated the video. Creative production and animation was provided by Free Range Studios.

http://youtu.be/JZkk6ueZt-U | #HCR #affordablecareact #uninsured #medicaid #exchange #ACA #healthcarereform

Will Health Reform Law Make Premiums More Expensive or More Affordable?

Source link: http://www.pbs.org/newshour/bb/health/july-dec13/obamacare_07-18.html

Summary

President Barack Obama defended the benefits of the Affordable Care Act in a news conference, part of a broader effort to sell the law amid continuing criticism from Republicans. MIT’s Jonathan Gruber and Avik Roy of the Manhattan Institute join Jeffrey Brown to debate the cost of coverage under the health reform law.

 

ANALYSIS    AIR DATE: July 18, 2013

Will Health Reform Law Make Premiums More Expensive or More Affordable?

SUMMARY

Transcript

JEFFREY BROWN: Much of the public remains skeptical or unaware, an important component has been delayed, and Republicans continue their attempts to derail it.

But President Obama again today offered a strong defense of his signature health care reform law. His remarks came as deadlines approach for its implementation.

President Obama ratcheted up his campaign to sell the health care law today in a speech in the East Room of the White House.

PRESIDENT BARACK OBAMA: The Affordable Care Act is doing what it’s designed to do: deliver more choices, better benefits, a check on rising costs, and higher-quality health care.

JEFFREY BROWN: The president highlighted a relatively obscure part of the law, which he himself now regularly refers to as Obamacare, that requires insurers to spend 80 percent of premium dollars on medical care or send rebates to their customers.

BARACK OBAMA: I bet, if you took a poll, most folks wouldn’t know when that check comes in that this was because of Obamacare that they got this extra money in their pockets. But that’s what’s happening.

JEFFREY BROWN: Today’s speech was part of a broader effort to sell the law. It comes amid continuing criticism from Republicans and worry from some supporters about its implementation.

Health insurance exchanges, one of the law’s central components, begin to open Oct. 1.

BARACK OBAMA: New online marketplaces will allow consumers to go online and compare private health care insurance plans, just like you would compare over the Internet the best deal on flat-screen TVs or cars or any other product that is important to your lives. And you’re going to see competition in ways that we haven’t seen before.

JEFFREY BROWN: The president chose not to address the decision earlier this month to delay the insurance employer mandate until 2015.

Other major parts of the law, such as an individual mandate, will still take effect as scheduled.

But opponents have seized on the delay as a sign of greater problems with the law. Yesterday, the Republican-led House voted to delay the individual mandate that requires most Americans to get coverage next year or pay a penalty.

House Speaker John Boehner:

REP. JOHN BOEHNER, R-Ohio: Listen, this is about basic fairness. To say that, well, we’re going to — we’re going to relax this mandate for a year on American business, but we’re going to continue to stick it to individuals and families is strictly, and simply, unfair to the American people.

MAN: All those in favor say aye.

MEN AND WOMEN: Aye!

MAN: Those opposed, no.

MEN AND WOMEN: No!

JEFFREY BROWN: The House vote marked at least the 38th time that Republicans have tried to eliminate or scale back the Affordable Care Act.

Republican Representative Luke Messer of Indiana:

REP. LUKE MESSER, R-Ind.: Obamacare is not working. The American people know that. Now it seems that President Obama knows that, too. The president’s unilateral decision to violate the law and delay the employer mandate, postpone some of the law’s worst damages for businesses, fundamental fairness dictates that individuals get the same reprieve.

JEFFREY BROWN: Yesterday’s vote came on the same day New York State announced its insurance premiums on the individual market are expected to drop 50 percent.

Today, the Obama administration put out its own report on the expected cost of premiums once the new exchanges take effect. It concluded that 10 states, plus the District of Columbia, would be able to offer monthly premiums that will be 18 percent lower than initially projected by the Congressional Budget Office. Those estimates were for a lower-cost plan that would run about $320 a month for an individual.

But other states have come up with very different and higher numbers. Last week, Ohio issued its own estimate. It reported the average individual market health insurance plan would jump 88 percent next year.

The question of how much insurance will cost is a crucial one for the success of the law.

And we explore the issue further with Jonathan Gruber, an economist at the Massachusetts Institute of Technology. He worked with the administration on the health reform law and is a key architect of the Massachusetts law.

And Avik Roy, senior fellow at the Manhattan Institute, he served as Mitt Romney’s health care adviser during the 2012 presidential campaign.

Well, welcome to both of you.

Jonathan Gruber, starting as a sort of general starting point, is there a simple answer as to whether the health reform law will lower or raise premiums?

JONATHAN GRUBER, Massachusetts Institute of Technology: There’s never a simple answer with something as complicated as health care, but there’s a three-part answer.

The first part is, for most Americans who have private health insurance who get it from their large employers, nothing changes.

The second part of the answer is, for the second largest groups, those who get insurance from small employers, what they’re going to see is increased premium certainty. They won’t see their premiums jump 50 percent in the year because someone gets sick.

And on average, they are going to see rates basically stay the same. Some will go up some, some will come down some, but basically stay the same. The third group is individuals.

Now, the effect on individuals is going to vary a lot across states, because — depend on how regulated the individual market was before this law.

But what we are going to see is on average the premiums individuals face will go up, but that will be offset by the fact that the Affordable Care Act includes tax credits to cover the cost of health insurance. After you factor in tax credits, premiums will go down on average.

JEFFREY BROWN: All right, we will go through some of the details.

But first I want to ask Avik Roy the same question. The general proposition, what do you see?

AVIK ROY, The Manhattan Institute: So, I agree with most of John’s framework.

I would say that it’s important to understand that in the small group market and the large group market, you are still going to see insurance rates go up because insurance rates just go up every year with health care inflation, something that unfortunately the Affordable Care Act doesn’t do that much to dent.

In the individual market, he’s right that certain states will do OK because they are highly regulated already. They are regulated much the way the Affordable Care Act regulates the entire country.

But in unregulated or lightly regulated states, such as California, where today an individual who is say 40 years old can buy an insurance plan that is reasonably good for say $94 a year, they’re going to see substantial increases.

And the subsidies won’t offset increases for everyone. So, there will be a certain slice of low-income individuals who will benefit, but there’s — the majority will not.

Even if you get a partial subsidy, your rates will still go up. And if you’re not eligible for a subsidy, you get hit twice, because not only does your insurance rate goes up, but you are paying the taxes to fund subsidies that go to other people.

JEFFREY BROWN: Jonathan Gruber, respond to that. So, it’s different as opposed to what you were starting to talk about, the difference within different states.

JONATHAN GRUBER: Yes, it’s different in different states.

Look, the idea of insurance is that the healthy contribute more than they expect to get at the end of the year. The sick collect more than they contributed. And over time we are all both healthy and sick so it all evens out.

The problem is you can’t get insurance to work that way in the private market, because if you just leave the private market alone, what happens is insurance companies don’t want the sick guys, right? They’re not going to make money on them. They just want the healthy guys.

So, what they do in states like California and other states is they exclude the sick from coverage, and the healthy get very skimpy coverage. So, for instance, the $94 plan that Avik mentioned is not good coverage. It’s a plan with maybe a $10,000 deductible. These are really — or a plan which caps the benefits you can get.

What happens is states that are not regulated end up with insurance where the sick can’t get it and healthy get very skimpy plans. The result of the law will be the sick and healthy will pay same price. Plans will be more generous.

We both agree some are going to pay more. I think it’s a minority of people. By my estimates, after you factor in tax credits, about a third of those currently buying in the individual market will pay more, and about two-thirds will pay less.

JEFFREY BROWN: Avik Roy, first, I want to clarify. You said $94 a month, I think, as opposed to a year?

AVIK ROY: Ninety-four dollars a month, and that’s for a 44-year-old individual, single and childless.

JEFFREY BROWN: Let me ask you about that impact of tax credits that Jonathan Gruber was talking about. Doesn’t that offset — or to what degree does it offset any rise in premiums?

AVIK ROY: Yes, so two actuaries looked into this in the magazine “Contingencies,” which is published by the American Academy of Actuaries.

And they estimated that if you are between 20 and 30 years of age, 80 percent of people, even despite the impact of subsidies, will see increases. And for people who are 30 to 40, it’s about 30 to 40 percent of people will still see increases, despite subsidies.

So, the subsidies will have impacts for some people, but other people will see substantial rises. And here is the thing.

Jonathan had this framework where he said, well, the deal with insurance is that healthy people pay more, so that sick people can pay less. That’s one way to think of insurance.

Another way to think of insurance is the way we think of car insurance or auto insurance, which is I want to be protected. I want to protect myself if I get into a collision or my car gets stolen, but I don’t want to subsidize — I don’t want my rates to go higher because there are drunk drivers running around who are crashing their cars all the time.

So, if insurance is a bad deal for me, I have more of an incentive to drop out of the market, despite the individual mandate and some of the other factors in the law that try to dragoon people in, even though they’re being forced to subsidize people where they don’t actually benefit from the amount they’re spending on their health insurance.

JEFFREY BROWN: Well, Jonathan Gruber, feel free to respond to that, but I do want to clarify to both of you just so the audience understands, the population that we’re talking about in all of this, right? Do we agree on that, the size of the population and who is affected?

JONATHAN GRUBER: Yes. Yes.

I mean, the population is — first of all, it’s those who buy individual insurance now who’s really affected. That is currently about 7 percent of the U.S. population.

Second of all — of the non-elderly population — second of all it’s the young healthy group, individuals who are not poor, which is about a third of that group.

So, we’re talking about something like maybe 2.5 percent of people in the U.S. might see rates go up, something on the order of that.

AVIK ROY: I would add something.

JEFFREY BROWN: Go ahead.

AVIK ROY: … which is that, if you look at the Congressional Budget Office’s estimates and you add up all the people that the Congressional Budget Office projects will be shopping for insurance on their own, either through the ACA exchanges or through other means, it adds up to about 77 million people by 2016.

So it is a substantial number of people, because it’s not just the people who buy insurance today on the individual market. It’s the people who are uninsured who should be buying insurance on the individual market, but don’t, either because they think it’s a raw deal for them or because they can’t afford it or for some other reason.

JEFFREY BROWN: And, Jonathan Gruber, now that we’re getting close, things are starting to kick in and we are getting closer to fuller implementation, what are the key uncertainties here as we try to figure out what’s going to happen? What are you looking for?

JONATHAN GRUBER: Well, I think there’s really two big sources of uncertainty.

The biggest source of uncertainty is this issue of the Medicaid expansions. State policy-makers are making absolutely short-sighted, really there’s no other word but stupid decisions not to expand their state Medicaid programs, despite the fact it’s federally financed, leaving millions of Americans without health insurance coverage, and adding confusion in implementation, because if I go to an exchange tomorrow or in January and my income is 99 percent of the poverty line, they say, sorry, you’re out of luck if you’re in Texas or Florida, because there’s no Medicaid.

But if I’m 101 percent of the poverty line, I get great subsidies. I think that uncertainty, it’s going to be a problem.

The second source of uncertainty is people not really understanding the laws in place, understanding the benefits of the law. The misinformation that is being passed out is going to confuse people.

And unless people understand what the law could do for them, they might not sign up and that might limit the benefits of the law.

JEFFREY BROWN: And, Avik Roy, same question to you. What uncertainties do you see?

AVIK ROY: I would say that the biggest uncertainty is whether or not healthy and young people will sign up for insurance under the ACA exchanges.

And I think that is why you heard the president give that speech today. It wasn’t really so much for political reasons. It was because if young and healthy people don’t sign up for the exchanges, you will have a result that is a lot like the New York insurance market of today, where insurance cost $800, $900 a month for people. It’s unaffordable, because young and healthy people drop out of the market.

So, there’s a lot of concern I think among the administration and its officials that young and healthy people will see this as a raw deal — and I think correctly — and not sign up for the cross-subsidy, where they are spending a lot more for insurance to subsidize other people, where the money doesn’t benefit directly.

JEFFREY BROWN: Jonathan Gruber, just the last word on that one, on that specifically, on the young people, healthy people?

JONATHAN GRUBER: I think Avik is exactly right.

It’s critical that the young and healthy sign up. I think they will because there’s going to be low-cost insurance products available and many of them will get tax credits.

JEFFREY BROWN: All right, Jonathan Gruber and Avik Roy, thank you both very much.

AVIK ROY: Pleasure.

JONATHAN GRUBER: My pleasure.

Speaking Out for Health Care Act, Obama Says Millions Will Get Rebates

Doug Mills/The New York Times

Obama Defends Affordable Care Act: At a White House event, President Obama spoke about how his health care law is saving Americans money.

Source Link:  http://www.nytimes.com/2013/07/19/us/politics/speaking-out-for-health-care-act-obama-says-millions-will-get-rebates.html?partner=rss&emc=rss&_r=1&

By
Published: July 18, 2013

WASHINGTON — President Obama, slipping back into his episodic role as a vigorous campaigner for his new health care act, said Thursday that thanks to the law, more than 8.5 million Americans are getting rebates this summer from their insurance providers.

Mr. Obama was joined by families who have benefited from a provision in the law, which requires health insurers to spend at least 80 percent of the revenue from premiums on medical care rather than on administrative costs. Insurers who fail to meet that benchmark must reimburse customers, a process that began in 2012.

“Last year, millions of Americans opened letters from their insurance companies, but instead of the usual dread that comes with getting a bill, they were pleasantly surprised with a check,” Mr. Obama said in a midday ceremony at the White House.

The checks typically amount to no more than a few hundred dollars. But the president, recounting the stories of middle-class families arrayed on the stage behind him, celebrated these modest windfalls as an early sign of the tangible benefits of the law.

For Mr. Obama, it was a high-profile return to a debate in which his voice has sometimes seemed absent. For example, he has said nothing publicly about the administration’s decision to delay for a year a part of the law dealing with employer-provided insurance.

With the Republican-controlled House of Representatives voting yet again this week to repeal the Affordable Care Act, however, he seized on new statistics that demonstrate the law is driving down premiums in New York, California and several other states.

The Department of Health and Human Services released a report Thursday asserting that in 11 states and the District of Columbia, proposed health insurance premiums for 2014 were nearly 20 percent lower than the administration had projected.

“Today’s report shows that the Affordable Care Act is working to increase transparency and competition among health insurance plans and drive premiums down,” Kathleen Sebelius, the secretary of health and human services, said in a statement.

In New York, state insurance regulators said they had approved rates for 2014 that were an average of at least 50 percent lower than those now available. Administration officials attribute much of that decline to online purchasing exchanges, set up by the law, which they say encourage more competition among insurance providers.

Thursday’s choreographed event in the East Room was intended to put the White House back on the offensive on health care, after a messy period following its decision to delay requiring employers with more than 50 employees to offer health insurance, or pay a penalty.

The delay came after heavy pressure from businesses, which said the law was too complex and cumbersome to implement on time, and it provided critics with fresh ammunition for their claim that the law is putting unfair burdens on individuals and employers.

Republicans did not let up on Thursday, claiming that the benefits extolled by Mr. Obama would be more than offset by higher costs. In some cases, they did not even wait for him to speak.

“Even though we expect the president today to tout about $500 million of these types of refunds, what he won’t say is that next year, Obamacare will impose a new sales tax on the purchase of health insurance that will cost Americans about $8 billion,” said the Senate Republican leader, Mitch McConnell of Kentucky. “That’s a 16 to 1 ratio!”

In a statement after Mr. Obama spoke, Speaker John A. Boehner said: “The picture the president paints of his health care law looks nothing like the reality facing struggling American families. They know that the law is turning out to be a train wreck.”

Mr. Obama dismissed these arguments as political gamesmanship in Washington, belied by the statistics from the states. As for the House’s latest vote to repeal the act, he said Republicans were “refighting old battles” rather than confronting the nation’s problems.

“I recognize that there are still a lot of folks — in this town at least — who are rooting for this law to fail,” he said. “Some of them seem to think that this law is about me. It’s not. I already have really good health care.”

<img src=”http://meter-svc.nytimes.com/meter.gif”/> Source Link:  http://www.nytimes.com/2013/07/19/us/politics/speaking-out-for-health-care-act-obama-says-millions-will-get-rebates.html?partner=rss&emc=rss&_r=1&

A version of this article appeared in print on July 19, 2013, on page A14 of the New York edition with the headline: Speaking Out for Health Care Act, Obama Says Millions Will Get Rebates.

Obamacare pilot project lowers Medicare costs

By: Brett Norman
July 17, 2013 05:00 AM EDT
 

Source Link:  http://dyn.politico.com/printstory.cfm?uuid=81086AEB-BC65-4936-8901-F1E34EB14854

An ambitious program under the health law to change how care is paid for lost nearly a third of its participants after the first year, but not before all were able to boost the quality of care provided to patients in an experiment that some experts say holds promise to bring down health care costs in the long run.

The Centers for Medicare & Medicaid Services announced Tuesday that all 32 health care organizations had hit performance benchmarks for improving care in the Pioneer Accountable Care Organization program, and 13 had done so while substantially lowering Medicare costs. In part, that was by reducing hospitalization and rehospitalizations, CMS reported.

By health care standards, the savings claimed were relatively modest — $87.6 million in 2012. And two participants reported increasing costs by $4 million. Overall, for the 669,000 Medicare enrollees in the program, costs rose by just 0.3 percent compared with 0.8 percent for typical Medicare patients.

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“These results show that successful Pioneer ACOs have reduced costs for Medicare and improved the quality of care for their patients,” CMS Administrator Marilyn Tavenner said in a statement. “The Affordable Care Act has given us a wide range of tools to realign payment incentives in Medicare and Medicaid, and these efforts are already paying off.”

Mark McClellan, former CMS administrator under President George W. Bush and a leading accountable care expert, said the first-year performance is in line with similar undertakings in the private sector. Quality improvements typically precede savings because they can be accomplished more quickly while the savings sometime lag.

“Improving diabetes care now, you see benefits 18 months, 24 months down the road,” said McClellan, now at The Brookings Institution.

“This is a difficult journey,” he said. “It’s a marathon not a sprint, and some organizations are in a better position to do it faster, and others slower.”

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The Pioneer ACO program is among the health care law’s most aggressive experiments in improving care and cutting costs. Networks of doctors coordinate care for patients and share in both the savings they generate and — eventually — the risk of losses.

The Medicare Shared Savings Program is a risk-free version of the accountable care effort, but the share of the savings for the health care organization is also substantially smaller. Seven of the Pioneer ACOs are transitioning to that option this year, and two are opting out of the health law’s ACO programs altogether, although they may adapt their ACO investments for contracts with private insurers, Blair Childs, senior vice president for Premier healthcare alliance, said.

Presbyterian Healthcare Services in New Mexico is one of two Pioneers to drop out of the ACO program completely. The integrated health system, which also has a large health plan, faced two major challenges, according to Todd Sandman, its vice president for strategy and customer engagement. Part of the problem centered on using retrospective data, and part was that New Mexico is a “low-cost, low-reimbursement, low-health care utilization state” — putting it at a disadvantage to perform better than other Medicare providers, Sandman said.

“Frankly, what was hard for us getting out is we really do believe this is the right direction for health care providers,” Sandman said, describing the relationship with CMS as “very collaborative.”

More than 200 health care organizations are participating in the shared-savings program in addition to the Pioneer ACOs, and private insurers are employing the concept as well.

It’s one of several ideas, including bundled payments and medical homes, that are all likely to be part of reorganizing the payment model toward paying for quality, not volume, of care, McClellan said.

CMS should strike “the right balance between incentives and encouragement for change and getting participation in the program,” McClellan said. But the agency shouldn’t back off of rigorous goals — it “should continue to think of [the Pioneer ACO] program as pushing the envelope.”

Some participants had threatened to leave the program this spring over what they said was an overly ambitious set of 33 quality measures. CMS did not make the adjustments they sought. Health systems also have complained that the agency has not been fast enough in providing Medicare claims data that would help them keep track of whether their patients were filling needed prescriptions, for instance, or following up on referrals to specialists.

Jason Millman contributed to this report.

© 2013 POLITICO LLC

Consumer groups monitor Affordable Care Act hiring in California

Monday, July 15, 2013

SACRAMENTO, Calif. (KGO) — Consumer groups are worried about possible fraud or identity theft as California ramps up hiring for the new Affordable Care Act.

About 21,000 people are being hired to enroll Californians in the new Covered California program.

Just as the state begins implementing the federal Affordable Care Act to some 5 million uninsured Californians, Insurance Commissioner Dave Jones says not enough is being done to prevent fraud.

The Health Benefits Exchange, now known as Covered California, will start sending out thousands of enrollment counselors throughout the state in September. They will be asking for people’s personal information –like social security numbers — to sign them up for coverage.

“They can use that to perpetuate identity theft. They can also worm into your confidence and trust and sell you other insurance products and we’ve seen this time and time again where consumers get ripped off,” said Jones.

While enrollment agents will be fingerprinted and background checked, Jones would like to see them regulated like insurance brokers and agents where the bar is higher.

Covered California insists consumer information will be protected.

“We’re going beyond fingerprinting and background checking. I mean, there’ll be field monitors out there to make sure that the people who are taking this information are doing so in an appropriate manner,” said Covered California Spokesman Dana Howard.

Enrollment counselors will play a critical role in signing up traditionally hard-to-reach populations. Some criminal records for minor non-financial offenses maybe overlooked on applications because of their specific connections to neighborhoods.

“We also don’t want to preclude people who have paid their debt to society, who maybe are living and working in the communities now; who, you know, now finally have a chance to really redeem themselves and help their communities get covered,” said Vanessa Cajina of the Western Center on Law and Poverty.

The Health Benefits Exchange is paying more than 3,000 community organizations about $58 for each successful enrollment in the Affordable Care Act.

Training for enrollment agents begins next month.

(Copyright ©2013 KGO-TV/DT. All Rights Reserved.)

 

Article Link: http://abclocal.go.com/kgo/story?section=news/politics&id=9173551

 

Health care law opponents dominate advertising wars

Fredreka Schouten, USA TODAY 5:58 p.m. EDT July 10, 2013

 

WASHINGTON — Opponents of the 2010 health care law have out-spent supporters by nearly 5-1 on the airwaves — as conservatives seek to cast doubts about its effects and pledge to keep it at the forefront of federal, state and local races, an analysis shows.

Critics of the Affordable Care Act spent at least $385 million from March 2010, when Congress enacted the sweeping health care measure, through the end of last month, according to an analysis of TV advertising nationwide by Kantar Media.

The biggest spender among opponents: Crossroads GPS, a political advocacy group affiliated with Republican strategist Karl Rove. It pumped at least $40 million into advertising that mentioned the law. Backers, led by the U.S. Department of Health and Human Services, spent roughly $78 million.

Kantar’s Campaign Media Analysis Group predicts spending on the law will hit $1 billion by its fifth anniversary in 2015, according to the analysis released this week.

“There’s been no other law we can think of that has been the focus of this much ad spending” immediately following its passage, said Elizabeth Wilner, vice president of the Campaign Media Analysis Group. “The gap between enactment and implementation has created an opening for this to continue to be a point of attack for its critics.”

A new round of advertising hit the airwaves this week.

Americans for Prosperity, a non-profit advocacy group co-founded by billionaire industrialist David Koch, launched a $700,000 TV advertising campaign, largely in Virginia and Ohio, that features a pregnant mother worried that the law will restrict her family’s health care choices and drive up premiums.

The law’s proponents also are gearing up to defend the law and encourage uninsured individuals to begin seeking coverage in new state health insurance exchanges. Enrollment in the exchanges begins Oct. 1.

Organizing for Action, an advocacy group linked to President Obama, released an ad this week touting the law’s elimination of lifetime caps for health-insurance benefits. The ad, featuring Phoenix mother Stacey Lihn, whose young daughter has undergone multiple surgeries for a heart defect, is part of what the group says is a series of commercials over the summer that will cost a total of “seven figures.”

“When people understand the concrete examples of what this means for them, they like the law; they are excited about the law and they want to tell people about it,” said Jon Carson, the group’s executive director.

On Wednesday, two large health care companies — Walgreens and the Blue Cross Blue Shield Association — rolled out a new website to encourage enrollment.

“The overwhelming majority of the public is tired of the political back-and-forth contentiousness and really just wants to know how the Affordable Care Act will help them in the future,” said Ron Pollack, who is executive director of Families USA and a founder of Enroll America, a non-profit group promoting the law.

He said the groups have raised millions to promote enrollment and will target their efforts on counties with big populations of uninsured residents. They include Los Angeles County, home to about 2.2 million people who lack health care coverage — or nearly 5% of the nation’s 46 million uninsured.

The advertising flurry comes as Republican leaders on Capitol Hill vow new attempts to roll back key provisions of the law — emboldened by the Obama administration’s surprise decision last week to impose a one-year delay on the mandate that larger employers provide insurance to their employees or face penalties.

The law “is never going to be ready for prime time,” Senate Majority Leader Eric Cantor, R-Va., said on Fox News this week. “We need a permanent delay.”

In one sign of how volatile the issue has become, the National Football League recently declined to become involved in promoting the law. The league’s decision came after two leading Republicans, Senate Minority Leader Mitch McConnell and Texas Sen. John Cornyn, warned the NFL and other professional sports leagues that promoting the health care exchanges would “risk damaging” their “apolitical” brands.

Kantar’s analysis shows the issue also has reached contests for local offices that have little role in the law’s future.

Last month, the Republican State Leadership Committee ran ads that sought to tie the law to Democrat James Kay during a special election in Kentucky for a state House seat. Kay prevailed in the three-way contest, allowing his party to retain its 10-seat advantage in the chamber.

Kentucky Democratic Party Chairman Dan Logsdon said voters are “starting to block out” the health care attack ads. “Folks can distinguish between sending someone to the state Legislature … and supporting Obamacare,” he said. “People aren’t stupid.”

RSLC’s president, Chris Jankowski, said his group will press the issue in legislative races in Kentucky next year — a state Obama lost by more than 22 percentage points in 2012 — and other state and local contests across the country in the coming years.

“We believe there are gains to be made for Republicans in Kentucky,” he said. “We think President Obama definitely is going to be an issue at the state level in Kentucky in general, and we think the Affordable Care Act, specifically, is going to be front and center as it begins to affect the public more directly.”

Contributing: Kelly Kennedy

Article Link: http://www.usatoday.com/story/news/politics/2013/07/10/affordable-care-act-ads-nfl-president-obama-republicans-attacks/2506633