Nov 16
adminArticles Affordable Care, Ben Bernanke, Betrayal, Care Act, Coders, Dilemma, Electronic Exchange, Federal Government, Health Insurance, Illinois Lawmakers, Individual Health Insurance, Losing Control, Management Structure, Nine Months, Proposal, Republican States, Rick Perry, Timetable, Viable Plan, Working Exchange
The trouble is that one state’s progress is often considered a treasonous betrayal by others – think Rick Perry and Ben Bernanke. Here we have this pesky law called the Affordable Care Act that no one in the Republican camp likes. As proof of this, twenty-six US states have challenged the law as unconstitutional. The Supreme Court has accepted the case and it will be heard sometime during the next nine months. The reason why this makes the Act pesky is because it’s actually a part of the law unless and until the Supreme Court rules it unconstitutional. Contained with the statute is a timetable and it’s ticking away. This creates a dilemma for the Republican states. This timetable is not going to be rewritten so, if the Act is upheld, the states that have failed to take the steps towards implementation could suddenly find themselves losing control of the process.
Each state must have a working exchange in place come 2014. Note this is not a requirement simply for a proposal or a detailed specification. The actual exchange must be up and working. That means commissioning the design now, allowing plenty of time for the coders to work their magic and then debug until the exchange actually works. Most experts take the view this is getting close to the deadline for beginning the work if a properly tested exchange is to be ready in time. This is reinforced by the federal government which is providing funding support on a use-it-or-lose-it basis. If states have a viable plan and greenlight the project, they get the money. The latecomers either pay for the work out of their reserves (not a good thing given most states are running a deficit) or they accept the electronic exchange provided by the federal government.
As an example of how some states are approaching the problem, let’s look at Illinois. Lawmakers are now considering a bill to approve work on the exchange and, equally important, to create the management structure to oversee the operation of the exchange once it’s up and running. The bill calls for the initial work to be complete by June 2012 which is the deadline for access to federal funding – estimated to be about $150 million for the hardware and software. Because of pressure on the state budget, the unanswered question for now is who will be responsible for paying the administrative costs of the exchange after 2014. Independent experts estimate this will be about $75 million per year. As the Affordable Care Act is written, it appears this must be paid by the state but it’s possible new regulations could change this.
While we wait for all this to become more clear, the latest estimates for the cost of insurance through the exchange are encouraging. Taking current reality, some 1.7 million are uninsured and a floating population of 1.4 million is expected to use the exchange. Assuming about 1 million become steady users within the first two years, the health insurance plan would cost about $12 per month. If the poor were to be charged extra to cover the administrative costs, this could make the insurance significantly less attractive. This will genuinely be cheap health insurance for the poor of Illinois and a good model for all to follow.
Sep 28
adminArticles Affordable Care, Battlegrounds, Budget Requirements, Care Act, Department Of Health And Human Services, Enabling Bill, Enabling Legislation, Gop Governors, Health And Human Services, Health Insurance, Health Insurance Program, Health Officials, Insurance Marketplaces, Oaths, Partnership Approach, Perfect Answer, Political Leverage, Republican Party, Sixteen States, Tax Credits
Like everything written down, the Affordable Care Act sounds the perfect answer to all our problems. Except, of course, when it comes to turning the words into action, problems can emerge. One of the battlegrounds is turning out to be the insurance marketplaces or exchanges. These are supposed to make it easier and cheaper to buy insurance. They should allow people to compare prices, and discover whether they are entitled to any assistance like tax credits, Medicaid or the Children’s Health Insurance Program (CHIP). Every state is supposed to have one up and running by 2014. Should any state default, the federal government is apparently ready to step in and run one. The principle matches the mandate. If everyone is required to buy a policy, buying a policy should be made as easy as possible.
As we come in the Fall, ten states have already passed the necessary enabling legislation and are on their way toward getting their exchanges in place. Seven more states have bills pending. Legislation has failed in sixteen states. The rest of the states have either decided to take their time or are flatly refusing to make progress. Such is the world of politics with the Republican party dead-set against exchanges. Some GOP governors have sworn oaths on a stack of Bibles they will never sign an enabling bill into law. Yet this is not necessarily good politics.
Because the federal government will impose an exchange if the state refuses to act, the arrival of an exchange is unavoidable. Some GOP governors are therefore interested in negotiating terms. If they have no choice, they might as well try to influence the outcome to their advantage. So this September, health officials from the majority of the states will be attending a conference organized by the Department of Health and Human Services. Most GOP governors are prepared to talk about a partnership approach to give them some political leverage. Equally, if the states actually do less of the work, the budget requirements will be lower. For example, some states are offering to run local call centers to guide people through their choices. This is fairly uncontroversial. More problematic are the offers of some states to run outreach and education programs to bring their citizens into the exchanges. If staff hostile to the notion of the exchanges are involved, the exchanges may not get the expected number of applicants.
When the dust settles at the end of all the negotiations, we can hope for a health insurance exchange or marketplace in every state where citizens can be guided between federal and state aid, and the private section plans. With supportive staff working in the call centers, everyone should end up with the level of cover appropriate to their individual needs. Significantly, the exchanges are also intended to help small and medium-sized businesses navigate the new laws. Many business people are as confused as ordinary citizens. If everything works as it should, we should all find access to affordable covered significantly easier. However, with their opposition to the central principles of Obamacare undiminished, we can expect the GOP to find a whole new set of ways to slow down this health insurance reform. Your vote in the next election will help decide matters.
Jun 09
adminArticles Affordable Care, Balance Of Power, Care Act, Eggs Is Eggs, Friendly Company, Healthcare Reform, Independent Auditors, Individual Health Insurance, Insurance Industry, Insurance Market, Insurance Premium, Kathleen Sebelius, Mathematical Explanations, Maximum Rate, Number Of States, Obama, Rate Increases, State Insurance Commissioners, Union President, Wellpoint
There are times when you get an overview and then it hits you, “Somethings just don’t add up.” Well, you remember Wellpoint, don’t you? This is the friendly company that, around January or February, announced it was going to increase premium rates by up to 39% in a number of states around the Union. President Obama got himself all worked up, citing them as the real reason why all the Democrats in Washington should band together and take a stand against the insurance industry. Then, sure as eggs is eggs, there was a stampede to get the healthcare reform bill to the President for him to sign it into law. Those Democrats sure did have fun beating on Wellpoint. So the big question is what happened next? Here’s one of the largest corporations in the insurance market demanding premium increases. Did it get its way?
The answer starts off in California where the maximum rate of 39% was due to take effect. The state referred the proposed increase to independent auditors for an opinion. The answer came back negative. It seemed Wellpoint couldn’t add up. Well, that’s oversimplifying things a little. But the reality is that the numbers Wellpoint offered to support their premium increases were based on some very shaky mathematical assumptions. When news of the report became public, Wellpoint withdrew the proposed increase. Acting on this, Kathleen Sebelius who is Secretary of the Department of Health and Human Services sent out a letter to all state insurance commissioners encouraging them to review every proposed premium increase. This is the first sign that the balance of power is shifting against the insurance industry and in favor of the consumer. For too long, insurance companies have hidden behind complicated mathematical explanations and gamed the system. With the Affordable Care Act now law, Sebelius is encouraging every state to give itself the power to approve rate increases. The first sign of continuing good news for consumers comes out of Connecticut where Attorney General Blumental forced an audit of Blue Shield and Anthem Blue Cross, both Wellpoint subsidiaries. Connecticut’s Insurance Commissioner Sullivan rejected these companies requests for increases last year. It seems likely the same thing will happen this year.
By moving so quickly to encourage states to review all proposed rate increases, Secretary Sebelius is demonstrating one of the key advantages now available to the Federal Government under the new laws. That the interests of the consumer will be put before the interests of the health insurance industry. This means every state should be going through a routine of analysis every time premium rate increases are proposed. The assumptions, evidence, claims histories and trends asserted should all be rigorously tested. If there are any problems, the increases should be denied. The aim should always be to ensure affordable individual health insurance plans are available to the majority of people living in the US. For too long, the insurers have been allowed to bamboozle regulators with math and complicated explanations. With independent audits now coming into play, the kind of success enjoyed by the citizens of California should be felt around the US.
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