Archive for the ‘Health Insurance Politics’ Category

Will the GOP Wave be enough to Wash out Health Care Reform?

Tuesday, September 27th, 2011

You had to be hiding under a rock not to see it coming: The huge wave of smaller-government sentiment that crashed down on the Washington establishment has been building for a long time, picking up steam with each passage of legislation that expanded government’s encroachment into the lives of the American people.Central to all of this has been the controversy surrounding health care reform.

How Will Health Care Reform Be Affected by a Republican Majority?

The question that has surfaced even before the votes were counted is whether the new Republican led House will act on its threat to force the repeal or defunding of health care reform. Tea Party backed Republicans have declared their election to Congress as a mandate by the electorate to take immediate steps to repeal or substantially change the Act.

Demoralized Democrats fight to Uphold Health Care Reform

The demoralized Democrats, including the Administration, have a more tempered view that sees the election results as the public’s insistence that there be less partisanship Congress and more cooperation between the Administration and Republicans on policies needed to get the economy moving again. The reality may lie somewhere in between, but that is not going to slow the efforts of the new Republican leadership to press forward on the dismantling of health care reform.

Can the GOP Actually End Health Reform?

The basic math would say no. While the Republican-led House can pass legislation to repeal, the Senate, where the Democrats will hold a 53 to 47 edge, is less likely to muster the votes to pass similar legislation. Even if the a few embattled Senate Democrats were lured over to the Republican side, there would not be enough of the 66 votes required to overcome a Presidential veto. Most political observers agree that such an effort would not have a chance of success until 2012 with a change of parties in the White House.

This is not likely to dissuade the new Tea Party infused blood in the House as even the Republicans have been put on notice that the electorate expects action quickly and often on reigning in government and spending. We can expect “dead-end” repeal legislation to be introduced and passed soon after the new session begins. And, as quickly as it dies, another piece of legislation will take its place.

The more feasible track will be the defunding effort that will take place as components of the Act are brought up for implementation funding. The House can simply hold up funding by refusing appropriations or tying things up in committee hearings. While this is a slower process, it can also inflict a lot more pain by drawing out all of the Act’s flaws holding them up to public scrutiny, which never really occurred during its backdoor passage.

We can also expect many committee hearings and investigations, led by new Republican leadership, to delve into the process by which the bill was passed as well as the constitutionality of the bureaucratic mechanisms that have been created to implement and enforce the Act.

In the end, the Affordable Health Care Act may not be repealed during this current session of Congress, but it will be starved, scrutinized and assaulted in such a way that it will remain as a political ball and hammer for pro-reform candidates in the next election.

Creative Commons License photo credit: JosephLeonardo

New Health Reform Website Debunks Myths

Tuesday, August 9th, 2011

Health Reform

An alliance of advocacy groups and health care groups began a new site intended to help individuals in this country to understand better all the confusing changes occurring under the health care law. The name of the site is HealthCareandYou.org. The intention is to avoid all the heated politics associated with the legislation while focusing on exactly what the health care plan means for consumers. When you log on, you will be able to click on your state, age group and specific circumstances, such as small business owners, etc. This will help you find clarifications of particulars of the law. You will also find a timeline that highlights the various provisions and when they will go into effect.

The head of the AARP, which had a hand in building the new website, Nancy LeaMond said that the site was meant to offer “simple, straightforward information” about the Patient Protection and Affordable Care Act, which is gradually being phased in over the next few years.

However, the site is up for somewhat of a challenge. Research indicates that a large number of Americans who believe that they understand the workings of the new law are misinformed, and many are not even aware that it remains in effect, let alone have an understanding of the state health exchanges to be ostensibly completed by 2014.

Kaiser “Health Reform” Poll Finds Americans are Uninformed

The Kaiser Family Foundation recently released a poll that showed around twenty percent of people mistakenly believe the law was stopped when a repeal was made by House Republicans. Another twenty-six percent admitted that they did not know if it was still a law or not.

Even though the bill to repeal the new health care act was approved by House Republicans recently, it is primarily seen as nothing more than symbolic because it is not likely that a similar measure would clear the Senate, which is controlled by Democrats. Additionally, the President has said that the bill would be vetoed if it ever made it to his desk.

GOP Vollies for Interstate Health Insurance Sales

Thursday, August 4th, 2011

Right on the heels of their successful repeal vote, House Republicans have introduced a bill that would allow interstate sales of health insurance.  This has long been a main plank in the Republicans alternative health reform plan and the debate on its viability has been split pretty much along party lines with Democrats largely opposing it.  We’ll examine the arguments for and against in subsequent columns, however, this is a brief overview from the perspective of the bill’s authors.

Targeting the Individual Insurance Market

The Health Care Choice Act would make it possible for individuals to shop for insurance across state lines over the Internet, by phone, or using an insurance broker. It would primarily affect the 17 million people who buy private individual or family insurance plans. There would also be some affect on a portion of those in our country who are not currently insured.  About 35% of the 46 million of uninsured individuals could probably afford to buy health insurance but choose not to. Although it is not clear how many of the 35% would buy insurance if the price point was low enough to make it “a good buy,” studies show that it may induce many to do so.

Why Premiums are so High in Some States

State insurance rates vary widely due primarily to the degree of regulation in a particular state. More heavily regulated states, especially ones that have mandated specific types of coverage, such as acupuncture, mental health, maternity, contraceptives and marriage counseling. These requirements drive much higher premiums than others with less regulation or mandates.  Depending on age and health, a policy in New Jersey could cost more than five times as much as an equivalent policy in Kentucky.

Research has shown that the higher premiums are a result of insurers spreading the cost of higher-risk, mandated coverages to all policyholders.  Highly regulated states have a lower percentage of younger insureds than states with fewer regulations.  So, the individual insurance market and the risks are skewed towards older individuals which force their premium rates higher.

Some state mandate guarantee issue and community ratings which results in higher premiums to protect against obvious risks and the financial losses that will occur from having to insure people with even the worst health conditions.  States with these requirements have fewer insurance carriers

How Increased Competition Could Bring Rates Down

There would actually be two competitive dynamics occurring. The first would be a market-driven dynamic that would force insurers to come to market with a wider variety of plans that are not laden with expensive coverages that most people don’t need or want. Critics say this would produce a market of low-end, stripped down plans that would drive out higher end plans that some people need to cover specific conditions. It also could squeeze our elderly individuals if the insurers just want to chase the lower risk market.  Proponents argue that the free market will respond to any demand and if there is demand for higher-risk, broader coverage, insurers will meet the demand.

There is also the dynamic of states competing for insurers’ presence in the state along with the much needed revenue.  States that have been notoriously big regulators and mandate crazy may need to rethink their policies if they too lose many insurers due to the non-competitive nature of the insurance environment.  It would also discourage the influence of special interests and lobbyists who have managed to get their particular diseases or conditions covered under state mandate. All of which will drive market prices lower.

The bill’s authors claim that the resulting free market for health insurance would increase the availability of polices that can more beneficially meet the needs and budgets of millions of Americans. Opponents of the bill have plenty of ammunition centered on the dilution of consumer protections that the “deregulation” will cause. We’ll examine their arguments more closely in a future column.

Creative Commons License photo credit: Mike Licht, NotionsCapital.com

New Blue Shield Rates Trigger Obamacare Showdown

Wednesday, August 3rd, 2011

In what could trigger the first public confrontation between the Department of Health and Human Services and a major health insurer, Blue Shield of California has taken the brazen step of announcing a series of rate increases that will amount to a nearly 60% increase for individuals. Citing increasing health care costs and the mounting financial pressure of implementing Obamacare, Blue Shield is proposing a three-tiered increase to take effect over the next five months that will impact nearly 200,000 policyholders.

The recent smack down of Anthem Blue Cross by state and federal officials over its plans to raise its rates by 40% didn’t seem to deter Blue Shield which says that the increases are necessary and within the bounds of regulatory guidelines.  The email inbox and phone lines of the state’s Insurance Commissioner, Dave Jones, are melting down by a lava flow of consumer complaints. However, the state claims that its hands are tied.

First Test of Obamacare’s Regulatory Mettle

Anthem backed down on its huge rate increase only because of the public pressure that mounted following President Obama’s high profile lambasting of the company. Anthem still imposed an increase of 20% and is planning on additional increases over the next year.  No one expects Blue Shield to buckle under public pressure, however, HHS, through its Secretary Kathleen Sebelius, has already issued a warning that the rate increase will be challenged under her newly issued edict of that increases deemed to be unreasonable will receive close federal scrutiny.

Although HHS hasn’t clearly defined “unreasonable,” the threshold that would trigger its attention is a rate increase in excess of 10% and where the insurer has not presented sufficient justification for the increase.  This trigger is fairly broad and so are the powers that HHS is exercising in exerting its oversight over the state’s domain of insurance regulation.

The move by Blue Shield, which is expected to be followed by other insurers, will be the first big test of the brawn of HHS and the regulatory muscle that Obamacare wants to flex in its control over health insurance companies.  The new health care law was just weeks old when a number of major insurers announced their plans to raise their rates due in part to the anticipated cost pressures of the new law.  The announcement came as somewhat of an embarrassment to the Obama administration which was in the midst of another campaign to “sell” the new law and its cost-cutting benefits to the public.

Only Losers are Health Policyholders

The coming showdown between Blue Shield and HHS will be a test of wills that will not play out very pretty in the public eye. There is not likely to be a clear winner, especially on the public relations front, but there will most definitely be losers which will be the policyholders who will suffer through rate hikes regardless of the outcome.

photo credit: mangpages

Wall Street, Health Insurance, and Reform

Sunday, July 31st, 2011

The American lifestyle encourages us to make a lot from a little. Wall Street is the product of this mentality. Is it fair then, that our insurance companies are controlled by a system that is designed to get the most from doing the least? Medicine as we know it today is unlike the medicine of even thirty years ago. In the 1980s, medical insurance went public and the whole game changed. Health insurance is now controlled by huge, publicly traded, for-profit companies. The medical field of the 21st century has both pros and cons.

Pros of the Modern Health System

  • Medical procedures are more successful than ever before.
  • Pharmaceutical innovations allow patients whose diseases were once death sentences to lead a more normal life.
  • With current health care reform, all Americans will have access to affordable health care.
  • Through medicine we live longer, more fulfilling lives.

Cons of Health Care Today

  • Health care costs have more than doubled since insurance went public.
  • Until 2014, insurance companies have the right to turn away subscribers with preexisting conditions and deny coverage to those who develop illnesses.
  • Doctors and physicians are required to attain the permission of insurance companies to perform life saving procedures.

Health care is as vital to our existence as food, clothing, shelter, and water. Without modern health care, we cannot live life as we do now. It makes sense then, that we feel somewhat controlled by our health insurance companies. We are obligated to pay what they ask. They can say no to expensive procedures they deem unnecessary. This year’s health care reform law offers some control of the decisions made by insurance companies. In the future, regardless of medical conditions, Americans will have the right to benefit from the excellent medical care available in the United States. A perfect solution it is not, but it is the beginning of significant changes in the way we receive medical care.

Creative Commons License photo credit: guillenperez

Shortage of Nurses and Doctors Challenge Health Reform

Friday, July 29th, 2011

You can’t read a newspaper or a blog these days without reading more depressing news about the economic crisis, but there are some situations where – instead of a slump – business is booming; one of those is the medical school business, where a predicted doctor shortage is seeing many schools expanding to accommodate increased recruitment and enrollment.

Just 25 years ago, experts warned that a surplus of doctors was contributing to rising health care costs due an increase in unnecessary procedures. In response, many medical schools capped enrollment. Now, it seems, the problem is a shortage rather than a surplus.

Physician Shortage Happened Over Years

Warnings of a crisis-level doctor shortage have been abounding for several years, and the apparent crisis is apparently closer than ever. In response, medical schools are expanding with new classrooms, laboratories, and staff. Additionally, new medical schools are under development all over the country, from Michigan to Texas.

Americans over the age of 65 will expand rapidly beyond 2011, eventually burdening the health care system and leading to a high demand for health care workers.

Americans over the age of 65 will expand rapidly beyond 2011, eventually burdening the health care system and leading to a high demand for health care workers.

According to Dr. J. James Rohack, a Texas cardiologist, the reason behind the seemingly contradictory boom of the medical school business is actually fairly logical: The population is expanding, and people are living longer. That means the country’s need for trained and educated medical staff will increase too.

Doctor shortages are already rampant in rural and poor areas, partly because many new graduates choose higher-paying specialties rather than becoming primary care physicians. Medical experts admit that increasing enrolment isn’t necessarily the answer, but that it will help alleviate the problems caused by the shortage.

Nurse Shortages Threaten Health Care Quality Now

The doctor shortage is compounded by a problem that at present is even more of an issue for the healthcare system: a severe nurse shortage that is currently a much greater threat to the quality of healthcare.

The U.S. faces an impending shortage of health care workers - most notably nurses.

The U.S. faces an impending shortage of health care workers - most notably nurses.

It has been estimated that more than 200,000 nursing positions are currently unfilled across the country, and the shortage is expected to get even worse as the baby boom generation hits retirement. The shortage leads to decreased quality of patient care, with an increased risk of delays in healthcare, medical errors, and safety hazards.

Curiously enough, the problem isn’t that there’s a lack of people interested in entering the profession: The problem is that nursing schools simply don’t have the resources and faculty needed to train the number of nurses that the country needs. Thousands of applicants are turned down every year while facilities across the country struggle to fill vacant nursing positions.

Obamacare 2010 – The Year of Unintended Consequences

Friday, January 21st, 2011

To say that 2010 was a transformative year for health care would be the understatement of the year. Obamacare is nine months old and only five provisions were implemented this year, with most of the key provisions scheduled for implementation over the next eight years. Yet, we have already seen some seismic shifts in a health care system that seems to be bracing for all of the worst case scenarios that the hastily passed law could bring to businesses, medical costs, insurance costs, medical access, and anyone who has a health insurance plan.   So far, the unintended consequences of the health care reform law have dominated the outcomes of the law’s enactment driving more people to the side of the repeal proponents.

Five Key Obamacare Provisions Implemented in 2010

  1. Spending caps on lifetime and annual benefits were prohibited
  2. Individual health plans and carriers were prohibited from canceling coverage
  3. Plans were required to cover preventative care at no cost
  4. Obamacare required coverage of dependent children on parent’s plans until age 27
  5. Obamacare mandated protections to children with pre-existing conditions

The Unintended Consequences Unfolding in 2010

  • Major insurance carriers announce their plans to discontinue child-only insurance coverage.
  • Medical device manufacturers announced plans to cut jobs due to the new taxes on medical devices
  • Surveys indicate that 66% of Baby-Boomer aged physicians will likely leave their practice as a result of Obamacare
  • 222 companies and union groups received waivers from the government so they can continue to provide mini-med plans to low wage workers in the face of the new benefits-ration requirement imposed by HHS.
  • The 2010 enrollment period saw most employers reduce their plan contributions, raise co-pays and deductibles in anticipation of higher costs.
  • AARP, a staunch advocate of Obamacare and major companies such as Boeing, announced several cuts to benefits as result of higher costs and taxes from Obamacare.
  • SEIU, another staunch advocate of Obamacare announced that it will drop coverage for children of 30,000 low wage workers.
  • Texas announces its intent to drastically cut Medicaid benefits.
  • Arizona announced a30% increase in state health care insurance premiums.
  • Major health insurance companies, such a Principal Group, announce plans to discontinue offering health insurance. Met Life announces that it will leave the Long Term Care insurance market.
  • Microsoft, for the first time, announced that employees will need to make contributions to its high end health care coverage and a reduction of benefits.
  • Employers announce their plans to reduce hiring lower wage workers due to the increased costs of providing coverage under Obamacare.
  • Drug companies began notifying children’s hospitals that they no longer qualify for major discounts on drugs used to treat rare medical conditions.
  • Major health insurance carries raise individual premiums an average 20%. Following this, HHS threatens insurers who raise premiums with exclusion from participation in the insurance exchanges.
  • Insurance companies anticipate insurance premiums for the young and health will increase by 17% to offset the caps on insurance for the elderly and sick.
  • HSA-High Deductible Insurance plan providers, such a nHealth, will stop offering these plans due to the stringent benefits-ratio requirements imposed by HHS.
  • Employers are now considering dropping their coverage of employees because it would be more cost-effective to pay the $2,000 Obamacare penalty.

Creative Commons License photo credit: charlesfettinger

Health Care Prices: Can Consumers Control Costs?

Monday, November 22nd, 2010

Over the last decade, a major shift has occurred that has consumers more engaged in managing their own health care costs. The advent of Health Savings Accounts (HSA) coupled with High Deductible Health Insurance Plans (HDHP), an increasingly popular health insurance plan, has created a wave of consumer price consciousness in the realm of health care and medical services. The notion of “price shopping” medical services, once thought impractical or even impossible, is fast becoming the norm for millions of Americans who finally understand that they have some “skin in the game.”

Top health care experts and the medical community have been lamenting for years that one of the primary reasons health care costs have spun out of control is due to the disconnect between consumers and the actual costs of medical care. Employer-provided health insurance, the primary source of health care coverage for the majority of Americans, has created a buffer between covered employees and the prices that are charged and then reimbursed by insurance companies. The unintended result is that medical costs are not consumer driven; rather they are a product of negotiation between what the insurance companies are willing to pay and what medical community is hoping to get for its services.

Health Care Consumers Hold the Key to Price Pressure

A big part of the solution for bending the cost curve on health care costs, according to the experts, is to get more consumers engaged directly in the supply and demand dynamic of health care services. Until the recent movement towards HDHP plans, there has been little incentive for the consumer to do so. Now, with HSA/HDHP plans that require the consumer to invest more personal dollars into their coverage, they are paying much more attention. With an HAS, individuals are allowed to contribute tax deductible funds to a savings account that may be accessed to pay for qualified medical expenses. The individuals bear theses costs until the deductible on their HDHP is met.

The key to making the HSA/HDHP work is through increasing the transparency of hospital and doctor pricing on services provided, and that is still an uphill battle. In their attempts to shop services and compare prices, consumers are thwarted by the complexity and unresponsiveness of the medical community that has, heretofore, not really had to deal with the consumer directly. Consumers looking for price estimates on services are often given vague and sometimes conflicting responses if they get them at all.

More recently, several resources have become available that enable consumers to more easily compare pricing among major health care providers. Some websites have popped up that act as a “blue book” for medical services and provide consumers with some basis for negotiating prices. As the movement towards consumer-driven health care pricing continues, we should see more of these resources become available.

The trend towards consumer-based health care has been a positive development in controlling the cost curve of medical costs. There is evidence that even the medical community and the insurance companies see the ultimate benefit. The only potential obstacle for consumer-based, HSA/HDHP may be the new health care reform law which layers on requirements and regulations that would make it difficult for insurance providers to offer them.

Creative Commons License photo credit: {Guerrilla Futures | Jason Tester}

COBRA Subsidies Have Expired

Wednesday, June 2nd, 2010

American Unemployment Rate

Bad news if you’re about to become unemployed: COBRA health coverage is no longer cheap. After more than a year of expanded federal subsidies for COBRA, congress allowed the help to expire on June 1st.

In March of 2009, under the American Recovery and Reinvestment Act, COBRA health coverage costs were cut by 65% with the help of the federal government. This meant that the average family in California only had to pay about $390 for coverage – a far cry from the average cost of around $1,107 before the subsidy (according to a Families USA study).

Now that COBRA help has expired, you’re left with two options for individual or family health insurance:

  1. Pay the full cost of COBRA coverage – which is basically the same coverage you received from your previous employer when you worked with them. However, now that the subsidy has expired, you will need to pay the full cost – which currently averages around $1,100 for a family.
  2. Opt for an affordable alternative to COBRA. You can request a free quote for health insurance here to see if you can save money with a private alternative.

COBRA Insurance Extension “Unlikely”

Secretary of Labor Hilda Solis said in a statement that “if the [COBRA] extension is not approved immediately, millions of Americans could lose the safety-net programs they deserve and desperately need.” Unfortunately, congress is in a cost-cutting mood, so they’re not likely to extend COBRA subsidies.

CNN estimates that nearly 10 million people are collecting unemployment insurance, and 46% of the 15.3 million jobless Americans have remained unemployed for six months or longer. Despite a comprehensive health reform bill, COBRA coverage remains as expensive as it always has been, and the government is no longer willing to subsidize its costs.