From the Kaiser Family Foundation:
Duane Davis, chief executive of Geisinger Health Plan, in an interview with us the day before Obama announced he would allow insurers to extend for another year existing health plans that would otherwise be canceled under reform: ”It’s pretty easy to say. It’s pretty hard to unravel.”
Here are the latest tallies:
From The Wall Street Journal:
Fewer than 50,000 people had enrolled in plans through the federal health-care website as of last week, a fraction of the target.
From Avalere Health:
12 state-based exchanges have enrolled about 3 percent of their expected 2014 exchange participants. Together, the 12 states have enrolled 49,100 people in exchanges based on data released by the states, as of Nov. 10. By the end of 2014, Avalere projects these states will account for 1.4 million exchange enrollees.
WellPoint chief executive Joseph Swedish commenting on health insurance exchanges during the company’s recent earnings call with Wall Street analysts.
As has been widely reported in the press, there have been some interface and technical challenges during the first few weeks. The environment is generally consistent with our expectation that the initial phase of implementation would be choppy and involve greater manual workload. We have prepared and invested for expected challenges with the sign-up period as we have thousands of people dedicated to full-time exchange support in locations across the country. One key issue involves the income verification for individuals who are eligible for federal subsidies. This is a necessary step to complete the enrollment process for these individuals, and we support the efforts of state and federal governments to improve the functionality of the exchange technology and streamline the enrollment process. We have a common goal of increasing access and affordability of health care for as many Americans as possible through our collective efforts.
We can say that initial interest in exchange products appears robust. As a point of reference, during the first week of open enrollment, we received over 35,000 calls into our service centers, which is more than double our historical weekly volume for individual business. In the second week, this increased to nearly 45,000 inbound calls as consumer awareness began to ramp up across the regions. We continue to evaluate our spending and now have localized TV and radio advertising running in targeted markets, with awareness and outreach efforts also underway through partnerships with Univision, serving the Hispanic community, several retailers, and using social media. Our marketing efforts will continue to be informed by our assessment of local market competitive dynamics and overall federal and state exchange readiness. We will keep you updated on our progress as best as we can as we move forward.
Thoughtful, uncompromising piece from Aaron Carroll of Indiana University School of Medicine, writing for CNN on the federal exchange website disaster:
Those in charge of the rollout of the exchange website were unprepared. They didn’t have the necessary experience to manage the more than 50 different contractors producing software independently that would eventually need to function together as a whole. This is incredibly technical work, and it’s not clear that government was in a good position to direct things here….
Administration officials are now calling in “more computer experts” to try and fix the problem. But this may be too little, too late. Some are saying that even if the administration pours in massive resources, the problems may not be fixed by December 15, the deadline for when insurance needs to be bought for it to be covering people on January 1.
It’s hardly the ObamaCare’s finest hour. But it’s not the end of the story either.
From Wonkblog: The shutdown was meant to stop Obamacare. Instead, it provided crucial aid to the struggling law. If not for the drama in Washington, HealthCare.gov’s disastrous launch would’ve been the top news story in the country. Instead, it was knocked off the front pages. Many assumed, reasonably but wrongly, that the flaws were attributable to the GOP’s shutdown. And Obamacare actually gained in the polls. Rarely has a strategy failed so completely.
From Deutsche Bank:
We have analyzed premium rate data for over 78,000 discrete products offered by all participating carriers operating across all 36 federal facilitated exchanges (FFEs). The findings suggest that many of the exchange markets with high population density will be quite competitive, particularly in the Bronze and Silver metal categories where most of the enrollment will be concentrated. While many investors have viewed the public MCOs as taking a highly conservative approach to the public exchanges (with WLP and HNT being the notable exceptions), the reality is not that simple as both HUM and AET are also competing actively in numerous exchange markets….The other most notable company-specific observation is the lack of participation in any of the FFE individual exchange markets from UnitedHealth.
From The New Yorker:
The likely benefits of Obamacare for small businesses are enormous. To begin with, it’ll make it easier for people to start their own companies—which has always been a risky proposition in the U.S., because you couldn’t be sure of finding affordable health insurance. As John Arensmeyer, who heads the advocacy group Small Business Majority, and is himself a former small-business owner, told me, “In the U.S., we pride ourselves on our entrepreneurial spirit, but we’ve had this bizarre disincentive in the system that’s kept people from starting new businesses.” Purely for the sake of health insurance, people stay in jobs they aren’t suited to—a phenomenon that economists call “job lock.” “With the new law, job lock goes away,” Arensmeyer said. “Anyone who wants to start a business can do so independent of the health-care costs.” Studies show that people who are freed from job lock (for instance, when they start qualifying for Medicare) are more likely to undertake something entrepreneurial, and one recent study projects that Obamacare could enable 1.5 million people to become self-employed.
I suppose it’s very good news for ObamaCare that people are rushing to the insurance exchanges to sign up for coverage. But it’s also kind of sad. As previously reported, some people stayed up until the stroke of midnight on Oct. 1 so they could sign up. That’s how desperate they are for affordable coverage. Does anyone seriously think that a few technical glitches–even a lot of technical glitches–will keep these people away? Consider the reaction of Bertha Stewart, who was attempting to sign up at a local community health center in the poor Miami neighborhood of Liberty City. The New York Times reports:
[She] just smiled when the counselor helping her could not get the federal Web site to work….”I am patient,” Ms. Stewart said, who is 53 and suffers from asthma. “That’s how you get stuff done. You are patient.”
Let the excitement, relief and frustrating glitches begin:
From Sarah Kliff of the Washington Post (here):
Lori Futcher hit a glitch Tuesday morning when she tried to enroll on Tennessee’s new insurance marketplace. But she was actually excited to see the error message: It said that too many people were trying to use the site, and she would need to wait a little longer.
“My reaction was like ‘yay, a lot of people want coverage!’” Futcher, a 42-year-old mother who was trying to buy coverage for her husband, said. “There are lots of other people like me are getting going on day one.”
Jon Tucci stayed up until midnight Monday, hoping to enroll on West Virginia’s new insurance marketplace at the first moment possible.
Ten hours later — after two attempts at signing up and one 45-minutes call with a consumer service agent — technical glitches have prevented the 60-year-old grandfather from purchasing a plan.
“I’m pretty fluent on the Internet,” Tucci, who is self-employed in the oil and gas industry, says. “I’ve applied for a lot of things, and there are always glitches. But this was totally disappointing. I’m just really frustrated.”…
Tucci says he’ll probably try and sign up later Tuesday, if he has time when he gets home from work. Any coverage purchased on the marketplace does not start until January so, practically speaking, even waiting two months would not make a difference in his access to health care services.
Many credible people are worried that the ObamaCare insurance exchanges will be an operational nightmare for both health plans and consumers–riddled with technical glitches, misquoted prices, and delays in determining member eligibility and subsidy levels.
Some–like Daniel Henniger in today’s Wall Street Journal–are actually hoping the exchanges crash and burn. ObamaCare’s Achilles’ heel, he writes, is technology.
The software glitches are going to drive people insane….ObamaCare’s software has to communicate—accurately—across a mind-boggling array of institutions: HHS, the IRS, Medicare, the state-run exchanges, and a whole galaxy of private insurers’ and employers’ software systems.
All indications are that there will be a lot of technical problems when the exchanges open up for business on Oct. 1. But in the end, they won’t matter. Why? Because lots of people will be getting pretty good health insurance for a very low cost given subsidies.
I always harken back to research from Harvard University professor Robert Blendon, who once offered a provocative assessment of public attitudes toward managed care after the first HMO horror stories started to emerge.
Blendon pointed out that the HMO backlash of the 1990s actually occurred as overall customer satisfaction with HMOs was pretty high. His conclusion: people are willing to endure obtrusive administrative barriers and other annoyances as long as they aren’t denied care when they are really sick.
Likewise, I think people will ultimately endure the frustration caused by the early–inevitable–kinks in these complex exchange systems, as long as in the end they aren’t denied decent coverage at an affordable price.
There’s good news from HHS on health insurance exchange premiums in 47 states and Washington, DC: The rates are 16% lower than expected on average, and that’s before subsidies are taken into consideration.
The report shows that a 27-year old living in Dallas who makes $25,000 per year will pay $74 per month for the lowest cost bronze plan and $139 per month for the lowest cost silver plan, taking into account tax credits. And he or she will be able to choose from among 43 qualified health plans. For a family of four in Dallas with an income of $50,000 per year, the lowest bronze plan would cost only $26 per month, taking into account tax credits. The majority (around 6 out of 10) of the people uninsured today will be able to find coverage for $100 or less per month in the Marketplace, taking into account premium tax credits and Medicaid coverage.
The bad news–as illustrated in states like California–is that the young and healthy will see premium rates increase; although the elderly see rates decline. There’s also the fact that cost sharing in exchange plans is relatively high–at least relative to employer-sponsored coverage–according to an analysis by Avalere:
For an individual enrolled in a Silver plan, the average annual deductible before any plan coverage begins is more than twice the average deductible in employer-sponsored coverage. Most exchange plans also rely on coinsurance for non-preferred brand drugs and higher-cost specialty drugs, with average patient contributions around 40 percent of the drug cost. However, there is a ceiling to exchange enrollees’ annual out-of-pocket costs, which is $6,350 for an individual.
In other words, exchange plans offer low-cost (read: subsidized) coverage, choice, a highly regulated minimum benefit level, protection against catastrophic events and skin-in-the-game (i.e., incentives for patients to control spending). It’s almost like the type of program both liberals and conservatives could support.
Alan Hughes, chief operating officer of Blue Cross Blue Shield of North Carolina, gets high marks for clearly outlining the opportunities, challenges and concerns around health insurance exchanges as his organization readies itself for the launch of the ObamaCare marketplaces.
Hughes spoke this month at CRG’s Health Insurance Exchange conference in Boston. His biggest fear: that consumers will have a bad experience because of a lack of readiness on the part of the federal government and by extension blame BCBS-NC for the shortcomings. (North Carolina is a federally funded exchange state).
He quipped that maybe one of the reasons why large national health plans are approaching exchanges with caution is that they want early adopters to take the heat from a deficient launch and then ride in later after the kinks are out and offer an improved experience.
Complete coverage of Hughes’ remarks and other conference coverage appear in this week’s issue of Health Plan Market Trends.
From the New York Times:
As many states prepare to introduce a linchpin of the 2010 health care law — the insurance exchanges designed to make health care more affordable — a handful of others are taking the opposite tack: They are complicating enrollment efforts and limiting information about the new program.
Chief among them is Florida, where Gov. Rick Scott and the Republican-dominated Legislature have made it more difficult for Floridians to obtain the cheapest insurance rates under the exchange and to get help from specially trained outreach counselors.
Missouri and Ohio, two other states troubled by the Affordable Care Act, have also moved to undercut the law and its insurance exchanges, set to open on Oct. 1. In Georgia, the state insurance commissioner, Ralph T. Hudgens, has said he will do “everything in our power to be an obstructionist.”
Here’s a handy website from Kaiser called State Premium Watch, which tracks exchange premiums by state and plan.
From a report by HHS’ Office of the Assistant Secretary for Planning and Evaluation:
In the eleven states for which data are available, the lowest cost silver plan in the individual market in 2014 is, on average, 18% less expensive than ASPE’s estimate of 2014 individual market premiums derived from CBO publications….Although the ASPE-derived CBO estimate of 2014 premiums is higher than the actual 2014 premium costs seen to date, the ASPE-derived CBO estimate was still much closer to actual 2014 premiums than those of many other analysts. For example, in a 2009 report, Oliver Wyman estimated that the average premium for an individual purchasing coverage in the individual market would be $4,561(or $380 per month) in 2009 dollars due to the Affordable Care Act reforms, and that this would represent a 54% premium increase over the status quo….The Oliver Wyman predictions are clearly far above the reality of 2014 premiums. In the eleven states with available data 2014 premiums average $321 per month for the lowest cost silver plan, and $352 per month for the second lowest cost issuer.
A lot still needs to be sorted out, but here are some quotes from experts on how the U.S. Supreme Court ruling requiring the federal government to recognize gay marriage impacts healthcare benefits. The ruling only applies to states that have legalized gay marriage. But the rainbow genii is out of the bottle, and all I can say is it’s about time.
Aon Hewitt: “Under the ruling, employees will have expanded access to employer-sponsored health and retirement benefits, depending on plan design, in the 12 states and District of Columbia that recognize same-sex marriage. This includes…Health Savings and Flexible Spending Accounts… COBRA continuation coverage…HIPAA special enrollment rights…Ability to pay for health benefits with pre-tax dollars and receive an employer contribution towards a same-sex spouse’s coverage without being taxed on such coverage (also referred to as taxation on “imputed” income).”
The Williams Institute: “Same-sex couples working in the private sector pay, on average, $1000 more than different-sex couples in taxes for employer-sponsored healthcare. Same-sex spouses in federally recognized marriages might no longer be subject to this additional tax burden….Same-sex spouses of federal employees could be eligible for employee benefits that are currently provided to employees with different-sex spouses.
Sarah Kliff, The Washington Post: “With the United States recognizing same-sex marriage, a same-sex couple can be counted by the federal government as one family unit. Instead of two separate individuals applying for health benefits, each judged by the federal poverty line for one person, they’re now a team. Their federal poverty line is $15,510.”
Jackson Hewitt Tax Service: “Same-sex partners with similar incomes may lose out. For example, same-sex partners who each have an income of $40,000 may be eligible for the premium assistance tax credits under the ACA – but only if they remain single. If they marry (in those states that allow same-sex marriage), then they would lose eligibility because their income would be over the threshold for a household of two.”
However, Brian Haile, senior vice president for healthcare policy at Jackson Hewitt, notes that same-sex couples with disparate incomes may gain. In the example he provides, “one member of the household make zero and the other makes $60,000. If they live in a state that does not expand Medicaid, then the person that makes zero wouldn’t be eligible for Medicaid and wouldn’t be eligible for the tax credit. The person who makes $60,000 would not be eligible for the tax credit. If they got married, they would both be eligible for the tax credit.”
President Obama: Politics Now reports, “The federal government should broadly interpret its laws to guarantee benefits to the maximum number of same-sex married couples, President Obama said, as he praised the Supreme Court decision.”
As reported in last week’s issue of Health Plan Market Trends, CMS had committed $394 million as of March 31 through contracts with various vendors to develop federally facilitated insurance exchanges for rollout later this year. The figure doesn’t include related CMS salaries and administrative expenses.
According to CMS, the largest contract—$88 million—went to CGI Federal for information technology and technical assistance to support federal exchange development. A $55 million contract went to Quality Software Services to help build the federal data hub. Other vendor projects include the healthcare.gov website, call center, and technical assistance for the federal exchanges.
The CRG conference on Insurance Exchange Strategies for Health Plans, Sept. 20 in Boston, is shaping up to be a good one. Below is a list of some featured speakers (in order of appearance). For a copy of the full agenda, click here.
EVP and Chief Operating Officer
BLUE CROSS BLUE SHIELD OF NORTH CAROLINA
Head of Exchange Strategy and Implementation
Senior Director, Market Planning, Innovation and Implementation
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS
General Manager, U.S. Individual and Family Plans
SVP, Market and Product Group
SVP, Medicare, Duals and Marketplace
Director of Business Development
MASSACHUSETTS HEALTH CONNECTOR
Dan Mendelson, chief executive of Avalere Health, on the company’s recent study showing that two-thirds of young adults (30 and under) will receive premium subsidies to offset rate shock in the individual insurance exchanges.
Most of the people who are going to be purchasing insurance on the exchanges are poor or near-poor.
This is something I’ve argued for some time: fear of not being able to afford healthcare coverage prevents people from leaving their jobs and striking out on their own as entrepreneurs.
ObamaCare will help get at this problem, according to a May 2013 Urban Institute analysis, which projects that the number of people who are self-employed will be 1.5 million higher in 2014 than if the law wasn’t enacted.
The Urban Institute bases its projection on the results of some recent studies. One study suggests that people are much more likely to start a business if they have healthcare coverage through a spouse or Medicare. Another finds that self-employment in New Jersey soared after the state instituted individual market reforms similar to ObamaCare, including guaranteed issue and community rating.
The results of Oregon’s randomized controlled Medicaid trial change nothing for health plans banking on dramatic membership gains from an expanded Medicaid program. Despite the spin from conservatives and liberals alike, the findings are mixed and unlikely to result in any major policy shifts. If anything, the results favor expansion.
The headline finding is that for people on Medicaid for two years, there is “no statistically significant effect on measured blood pressure, cholesterol or…diabetic blood sugar control.” That’s hardly good new for liberals seeking a clear indication that Medicaid improves a person’s health across the board.
But it’s not the failure conservatives are portraying either. The study also finds, “Medicaid coverage lowered rates of depression and nearly eliminated catastrophic out of pocket medical expenditures.”
The study adds that compared to being uninsured, Medicaid increases the use of physician services, prescription drugs, preventive care and screenings, the probability of being diagnosed with diabetes, and the likelihood of having a usual place of care.
By the way, the study isn’t necessarily saying that Medicaid didn’t improve people’s health, but rather that “our power to detect changes in health was limited by the relatively small numbers of patients with these conditions.”
What the study says to me is that Medicaid is doing pretty much what insurance is supposed to do: help people get access to care and protect them from financial ruin.
The fact that there wasn’t a meaningful improvement in certain health measures may indeed indicate very real shortcomings in the Medicaid program. But as the study suggests, the result may also indicate that there isn’t always a clear “connection between insurance coverage and observable improvements in our health metrics.”
Senate Finance Committee Chairman Max Baucus (D-MT) announced he will retire in 2014 after 36 years in the Senate. He was a key figure in the drafting and passage of ObamaCare, but is blamed by liberals for dismissing single payer healthcare as an option during the ObamaCare debate. Baucus, who has been a big beneficiary of health insurance industry campaign funds, admitted that ruling out single payer was a negotiating mistake, according to a 2009 article in The New York Times:
He conceded that it was a mistake to rule out a fully government-run health system, or a “single-payer plan,” not because he supports it but because doing so alienated a large, vocal constituency and left Mr. Obama’s proposal of a public health plan to compete with private insurers as the most liberal position.
Republicans manage to deny Obamacare the anticipated funding required for smooth implementation. This makes implementation go less smoothly. Democrats begin to worry. Republicans use Democratic worries over implementation as a way to attack the law itself.
Yet another reason I would never survive in politics.
Comments from Gail Boudreaux, EVP of UnitedHealth Group, on the company’s first-quarter 2013 earnings conference call.
Our position on exchanges hasn’t changed….As we think about the contracting side, again, I think I shared this last time that we see the contracting based on a market-by-market assessment and the economics needed to participate effectively in that market and an exchange. So those rates are going to vary from commercial to something less. We’ve had a pretty long history of having value-based networks and have been successful at that. And I would tell you, at this stage, our contracting for the exchange markets is going very well, so we feel positive about that.