MEDICARE FOR ALL? (AND “THE TOOTH FAIRY PROMISES A 2 YEAR TREASURY NOTE PAYING 10.7% UNDER YOUR PILLOW IN 2020)

OpEd by D. Kenton Henry                                                                                           01 October 2019  HealthandMedicare.com

       VS.                 

I listened to the recent Democrat Presidential Primary Debates, as I listen to the daily sound bites in the media, as candidates try unabashedly to outdo each other. They do this in terms of the massive give-aways they promise us if elected in 2020. They promise these things not just to citizens, but everyone within the border of the United States. My incredulity, upon hearing such, exceeds even those bounds.

Their original promise is “free healthcare for all”. Healthcare free of premiums, deductibles, and copays. Medicare is the vehicle. To which I must ask myself, “Do these people even know the costs involved in Medicare?” “Do they really believe Medicare pays everything?” They would have you believe as much. They are counting on your naivety and lack of familiarity with the subject.

What makes Medicare a convenient and acceptable form of medical coverage for millions of people 65 and older (or disabled for 24 months or more) is it working in conjunction with private insurance plans. That, and thousands of licensed and “Certified” agents and brokers, helping to deliver comprehensive medical coverage at an affordable price. It is a hybrid package that provides as complete protection as available. The insurance plans would not exist without Medicare and, by itself, Medicare leaves the recipient/member exposed to significant liabilities.

Do these candidates, and the average voter know that in 2019:

A hospital admission requires the Medicare member to pay a $1,364 deductible each time they are admitted to the hospital as an inpatient for a separate medical condition, or the same medical condition separated by more than 60 days.

For days beyond 60, they pay $335 per day

Beyond day 90, they pay $682 per day

Eventually― say in the event of a stroke, paralysis, or being severely burned―they will pay all costs.

Part B Co-Insurance, Deductible and Premium

Relative to out-patient medical care, the Medicare member pays 20%, plus can be liable for excess charges above and beyond what Medicare deems “reasonable and customary”.

In addition, Medicare recipients pay an annual deductible of $185 for Medicare Part B (out-patient) medical care and a premium generally beginning at $135.50 per month and increasing to as high as $460.50. The latter depending on one’s adjusted gross income.

Perhaps most important, to take note of, in considering whether “Medicare For All” is even feasible, much less cost effective, is this. Medicare recipients have paid into the Medicare program their entire working careers via Medicare care taxes and payroll deductions. To qualify for Part A, (inpatient) coverage, they must have worked a minimum of 40 quarters or “buy in “with a premium as high as $422 per month.

So, you can see, Medicare is hardly free. And yet these candidates would have you believe it will be provided free of premiums, deductibles, and copays. (Now this is where even The Tooth Fairy raises her eyebrows!) It will be GIVEN, not to just those over 65, but to every man, woman, child, legal, and non-legal citizen or resident of the United States―whether they have paid a dime into the system or not.

Factor all that in and process this. Medicare now spends an average of about $13,600 a year per beneficiary, and in five years, the annual cost is expected to average more than $17,000, the report said.

According to CMS.gov (The Centers for Medicare & Medicaid Services ― refer to featured article 1 below*) The Medicare Board of Trustees predicts Medicare’s two trust funds, for Part A and Part B and D, respectively ― will go broke in 2026!

To put things in perspective, in 1960 there were about five workers for every Social Security beneficiary. The ratio of workers to beneficiaries fell to 3.3 in 2005 and then to 2.8 in 2016. It will decline further to about 2.2 by 2035, when most baby boomers will have retired, officials said.

The aging of the population is another factor in the growth of the two entitlement programs. The number of Medicare beneficiaries is expected to surge to 87 million in 2040, from 60 million this year, according to Medicare actuaries. And the number of people on Social Security is expected to climb to 90 million, from 62 million, in the same period.

The United States Treasury: U.S. Debt And Deficit Grow As Some See Government As The “BeAll and EndAll”.

All this and the candidates would have you believe our government can provide free health care to everyone? When it can’t even provide it to our current citizens who have paid into the system their entire working lives! And who exactly is the government? “We The People”. We the tax payers. You and I. Even some of the candidates, admit the proposal will call for more taxes from the middle class. More? Really! One projected cost for Medicare For All is 39 trillion dollars over the first ten year period. The national debt is currently $22 trillion and took since the end of President Andrew Jackson’s administration (1837 and the last time the national debt was fully paid-off) to accumulate that! The combined wealth of all American households is less than $99 trillion. One can only conclude that “Medicare For All” would be a “Welfare System For All”. It would push our country into a socialist economic system to a depth from which it would be impossible to extricate itself.

As a new Medicare recipient, myself, I find the combination of the government program and private insurance working very well for myself and clients, from an insured standpoint. The program’s, and our nation’s, fiscal concerns are a more substantial matter and a topic for another time. With Medicare “Open Enrollment” a mere 15 days away, I can only say, “I hope whoever is President, and controls Congress, in future administrations―while providing a safety net for all American citizens―first and foremost, provides the capable, responsible, American taxpayer quality medical coverage―free of rationing of treatment and access to providers. At an affordable cost.”

D. Kenton Henry, editor HealthandMedicareInsurance.com, Agent, Broker

Email: Allplanhealthinsurance.com@gmail.com https://TheWoodlandsTXHealthInsurance.com https://Allplanhealthinsurance.com https://HealthandMedicareInsurance.com 

 

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Centers for Medicare & Medicaid Services

Press release

Medicare Trustees Report shows Hospital Insurance Trust Fund will deplete in 7 years

Apr 22, 2019 

Medicare Trustees Report shows Hospital Insurance Trust Fund will deplete           in 7 years

Today, the Medicare Board of Trustees released their annual report for Medicare’s two separate trust funds — the Hospital Insurance (HI) Trust Fund, which funds Medicare Part A, and the Supplementary Medical Insurance (SMI) Trust Fund, which funds Medicare Part B and D.

The report found that the HI Trust Fund will be able to pay full benefits until 2026, the same as last year’s report.For the 75-year projection period, the HI actuarial deficit has increased to 0.91 percent of taxable payroll from 0.82 percent in last year’s report. The change in the actuarial deficit is due to several factors, most notably lower assumed productivity growth, as well as effects from slower projected growth in the utilization of skilled nursing facility services, higher costs and lower income in 2018 than expected, lower real discount rates, and a shift in the valuation period.

The Trustees project that total Medicare costs (including both HI and SMI expenditures) will grow from approximately 3.7 percent of GDP in 2018 to 5.9 percent of GDP by 2038, and then increase gradually thereafter to about 6.5 percent of GDP by 2093. The faster rate of growth in Medicare spending as compared to growth in GDP is attributable to faster Medicare population growth and increases in the volume and intensity of healthcare services.

The SMI Trust Fund, which covers Medicare Part B and D, had $104 billion in assets at the end of 2018. Part B helps pay for physician, outpatient hospital, home health, and other services for the aged and disabled who voluntarily enroll. It is expected to be adequately financed in all years because premium income and general revenue income are reset annually to cover expected costs and ensure a reserve for Part B costs. However, the aging population and rising health care costs are causing SMI projected costs to grow steadily from 2.1 percent of GDP in 2018 to approximately 3.7 percent of GDP in 2038. Part D provides subsidized access to drug insurance coverage on a voluntary basis for all beneficiaries, as well as premium and cost-sharing subsidies for low-income enrollees.  Findings revealed that Part D drug spending projections are lower than in last year’s report because of slower price growth and a continuing trend of higher manufacturer rebates.

President Donald J. Trump’s Fiscal Year 2020 Budget, if enacted, would continue to strengthen the fiscal integrity of the Medicare program and extend its solvency.  Under President Trump’s leadership, CMS has already introduced a number of initiatives to strengthen and protect Medicare and proposed and finalized a number of rules that advance CMS’ priority of creating a patient-driven healthcare system through competition.  In particular, CMS is strengthening Medicare through increasing choice in Medicare Advantage and adding supplemental benefits to the program; offering more care options for people with diabetes; providing new telehealth services; and lowering prescription drug costs for seniors.  CMS is also continuing work to advance policies to increase price transparency and help beneficiaries compare costs across different providers.

The Medicare Trustees are: Health and Human Services Secretary, Alex M. Azar; Treasury Secretary and Managing Trustee, Steven Mnuchin; Labor Secretary, Alexander Acosta; and Acting Social Security Commissioner, Nancy A. Berryhill. CMS Administrator Seema Verma is the secretary of the board.

The report is available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/index.html.

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*Featured Article #2

Politics

Health insurers ramp up lobbying battle against Medicare-for-all

By Ana Radelat

The CT Mirror |

Aug 12, 2019 | 6:00 AM

Health insurers have joined forces with their longtime foe, the pharmaceutical industry, as well as partnering with the American Medical Association and the Federation of American Hospitals, to form a coalition to fight Medicare-for-all proposals and other Democratic plans to alter the nation’s health care.

As Democratic presidential candidates embrace changes to the nation’s health care system that could threaten Connecticut’s health insurers, the industry is hitting back.

Health insurers have joined forces with their longtime foe, the pharmaceutical industry, as well as partnering with the American Medical Association and the Federation of American Hospitals, to form a coalition to fight Medicare-for-all proposals and other Democratic plans to alter the nation’s health care.

The Partnership for America’s Health Care Future, funded by the insurance industry and its allies, is running digital and television ads aimed at undermining support for Medicare-for-all proposals and plans for a “public option,” a government-run health plan that would compete with private insurance plans.

The partnership was formed a little more than a year ago to protect the nation’s current health care programs, mainly the Affordable Care Act, Medicare and Medicaid.

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The organization’s executive director, Lauren Crawford Shaver, said diverse groups in the coalition found a common cause in 2017 — opposing an attempt by congressional Republicans to repeal the Affordable Care Act.

“We came together to protect the law of the land,” she said.

That battle was won. Coalition members determined they should continue to band together to ward off other political dangers.

“There’s a lot of things we might fight about, but there’s a lot we can agree on,” Crawford Shaver said.

Sens. Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts have called for a Medicare-for-all through a single-payer system, in which all Americans would be enrolled automatically in a government plan.

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Warren was among several candidates during the most recent Democratic debates who took aim at health insurers.

“These insurance companies do not have a God-given right to make $23 billion in profits and suck it out of our health care system,” she said.

Other candidates prefer a more modest approach, offering a “public option” or Medicare buy-in plan that would allow Americans to purchase government-run coverage, but unlike Medicare-for-all would not eliminate the role of private insurers.

That split among Democrats also runs through Connecticut’s congressional delegation, with Sen. Richard Blumenthal, D-Conn., and Rep. Jahana Hayes, D-5th District, endorsing Medicare-for-all plans and the other lawmakers supporting Medicare buy-in or public option plans.

The nation’s health insurers oppose all of the Democratic proposals discussed during the two nights of debates.

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The insurers’ message is simple: The Affordable Care Act is working reasonably well and should be improved, not repealed by Republicans or replaced by Democrats with a big new public program. Further, they say, more than 155 million Americans have employer-sponsored health coverage and should be allowed to keep it.

Insurers also say that public option and Medicare buy-in plans would lead the nation down the path of a one-size-fits-all health care system run by bureaucrats in Washington D.C.

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They say offering a public option or a Medicare buy-in would prompt employers to drop coverage for their workers and starve hospitals, especially those in rural areas, since government-run health plans usually reimburse doctors and hospitals less for medical services than private insurers. They also say Medicare-for-all and other Democratic proposals will lead to huge tax increases to pay for the plans.

“Whether it’s called Medicare for all, Medicare buy-in or the public option, the results will be the same: Americans will be forced to pay more and wait longer for worse care,” said Crawford Shaver.

The Partnership for America’s Health Care Future ran its first television ad on CNN just before and after the cable channel ran last week’s debates.

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The commercial showed several “ordinary Americans” at home and work decrying “one-size fits-all” health plans and “bureaucrats and politicians” determining care.

“We need to fix what’s broken, not start over,” the final speaker says.

Members of the Partnership for America’s Health Care Future have a lot of money and influence to wield on Capitol Hill. They spent a combined $143 million lobbying in 2018 alone, according to data from the Center for Responsive Politics.

And coalition members appear eager to spend even more lobbying money this year.

In the first six months of this year, America’s Health Insurance Plan, a health insurer industry group and member of the partnership, spent more than $5 million on lobbying expenses, and is on the way to surpassing the $6.7 million it spent in lobbying last year.

To underscore the health insurance industries’ importance to local economies, AHIP releases a state-by-state data book each year that details coverage, employment and taxes paid.

In Connecticut, the industry employs 12,296 workers directly and generates another 13,586 jobs indirectly, AHIP says. The payroll for both these groups of workers totals over $3.8 billion a year, AHIP says, and the average annual salary in the business is $112,770. The Connecticut Association of Health Plans puts the number higher, saying Connecticut has 25,000 direct jobs related to the health insurance industry, and another 24,000 indirect jobs.

AHIP also estimates that Connecticut collects nearly $200 million a year in premium taxes on health care policies sold in the state.

Connecticut’s reliance on health insurers – and their continuing influence – was on full display during the last legislative session when the insurance companies, led by Bloomfield-based Cigna, derailed

DENTAL INSURANCE: WORTH THE PREMIUM YOU PAY … OR SIMPLY A “TIME PAYMENT PLAN”?

 

 

 

Op-ed by D. Kenton Henry

“Is dental insurance really worth the premium I pay?” is one question I am asked frequently. It is often followed, almost instantly, by―”Or am I simply paying for my dental work on a time a payment plan?”

My answer to both questions is a definitive, “Maybe.”

If you, as the majority do, have dental insurance through your employer, that employer is subsidizing all or part of your premium. This convenience makes for a solution to the equation, more favorable to you. In contrast―if you are self-employed, retired, or otherwise personally have to pay the full amount of a dental insurance premium―the opposite may be true. That is unless you take some straightforward advice, I am about to provide. If you do not, you most likely will only be spreading your cost for dental work over time. Even worse, dental insurance could prove to be a “loss item” in that you will have paid more in premiums than you will ever receive in benefits.

Short of taking a long drive and crossing the Rio Grande into Mexico to obtain your dental work, what can you do to offset the cost of say, a dental implant, which, on this side of the border, is going to run from $3,500 to $7,000?

Let me preface this by with a premise or three:

#1) With no insurance company is “the sky the limit”. I’m referring to the fee they are going to pay a dentist for a particular dental procedure. For example, no insurance company is going to accept a fee of $10,000 for a single porcelain crown. Not even their share of that cost, which is typically 50%. So what is the limit of a fee the insurance company will cover? That limit must be contractually defined, and the limit most insurance companies abide by is, “reasonable and customary” or “reasonable, usual, and customary”. These are empirical standards an insurance company uses to determine whether to pay a fee. Or how much of a fee to pay. If the dentist charges the general prevailing rate in your geographical area, they are going to pay the portion for which they are contractually obligated. Basically, it’s the average charged in your neighborhood. You will be charged more in Beverly Hills, California and less in Brenham, Texas “where the cows think it’s heaven”. Additionally, if “usual” is part of the definition, the fee has to be in line with what this particular dentist charges for a particular procedure. If fee is disproportionate either, or, both, ways―the maximum amount paid by the insurance company will be the limit set in their fee schedule.

#2) A dental insurance plan is either a provider network plan or a non-network plan. If it is a network plan, it is usually either a Dental Preferred Provider Organization (DPPO) Plan or a Dental Health Maintenance Organization (DHMO) Plan. If it is the first, you may go outside the network of dentists with which the insurance company has contracted but will most likely pay a higher cost for doing so. With the latter, you must remain within the network of dentists or, you have no insurance coverage whatsoever. For either of these options, you pay a lower premium than if you purchase a non-network or “any dentist” plan. The reason is that you agree to utilize or, at least, consider utilizing a dentist with whom the insurance company has contracted to charge you a lower fee than they would without the contract. This limits the insurance companies losses and brings increased traffic to the dentist.

#3) This is perhaps the most important part. If you purchase a non-network dental insurance plan, you can, almost, be assured you will be charged more than the insurance company deems acceptable. Additionally, you will be responsible for any dollar amount above their “reasonable and customary” rate. However, if you purchase a network plan, and go within the network of dentists, you will not be held responsible for any “excess” charges. Any charges above the reasonable and customary rate, the dentist will be forced to “write off”. In this situation, you will never have to worry about a surprise bill or claim. If a policy says your share of the bill is 20% or 50%, it will be that and not 20% or 50% plus any excess charges.

Assuming you accept you must acquire a network plan, in order to limit you own losses and surprise dental bills, the challenge becomes, “How do you find a quality dentist willing to accept a lower fee for treating you?” The typical HMO dental provider is typically someone straight out of dental school or who otherwise needs to build their patient base. In return for sending patients their way, the dentist is willing to accept a meaningfully lower fee. If the dentist is a PPO provider, they may have been in business longer, have more experience, and perhaps a reputation for having better skills. But they are willing to accept a somewhat lower fee in return from the many employees a large company may send their way. The dentist who isn’t willing to participate in any network apparently feels they have all the clients they need. That or their reputation is so great it will draw all the traffic they require.

The problem is, unlike a large oil company, as an individual, or family, you don’t bring enough “volume” to the table to bargain for a lower dental fee. At least not by yourself. Therefore, you have to identify and purchase your dental insurance from an insurance company which has the reputation of insuring a large number of employees of that oil company. As well as having a reputation for paying their claims in a timely and efficient manner. A manner such that the dentist wants to be contracted with them. From your standpoint, you want that insurance company to have a reputation for the same when it comes to you and not have to worry about claim disputes.

Another challenge is, at $6,000 for a dental implant, your dental benefit may not go too far. Secondly, does your insurance plan cover implants in the first place? Again, the sky is not the limit. The average dental plan covers a maximum of $1,000 of dental treatment per year. You can pay a higher premium for incremental benefits up to a maximum of $5,000. But a policy which pays that much in year one would cost a fortune and there is typically a twelve-month wait for major dental work to be covered. As such, you may want to find a plan which increases to that limit with each passing year and is available at what you consider a reasonable cost.

How do you find a dental policy which does not subject you to “excess” costs; allows you to see a highly skilled dentist, utilizing the latest technology and performing the most advanced form of treatment; all at a competitive premium? And this from a company which pays the claims they are contractually obligated to pay while doing so in a timely fashion?

This is where I, and my thirty-three years experience in the medical and dental insurance business, come in. My experience as a patient and consumer is even longer. After being in braces for eight years, I had all my front teeth knocked out in an auto accident when they impacted the steering wheel. I was wearing a seat belt, which saved my life, but not a shoulder strap. I’ve had to have the dental work replaced on three occasions since that senior year of high school. This year, I proceeded with what will be one double crown and, ultimately, two implants. (Ouch, is right!) I was not willing to accept this type of work from a mediocre dentist―and certainly did not care to pay cash for it! So I found a policy, issued by a large, financially sound insurance company, with a reputation for excellent customer and claim service. Then I found a policy which ultimately pays the maximum $5,000 annual benefit. In order for it to be affordable to me, it started, December 1 of 2018, at a calendar year benefit of $1,500―immediately went to $2,500 January 1, of this year―and will go to a $5,000 benefit this coming January. So I only paid for a $1,500 benefit for one month before it jumped to a $2,500 benefit! During this year I acquired the double porcelain crown and the bone graft and post for one dental implant. In 2020, I will have the crown for the implant post attached, when my calendar year benefit is $5,000. The second implant is optional, and I will probably have that work done in 2021 when my benefit remains $5K.

Once I knew what company to go with, the final step in selecting my dental insurance policy required finding the right dentist. I reviewed the insurance company’s list of network providers and researched the dentist’s reputation via credentials and reviews. I won’t belabor that but, suffice it to say, I found a dentist who met my requirements. He is very conveniently located relative to any resident of The Woodlands or Spring and, in my opinion, is well worth going to if you reside anywhere in Montgomery County or Northwest Harris County. He utilizes the latest technology, has a great and skilled staff, and a decent, very professional, if not overly effusive, chairside manner.*

 

In summation, in order to make dental insurance worth your while, you need to:

1) accept you need to acquire a “network provider” dental plan

2) find a policy which pays a reasonable benefit based on your foreseeable need, at an affordable premium and

3) allows you to go to a skilled dentist convenient to you

I have done all the homework for you. For over three decades, I have specialized in medical, Medicare-related, and dental insurance. I provide objective quotes from established “A” rated companies and quality customer service. Among the companies I represent are Aetna, Ameritas, Anthem, BlueCross BlueShield, Cigna, Delta Dental, Humana, and UnitedHealthcare. I am located in the heart of The Woodlands and am accessible from my websites Allplanhealthinsurance.com and TheWoodlandsTXHealthInsurance.com. You may also feel free to contact me at my numbers below.

I look forward to working with and assisting you in acquiring any of the above referenced products.

D. “Kenton” Henry                                                                                                               Editor, Agent, Broker Office: 281-367-6565                                                           Text my cell @ 713-907-7984                          http://TheWoodlandsTXHealthInsurance.com                              http://Allplanhealthinsurance.com                                   http://HealthandMedicareInsurance.com https://linkedin.com/in/kentonhenryinsuranceconsultant

*(Neither I nor my agency and websites are affiliated in any way with a particular dentist or dental office. Neither do we receive compensation from the same for any recommendation we may make.)

Obamacare: Are All Bets Off For 2018 Open Enrollment?

By D. Kenton Henry, Editor, Broker, Agent

Last evening I began to receive texts and messages inquiring how President Trump’s executive order (EO) on Thursday, October 12th, would impact both the near and long-term future of Obamacare. Before retiring for the evening, I responded – “In the long run, dramatically. But in the short run, not so much because it will take quite awhile for the insurance industry to respond appropriately.” At that time, all I had learned was, the President ordered regulators to allow consumers to shop across state lines for health insurance along with the ability individuals of like professions, careers, and risk profiles, to band together in associations for the purpose of acquiring individual and family health insurance. Theoretically, the first would allow the consumer to shop for their best value among a far greater number of companies and plans, thus restoring competition to the market. The second would allow pooling a large number of people, and the resulting volume would lower risk to the insurance companies, thus allowing them to charge lower premiums to the members. The same principle and effect currently available to employer groups. And that was all I was aware of regarding the EO. Additionally, the EO loosens the restrictions on “Short-Term” health insurance, allowing it to serve as a viable alternative to long-term coverage for the young and/or healthy.

Today, I awakened to learn the Department of Health and Human Services announced late last night that the EO includes the cessation of federal payments for Cost-Sharing Reductions (CSRs) to insurance companies. “Immediately.” This, according to Secretary Eric Hargan and Medicare administrator, Seema Verma. And―with that―all bets are off! The Administration claims this can be done because Congress never appropriated funds for the CSRs. These funds were used to reimburse insurers for the CSRs which result in reductions in deductibles, copays, and out-of-pocket maximums for eligible individuals. However, while the insurers will lose these subsidies (amounting to $7 billion this year), they remain obligated to continue offering them to eligible customers! Eligible customers mostly include those qualifying for subsidies and electing “Silver” plans through the Marketplace, Healthcare.gov. At the very least, halting the payments could trigger a spike in premiums, at some point, for the coming year, unless Congress authorizes the money. The next payments are due around October 20th. The Congressional Budget Office estimates, without the subsidies, premiums could go up by as much as 20%. That is on top of the 15-20% average increase anticipated with the subsidies in place! Nearly 3 in 5 Healthcare.gov customers qualify for help. If you qualify for a premium subsidy, the increase will simply be paid for by your fellow taxpayers as it has the last four years. The person or family who does not qualify will have to pay for it entirely out of their own pocket. As always, it is the hard working middle class who could be hurt the most. Those who make just enough to get by, but a little too much to qualify for government assistance.

Will this break Obamacare altogether and, if so, when? What impact will it have on 2018 individual and family health insurance premiums? Rates had to be (and were) submitted to state health insurance commissioners, as required, on September 30th. Can insurance companies pull out of the market at this point? Will they? Apparently, Premium Subsidies (separate from CSRs), designed to lower premiums, per se, for qualified individuals – as well as though qualifying for tax credits upon filing – will not be affected. However, here is what the Washington Post (article below) had to say about the cessation of CSR subsidies, alone: “Ending the payments is grounds for any insurer to back out of its federal contract to sell health plans for 2018. Some state’ regulators directed ACA insurers to add a surcharge in case the payments were not made, but insurers elsewhere could be left in a position in which they still must give consumers the discounts but will not be reimbursed.” In my opinion, it is too late to submit new rates for approval in time for Open Enrollment, just around the corner. But it is not too late for an insurance company to pull out of the market altogether. What options will that leave the consumer, including my clients, for coverage in 2018 and beyond?

I agree with the administration; this is their move to force the hand of Congress to reverse the policies of Obamacare, restore competition and consumer choice, to the market. It will allow elements of a free market to regulate the variables, most important of which are, benefits, choice of provider, and premium. How long it will take for this action on the part of the Trump to accomplish this, I can’t say. The Executive Order is almost certain to be challenged by state Attorney Generals and litigated in federal courts. This could take months, or more, to play out, and probably will.

I apologize that, at this point, I have more questions than answers. In the meantime, I, and, my clients have yet to learn what our 2018 health options and premiums would be (or would have been) without the ramifications of the Executive Order. Rest assured, I will be watching in earnest for the details as this situation evolves.

As always, please feel free to phone me at 281.367.6565; text me at 713.907.7984 or email me at allplanhealthinsurance.com@gmail.com. The closer we get to November 1, the more I will know. And whatever is available to you, I will have. Along with your best option. Bear in mind, “best” is a relative term.

http://TheWoodlandsTXHealthInsurance.com https://HealthandMedicareInsurance.com

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Featured article:

WASHINGTON POST
By Amy Goldstein and Juliet Eilperin By Amy Goldstein and Juliet Eilperin
Health & Science
October 13 at 9:42 AM

President Trump is throwing a bomb into the insurance marketplaces created under the Affordable Care Act, choosing to end critical payments to health insurers that help millions of lower-income Americans afford coverage. The decision coincides with an executive order on Thursday to allow alternative health plans that skirt the law’s requirements.
The White House confirmed late Thursday that it would halt federal payments for cost-sharing reductions, although a statement did not specify when. Another statement a short time later by top officials at the Health and Human Services Department said the cutoff would be immediate. The subsidies total about $7 billion this year.
Trump has threatened for months to stop the payments, which go to insurers that are required by the law to help eligible consumers afford their deductibles and other out-of-pocket expenses. But he held off while other administration officials warned him such a move would cause an implosion of the ACA marketplaces that could be blamed on Republicans, according to two individuals briefed on the decision.
Health insurers and state regulators have been in a state of high anxiety over the prospect of the marketplaces cratering because of such White House action. The fifth year’s open-enrollment season for consumers to buy coverage through ACA exchanges will start in less than three weeks, and insurers have said that stopping the cost-sharing payments would be the single greatest step the Trump administration could take to damage the marketplaces — and the law.
Ending the payments is grounds for any insurer to back out of its federal contract to sell health plans for 2018. Some states’ regulators directed ACA insurers to add a surcharge in case the payments were not made, but insurers elsewhere could be left in a position in which they still must give consumers the discounts but will not be reimbursed.
A spokeswoman for America’s Health Insurance Plans, an industry trade group that has been warning for months of adverse effects if the payments ended, immediately denounced the president’s decision. “Millions of Americans rely on these benefits to afford their coverage and care,” Kristine Grow said.
And California Attorney General Xavier Becerra (D), who has been trying to preserve the payments through litigation, said the president’s action “would be sabotage.” Becerra said late Thursday that he was prepared to fight the White House. “We’ve taken the Trump Administration to court before and won, and we’re ready to do it again if necessary,” he said in a statement.
Trump’s move comes even as bipartisan negotiations continue on one Senate committee over ways to prop up the ACA marketplaces. Both Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) have publicly said the payments should not end immediately, though they differ over how long these subsidies should be guaranteed.
The cost-sharing reductions — or CSRs, as they are known — have long been the subject of a political and legal seesaw. Congressional Republicans argued that the sprawling 2010 health-care law that established them does not include specific language providing appropriations to cover the government’s cost. House Republicans sued HHS over the payments during President Barack Obama’s second term. A federal court agreed that they were illegal, and the case has been pending before the U.S. Court of Appeals for the D.C. Circuit.
President Trump signed an executive order on the Affordable Care Act on Oct. 12. With the order, he directed federal agencies to rewrite regulations on selling a certain type of health insurance across state lines. President Trump signed an executive order on the Affordable Care Act on Oct. 12. (Photo: Jabin Botsford/The Washington Post)
President Trump signed an executive order on the Affordable Care Act on Oct. 12. With the order, he directed federal agencies to rewrite regulations on selling a certain type of health insurance across state lines. (The Washington Post)
“The bailout of insurance companies through these unlawful payments is yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system,” a statement from the White House said. “Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people.”
In a filing Friday morning, the administration informed the court that HHS had “directed that cost-sharing reduction payments be stopped because it has determined that those payments are not funded by the permanent appropriation.”
House Speaker Paul D. Ryan (R-Wis.) said in a statement that the administration was dropping its appeal of the lawsuit — something the White House did not mention in its announcement. Ryan called the move to end to the court case “a monumental affirmation of Congress’s authority and the separation of powers.”
Meanwhile, the top two congressional Democrats, House Minority Leader Nancy Pelosi (Calif.) and Senate Minority Leader Charles E. Schumer (N.Y.), excoriated the president’s decision. “It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America,” they said in a joint statement. “Make no mistake about it, Trump will try to blame the Affordable Care Act, but this will fall on his back and he will pay the price for it.”
For months, administration officials have debated privately about what to do. The president has consistently pushed to stop the payments, according to officials and advisers who spoke on the condition of anonymity to discuss private conversations. Some top health officials within the administration, including former HHS secretary Tom Price, cautioned that this could exacerbate already escalating ACA plan premiums, these Republicans said. But some government lawyers argued that the payments were not authorized under the existing law, according to one administration official, and would be difficult to keep defending in court.
Acting HHS secretary Eric Hargan and Seema Verma, administrator of the department’s Centers for Medicare and Medicaid Services, said they were stopping the payments based on a legal opinion by Attorney General Jeff Sessions. “It has been clear for many years that Obamacare is bad policy. It is also bad law,” their statement says. “The Obama Administration unfortunately went ahead and made CSR payments to insurance companies after requesting — but never ultimately receiving — an appropriation from Congress as required by law.”
While the administration will now argue that Congress should appropriate the funds if it wants them to continue, such a proposal will face a serious hurdle on Capitol Hill. In a recent interview, Rep. Tom Cole (R-Okla.), who chairs the House Appropriations Subcommittee overseeing HHS, said it would be difficult to muster support for such a move among House conservatives.
One person familiar with the president’s decision said HHS officials and Trump’s domestic policy advisers had urged him to continue the payments at least through the end of the year.
The cost-sharing payments are separate from a different subsidy that provides federal assistance with premiums to more than four-fifths of the 10 million Americans with ACA coverage.
Word of the president’s decision came just hours after he signed the executive order intended to circumvent the ACA by making it easier for individuals and small businesses to buy alternative types of health insurance with lower prices, fewer benefits and weaker government protections.
The White House and allies portrayed the president’s move as wielding administrative powers to accomplish what congressional Republicans have failed to achieve: fostering more coverage choices while tearing down the law’s insurance marketplaces. Until the White House’s announcement late Thursday, the executive order represented Trump’s biggest step to date to reverse the health-care policies of the Obama administration, a central promise since last year’s presidential campaign.
Critics, who include state insurance commissioners, most of the health-insurance industry and mainstream policy specialists, predict that a proliferation of these other kinds of coverage will have damaging ripple effects, driving up costs for consumers with serious medical conditions and prompting more insurers to flee the law’s marketplaces. Part of Trump’s action, they say, will spark court challenges over its legality.
The most far-reaching element of the order instructs a trio of Cabinet departments to rewrite federal rules for “association health plans” — a form of insurance in which small businesses of a similar type band together through an association to negotiate health benefits. These plans have had to meet coverage requirements and consumer protections under the 2010 health-care law, but the administration is likely to exempt them from those rules and let such plans be sold from state to state without insurance licenses in each one.
In addition, the order is designed to expand the availability of short-term insurance policies, which offer limited benefits as a bridge for people between jobs or young adults no longer eligible for their parents’ health plans. The Obama administration ruled that short-term insurance may not last for more than three months; Trump wants to extend that to nearly a year.
Trump’s action also is intended to widen employers’ ability to use pretax dollars in “health re-imbursement arrangements” to help workers pay for any medical expenses, not just for health policies that meet ACA rules — another reversal of Obama policy.
In a late-morning signing ceremony in the White House’s Roosevelt Room, surrounded by supportive small-business owners, Cabinet members and a few Republicans from Capitol Hill, the president spoke in his characteristic superlatives about the effects of his action and what he called “the Obamacare nightmare.”
Trump said that Thursday’s move, which will trigger months of regulatory work by federal agencies, “is only the beginning.” He promised “even more relief and more freedom” from ACA rules. And although leading GOP lawmakers are eager to move on from their unsuccessful attempts this year to abolish central facets of the 2010 law, Trump said that “we are going to pressure Congress very strongly to finish the repeal and replace of Obamacare.”
But in an early morning tweet Friday, Trump reached out to Democrats with an appeal to somehow work together on a health-care “fix.”
“The Democrats ObamaCare is imploding,” Trump wrote. “Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!”
The executive order will fulfill a quest by conservative Republican lawmakers, especially in the House, who have tried for more than two decades to expand the availability of association health plans by allowing them to be sold, unregulated, across state lines. On the other hand, Trump’s approach conflicts with what he and GOP leaders in Congress have held out as a main health-policy goal — giving each state more discretion over matters of insurance.
Health policy experts in think tanks, academia and the health-care industry pointed out that the order’s language is fairly broad, so the ensuing fine print in agencies’ rules will determine whether the impact will be as sweeping or quick as Trump boasted — his directive will provide “millions of people with Obamacare relief,” he said.
Significant questions that remain include whether individuals will be able to join associations, a point that could raise legal issues; whether the administration will start to let association health plans count toward the ACA’s requirement that most Americans carry insurance; and whether such plans can charge higher prices to small businesses with sicker workers — or refuse to insure them.
A senior administration official, speaking to reporters on the condition of anonymity shortly before Trump signed the order, said that the policy changes it sets in motion will require agencies to follow customary procedures to write new rules and solicit public comment. That means new insurance options will not be available in time for coverage beginning in January, he said.
Among policy experts, critics warned that young and healthy people who use relatively little insurance will gravitate to association health plans because of their lower price tags. That would concentrate older and sicker customers in ACA marketplaces with spiking rates.

Selling health plans from state to state without separate licenses — the idea underlying much of the president’s order — has long been a Republican mantra. It has gained little traction in practice, however.
Half a dozen states — before the ACA was passed in 2010 as well as since then — have passed laws permitting insurers to sell health policies approved by other states. And since last year, the ACA has allowed “compacts” in which groups of states can agree that health plans licensed in any of them could be sold in the others. Under such compacts, federal health officials must make sure the plans offer at least the same benefits and are as affordable as those sold in the ACA marketplaces.
As of this summer, “no state was known to actually offer or sell such policies,” according to a report by the National Conference of State Legislatures. A main reason, experts say, is insurers’ difficulty in arranging networks of doctors and other providers of care far from their home states.

BITTER CHILL IN THE FALL AIR FOR OBAMACARE

by D. Kenton Henry, Editor, Agent, Broker

The Open Enrollment Period (OEP) when individuals and families can select and enroll in health insurance plans for the calendar year 2018 is, just around the corner, beginning, as usual, November 1. What is different this year is, the Department of Health and Human Services (DHS), which oversees Obamacare (the Patient Protection and Affordable Care Act ― ACA), has proposed ending it December 15th ― a period half as long as in all previous years. OEP historically ends January 31st. If this proposed change is effected, consumers, and agents and brokers on their behalf, will be under considerably more pressure to bind coverage during a period which has always been fraught with confusion and frustration. Expected to heighten the latter, are increasing premiums and less participation by insurance companies and providers. Increasing premiums (which have only accelerated during Obamacare) speak for themselves. Less participation by insurance companies means less competition and fewer plans from which consumers may choose. Less participation by providers means it will be even harder to find your doctor or hospital in the Health Maintenance Network (HMO) plans we Texans are forced to choose from since January 2016. Do not expect Preferred Provider Organization (PPO) plans to return for 2018. The reason behind this deliberate trend is the unstated agenda of the industry to accustom each of us to have our providers―and thereby our treatment―rationed. The stated agenda is an attempt to mitigate financial losses by the insurance companies. Those in office who would replace Obamacare, and our current insurance system, with a “Single-Payer” system have no problem, whatsoever, with this trend. This, because restrictions on providers and treatment will be inherent in any single-payer program.There are many in Washington who believe the solution to healthcare insurance is to add all of us to Medicare.Those who share in the belief the single-payer system is the solution should consider the reality that Medicare is 50 trillion is debt and predicted to be insolvent 12 years from now. (That is according to the Trump administration. Obama’s predicted it to be insolvent one year earlier, the Congressional Budget Office three years earlier) http://www.modernhealthcare.com/article/20170713/NEWS/170719951

And this is the reality with current members having paid into it their entire working careers. How do you think that is going to work when you add every other American, a great many of which are not contributing to Medicare and never have? In my mind, that will expedite the path to insolvency exponentially. Consider a true single-payer program which serves as an example: Veteran’s Administration Health Care. A beacon of mismanagement resulting in waiting lines, provider rationing, and, in many parts of the country, long travel distances for care.

To exacerbate the difficulty in predicting premiums, and budgeting accordingly, President Trump has stated he is considering withholding federal subsidies to insurance companies. Historically, these have bought down the retail premiums the consumer must pay. Here we are halfway through September, and we still do not know if Trump will do so. Now―here is the real wrench in the grist mill ― the insurance companies must submit their 2018 premiums to the State Insurance Regulators by September 30th!

“If there’s no deal on the subsidies within the next five weeks, states will have no choice but to approve rate increases that include surcharges and go with those rates for the start of open enrollment on Nov. 1. On average that would mean consumers would see an extra 20 percent price hike next year.” ― 20 August 2017, CNBC.COM

“In many ways, the die has already been cast… if nothing changes before the end of September, we’re pretty much looking at those rates being locked in for 2018,” said Wisconsin insurance commissioner Ted Nickel, who is also president of the National Association of Insurance Commissioners. ― 20 August 2017, CNBC.COM

That is 20 percent on top of general premium increases predicted to be in the 12 to 15% range.

Once again, whether you feel you need assistance in coping with these issues in electing your 2018 coverage and protecting yourself and family from the sky-rocketing cost of health care, please call me at 281.367.6565. I have been specializing in health insurance for 26 of my 31 years in insurance. I have assisted my clients in coping with Obamacare since its passage in March of 2010.

For those of you enrolled in Medicare ― Open Enrollment for election of your 2018 Part D Drug Plan begins, as usual, October 15th. Current clients should email me a list of your current drug regimen at allplanhealthinsurance.com@gmail.com. Upon receipt, I will provide you my recommendation your lowest out of pocket cost Part D plan in 2018. Those of you not currently my clients are encouraged to do the same.

http://thewoodlandstxhealthinsurance.com

https://healthandmedicareinsurance.com

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Featured articles:

Governors Tell Congress to Stabilize Individual Health Insurance Market

Michael Collins, USA TODAYPublished 1:25 p.m. ET Sept. 7, 2017 | Updated 5:45 p.m. ET Sept. 7, 2017

WASHINGTON — Governors from five states called Thursday on Congress to move quickly to stabilize the individual health insurance market and then embark on a serious effort to deal with skyrocketing health care costs.

“All of us — Republicans, Democrats and independents — should agree that our current path is not a sustainable one,” Tennessee Gov. Bill Haslam told a Senate panel.

The governors — three Republicans and two Democrats — testified during the second of four bipartisan hearings before the Senate Health, Education, Labor and Pensions Committee.

The panel is looking for a short-term fix to stabilize the individual market after the collapse of GOP efforts to repeal and replace the Affordable Care Act, or Obamacare.

The committee’s chairman, Sen. Lamar Alexander, R-Tenn., said he hopes senators can forge a bipartisan agreement by the end of next week and pass limited legislation by the end of the month to keep prices down and make it possible for everyone in the individual market to be able to afford insurance.

Congress must act quickly. New insurance rates for 2018 must be posted on the government’s website, healthcare.gov., by Sept. 27.

At Thursday’s hearing, the committee heard from Republican Govs. Haslam, Charlie Baker of Massachusetts and Gary Herbert of Utah and Democratic Govs. Steve Bullock of Montana and John Hickenlooper of Colorado.

A key issue is the future of federal cost-sharing payments to insurers that help them provide affordable coverage for low- and moderate-income families.

President Trump has threatened to end the payments, worth about $7 billion this year.

Read more:

With Obamacare in limbo, senators look for fix to stabilize health insurance market

Trump says GOP senators ‘look like fools’ on health care, warns of ‘imploding ObamaCare’

Congress has a crucial to-do list in September: Here’s what lawmakers must accomplish

All five governors testifying Thursday urged Congress to continue the payments, echoing the pleas of state insurance commissioners who appeared before the panel a day earlier.

The governors also called for creation of a reinsurance program that would limit losses to carriers that provide coverage in the marketplace and for the federal government to give states more flexibility to design and regulate insurance plans more suited to their own needs.

“It’s time for the federal government to work with us, not against us,” said Hickenlooper, arguing that state efforts to bring down premiums have been frequently undermined.

Without the federal government’s help, trying to keep insurance affordable is “like climbing one of Colorado’s famous 14,000-foot mountains in winter without crampons,” Hickenloopper said. “It can’t be done.”

Alexander said one option for giving states flexibility would be to allow the governor or state insurance commissioner to apply for a waiver from Obamacare’s rules, instead of waiting for the state legislature to act. He also suggested a “copycat” provision so that when one state wins federal approval for a program or initiative, other states could quickly follow suit.

Senators most likely will fashion a short-term stabilization plan that includes continuing cost-sharing for a limited period of time and gives states significantly more flexibility through Obamacare’s waiver process, Alexander said.

Once a short-term fix is enacted to stabilize the individual market, lawmakers can then move quickly to focus on how to make the market vibrant in the long run, Alexander said.

“I hope we can begin to spend most of our time on the larger issue of health care costs,” he said.

Two more hearings are planned next week. The committee will hear Tuesday from various health policy experts. Health care providers and other stakeholders will appear before the panel next Thursday.

Health Insurance

If Congress doesn’t fund Obamacare subsidies next month it could get pretty complicated

  • Insurers can’t wait past a Sept. 30 deadline to set key insurance rates for next year.
  • However, the fate of key subsidy payments under the Affordable Care Act is still unknown.
  • State health insurance regulators expect that subsidies could remain in limbo past key deadlines, and are making plans for that possibility.

Bertha Coombs | @BerthaCoombs

Published 8:01 AM ET Sun, 20 Aug 2017  | Updated 4 Hours Ago CNBC.com

https://www.cnbc.com/2017/08/19/if-congress-doesnt-fund-obamacare-subsidies-it-could-get-complicated.html

State health insurance regulators have been hoping for the best when it comes to 2018 exchange enrollment, but are now bracing for the worst-case scenario — that the fate of key health insurance subsidies will remain in limbo past key deadlines next month.

“We have a way to protect consumers, but it is complicated and will cause unnecessary confusion and anxiety,” said Diana Dooley, chair of Covered California, the state’s Obamacare exchange, in a statement Friday.

California officials say they will wait until the end of September to decide whether to let insurers impose a 12.8 percent surcharge on 2018 exchange premiums to account for the potential loss of cost-reduction subsidies that reduce out-of-pocket costs for low-income enrollees.

“We are extending our deadline to give Congress time to act when they return in September,” Dooley explained. “We are heartened by the bipartisan discussion that put consumers first, but we can’t wait past Sept. 30.”

Some Republican lawmakers have proposed passing a short-term funding bill next month to authorize 2018 reimbursements for cost-reduction subsidies insurers are required to make under the Affordable Care Act.

However, if there’s no deal on the subsidies within the next five weeks, states will have no choice but to approve rate increases that include surcharges and go with those rates for the start of open enrollment on Nov. 1. On average that would mean consumers would see an extra 20 percent price hike next year.

 

“In many ways the die has already been cast… if nothing changes before the end of September, we’re pretty much looking at those rates being locked in for 2018,” said Wisconsin insurance commissioner Ted Nickel, who is also president of the National Association of Insurance Commissioners.

Pressure to act fast

State insurance commissioners, insurers and most of the major health industry groups have been urging Congressional leaders to fund the so-called cost-reduction subsidies for months, but politically it puts Republicans in a difficult spot after their failure to repeal the Affordable Care Act.

A federal judge ruled in favor of House Republicans last year, after they sued the Obama administration arguing that funding for the subsidies was never authorized by Congress. That lawsuit has been put on hold three times since last fall, and is due back in court this week.

President Donald Trump has repeatedly threatened to pull the plug on the insurer reimbursements citing the ruling, though the administration has continued to make the payments on a month-to-month basis, and will make them for August.

“What’s likely to happen is that Congress will pass some kind of interim funding, which negates the lawsuit,” said Julius Hobson, senior policy advisor at the Polsinelli law firm, adding that barring congressional authorization “it’s difficult to get a remedy that forces the government to spend the money.”

One thing that could help tip the balance for reaching a deal is the Congressional Budget Office’s report, which estimated that cutting the subsidies would increase the deficit by $194 billion over 10 years, in part because higher premium rates would result in more people qualifying for tax credits.

But Congress also has a number of key deals it has to reach next month, including raising the deficit and reaching an agreement to fund the government in order to avoid a shutdown.

What if the payments get funded after the rate hikes?

If funding for cost-reduction subsidies were approved after rates are locked in for open enrollment, consumers would not likely get relief from the price hikes right away.

“The Medical Loss Ratio that was instituted by the ACA will still be in place, meaning that consumers will be reimbursed [if] insures are not spending an 80% minimum on [health] care costs,” said Christina Cousart, senior policy associate at National Academy for State Health Policy, but she added those rebates would happen retroactively.

Some consumers might not be made whole for the premium surcharges. The higher rates would likely result in even fewer healthy unsubsidized consumers signing up for coverage. While the rate increases should be high enough to shield insurers from losses on sicker enrollees, they would not necessarily result in big rebates for consumers.

“There’s no way we can back out these higher rates that the companies put in… We’re going to have more expensive health insurance plans, we’re going to have fewer people enrolled,” said insurance industry consultant Robert Laszewski, president of Health Policy and Strategy associates.

What’s also unclear is whether consumers who receive larger tax credits would have to pay them back at tax time, if insurers do provide premium surcharge rebates.

“This is really hard to say at this point, without knowing how it will all play out — which is why we believe that the best solution is for Congress and the administration to resolve this issue now,” said Covered California spokesman James Scullary. “A resolution now eliminates the need for all of these workarounds to protect consumers.”

If Congress manages to come up with a funding deal to keep the subsidies in place, Wisconsin’s insurance commissioner says they should not stop there. He says the current problems underscore the need to give states more flexibility to stabilize their exchange markets than they have under current Obamacare rules.

“We have so little control now, so much of it is coming from the federal government through more of a central planning function rather than letting states engage in ways that best needs of their consumers,” said Nickel. “We do find ourselves in very difficult straights.”

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Changes Coming for Next Year’s Obamacare Open Enrollment Period

The Trump administration is working to make changes to the Affordable Care Act (ACA)

With the confirmation of Tom Price as Secretary of Health and Human Services, the Trump administration is already working to make changes to President Obama’s health reform law, the Affordable Care Act (ACA).

No, the promised “repeal and replace” of the ACA (also known as Obamacare) hasn’t happened yet, but Mr Price’s Department of Health and Human Services (DHS) has issued proposed guidelines that would affect consumers during 2018’s Obamacare open enrollment period.

The 2018 open enrollment period is not scheduled to begin until the fall of 2017. If the ACA is repealed, this next open enrollment period may be Obamacare’s last.

Let’s take a look at some of the proposed changes:

  • Shorter open enrollment period for 2018 – The 2018 Obamacare open enrollment period is currently scheduled to run from November 1, 2017 through January 31, 2018. DHS’s proposed change cut the duration of the the open enrollment period by half so that it runs from November 1 through December 15, 2017.
  • Some loosening of benefit requirements – The Obamacare law sets strict guidelines for “minimum essential coverage” that all major medical health insurance plans must provide. Though details are not yet available, DHS is proposing to loosen these rules somewhat, allowing insurers to offer plans with a broader range of coverage options.
  • More supporting documentation required for special enrollment periods – Outside of the nationwide open enrollment period, consumers can only purchase coverage on their own when they experience a major life change, such as marriage or divorce, or the birth or adoption of a baby, etc. A proposed revision of rules would tighten the requirements for applicants to provide documentation proving their eligibility for a special enrollment period.
  • Changes to doctor network rules – Under Obamacare, the federal government sets standards for what constitutes an adequate network of participating doctors and medical facilities for major medical plans. A proposed change from DHS would allow states to set these limits for themselves instead.
  • Collection of overdue premiums – In a move designed to discourage applicants from neglecting to pay their monthly premiums near year’s end and simply re-enrolling with the same plan for January, a proposed DHS rule would allow insurers to collect overdue premiums before extending coverage to such applicants in the next year.

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Trustees’ report says Medicare will be insolvent by 2029

Modern Healthcare

By Virgil Dickson  | July 13, 2017

The Medicare trust fund will be insolvent by 2029, the program’s trustees reported today.

 

The prediction is a year later than the 2028 date the Obama administration outlined in last year’s report. The Congressional Budget Office in January 2016 estimated the program would be solvent only until 2026.

 

Based on the new findings, the feared Independent Payment Advisory Board, which was designated by the Affordable Care Act to rein in Medicare costs if they grew faster than a set rate, will not be activated.

 

That’s likely good news as the board, called a death panel by ACA opponents, has never had to be formed. There hasn’t been the need, and some say, the willingness to expend the political capital. With midterm elections coming and possible fallout likely if Republicans repeal the ACA, this is one less possible political headache to worry about. Also of note, 2029 is 12 years longer than projected estimates before the Affordable Care Act become law.

 

However, trustees are worried doctors will exit the program anyway. The report contained new concerns about access to physicians in the coming years due to the Medicare Access and CHIP Reauthorization Act.

 

MACRA replaced the physician payment updates under the sustainable growth rate formula, which clinicians were paid under for years.

 

Under MACRA the annual physician payment update for 2017 through 2019 will be 0.5%. For 2020 through 2025, there will be no payment update, which alarmed the trustees.

 

“These amounts do not vary based on underlying economic conditions, nor are they expected to keep pace with the average rate of physician cost increases,” the report said. “Absent a change in the delivery system or level of update by subsequent legislation, access to Medicare-participating physicians may become a significant issue in the long term under current law.”

 

The new insolvency date does incorporate modest savings from the agency’s move to value-based care, including accountable care organizations. However, exact figures were not broken out.

 

“The innovations being tested under the ACA, such as bundled payments or accountable care organizations, could reduce incentives to adopt new cost-increasing technologies and could contribute to greater efforts to avoid services of limited or no value within the service bundle,” the report says.

 

Medicare Part D expenditures per enrollee are estimated to increase by an average of 6.4% annually over the next five years; that’s higher than the projected average annual rate of growth for the U.S. economy, which is 5.2 % during that period.

 

The report found that these costs are trending higher than previously predicted, particularly for specialty drugs.

 

In 2016, Medicare covered 56.8 million people and expenditures were $678.7 billion up from $647.6 billion and 55.3 million beneficiaries in 2015.

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https://healthandmedicareinsurance.com

ON THE STATE OF OBAMACARE EXCHANGES AS 2017 OPEN ENROLLMENT APPROACHES

By D. Kenton Henry

As a health insurance broker the last thirty years, I have a vested interest in the state of the industry, and especially so since the Affordable Care Act (ACA) , commonly referred to as Obamacare, was passed in March of 2010. It has been a turbulent ride as I and my clients have struggled to adapt to each phase of the law’s implementation. This has been especially true, the previous three years, as I prepared―and now prepare again―for “Open Enrollment” (OE). OE is the period during which the Department of Health and Human Services allows people to acquire individual and family health insurance for the coming year. This year, it is scheduled to run from November the 1st through January 31st. I say “scheduled”, because they typically extend it in an effort to give people more time to enroll. And, apparently, the Department needs to give people as much time as possible because the latest numbers indicate Obamacare enrollment has fallen significantly short of expectations. (Refer to our feature article from The Washington Post below.)  As it explains, enrollment in the exchanges is less than half initially predicted. The success of the exchanges was predicated on the young and healthy enrolling in numbers sufficient to offset the sick and elderly who would naturally submit more and higher claims to the insuring companies. The young and healthy have largely declined enrolling―presumably and primarily because, well―they’re young and healthy. Had they enrolled, the theory was they would have diluted the claims (losses) with positive (no losses) premium dollars. Additional factors are that, unless someone qualifies for a subsidy, the premiums are high and, for the most part, going higher. The only cases where premiums seem to have gone down are where the insured members are forced into Health Maintenance Organization (HMO) plans where they find their providers and treatment rationed. Furthermore, the penalties (“Shared Responsibility Tax”) for not having insurance, relative to the premiums for having it, are so small as to be largely ignored. Yes, the penalties are increasing but not in proportion to the premiums. And word is, the premiums are only going higher in 2017.

*(CLICK ON THE GRAPHIC TO ENLARGE STATE BY STATE PROJECTED 2017 PREMIUM INCREASES.)

PREMIUM STATS 2017

As our feature article from the Wall Street Journal ( posted below) describes ―another factor detrimental to the success of the Act and the exchanges is decreasing competition among carriers. In spite of the high premiums they charge, insurers are experiencing losses too great to allow them to remain in the marketplace. As a result, they are dropping out in ever increasing numbers. These losses result, in part, because the government itself has cut the subsidies they originally promised insurance companies in order to offset the losses they anticipated. Obviously, companies have less money to pay the higher than expected claims they are experiencing. A Kaiser Family Foundation study, cited in the WSJ article, indicates exchange shoppers may have only one insurance company to choose from in 31% of the nation’s counties and the possibility of only two in another 31%. While many are quick to blame the “greedy” insurance companies, this editor feels the need to point out the reality that insurance companies are not charities. And even charities must operate in the black if they are to remain in existence. It is my opinion that only the government feels it is entitled to operate at a loss and, additionally, that, that is acceptable. Of course, when your are operating entirely with other people’s money―that is a much easier thing to do.

I will now put down my keyboard and go back to studying, testing and certifying to offer and provide the new Obamacare and Medicare related plans to both my clients and prospective clients for 2017. It amounts to an investment of many hours in order to remain informed and credible in an extremely complicated market. As in 2016, one key hurdle for those purchasing 2017 individual and family coverage will be to deal with the inability to find their doctors, and even their hospitals, in the HMO networks. I have developed a strategy for coping with this which I have utilized for myself. While it does not entirely eliminate the inconvenience of the aforementioned problem, it does soften the blow and in some cases―from a purely monetary standpoint―offset the loss in dollars a total and ideal solution would have cost.  Please call me at 281.367.6565 to discuss this and other strategies designed to minimize the difficulties and accompanying stress of identifying and acquiring 2017 health insurance.

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FEATURE ARTICLES

Wall Street Journal

Health Insurers’ Pullback Threatens to Create Monopolies

Analysis suggests ACA exchanges are likely to offer just one coverage option in 31% of U.S. counties

By Anna Wilde Mathews and Stephanie Armour

Updated Aug. 28, 2016 7:47 p.m. ET

Nearly a third of the nation’s counties look likely to have just a single insurer offering health plans on the Affordable Care Act’s exchanges next year, according to a new analysis, an industry pullback that adds to the challenges facing the law.

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THE WASHINGTON POST

Business

Health-care exchange sign-ups fall far short of forecasts

By Carolyn Y. Johnson

Business

August 27 at 8:10 p.m.

Enrollment in the insurance exchanges for President Obama’s signature health-care law is less than half the initial forecast, pushing several major insurance companies to stop offering health plans in certain markets because of significant financial losses.

As a result, the administration’s promise of a menu of health-plan choices has been replaced by a grim, though preliminary, forecast: Next year, more than 1 in 4 counties are at risk of having a single insurer on its exchange, said Cynthia Cox, who studies health reform for the Kaiser Family Foundation.

The debate over how perilous the predicament is for the Affordable Care Act, commonly called Obamacare, is nearly as partisan as the divide over the law itself. But at the root of the problem is this: The success of the law depends fundamentally on the exchanges being profitable for insurers — and that requires more people to sign up.

In February 2013, the Congressional Budget Office predicted that 24 million people would buy health coverage through the federally and state-operated online exchanges by this year. Just 11.1 million people were signed up as of late March.

Exchanges are marketplaces where people who do not receive health benefits through a job can buy private insurance, often with government subsidies.

Aetna, the nation’s third-largest health insurer, announced that it will pull back from Obamacare exchanges citing losses of more than $430 million since January 2014. (Daron Taylor/The Washington Post)

Aetna, the nation’s third-largest health insurer, announced that it will pull back from Obamacare exchanges citing losses of more than $430 million since January 2014. Aetna, the nation’s third-largest health insurer, announced that it will pull back from Obamacare exchanges citing losses of more than $430 million since 2014. (Daron Taylor/The Washington Post)

“Enrollment is key, first and foremost,” said Sara R. Collins, a vice president at the Commonwealth Fund, a nonpartisan foundation that funds health-care research. “They have to have this critical mass of people so that, by the law of averages, you’re going to get a mix of healthy and less healthy people.”

A big reason the CBO projections were so far off is that the agency overestimated how many people would lose insurance through their employers, which would force them into the exchanges. But there have been challenges getting the uninsured to sign up, too.

The law requires every American to get health coverage or pay a penalty, but the penalty hasn’t been high enough to persuade many Americans to buy into the health plans. Even those who qualify for subsidized premiums sometimes balk at the high deductibles on some plans.

And people who do outreach to the uninsured say the enrollment process itself has been more complex and confusing than Obama’s initial comparison to buying a plane ticket.

“This exchange will allow you to ‘one-stop’ shop for a health-care plan, compare benefits and prices, and choose a plan that’s best for you and your family,” Obama said in a speech in 2009. “You will have your choice of a number of plans that offer a few different packages, but every plan would offer an affordable, basic package.”

In some markets, a shortfall in enrollment is testing insurers’ ability to balance the medical claims they pay out with income from premiums. In an announcement curtailing its involvement in the exchanges this month, Aetna cited financial losses traced to too many sick people signing up for care and not enough healthy ones.

The health-care law has been a political lightning rod from the beginning, and Republican legislators have used insurance companies’ withdrawals from the exchanges to reignite calls for the law’s repeal.

Kaiser tracks public data on insurer participation in the exchanges to project how many options counties will have, but the numbers are not final. This year, exchanges in about 7 percent of counties had just one insurer. Earlier this month, Aetna announced that it will pull out of 11 of the 15 states where it offers coverage on the health-care exchanges. Humana made a similar decision weeks earlier, planning to exit several states. And last spring, UnitedHealth Group said it would remain in three or fewer exchanges next year.

Obama has used the health-care law’s challenges to issue a new call for a public insurance option.

“Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited,” he wrote in an essay published in the Journal of the American Medical Association. “Adding a public plan in such areas would strengthen the Marketplace approach, giving consumers more affordable options while also creating savings for the federal government.”

Chicago resident Eva Saur, 32, is exactly the kind of healthy person insurers would like to have on their rolls. Saur hasn’t had coverage in nearly a decade, but she takes good care of her health. For the handful of times she’s been sick, a walk-in clinic at a pharmacy has been sufficient.

“I was raised — not against the system — but we had a doctor who would prescribe us herbs before a prescription” medication, Saur said. “For me, monetarily, it makes way more sense to do this.”

Saur’s tax penalty for being uninsured was a bit more than $600 last year, while the cheapest health plan she examined cost about as much for three months in premiums — and came with a $7,000 deductible.

The penalty for not signing up is increasing. Still, some policy experts insist it is not enough motivation to buy insurance.

“It was basically no stick at all. This is the classic case of where Johnny marked crayon on the wall, his mother said, ‘Don’t do that,’ and then slapped his hand a day later,” said Joseph Antos, a resident fellow at the American Enterprise Institute. “The connection between the offense and the penalty is a little remote.”

The health-care law has had unequivocal successes. In some areas, lots of insurers compete on the exchanges, which helps keep premiums low. In Cleveland and Los Angeles, the average premium for a benchmark health plan actually declined in 2016. The number of uninsured Americans continues to shrink, hitting 9.1 percent last year — the lowest level ever.

The average premium for the people who receive tax credits – 85 percent of the people signed up through the exchanges — is just $106 per month. People who qualify for the income-based tax credits are largely sheltered from premium increases.

The first people to sign up for insurance through the exchanges were expected to be those with chronic diseases and high medical costs. Because insurers could no longer discriminate against those people, the law built in three mechanisms for the government to redistribute money from plans with healthier patients to those with sicker ones. Two of those programs expire at the end of the year. The third, called the “risk adjustment” program, transferred $4.6 billion between insurers in 2014.

Critics say there’s a fundamental problem with the system, and the risk-adjustment program needs to be fixed. But supporters of the law argue that the problem is temporary, the natural evolution of a nascent free-market system. Some of the first companies to enter the market made bad bets on how healthy customers would be, resulting in unprofitable health plans. Proponents say it’s natural for new entrants to replace them, with better information and more competitive plans.

Cigna, for example, has said it has filed to enter exchanges in three new states next year.

“There’s no bottleneck, this is just the natural growth pains of a new market,” said Jonathan Gruber, an economist at the Massachusetts Institute of Technology. “What happened is they set up this new market where insurers didn’t have experience; insurers made an estimate as to what people would cost and their estimate turned out to be too low.”

Supporters point to a recent government analysis that suggests the “risk pool” — the number of high-cost sick customers relative to healthy ones — is not worsening and could even be improving. Medical costs per enrollee in the marketplaces fell by 0.1 percent in 2015, while medical costs for people in the broader health-insurance market grew by at least 3 percent. In states with strong enrollment growth, there were greater reductions in members’ costs.

Everyone agrees that more healthy people need to sign up.

In June, the Obama administration unveiled its plan to target younger and healthier adults, including direct outreach to individuals and families who paid the penalty. It also released new guidance, encouraging insurance companies to communicate more with young adults being kicked off their family’s plan when they turn 26 years old.

Even older adults are taking their chances without health-care coverage.

Donte Fitzhugh, 55, of Charlotte was laid off last year from a job as a call-center operations manager. COBRA, which allows former workers to extend their employer-provided health insurance if they pay the full premium, was expensive, and Fitzhugh didn’t sign up for the exchanges for very human reasons: He figured he’d find a job faster than he did. He thought every penny counted when he was unemployed. He didn’t have major health problems, and he got a coupon to help cover the costs of his hypertension medicine.

As the window to sign up for health insurance passed without a new job, he kept procrastinating. Although health insurance from a new job will begin in October, he faces a penalty that will cost him hundreds of dollars.

“I believe in Obamacare. As an American, it’s my responsibility to have health insurance,” Fitzhugh said. “Since I didn’t have it, it’s going to impact me financially.”

Such are the barriers to insurance: Remaining uninsured can be more attractive or just easier than signing up to pay hundreds of dollars a month for something that many people don’t think they need.

Judy Robinson, a health insurance support specialist at the Charlottesville Free Clinic, has counseled hundreds of patients who are eligible for subsidized insurance on the exchanges but ultimately decide not to sign up. She said the subsidized insurance on the marketplace tends to be a good deal for those who make between 100 and 150 percent of the poverty level. But those who make more often are faced with large deductibles that don’t seem like a good deal to many people.

Beyond the sticker price, she said it can require a lot of paperwork to demonstrate the annual income required to qualify for tax credits if people are juggling multiple part-time jobs. And sometimes, people are simply mistrustful.

“There’s a lot of people that live sort of off the grid, sort of semi-off the grid and they just don’t go to the doctor,” Robinson said. “The hospital is the place where you go to die, and doctors are just going to try and make you do procedures and get money out of you. That’s how they think.”

There are also those who want insurance but are struggling — and find themselves trapped by the high cost of health care.

Donna Privigyi, 49, of Charlottesville has looked into insurance through the exchanges a few times. But over the past few years, much of her modest child-care salary and effort went toward trying to help support her adult son, Mark, who hadn’t been the same since the death of his younger brother. Donna was focused on trying to support her son. Health insurance — even rent — was an afterthought.

“With supporting my son, it didn’t matter,” Privigyi said. “I was just like, I can barely get by, just juggling the bills and taking care of him.”

Late last year, Mark died of a drug overdose, and Privigyi — consumed by grief — wasn’t thinking about insurance when the window to sign up opened and closed.

Then, in June, she got appendicitis. Her bills from two hospitals were $33,000.

The argument for having health insurance is the pile of bills she has been collecting — now with late fees added. The obstacle to getting health insurance is that same stack of bills.

“It’s such a gamble, you know, until I figure out what to do with these medical bills,” Privigyi said. “They’re just adding on late fees. How can I even afford to sign up?”

Juliet Eilperin contributed to this report.

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The State of Health Insurance for 2017 (or “If It Weren’t For Bad News . . .)

HEALTH BLOG PIC 1

By D. Kenton Henry, editor

 

We are more than half-way through 2016 and three months away from the scheduled beginning of the 2017 Affordable Care Act (ACA) individual and family health insurance Open Enrollment Period (OEP). All of which finds this broker and many of his clients still reeling from the this year’s OEP which ended in February.

By last September, the rumor was health insurance premiums would not be inflating. That was quite encouraging to myself and to my clients who inquired as to such. However, what was unsaid―and to our shock―was what we learned with the commencement of OEP, November 1. Specifically, all carriers in southeast Texas (my major market) were eliminating Preferred Provider Organization (PPO) plans and forcing all new policyholders to accept Health Maintenance Organization (HMO) plans in their place. Anyone who knows anything about the latter knows that, with this type of plan, the patient must obtain treatment within the network or have no coverage whatsoever. For the young and bulletproof this seemed no great compromise. But to the middle-aged and older, whose health problems are moderate to very serious, it was a huge one. My existing PPO plan clients who were not grandfathered, including myself, were forced by the state’s largest insurance carrier (among others) to accept HMO coverage as a substitute or lose coverage altogether effective January 1, 2016. I scrambled to find acceptable replacement coverage for over 150 of my clients from the 2017 HMO plan options. This endeavor materialized into a “Mission Impossible” style nightmare as the HMO networks made available to them had nothing approaching the larger number of provider doctors and hospitals to which the employees and dependents of large employer plans had access. My clients learned they would be unable to utilize the providers in their current (and now former) PPO plans. It was mostly an exercise in futility attempting to find all of a person’s providers in any one network and, even if that person were so lucky, the inconvenience of getting their Primary Care Physician to refer them to a specialist was another cumbersome hurdle most considered an unwanted liability. After first enrolling in a higher cost Silver Plan offering doctor’s office copays, I myself, before the close of OEP, switched to a lower cost Bronze (non-copay plan) with another company. This after realizing it was virtually impossible for my physician to successfully maneuver the referral process.  I made the decision it was best to take the premium savings involved in the benefit downgrade and have it for the occasional doctor’s visit which I have found to average $150. I save much more than this by having gone with a Bronze plan and―so far―it has worked out for me.

Since the close of OEP my phone rings throughout the week with people pleading with me to get them out of their HMO plan and into PPO coverage so they may see the doctor of their choice. I have only one PPO medical plan I can refer them to. This plan made itself available after the close of OEP but it is a hospital system plan which requires the patient remain in the system or face high out-of-network expenses. Furthermore, if the prospect has not had what the Department of Health and Human Services and ACA call a “Life Changing Event” they cannot change to a new plan at this time and must wait until October to enroll for a January 1 effective date. To add personal insult to injury, the plan does not even allow brokers and agents to be appointed with them for the purpose of doing business. Any business we refer or submit to them is done strictly on a “pro bono” basis. The only good news to be had for the consumer is that premiums not only stabilized but, in the case of those forced to migrate to HMO coverage, may have even gone down. Of course. Why shouldn’t they? The forced migration took client/patients from a position of having the final say on who their provider was to a position of having their providers, and therefore, treatment rationed. Most do not consider the trade off a worthy one. I know I do not. Of all my clients on individual and family PPO plans, forced to exchange such, some were small business owners. Those that had the minimum two W2 employees were able to switch to “Group” (employer based coverage) and maintain a PPO plan and provider network. If you fit this profile, please contact me. I can assist you in acquiring group coverage at any time throughout the calendar year.

My clients ask me if I expect PPO plans to re-enter the individual and family market in 2017. I tell them we will have to wait until the beginning of the OEP October 15th. But I advise them not to bet the ranch on it. If insurance companies do reintroduce PPOs, it will be only to entice policyholders to make a plan switch which would require a new contract (policy) in which brokers and agents would be excluded from compensation. This would be done in an effort to wipe the insurance companies books clean of the liability for our compensation. Their rationale is they can now put a great deal of the cost of enrolling people on the American taxpayer by directing prospective enrollees to the state and federal health insurance exchanges. The lion’s share will be directed to Healthcare.gov.

But what of the financial health and solvency of the insurance companies and their plans? Today’s feature article, from the New York Times (below) describes the push to ration provider access and treatment. Of course, they do not use those words, choosing instead to describe it as a move to “curb” cost in an effort to stabilize premiums. In spite of such, the insurers, for the most part, still struggle for solvency. The article explains that companies overestimated the number of ultimate enrollees and underestimated the cost of providing all the mandated care. To exacerbate their generally thin to negative profit margin, they did not receive all the government subsidies originally promised. Like so many programs, it would appear they cannot approach solvency without tax-payer funded subsidies.

Given all this, most of the insurance co-ops have failed and even major carriers are announcing withdrawal from the market. UnitedHealthcare, the nation’s largest health insurance carrier, has announced it will be pulling out of 90% of its current market in 2017. Anthem seeks to buy Cigna and Aetna seeks to merge with Humana. All this results in far less competition and . . . less competition means higher premiums for the consumer.

Stay tuned to see what the market offers us during this fall’s OEP. I will be focusing more and more on my “Medicare” clients who, much to my regret, were somewhat neglected during last fall’s scramble on my part to find new policies for 150 plus under-age 65 health insurance clients. Medicare recipients will be a priority this fall during their own OEP for Medicare Advantage and Part D Prescription Drug Plans. I hope the market allows me to play an active role in assisting families in obtaining health insurance.  . . . We shall see. Predicting what is going to happen next in terms of what the general public refers to as “Obamacare” is a lot like walking into a swamp. You’re not quite certain if your next step will land in quicksand or on top of an alligator. Terra firma would be a welcome and unexpected change for the consumer and this agent / broker.

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*FEATURED ARTICLE

New York Times

Business Day

Health Insurer Hoped to Disrupt the Industry, but Struggles in State Marketplaces

By REED ABELSON JUNE 19, 2016

Oscar Health was going to be a new kind of insurance company. Started in 2012, just in time to offer plans to people buying insurance under the new federal health care law, the business promised to use technology to push less costly care and more consumer-friendly coverage.

“We’re trying to build something that’s going to turn the industry on its head,” Joshua Kushner, one of the company’s founders, said in 2014, as Oscar began to enroll its first customers.

These days, though, Oscar is more of a case study in how brutally tough it is to keep a business above water in the state marketplaces created under the Affordable Care Act. And its struggles highlight a critical question about the act: Can insurance companies run a viable business in the individual market?

Oscar has attracted 135,000 customers, about half of them in New York State. And some of its efforts with technology have been successful. But for every dollar of premium Oscar collects in New York, the company is losing 15 cents. It lost $92 million in the state last year and another $39 million in the first three months of 2016.

“That’s not a sustainable position,” said Mario Schlosser, chief executive at Oscar.

Companies like Oscar were initially attracted by the potential of millions of new customers added to the individual market by the health law. But the reality has been far messier.

In an effort to attract customers, insurers put prices on their plans that have turned out to be too low to make a profit. The companies also assumed they could offer the same sort of plans as they do through employer-based coverage, including broad networks of doctors and hospitals.

But the market has turned out to be smaller than they hoped, with 12 million signed up for coverage in 2016. Fewer employers have dropped health insurance than expected, for example, keeping many healthy adults out of the individual market.

And among the remaining population, the insurers cannot pick and choose their customers. The law forces them to insure people with pre-existing conditions, no matter how expensive those conditions may be.

As a result, most insurers are still trying to develop a successful business model. Last year, only a quarter of the insurers appear to have made money selling individual policies, according to a preliminary analysis from McKinsey, the consulting firm. Giant insurers like UnitedHealth Group have stopped offering individual coverage through the public exchanges in some states. And most of the new insurance co-ops, which were founded to create more competition, have failed.

A few times a week, Oscar Health serves a catered lunch for employees. The company has attracted 135,000 customers, but it is losing money. Credit Richard Perry/The New York Times

The heavy losses do not necessarily mean that the individual market is ready to implode. Some insurers, including large companies like Anthem, say they remain committed to the market, and some insurers have made money.

But the turbulence is certainly greater than expected. And it may well lead many insurers to seek double-digit percentage rate increases and tighten their networks.

“There was tremendous uncertainty that even the very established companies were flummoxed by,” said Larry Levitt, an executive with the Kaiser Family Foundation, which has been closely following the insurers’ progress.

Over all, insurance companies continue to make profits. The dearth of profits from the individual markets, though, show how challenging it is to make insurance affordable when it is not subsidized by the government or an employer.

The troubles in the individual market also underscore how some of the law’s provisions meant to protect the insurers have not worked as well as desired. Insurers did not receive all the payments they were due under one of the law’s provisions, and another provision, meant to even out the risk among companies to protect those that enroll sicker individuals, has been described as flawed by many health care experts. Federal officials have said they would tweak those formulas.

The companies that have fared best so far are those that have kept the tightest control over their costs, by working closely with low-cost providers or a limited group of hospitals and doctors. Many have abandoned the idea of offering the kind of access available through many employer plans. The successful companies have also avoided the very low prices found in some of the co-ops.

For most of the insurers, though, the math has just not added up, which is the case with Oscar.

In New York State, where Oscar is based, the company recently filed eye-catching requests to raise rates by a weighted average of nearly 20 percent for 2017. Regulators will make a decision in August.

“The market is over all too low in price,” Mr. Schlosser said. “We, like everybody else, have priced in a very aggressive way.”

Many of the big insurers, like Anthem, can rely on their other businesses to generate profits while they wait for this market to stabilize. Oscar does not have that luxury; it is focused on individual marketplaces. (In addition to New York, Oscar operates in California, New Jersey and Texas.)

Other new insurers that sell plans to employers or under government programs like Medicare have been a little more insulated. When Northwell Health, the system in New York previously known as North Shore-LIJ Health System, entered the insurance market, it created a new company. That company, CareConnect, has 100,000 customers, most of them individuals insured through both large and small employers.

“If we only had the individual market, we would have taken undue risk because we would not have understood that market,” said Alan J. Murray, CareConnect’s chief executive. He said the company is close to turning a profit.

Oscar says it plans to begin offering coverage to small businesses, but Mr. Schlosser was adamant that individuals will eventually be buying their own coverage, rather than relying on employers. The company is also racing to incorporate plans with smaller networks.

Bright Health, another start-up, also plans to work closely with health systems to offer consumer-friendly plans.

While Oscar has had to use another insurer’s network in New York, the company’s goal is to form partnerships with systems to create networks that specialize in managing care. The company began experimenting with these networks this year in Texas and California.

“Oscar talks about narrow networks like no one has seen one before,” said Dr. Sanjay B. Saxena, who works with insurers and health systems at the Boston Consulting Group.

Oscar has received $750 million from its investors, and Mr. Schlosser insists that the company understood how long it would take for the new insurance marketplaces to develop, calling these “very, very early days.”

Oscar points to its technological edge as a way to manage patients’ health better than the established insurers. It has created teams, including nurses, who are assigned to groups of patients and can intervene when its data flags a potentially worrisome condition like a high blood sugar level.

Promoting itself as a consumer-friendly alternative to the other insurers also has its risks. While Oscar has loyal customers, others say they are disappointed to find the insurer behaving like everyone else. Cosmin Bita, a real estate broker in New York, switched to Oscar from an insurer that had given him the runaround about whether it would pay for blood tests as part of his annual physical. Although Oscar said when he enrolled that the tests would be covered, he said, he found himself fighting with the company over whether everything was covered.

“The exact same thing happened,” Mr. Bita said.

Oscar executives said the company works hard to keep customers satisfied.

But so far, it has not proved that it has created a better model than the rest of the industry.

As Darren Walsh, a principal at Power & Walsh Insurance Advisors, said: “They haven’t invented a new mousetrap.”

http://healthandmedicareinsurance.com

AS YOU SLEEP THE FUTURE OF YOUR HEALTH INSURANCE SUBSIDY HANGS IN THE BALANCE

KENTONSBUSINESSWEBPHOTO

Op-Ed by D. Kenton Henry

While most Americans who receive a health insurance subsidy to offset the cost of the coverage they obtained from the federal website, Healthcare.gov, go quietly about their personal business―the future of that subsidy―and the very future of the Patient Protection and Affordable Care Act (PPACA) or Affordable Care Act (ACA) for short―which gave birth to said subsidies―hangs in the balance. And, for the most part, these same Americans remain blissfully ignorant that the future of their health insurance protection hangs with it also. Apparently sleeping as its fate is to be decided by the 30th of this very month when the Supreme Court releases its decision on King vs. Burwell.

King vs. Burwell contests the financial help available to some enrollees on  the federal insurance exchange in 34 states on the basis that the PPACA was not written to allow for the existence of subsidies provided by the federal exchange. In fact, the plaintiffs argue just the opposite―that only those exchanges established by the states could provide such. Should the court rule in favor of the administration, it will mean the law has survived one more effort to derail it and its future may well be assured. However, If the plaintiffs prevail, that leaves the estimated 6.4 million recipients of the subsidies in the thirty four states which did not with illegally subsidized health insurance. And, without subsidies . . . health insurance reform starts to fall apart. The majority of the recipients will drop their coverage and only the sickest―who bring the most expensive claims to the insurance companies―will remain on their plans. This phenomena is know within the industry as “adverse selection”. In reality, it means that the youngest and the healthiest, regardless of age, will flee their plans like rats off a sinking ship. And the sinking ship will be Obamacare. The law itself. This is because it is estimated that insurance premiums for these 6.4 million will increase an average 256%. A result which will single-handedly insert the substitution “Unaffordable” into the Affordable Care Act―Obama’s signature landmark legislation― sending it into a classic death spiral.

And what does the Supreme Court’s decision hinge on? Four key words: “established by the state”. As in the subsidies are to be available only to income qualified recipients in those exchanges established by the state. The four words are contained in that portion of the law which details how premium subsidies are calculated for health insurance policies. Plaintiffs argue thirty four states never established an exchange. Ergo, how can subsidies be provided for their residents? They argue the wording was constructed to serve as an incentive for the states to create own exchange; the states called the federal government’s bluff and the feds willy-nilly pulled a rabbit out of their head and provided federal exchange subsidies for which no provision within the law was made. To follow their argument to its logical conclusion, the Internal Revenue Service has violated the law by providing tax credits to individuals in these states.

The administration argues that exchanges were created by the states when they effectively opted to let the federal government do it for them. Therefore, their inaction became their action. This allows subsidies to be provided their residents.

As a health insurance broker with twenty-nine years in the industry, I have survived the inevitable ups and downs of the small business owner. I, and my practice, have survived Hillary’s attempt in the early nineties at health care reform and the deterring effect of ever increasing health care costs; the resulting sky-rocketing insurance premiums and the general turbulence of an industry which attempts to manage the costs of a sector which comprises an estimated twenty percent of our nation’s economy. I have survived the Affordable Care Act’s resulting cut in my compensation and the loss of hundreds of clients who were forced off their policies because they did not comply with the law’s mandates. Policies with which, for the most part, my clients were happy. Had they not been, they would have dropped them on their own. I now survive the effect of premiums which have risen on average fifteen percent each of the last two years and, in many cases, much, much more for those clients who do not qualify for the subsidy. The bottom line is, “if you qualify for a significant subsidy, you are probably happy with this law. If you qualify for a relatively small subsidy―or none at all―you are most likely very unhappy with it.” It seems everyone is judging it from the perspective of their own personal welfare. And that is human nature, is it not? And I reluctantly admit, I am no exception. And it is not without guilt I do so.

Because, if the subsidies are revoked, by my estimates, I stand to lose approximately two thirds of the new business I have written in the last two years since ACA plans were forced on the public under threat of penalty. Just last month I experienced the first and slightest increase in income since the act’s passage in March of 2010. My income had been decreasing precipitously since then, mostly due to the “minimum loss ratios” imposed on insurance companies resulting in maximum losses to the agent and broker. But I accepted these; remained committed to my industry and business and have survived. If King v. Burwell is decided in favor of the administration’s adversaries, my clients will let their coverage lapse and the resulting personal effect will be “two steps forward and three steps back”. Hence, the guilt. The guilt born of knowing the worst aspects of this law (unknown to average person) are yet to be implemented and only a minute portion of the resulting costs are currently apparent. Those forthcoming will have a devastating effect on our nation’s treasury which is already eighteen trillion in debt and rising “with a bullet”. I know that progression of this law and its mandates is already forcing rationing of our health care providers and further progression is going to result in ever increasing rationing of health care treatment available to each of us. And yet, for my own sake, I don’t want to experience more losses.

Please do not think I do believe there was no need for health care reform. When two of every five health insurance applications I submitted on behalf of clients was declined due to pre-existing conditions and another not taken due to “waivers” of such (prior to the law’s enforcement) I experienced the angst of my clients and my own.

And so I sit, in front of my computer desktop, on the edge of my seat monitoring each post from SCOTUSBLOG.COM and each editorial from the most liberal to conservative journalist (who knows much less about this law than I) attempting to predict as to which way this imminently pending decision will go. The patriotic conservative within me says, “for the welfare of my nation’s economy, this law should fail.” While the agent, broker, small business man within me who likes to eat, pay his bills, maybe put something away for retirement and doesn’t want to see any more of his clients lose their very necessary and greatly appreciated health insurance coverage says―”Please, oh, please. Let the Supreme Court of this United States of America, in all their supremacy, rule that the authors of the Patient Protection and Affordable Care Act didn’t really mean what they wrote. Let the subsidies stand.”

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Related stories:

THE NEW YORK TIMES

Politics

Four Words That Imperil Health Care Law Were All a Mistake, Writers Now Say

By ROBERT PEAR MAY 25, 2015

http://www.nytimes.com/2015/05/26/us/politics/contested-words-in-affordable-care-act-may-have-been-left-by-mistake.html?ref=us

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MORNING CONSULT Burwell Draws Line On Health Subsidy Fix Jon Reid   |   June 10, 2015  http://morningconsult.com/2015/06/burwell-draws-line-on-health-subsidy-fix/