PCIP Could Save the World

or at least the US Private Insurance system. It is an old rule of thumb that 20% of your population accounts for 80% of your claims. Hospitals account for 50% of all spending and most of the excessive cost and profit.

PCIP found this out when they blew through their allotted 5 billion to quickly. Being from the Government and always looking to help they had a very effective solution;

http://www.lifehealthpro.com/2013/05/17/feds-post-pcip-regs

"The federal PCIP program run by the U.S. Department of Health and Human Services (HHS) will set most reimbursement levels at just 100 percent of the Medicare reimbursement rates, officials said"

For doctors this might be a slight haircut but for large hospitals, the ones racking up large bills, used to getting 300-400% of Medicare, or more, this will be noticeable.

If the Government was truly interested in being useful they would provide catastrophic insurance to reign in hospital spending and leave all the day to day care and the other 80% of the population alone. This would immediately make insurance affordable for the majority of the country which would likewise drop the percentage uninsured. It would also do so without all the other intrusive programs and requirements of the ACA.    

The ObamaTax Dodge

As employers quickly realize that the ObamaTax will not, in fact, be lowering premiums by 3000%, they (and their agents) have begun looking for ways to minimize the impact.

Contrary to popular belief, new ObamaTax plans don't actually have to be all that benefits-rich. In fact, the Feds themselves agree that a plan which covers basically just the Minimum Essential Benefits "would appear to qualify as acceptable minimum coverage under the law, and let most employers avoid an across-the-workforce $2,000-per-worker penalty for firms that offer nothing."

That is, an employer could drop his existing full-coverage (or Catastrophic, for that matter) plan in favor of one of these "bare bones" configurations (Bob, you were way ahead of your time!). Coupled with a supplemental plan to cover some days in the hospital and the like, and the landscape suddenly changes.

This may prove especially attractive for employers with low-wage employees, who want to avoid the ObamaTax employer mandate penalty but can't afford to offer full-blown coverage. And if the premiums are low enough, perhaps those subsidies will cover the lion's share of their premiums.

Interesting concept.

JeffLinks Tuesday

FoIB Jeff M sends along two very helpful ObamaTax items.

First, courtesy of the Kaiser Foundation, a helpful (and free!) ObamaSubsidy calculator. This will no doubt help take some of the edge off those massive premiums hikes looming on the horizon.

But probably not.

Second, if you're a business owner, heads' up. Ms Shecantbeserious has released  a handy little FAQ sheet with timely (right) info on the SHOP (Small Business Health Options Program).

'Course, that presupposes that these things will ever actually get off the ground.

You can download the FAQ here.

Stupid Carrier Trick - Logging edition

Recently, I sold and delivered a policy to a client who, when applying, chose the monthly draft ("check-o-matic") premium payment option. This is a convenient way to budget premiums and, at least with this company, the second least expensive way to do so (typically, carriers impose a surcharge depending on how often premiums are paid - monthly, quarterly, etc). When the policy was approved and we had set an appointment for delivery, he indicated that he'd decided to change to annual pay.

Not a major issue - I notified our general agent (GA) for that carrier, and an amendment form was included with the policy. So far, no big deal. When I delivered the policy, I had the client sign that form (along with approximately 273 others) and sent it back in the handy, pre-paid envelope.

So far, so good.

You can imagine my surprise, then, to receive an email from the GA that "the new, re-issued policy" was on the way.

What new, re-issued policy?

Turns out, this carrier - even though we had signed and returned the amendment form - has decided that it needs to re-issue the entire policy, and over the weekend I received another half pound of paper (really!). Sent to me for a mere $2.50 of USPS postage.

I am far from a "tree-hugger," but even I find this offensive. Nothing substantive changed in the policy - why wouldn't the carrier simply print up and send out a little "certificate" noting the change?

Sheesh!

Rate Kaboom!

We've been warning about this for quite some time: if you think health insurance rates are bad now, just wait until the ObamaTax is in full swing.

But what do we know, anyway? Remember our Dear Leader promised rates would plummet by 3000%.

Turns out, not so much:

"Internal cost estimates from 17 of the nation's largest insurance companies indicate that health insurance premiums will grow an average of 100 percent under Obamacare, and that some will soar more than 400 percent"

Math sure is hard.

[Hat Tip: FoIB Jeff M]

HSA's still on life support

At the risk of mangling metaphors, the water's still murky and the jury's still out on the fate of Health Savings Accounts [ed: "mangled?!" How 'bout strangled?]. I've contended for a while (most recently here) that, due to the "cost-sharing reduction" requirements which essentially outlaw true High Deductible Health Plans, HSA's are DOA.

In fairness, Bob disagrees (agreeably, of course); he's "becoming more convinced there is a viable market for major med (and ancillary lines) outside the exchange. Yes, the products will still need to provide EHB's and adhere to MLR ... but they will also have more flexibility."

But we're both speaking in generalities here; that is, about the marketplace as a whole. LifeHealthPro's Allison Bell has an interesting article today on a specific segment of the market: those who may be eligible for tax subsidies:

"Low-income people will still be able to use health savings accounts (HSAs) after Jan. 1, 2014 ... For low-income people who want to use HSAs, the problem is that getting help with paying deductibles could make it impossible for a "qualified health plan" ... An individual who would not be eligible for the tax advantages of an HSA because the plan variation to which he or she would be assigned does not qualify as a [high-deductible health plan] may purchase the plan without cost-sharing reductions," officials said"

Well how nice for them. But what about those of us in the middle class, who aren't going to be eligible for subsidies? I asked Allison if this proclamation applied to us, as well, and she kindly replied:

"I think the guidance here is just about low/moderate income people who are getting cost-sharing subsidies that would make having an HSA and getting exchange coverage mathematically impossible. I think regular folks could still have an HSA and a non-subsidized, non-cost-sharing-subsidized plan, because the deductible could still be high enough that the plan would be compatible with the HSA rules."

Can't fault her for honest reporting, but I'm still unconvinced. After all, the whole "skin in the game" nature of HSA plans is in direct - and stark - contrast to plans that have to include all manner of pre-defined benefits payable at 100% (such as birth control convenience items).

If the story is accurate (and I have no reason to doubt that it is), then folks who haven't traditionally been prospects for HSA-type plans will suddenly become the only ones who actually qualify for them. But the very characteristics which made them less than ideal prospects (eg "what's my co-pay?") haven't changed, and won't change in the "new" environment.

'Tis a shame, really.

Underwhelming

As Bob noted last month, that seems to be the response of carriers to the upcoming Exchanges. Recall, though, that these are for individual policies; employers interested in group plan rates and products will access the "wholesale" version, SHOP (Small Business Health Options Program).

And shouldn't that actually be SB-HOP?

And as in the case of the aforementioned Exchanges, the reception by carriers has been - at best - lukewarm.

Case in point: Washington (the state, not Capital City).

"The board of the Washington Health Benefit Exchange is thinking about pushing the start date for the state's Small Business Health Options Program (SHOP) exchange to Oct. 1, 2014."

But, aren't those supposed to be online much sooner? As in, October of 2013?

Maybe, but you can't sell what you don't have, and thus far, a rousing one (1) carrier has expressed interest in participating. And that carrier, Kaiser Permanente, offers plans in only a limited area, not statewide.

There's a word for this....

Oh, yeah.