Friday, August 26, 2016

Insurers and Regulators Say ACA Proving Too Risky, Costly

This is from Dave Flessner writing at the Chattanooga Times Free Press (TN):
Tennesseans cannot afford 44 to 62 percent Obamacare price increases that will force them to make difficult decisions about their daily lives and their family budgets. They should not have to pay the price for a terrible health care law and the refusal by Democrats in Washington to see what is plainly obvious -- that Obamacare is failing. Sen. Lamar Alexander 
The price of individual health insurance coverage will increase next year by a record amount in Tennessee after state regulators agreed to the full amount of the rate increases requested by the three health insurers still offering exchange plans under Obamacare. 
But even with a 62 percent rate hike in 2016, the state's biggest health insurer is still evaluating whether to stay in the program, and Tennessee's insurance commissioner said Tuesday she worries about whether the state can maintain a competitive marketplace under Obamacare. U.S. Sen. Lamar Alexander, R-Tenn., the chairman of the Senate Health Committee, said the rate increases are too costly for Tennesseans, and Obamacare, at least in its current version, "cannot be allowed to continue." 
BlueCross BlueShield of Tennessee, the state's biggest health insurer, estimates it will have lost nearly $500 million on its individual exchange plans by the end of this year. Even with the state allowing BlueCross to more than double its rates in three years, BlueCross officials said they are still studying whether it makes sense to keep offering Obamacare coverage in 2017 or abandon the program and leave much of Tennessee without any coverage under the marketplace exchanges. 
"We continue to have concerns about uncertainties about the Affordable Care Act at the federal level and those concerns are leading us to keep all of our options open as it relates to participation in the 2017 marketplace," BlueCross Senior Vice President Roy Vaughn said Tuesday. "Despite ACA marketplace plans being a fairly small part of our business, they have continued to have out-sized losses and that is no longer sustainable. And from our standpoint, the Affordable Care Act is as risky as ever, if not more so for consumers and health insurers alike." 
BlueCross in Tennessee debuted its individual marketplace policies in 2014 with the second lowest rates of any insurer in the country. But after capturing the biggest share of the market, the Chattanooga-based BlueCross lost $311 million in the first two years of Obamacare and raised its rates 19 percent in 2015 and 36 percent this year before requesting another 62 percent hike in premiums for next year. 
After other insurers exited the market, state regulators agreed to allow BlueCross and other insurers to get their full requested rate increase for next year. 
Cigna and Humana are the only two other health insurers in the marketplace exchange in Tennessee and both got approval Tuesday for rate increases of more than 44 percent for 2017.
"There are significant risks for these companies beyond the rates and premiums that we can control and the companies told us they were worried about their current footprint and they certainly weren't interested in expanding their footprint until the market stabilizes," McPeak said. ...

Friday, August 19, 2016

Obamacare Exchanges are Headed to 18% to 23% Premium Increases in 2017

This is from the Wall Street Journal:
[Obamacare plans are headed for] another round of rate shock for 2017. Insurers in 49 states have submitted their premium requests to regulators, and the average “enrollment-weighted” rate increase, which accounts for market share, is in the range of 18% to 23%. The Congressional Budget Office projected 8%. ... 
[Even former ACA poster child California is struggling], where 11 of the 12 health plans that sell coverage under the state’s ObamaCare’s rules turned a profit the last two years. Yet the state is now reporting a final average rate increase of 13.2%, up from 4.2% in 2015 and 4% in 2016. In states with is less competition, the exchanges are even worse off. The Kaiser Family Foundation estimates that as many as 664 U.S. counties (out of 3,007) may be served by only a single insurer in 2017, up from 225 in 2016....

Thursday, August 18, 2016

On Armstrong and Getty on August 17, 2016 | Exchange Premiums Up 20% in 2017 & Carriers Defecting

1) How Much Are Obamacare Enrollees and the Newly Covered Medicaid Folks Costing Taxpayers?

Obamacare enrollees are 22% more costly than people covered through employer plans.

But at least Medicaid expansion is cheap. Right? Nope. As recently as 2011, Medicaid covered adults cost $3,247 per individual while children cost only $2,463. However, a new report from the U.S. Department of Health and Human Services found Medicaid expansion enrollees are 50% more expensive than originally projected. New Medicaid expansion enrollees’ costs were $6,366 in 2015. Yes, federal bureaucrats missed their projection by 50% just a few short years in.
2) How much are the Obamacare premiums?
Employer based coverage is increasing, on average, between 6% and 8% depending on the state while Obamacare premiums are increasing, on average, between 18% and 23% depending on the state. This, despite the fact that politicians have waived a 3.5% tax for 2017. Obamacare added a Health Insurer’s Tax to be baked into all premiums, indefinitely, to partially pay for Obamacare. Politicians and bureaucrats got together last fall and agreed to waive its collection on 2017 policies in order to avoid further disruption of insurance premiums. Hence, next year’s renewals will automatically be a least 3.5% higher.
3) Anthem (Blue Cross), Aetna, Humana and United Healthcare All Now Running from Obamacare Exchanges. 
Full stories from the Hill and the Washington Post.
4) Carriers Running Now, Will Be in a Full Blown Usain Bolt Sprint By This Time Next Year.
Why? Because the risk transfer "profit sharing" mechanism expires and a major portion of this spigot will be shut off.

Some carriers, including Blue Cross have already sued the federal government because they want more subsidies that they were promised but now aren’t entitled to due to subsequent congressional clarification (the Marco Rubio move). PPACA provided all along that most of the bailout money would come in a form of budget neutral profit sharing arrangement from some of the carriers who experienced windfalls to those who lost badly.

Initially, carriers balked suspecting that there would not be enough windfalls to offset their losses. Federal bureaucrats in HHS and CMS assured carriers that they would do whatever it took to make them whole – even if it meant dipping into other revenue sources. The Obama Administration had to make these assurances, lest carries begin exiting after Obamacare’s first year.

Marco Rubio and a group of Senators spearheaded legislation that mandated no general fund support for the bailouts. And so now, some carriers are higher and drier than they thought they would be. But that will only be exacerbated after 2017 when there are no bailout dollars baked into the cake.
5) Surely then, individuals are doing better, right?
A) Narrow Networks & High Deductibles Fueling Surprise Medical Bills and Fights Between Insurers, Providers & Patients: The higher deductibles and more narrow networks necessitated by Obamacare plan design rules, are leaving patients with bills they can’t afford and hospitals with elevated levels of bad debt. “This issue is taking off like wildfire,” said Betsy Imholz, special projects director at Consumers Union, which has collected stories from some 2,300 patients of surprise bills ranging from $50 to thousands of dollars. 
B) Bad Debt: Hospitals have long struggled to collect bills when patients aren’t covered by insurance - creating delinquent accounts. The Affordable Care Act was supposed to relieve some of that strain by helping pay for coverage for millions of Americans and expanding Medicaid in some states to cover the poor. Yet, an increase in insurance that comes with high deductibles and cost-sharing means hospitals are having a much harder time collecting.

Under individual Obamacare mid-level “silver” plans, the annual deductible was $2,556, and under less expensive, low-level “bronze” plans it was $5,328 in 2015.

Patients are unlikely to pay medical bills that are greater than 5 percent of household income, according to the Advisory Board, a consulting firm to hospitals. Median household income in the U.S. is at about $53,000, suggesting that when out-of-pocket charges exceed $2,600 hospitals can forget about collecting.

C) Subsidy Claw-back Nightmares: The Orange County Register highlighted the difficulties in the subsidy system. Telling the story of Kevin Foley who successfully enrolled in an Obamacare insurance plan with federal tax credits, made more money than expected and dealt with the government's byzantine clawback processes.  

Wednesday, August 17, 2016

Two Obamacare Architects See the Light - Loo Late

... Dr. Kocher joins Dr. Zeke Emanuel as another Obamacare architect who has realized giving the federal government this much power to shape the heath system is not having the outcome he anticipated. Back in 2009 and 2010, Dr. Kocher believed that the consolidation of physicians and hospitals into large health systems would lead to higher quality care at lower cost. As Dr. Kocher notes, the systems are consolidating, but they are not hitting cost and quality targets. 
Instead, smaller, physician-led practices do better at such improvements. Now that he is a professional investor in medical innovation, Dr. Kocher sees something that was not apparent when he worked in government. He recognizes that smaller practices are nimbler and more responsive to patients’ needs. 
However, practices are consolidating because larger, bureaucratic health systems are better able to comply with the massive regulatory burden imposed by Obamacare. Dr. Kocher invites the federal government to rewrite the rules to allow smaller, nimbler practices to succeed. 
Dr. Kocher and other former Obama officials who are now pursuing entrepreneurial opportunities in the health system they wrought are in the best position to advocate for such reform. Unfortunately, it is just not in the nature of big government to favor smaller, nimbler competitors over large, bureaucratic ones.

Tuesday, August 16, 2016

The Obamacare Tax Credit Nightmare

Last year, Santa Ana resident Kevin Foley successfully enrolled in an Obamacare insurance plan, thanks in part to a popular tax credit that helps low-income earners afford plans through the exchange. The process for Foley, then a college student, appeared to be hurdle-free. 
But after a sudden increase in income and the arrival of tax season, Foley’s situation began to get messy. An $800-plus bill with errant charges from Kaiser Permanente, his insurance provider, unexpectedly propelled Foley into the inner workings of a young, government-sponsored program as he searched for a refund. 
“They’ve had me jumping through hoops for months without actually helping me,” Foley said last month. “At one point, I was assigned a case manager who never contacted me and does not return my calls.” 
This marks the second year in which any financial implications of Obamacare have to be figured into your taxes – a meeting of two complicated systems that has produced a host of issues for involved parties, from the IRS to enrollees such as Foley. 
Foley’s tax dilemma centered on the repayment of the Advanced Premium Tax Credit, a government subsidy that helps reduce the premium costs of plans purchased through state-run insurance exchanges. 
From the get-go, Foley was supposed to repay the tax credit directly to Uncle Sam, not to Kaiser. In other words, in his case, Kaiser essentially got paid twice and Foley was on the hook for another large tab. ...

Monday, August 15, 2016

Small Employers Getting Out of Healthcare

From EBN:  
Employees who work at small organizations historically have been less likely to have employer-sponsored health insurance. But that’s even more the case these days. 
According to new research out this week from the Employee Benefit Research Institute, more and more small companies are getting out of the healthcare game in wake of the Affordable Care Act. 

Friday, August 12, 2016

Large U.S. Employers Project Health Benefit Cost Increases to Hold Steady at 6% in 2017

Despite skyrocketing specialty pharmacy costs, overall health care benefit cost increases at large U.S. employers are expected to hold steady at 6% again in 2017, according to an annual survey by the National Business Group on Health, a non-profit association of 425 large employers. The Large Employers' 2017 Health Plan Design Survey, the industry's first look at health benefit costs and plan design changes for 2017, also revealed that employees will not see major increases to their costs during this year's open enrollment season. ... 
According to the survey, the 6% increase employers project for 2017 is identical to the increase they would have experienced in each of the past two years had they not made changes to their plan design. However, many employers expect to hold increases to 5% by making some changes to their plans. The survey is based on responses from 133 large U.S. employers offering coverage to more than 15 million Americans. 
... [C]urrent estimates have health insurance premiums for the average public exchange plan increasing by at least 10%, about twice what large employers are projecting for next year. This is a clear indication that the employer-based health care model continues to be the most effective way to provide health insurance coverage to employees and their families.... 
Fueling the overall growth in the cost of health benefits is the surge in spending on pharmaceuticals, and specialty drugs, in particular. For the first time in the survey, most employers now consider specialty pharmacy the highest driver of health costs and are taking steps to curb them. According to the survey, nearly a third of respondents (31%) indicated specialty pharmacy was the highest driver of health costs. That compares with only 6% who cited specialty pharmacy as the number one driver in 2014. Overall, 80% of employers placed specialty pharmacy as one of the top three highest cost drivers, followed by high cost claimants (73%) and specific diseases and conditions (61%). ... 
Based on the survey, here is what else employees can expect during open enrollment:
  • Telehealth services on the rise: Nine in 10 employers (90%) will make telehealth services available to employees in states where it is allowed next year, a sharp increase from 70% this year. By 2020, virtually all large employer respondents will offer telemedicine. Utilization by employees remains low, but is increasing steadily.
  • Consumer-Directed Health Plans (CDHPs) increase slightly: Overall, 84% of employers will offer a CDHP in 2017, up from 83% this year. In addition, more than one-third of employers (35%) will only offer CDHPs to employees in 2017, a slight increase from 33% this year.
  • Spousal surcharges leveling off: One in three employers (33%) will have surcharges in place for spouses who can obtain coverage through their own employer, roughly the same as this year. A few employers will exclude spouses when other coverage is available through an employer.
  • Expanded options at Centers of Excellence grow. The use of Centers of Excellence will grow from 79% this year to 85% in 2017. The largest increases will be for bariatric surgery (up 15 percentage points), transplants and fertility treatments, both up 8 percentage points.
  • Tools to manage care: Eight in 10 respondents (80%) plan to offer nurse coaching for care and condition management while 72% will offer nurse coaching for lifestyle management. Nearly two-thirds (65%) will provide employees with self-service decision-making tools to help them become better health care consumers. ...

Tuesday, August 9, 2016

Office Workers Must Exercise for an Hour a Day to Counter Death Risk

From The Telegraph
Office workers must exercise for one hour a day to combat the deadly risk of modern working lifestyles, a major Lancet study has found. 
Research on more than one million adults found that sitting for at least eight hours a day could increase the risk of premature death by up to 60 per cent. 
Scientists said sedentary lifestyles were now posing as great a threat to public health as smoking, and were causing more deaths than obesity. 
They urged anyone spending hours at their desk to change their daily routine to take a five minute break every hour, as well as exercise at lunchtimes and evenings. ...

Monday, August 8, 2016

Federal Regulators Make It Pretty Simple: You Want No Part of Incentive Based Wellness Programs

Unless your business can hire a law firm to wade through and ultimately defend you on the competing federal laws and EEOC, ADA and GINA regulatory proclamations, wellness programs that do any more than make free information available clearly aren't worth the legal risk.

Oh, and let us not forget that when these programs are studied by folks who don't want to sell them to you their efficacy is dubious at best.  Here, here and here.

This is from Katarina E. Klenner writing at Bloomberg BNA:
New workplace wellness regulations that address participation incentive limits under disability and genetic anti-discrimination laws are inconsistent with overlapping federal laws, so employers must scrutinize their programs closely to ensure compliance.
Agency officials examined the scope of the Equal Employment Opportunity Commission's 2016 regulations under Title I of the Americans with Disabilities Act and Title II of the Genetic Information Nondiscrimination Act during a July 14 webinar sponsored by the American Bar Association.
They also described how those rules interact with 2013 regulations issued by the departments of Health and Human Services, Labor and Treasury that implement the nondiscrimination provisions of the Health Insurance Portability and Accountability Act, as amended by the Affordable Care Act. ...
Full story absolutely worth the time to read, here.

Friday, August 5, 2016

Chart of California State and City Paid Sick Leave Laws

From Fox Rothschild LLP:
Trying to keep track of all of California’s paid sick leave requirements is a daunting task. The state has its own rules and then so do seven municipalities, with Los Angeles joining the list July 1, 2016. 
To help keep track of the varying laws and regulations, Tyreen Torner has compiled a chart that contains all the requirements. 
Click here to download a PDF of the California State and City Paid Sick Leave Laws Chart.

Thursday, August 4, 2016

Your Employees are Drowning in a Benefits Quagmire. More Tech? Maybe Not - Consider More Outsourcing

More and more we see and hear employers turning to technology to "solve" the benefits problem.  And while there is no doubt that technology is part of the solution, it can't be the only component.  As healthcare becomes more complex and challenging, we see an increasing number of clients turn to us to wholly outsource their benefit department.  Here is why, in summary, from Employee Benefit Adviser:
  • Nearly one-third (32%) of insured survey participants reported that they are uncomfortable with their personal knowledge and skills for navigating their medical benefits and the healthcare system.
  • Employee productivity is diminished because employees are spending an average of three and a half hours of company time a month dealing with healthcare issues in addition to time spent at home wrestling with the pros and cons of various health plan options.
  • Health benefits executives should be asking if they're really getting the maximum return on these tools and technologies or if they're creating additional problems and complexity for employees at various ages and stages of their career.

Wednesday, August 3, 2016

Obama Administration Unlawfully Reimbursed Health Insurers, Judge Rules

House Republicans win challenge, but judge stays ruling pending the government's appeal.

From Zoe Tillman writing at The National Law Journal:
The Obama administration unlawfully paid billions of dollars to insurance providers under the Affordable Care Act without a funding appropriation from Congress, a federal district judge in Washington ruled.
The insurance subsidies were designed to offset discounts that insurers were required to give eligible lower-income Americans [making less than 250% of the Federal Poverty Level] under the health care reform law. U.S. District Judge Rosemary Collyer said federal agencies could not fund the subsidies through another section of the health care law that allocated money for tax credits.
“Paying out Section 1402 reimbursements without an appropriation thus violates the Constitution,” Collyer wrote. “Congress authorized reduced cost sharing but did not appropriate monies for it, in the FY 2014 budget or since. Congress is the only source for such an appropriation, and no public money can be spent without one." ...
[The] ruling won’t take effect right away. Collyer stayed an injunction that would block further payments to insurance companies in order to give the executive branch the opportunity to appeal. ...
Jonathan Turley, the George Washington University Law School professor who represented the House plaintiffs, called Collyer’s ruling “a resounding victory not just for Congress but for our constitutional system as a whole.”
Turley said in a statement: “We remain a system based on the principle of the separation of powers and the guarantee that no branch or person can govern alone. It is the very touchstone of the American constitutional system and today that principle was reaffirmed in this historic decision." ...

Tuesday, August 2, 2016

New California Rules Dictate Precisely What Must Be in Handbooks Regarding Harassment, Discrimination, and Retaliation

From Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C:
Beginning April 1, 2016, new California regulations (§11023 specifically) will require all California employers with more than five employees to have written policies regarding harassment, discrimination, and retaliation.  For some employers, this may mean drafting a specific policy for the first time; for others, it may require some tinkering with an existing policy.  Below we address the new regulations.
Full story.

Monday, August 1, 2016

Narrow Networks Fueling Surprise Medical Bills and Fights Between Insurers, Providers and Patients

The growth of insurance plans built around small networks of health-care providers is fueling new fights over surprise medical bills, when patients inadvertently get care from out-of-network doctors. 
Providers and insurers are blaming each other for sticking patients with higher bills in such cases, and nearly two dozen states have passed or are considering legislation to protect consumers. 
“This issue is taking off like wildfire,” said Betsy Imholz, special projects director at Consumers Union, which has collected stories from some 2,300 patients of surprise bills ranging from $50 to thousands of dollars. 
Surprise bills often occur when patients receive care at an in-network hospital, but end up being treated by an emergency physician, anesthesiologist, radiologist or other hospital-based specialist who doesn’t accept the same insurance. 
While the problem has simmered for years, consumer advocates say it is escalating with the rise of “narrow network” plans that contract with limited numbers of doctors and hospitals to lower costs. 
What’s more, nearly 75% of the plans sold on the marketplace this year offer no out-of-network coverage except for emergencies, according to consultants Avalere Health LLC. Out-of-pocket maximums typically don’t apply to out-of-network bills, so plan members can face unlimited costs. 
Patients can be powerless to avoid it. 
Cassie Ray, a policy analyst with the American Cancer Society in Fairfield, Calif., says she verified, twice, that the outpatient surgery center where she had a follow-up to a mastectomy was in her insurance network. So she was shocked to receive a $588 bill from an out-of-network anesthesiologist. 
“The surgery center wouldn’t even discuss it with me. They said the anesthesiologist worked for a separate company,” she says. 
Many of the current disputes center on the “usual and customary” rates insurers use to determine how much, if anything, to pay out-of-network doctors. Patients are typically responsible for the difference between what an out-of-network doctor charges and what their insurance pays. 
Prime Healthcare Services, which operates 43 hospitals in 14 states, filed lawsuits against six insurers last month, charging that they use “a flawed, secret and legally inappropriate” system to set out-of-network rates that forced Prime providers to charge patients more. 
In May, the American College of Emergency Physicians sued the Obama administration over a similar issue, charging that its final rules under the Affordable Care Act allow insurers to set out-of-network rates for ER doctors as low as they choose. 
“The problem isn’t surprise bills—it’s surprise gaps in insurance coverage,” said Jay Kaplan, president of the emergency-physicians group. It says insurers have slashed payments to ER doctors as much as 70% in recent years, and taken advantage of federal laws requiring them to provide emergency care regardless of cost. 
Insurers counter that more doctors are rejecting in-network rates, then charging out-of-network fees that are many times higher. 
“This is as much about the prices that providers are charging as it is the insurance coverage,” says Clare Krusing, a spokeswoman for America’s Health Insurance Plans. “They are essentially demanding a blank check.”
For emergency care, when patients often can’t choose where ambulances take them, the ACA requires insurers to pay “reasonable” amounts to out-of-network providers and allows doctors to bill patients for the remainder, called balance-billing. Regulations under the ACA define reasonable as “the greatest” of either the Medicare rate, the insurer’s average in-network rate or the insurer’s usual-and-customary rate for out-of-network payments. 
The ER physicians’ lawsuit demands that the Obama administration require insurers to use an independent database such as FAIR Health Inc. to calculate usual-and-customary rates. FAIR Health, which collects some 1.7 billion claims annually, was created in 2009 to settle charges by the New York State Attorney General’s office that insurers were significantly underestimating such rates. The ER doctors warn that insurers could underestimate those rates again unless the law requires transparency. 
A spokesman for the Department of Health and Human Services declined to comment on pending litigation.  
The insurers named in Prime Healthcare’s suit—including Aetna Inc., Cigna Corp., and Anthem subsidiary Amerigroup Nevada—declined to comment. 
Prime itself is facing allegations of Medicare fraud from the Justice Department, which it has denied. 
State laws to protect consumers vary widely. Some merely require insurers to inform patients they might be billed by an out-of-network provider. Others limit how much out-of-network providers can bill patients and some set up arbitration processes to resolve disputes between insurers and providers. ...

Bad Debt Is the Pain Hospitals Can't Heal as Patients Don't Pay

From Bloomberg:
A type of pain that hospitals thought they had relieved has come back with a vengeance: it’s called bad debt. 
Hospitals have long struggled to collect bills when patients aren’t covered by insurance -- creating delinquent accounts. The Affordable Care Act was supposed to relieve some of that strain by helping pay for coverage for millions of Americans and expanding Medicaid in some states to cover the poor.
Yet while millions of people have gained coverage since Obamacare became law in 2010, there’s also been an increase in insurance that comes with high deductibles and cost-sharing. Under those plans, the first few thousand dollars of annual medical expenses come out of patients’ wallets. That’s money that hospitals like Childress Regional Medical Center in the Texas Panhandle region are unlikely to collect. ... 
Hospitals are feeling the pressure from those patients. Community Health Systems Inc. operates 195 hospitals in 29 states and is the U.S.’s second-biggest for-profit U.S. hospital chain. This month, it revised its fourth-quarter 2015 provision for bad debt up by $169 million -- and said that 40 percent, or about $68 million of that amount, was from patients being unable to pay deductibles and co-payments. Patient bankruptcies also contributed, the company said. A Community Health spokeswoman didn’t respond to requests for comment. ... 
While higher out-of-pocket charges can lower what insurance costs up front, it means more costs for patients on the back end. Under individual Obamacare mid-level “silver” plans, the annual deductible was $2,556, and under less expensive, low-level “bronze” plans it was $5,328 in 2015, according to the Kaiser Family Foundation. ...  
Patients are unlikely to pay medical bills that are greater than 5 percent of household income, according to the Advisory Board, a consulting firm to hospitals. Median household income in the U.S. is at about $53,000, suggesting that when out-of-pocket charges exceed $2,600 hospitals can forget about collecting....