Tuesday, July 31, 2012

Those Marvelous Rebates

The folks in LaLa land were greeted with this posting from the California Dept of Insurance. Seems the MLR rebates have been calculated and the results are in.

  • Blue Shield of California Life & Health Insurance Company: $10.8 million rebate to policyholders in the individual market; approximately 239,595 subscribers impacted; $45.15 average rebate per subscriber;
  • Kaiser Permanente Insurance Company: $277,034 rebate to policyholders in the individual market; approximately 21,823 subscribers impacted; $12.69 average rebate per subscriber;
  • Connecticut General Life Insurance Company (CIGNA):$3.4 million rebate to employers in the large group market; approximately 89,575 subscribers impacted; $37.70 average rebate per subscriber;
  • Anthem Blue Cross Life and Health Insurance Company: $1.3 million rebate to policyholders in the individual market; approximately 407,429 subscribers impacted; $3.16 average rebate per subscriber;
  • Aetna Life Insurance Company: $3.4 million rebate to employers in the large group market; approximately 84,428 subscribers impacted; $40.50 average rebate per subscriber;
  • PacifiCare Life and Health Insurance Company: $789,615 rebate to employers in the large group market; approximately 63,600 subscribers impacted; $12.42 average rebate per subscriber.

2700 pages, over 12,000 additional pages of regulations and interpretations so policyholders can get a refund ranging from $3 - $45.

I mean really?


Nobamacare is a real possibility thanks to the Supreme Court Decision. If the states refuse to participate in key parts of Obamacare the law quickly becomes Nobamacare.
If any state declines to participate in the expansion, the Department of Health and Human Services (HHS) could strip that state of 100% of its Medicaid dollars. Every voter in that state would continue funding Medicaid through payroll taxes twice a month, but now would be subsidizing the other 49 states. Rejecting the expansion would thus be a political death wish for any governor or legislature.

 This coercion is an unconstitutional violation of state sovereignty, so the Court struck down part of ObamaCare’s massive Medicaid expansion.
​By rejecting Medicaid expansion, millions will have to forego the "free" health care entitlement.
​Next, the states will need to refuse to create the exchanges. This forces HHS to establish them, paving the way for Nobamacare.
But there are no tax subsidies if HHS runs an exchange, so no incentive for people to flock to the exchanges; they’d pay full price. While many high-risk individuals would do so, it would still be vastly more expensive. Many will instead choose to pay the penalty (tax?) for violating the individual mandate.
Perhaps the rocket surgeons on Congress should have thought of that before writing this bill.
Since HHS-run exchanges have no subsidies, for states refuseing to create exchanges, no employer in that state will be subject to that penalty. This means business owners will band together to lobby their state not to set up exchanges.
This will create an unworkable patchwork nationwide, between states with semi-socialized medicine and healthcare costs spiraling out of control, versus those with private-sector medicine. Expect doctors, insurers, and providers to flock to these friendlier states, creating an increasingly unbalanced system. Then ObamaCare will start coming apart at the seams, and momentum will build to repeal and replace.
​Sounds like a plan to turn Obamacare in to Nobamacare.

​I like it.

Medicaid Patents Get Short Sheeted

Sixteen states impose a monthly limit on the number of drugs Medicaid recipients can receive and seven states have either enacted such caps or tightened them in the past two years, according to the Kaiser Family Foundation (KHN is a program of the foundation). The limits vary across the country. Mississippi has a limit of two brand-name drugs. In Arkansas adults are limited to up six drugs a month.
Since June, Alabama has had the nation’s stingiest Medicaid drug benefit after limiting adults to one brand-name drug. HIV and psychiatric drugs were excluded. On Aug. 1 the state will relax the limit to its previous level — four brand-name drugs — after the restriction saved more money than expected and the state received money as part of a settlement with a pharmaceutical company.

Pizza Getting Cold

A successful pizza restaurant owner wants to expand and open a new restaurant but is putting off plans because of Obamacare.

"I want to open a new restaurant, but without knowing how Obamacare will affect me, I can't make plans," Nichols said at a recent community forum in Beaumont on the new Patient Protection and Affordable Health Care Act.
 With property purchased and blueprints drawn, Nichols said her building is now on hold because she can’t determine how to budget for Obama’s mandate.
New restaurant. More jobs.
Just what this economy needs.
Those who do not offer health insurance will have to pay a tax of $2,000 per employee.
Nichols has 85 Beaumont area employees set up on a private carrier insurance plan and matches the $90 a month each worker pays with $90 to cover the entire premium."
That's the cost if I continue to provide insurance. So I have two options, I can stop offering coverage and pay the $2,000 fine, or I could keep my number of staff under 50 so the mandate doesn't apply.
Hmmmm. Where have we heard this before?
She has been in the restaurant business for over 30 years “producing jobs for young adults.”
“Tens of thousands of kids have been sent to college, families have been started and careers have begun," Nichols added. "Now, a long and productive career is about to be destroyed by slavery instead of being rewarded with retirement."Nicholas said in 2011 she had to pay 87.49 percent of her income to federal income, state franchise tax, and property tax.
"Now add to that sales tax, phone tax, trash tax, water tax, gasoline tax, payroll tax and other taxes ad naseum," she continued.
Sounds like Washington is a taxaholic.
Just say no to Obamacare.

Pinning Hopes on Promises

Georgia residents Liz Johnson and Robert Irby have diabetes and no health insurance. They had health insurance in the past . . . a high deductible plan with BCBSGA but they dropped it when the premium increased.

Johnson and Irby will be eligible for the state Pre-Existing Condition Insurance Plan, created for ‘’high risk’’ individuals like themselves. More than 1,000 Georgians with health conditions belong to this new health plan. The couple must be uninsured for six months before joining PCIP. 
Johnson says she has looked into the PCIP and says, “It might be cheaper than what we had.’’
In addition, beginning in 2014, health plans will be barred from denying coverage to people with pre-existing conditions, and also won’t be able to charge them discriminatory premiums. And people with health problems and individual policies will be able to access private coverage through an insurance exchange, which should lower premiums for many consumers buying on their own
They are in fact eligible for PCIP. The premiums for the Standard option is $470 each.
Instead of signing up for PCIP they are "hoping nothing goes wrong".
PCIP is one area of Obamacare that actually works . . . as long as you sign up for it. Otherwise you live with the hope that your health won't change.

Monday, July 30, 2012

Limited Choice Under Obamacare

Obamacare is supposed to make health care and health insurance more affordable, give consumers more choices and provide free health care services.

Apparently the politicians in DC believe the public is both ignorant and gullible. In truth, there are at least 10 ways in which Obamacare LIMITS consumer choice.

"Free" preventive services are not really free. Everyone pays for these services in the form of HIGHER PREMIUMS. 

Care to guess who decides which preventive services are essential?

The U.S. Preventive Services Task Force, a committee of experts chosen by HHS (Health and Human Services). In other words, non-elected officials are deciding the level and type of care you need.                     

We have discussed how the MLR (Medical Loss Ratio) is impacting health insurance by RAISING premiums and LIMITING choice. Seems it can also lead to the loss of HSA and HRA type plans.
since HSAs often cover most or all of participants’ routine medical expenses, the claims that a high-deductible health plan experiences are larger and may fluctuate significantly from year to year. According to one study, “For high-deductible and HSA plans to be viable, both from a consumer and carrier perspective under [Obamacare], an adjustment to the MLR formula for the impact of HSAs may be necessary.”[5] Otherwise, HSA plans may disappear, robbing consumers of an attractive and popular option.
We don't have to remind you that HSA and HRA plans actually make premiums AFFORDABLE for thousands of people that would otherwise go without insurance.

In addition to the IPAB (Independent Payment Advisory Board), a new government bureaucracy that decides what health services will be covered by insurance and which ones will not, a new CER (Comparative Effectiveness Research) entity will decide what type of care you can receive.

The list of 10 limits under Obamacare is available for review at this link.

Change you better believe in.

Saturday, July 28, 2012

FDA Created Cancer Drug Shortage

What does Margaret Hamburg and the FDA have against cancer drugs? Maybe she can't wait for the Obamacare death panels and wants to speed the process along.

This FDA smackdown on generic drugs has led to a shortage of much needed cancer drugs.
The report, commissioned by Oversight Committee chairman Darrell Issa (R., Calif.), details the dramatic drop in the production of generic injectable drugs since Hamburg was confirmed as FDA chief in May 2009. Upon taking office, Hamburg promised an aggressive effort to enforce the FDA’s stringent manufacturing standards. In 2010, Hamburg’s officials issued 673 warning letters to drugmakers and other companies: a 42 percent increase from 2009. In 2011, the agency issued 1,720 warning letters: a further increase of 156 percent.
So what does Ms. Hamburg know about quality control that her predecessors did not?

Good question.
“According to sources with inside information about FDA’s operations, there is a disconnect between the FDA field force, the inspectors who work out of the agency’s district offices, and scientists and other career individuals at FDA headquarters who work on review and compliance functions,” Issa writes. “According to the Committee’s sources, FDA’s field force does not believe that it is within the scope of their authority to worry about the implications of their actions, even if it means a manufacturer closing a facility or removing manufacturing lines from production.”
Sort of a shoot first and ask questions later approach.

Wonder how cancer patients feel about this?
Ondansetron, a drug used to treat chemotherapy-induced nausea and vomiting, used to cost $3.71 per injection when it was on patent. Within one year after the drug’s patent expired, an injection cost 28 cents.

But injectable drugs require special manufacturing costs. “Injectable drugs often need to be lyophilized,” or freeze-dried, “which is extraordinarily expensive—the machine costs around $100 million,” says Mantha. “It’s a big capital expenditure.” On top of that, companies had to deal with the blizzard of new FDA enforcement actions
Why should the FDA care? It isn't their problem.
 in a normal market, whenever you have a shortage, manufacturers can raise prices, in order to restore their incentive to supply more product. But because of Medicare’s 6 percent cap on price increases, suppliers had no ability to raise prices to respond to doctor and patient demand.
Government interference in the market place created these shortages. The tag team of Medicare and FDA is squeezing the life out of low cost generic drugs.
the recently passed Prescription Drug User Fee Act legislation contains some language regarding drug shortages, but again the emphasis is on early warning of shortages, and speeding up FDA reviews, rather than on the real problems: excessive regulatory interference, and Medicare’s price controls.
As a former generic-drug CEO says below, “it seems somewhat ironic that the FDA is being empowered to cure a crisis they may have had a hand in creating.”
This is what happens when government officials try to regulate industries about which they have no idea how their actions impact end results.
As usual, Avik Roy's take on this topic is on target. Click here to read the full report as well as two addendum's.

An Exchange by Any Other Name

is still an exchange. You can change the name, put some lipstick on that pig, but it is still a pig.

Health insurance exchanges are an integral part of Obamacare.    

So are taxpayer funded subsidies.

Without exchanges, there are no subsidies. More importantly, without the RIGHT KIND of exchange, there are no subsidies.

The Massachusetts exchange used for Romneycare relies heavily on taxpayer funding . . . especially from the federal tax coffers.

Much has been written about the Massachusetts Connector (the exchange) but very little about the exchange in Utah.

The Mass Connector has a staff of 45 employees and contractors and an annual budget of $40 million.

The Utah exchange has a staff of 2 and a budget of $750,000.

The Mass Connector relies heavily on salaried "navigators" and advertising to enroll citizens (and non-citizens) while the Utah connector incorporates and welcomes insurance broker participation.

According to The Economist:
Utah's reform is “market-based”, says Mr Herbert, whereas “Obamacare” is a big-government monstrosity. But it too relies on exchanges, so now the word is tainted.
Tainted by Obamacare.

So the folks in Utah want to hold a contest to rename their exchange.

But how is the Utah exchange is different from the Mess Connector and Obamacare?
Utah also decided that government subsidies should play no part in its reform, whereas the one in Massachusetts was based on them. Thus Mr Romney's plan became, more or less, the basis for Obamacare, whereas Utah started seeing its plan as a free-market alternative. 
Unsubsidized insurance. Instead, allowing the free market to determine price.

What a novel idea.
So the Utah Health Exchange is decidedly not Romneycare or Obamacare. But what is it? At first glimpse, it is a snazzy web portal where four of Utah's five largest health insurance companies offer about 140 plans to about 6,600 employees of 285 small businesses. Each employer determines in advance how much he will contribute to an employee's insurance, as in a defined-contribution pension plan. The employee then filters the plans and selects his favourite—again, as he might choose mutual funds in his defined-contribution pension plan.
Freedom of choice rather than a government mandated level of benefits. Agent participation. Market driven premiums. No mandate. No MLR (at least not at the state level).

How did they ever come up with that idea?

Granted, the Utah exchange doesn't have the participation like the Mess Connector but they also are spending very little of the taxpayer dollars to run the thing.

Does spending more money make it better or just make it more expensive?

Friday, July 27, 2012

Mediocre Medicare

Seems the folks to our north have a secret they have been hiding for years. Their Medicare system is mediocre.     

The Canadian health care system (actually systems, since there is one for each province) provides equal access for all but falls short in delivering value.
In the eyes of the provinces, national standards merely ensured minimum benchmarks — that is, avoiding worst practices. Now, instead of bare minimum, the premiers aim to put their best face forward — at the best price.
So, how much will all this cost?

Their latest report highlights case studies that cry out for action: Exhibit A is foot ulcers that plague diabetics when treated poorly, leading to needless amputations. Exhibit B is teamwork, using nurse practitioners to do more primary care.
All of the premiers’ proposed reforms — clinical guidelines, fairer fees, better teamwork, cheaper generics — are no-brainers. They are also old news, and ought to have been targeted by now.
No brainers indeed.
Wonder how much the study cost that came to this conclusion?
Cost controls, for example, are vital if Ontario is to repurpose funding where it is needed most in home care and long-term care. Doctors take up one-quarter of all health expenditures in Ontario, about $48 billion, and roughly 42 per cent of all program spending in the province.
A few months ago, McGuinty sent out a letter to his fellow premiers ostensibly updating them on how Ontario was reining in doctors’ fees, but purposely seeking validation for his hard line. Other premiers responded privately by expressing strong support — and outright thanks — for paving the way.
What a novel idea.
Bring down the cost of health care by limiting how much a doctor can charge for their services.
What could possibly go wrong with that?

Thursday, July 26, 2012

On the Colorado tragedy, medical bills and health insurance

Our hearts of course go out to the victims of last week's horrific shooting spree, and we wish the survivors a quick and full recovery. But some folks have already decided to politicize the attack, noting that "[s]ome of the victims ... may face another challenge when they get out of the hospital: enormous medical bills without the benefit of health insurance."

The article then goes on to speculate, with zero evidence, that even though there's "no exact count of how many of them don't have insurance ... statistics suggest many of them might not be covered."

Let's leave aside for the moment that such speculation is what got Brian Ross in hot water in the first place, and grant that some (many?) of those at the theater were uninsured.

How come no one's asking "why?" It appears that most of those in attendance were young (teens, twenties and thirties), hardly a high-risk (and thus high premium) demographic. And remember, under the new health care law, those 26 and younger COULD have been on their parents' plans. That they chose to be uninsured is on them. Heck, the wife of one victim is pregnant – without insurance. How were they going to pay for that? HOW they ended up in the hospital has NOTHING to do with the fact that they CHOSE to be uninsured.

Some years ago, we discussed the sad case of "Amanda," another young person who chose not to buy insurance. She ran up almost $2 million in bills for cancer treatment. She didn't expect to get cancer any more than the folks in the theater expected to be shot.

The good news for the Colorado victims is that at least some of their bills will be waived, and their fellow citizens (and Warner Brothers) have generously contributed funds to help pay for their care. But using their plight to score political points is an insult to folks who do play by the rules and accept personal responsibility.