Tuesday, March 03, 2015

Another day, Another CoOp Snafu

Last week, Bob posted his take on the rather tumultuous CoOp situation. As fate would have it, I was working on a post about the same thing, but with a slightly different "angle." Now, I frequently claim that "I was told there'd be no math" here, but for once I'm going to be the culprit.

Thanks to a heads' up from FoIB Josh Archambault, we have this little gem:

"The Minuteman Health Inc. Co-op in Massachusetts got more than $156 million and covered only 1,822 people – over $86,000 per enrollee."

But wait, that's not all!

"HealthyCT Inc. Co-op in Connecticut got more than $128 million and covered only 6,094 people – more than $21,000 per enrollee."

If that doesn't give you the warm fuzzies, I have no idea what will.

Cancel that, sure I do: there are another handful of CoOp "success" stories at that link (for a given value of "success"), with a combined cost of $800 million in 2014, insuring a total of just over 22,000 people. For those keeping score at home, that's an average cost of $35,000 per enrollee.

To really drive home the point of just how wasteful this whole exercise has become, that's about $3,000 per month per enrollee.

Seems spendy.

So, I meandered over to the 404Care.gov site to find out how much a Platinum plan would cost a 64 year old Prairie Stater (the MA connector link appeared to be broken when I tried it). You'll likely not be surprised that the most expensive plan I could find was just over $1,500 a month, roughly half the cost of the average CoOp.

Your tax dollars (not) at work.

[Thanks to Co-Blogger Pat P for his help]

Monday, March 02, 2015

Five Little Words: An Epiphany

"Exchange established by the State under 1311"

I've always believed the adage that "words mean things;" that is, words have meaning and one should be careful in how they're used. Sometimes, silence is golden: not speaking can communicate better than words.

In the original series opening of Star Trek, William Shatner speaks of the ship's "5 year mission." That always struck me as self-limiting: what if it had been picked up for a 6th season? Would Captain Kirk have become Captain Steubing?

Likewise, in The Next Generation, Patrick Stewart calls it an "on-going mission," an unnecessary redundancy. How much more sense it would have made to just say - in both shows - "its mission,"  no qualifier needed.

And so it is with the subsidies. The whole of Section 1311 refers to "each State" and "a State" over and over; if Congress had truly wanted subsidies available for everyone whose income justified it, why not just say so? It would have been simple enough: "... enrolled in through an Exchange established  under the Patient Protection and Affordable Care Act."

Easy peasy.

That they chose to specify Exchanges established by a "State"  means something. Words matter.

Friday, February 27, 2015

Rationing the MVNHS©

In response to yesterday's post on the apparent death-spiral of the Much Vaunted National Health System©, frequent (and valued) commenter John Fembup observed that this is not really news; in fact, Dr David Owens (former chief of the Service) noted the likely future 40 years ago:

"The National Health Service is a rationed service. There will never be a government or a country that has enough resources to meet all the demands any nation will make on a national health service."

That quote, by the way, comes from a report of the annual meeting of the National Academy of Sciences in DC in 1976.

It should come as no surprise to regular IB readers that what Dr Owens observed must, in fact, be the case. Almost 6 years ago, co-blogger Bob explained it in easily understandable economic terms:

"The economics of goods and services can be reduced to simple demand and supply. Health care is no different. It follows economic theory just like every other consumer good.At either extreme you have inelastic price curves and elastic curves. Most consumer items track a bell curve but some things are totally elastic or totally inelastic."

That is, health care is, in fact, a good and a service (depending on whether you're talking about a cast, or the orthopedist affixing it to your arm). Regardless, there is only so much of it at any given time (there's not an endless supply of cardiologists, for example). And folks who deliver health care expect to be paid for their services, as those who supply bandages and syringes expect to be paid for their products. How much we're willing to throw at a given patient then becomes an issue.

When the cost of health care is perceived to be free (as in a nationalized scheme), the demand is going to go up. But from where do the funds come to pay for unlimited services and supplies?

One could ask Venezuela about that, no?

Thursday, February 26, 2015

MVNHS© Circling the Drain?

While prognosticators opine breathlessly on the potential Halbig/King/Burwell fallout, it may be instructive to cast our eyes eastward to see how Britain's Much Vaunted National Health System© is faring:

"NHS may be forced to abandon free healthcare for all, says Britain's top doctor"

Wait, what?

That can't be good.

Surely he's overstating the case, right?

Not so much:

"If the NHS continues to function as it does now, it’s going to really struggle to cope because the model of delivery and service that we have at the moment is not fit for the future."

Turns out, if something's "free" it's likely to be much in demand, and you know the old saw: "You can have it fast. You can have it cheap. You can have it good. Pick two."

Under a nationalized health are scheme such as the MVNHS©, it's readily apparent that the folks in charge have long opted for the first two. Now, they're even failing at least one of those, which does not bode well for the average Brit.

Interestingly, the good doctor is calling for a more holistic delivery approach, with services more centrally located and delivered. Now, how - or even if - that can be accomplished becomes the next big challenge.

Health Wonk Review: Decade edition

The venerable Health Wonk Review celebrates its 10th anniversary, and I can think of no one more fitting to present it than David Williams. His own blog also turns 10 this weekend (we beat him by a month), so he's a natural to host this very special 'Review.

Wednesday, February 25, 2015


This just in ........
Massachusetts' governor has fired Obamacare architect Jonathan Gruber from a board that oversees the state's health insurance exchange, a source confirmed to the Washington Examiner.
Gruber ignited a controversy last December when a series of videos surfaced where the Massachusetts Institute of Technology professor discussed the “stupidity of the American voter” was vital to passing the 2010 Affordable Care Act. - Washington Examiner

I guess he feels really stupid now.

Biting the Hand .......

In a recent campaign speech to participants of the Council on Aging the Arrogant One let his feelings be
known with regard to financial planners.
President Obama made only one reference to any insurance-related product today at an AARP event in Washington. He thanked AARP for helping the White House organize the aging conference, and then used the rest of the appearance to blast financial advisors who "receive backdoor payments or hidden fees for steering people into bad retirement investments that have high fees and low returns." - Life Health Pro
Either El Presidente is unaware that AARP would not exist if not for fee's and commissions paid by carriers in exchange for an endorsement, or he knows but fails to connect the dots.

Can you say backdoor payments to AARP?

Oh, and speaking of low return retirement investments, how is Social Security doing these days? Let's consider those that work until their 65th birthday and then drop dead the day after they retire.

What kind of ROI do they get?

No fees, please

Over at LifeHealthPro, Craig Gottwals has a very interesting take on the role of fees in the age of MLR (Medical Loss Ratio). Craig's an attorney specializing in health care law, so what he says has a lot of credibility.

In a nutshell, one of the challenges facing agents in the fully insured large group market (where most of the whole fee discussion takes place) is how employers and their agents deal with the annual rate increases. Traditionally, it's not been unusual for the employer to pay his agent a fee for procuring coverage, and the agent then negotiates with the carrier to deduct the cost of commissions from their premium calculations.

Alternately, the agent might agree to a simple commission reduction (although this might be classified as rebating, but that's another post).

Regardless, the goal is to find a way to lower premiums.

Craig asks a simple question: Will this strategy still work in the age of MLR?

The short is answer is "No," but I really recommend reading the whole thing. There's precious little insider lingo, and he does a great job of explaining why this arrangement is not only spinning wheels, it can actually put you in reverse.


Tuesday, February 24, 2015


If you liked Solyndra you are going to love the Obamacrack co-ops.
* Only one Obamacare co-op made money during the first three quarters of 2014.
* Taxpayers are set to lose more than $1 billion of the $2.4 billion loaned to the co-ops - nearly double the loss of Solyndra. - Insurance News Net
Reminds me of a line Gov. Romney used in one of the debates with Obama. It seems like Obama only picks losers.
According to S&P, almost a third of the co-ops received more than $20,000 in federal loans for each person covered in 2014:
*The Minuteman Health Inc. Co-op in Massachusetts got more than $156 million and covered only 1,822 people - nearly $86,000 per enrollee.
*The Land of Lincoln Mutual Health Insurance Co-op in Illinois got more than $160 million and covered only 3,428 people - nearly $47,000 per enrollee.
*Freelancers Co-op of Oregon (Health Republic of Oregon) got more than $60 million and covered only 1,279 people - more than $44,000 per enrollee.

The money would have been better spent on vouchers and let these people buy coverage from a real insurance carrier.

Where do I go to get my tax money back?

The Obamatax Man Cometh

Obamacrack buyers. Did you get a government bailout last year? You might have a surprise when you file
your taxes.
The majority (52 percent) of Obamacare enrollees receiving an advance premium tax credit to purchase Obamacare insurance is facing the prospect of paying back $530 of that tax credit to the IRS, according to a new study from H&R Block.  This clawback is reducing the refunds for these taxpayers by 17 percent this filing season. - ATR
Obama giveth to buy votes and the IRS taketh away.



According to the UK Daily Mail the 52% figure translates to roughly 4.5M tax filers.

Now isn't that special?

Thanks to Henry Stern for the update info.

Green Mountain State gets $Grubered

Monday, February 23, 2015

Pimping Medicare

Medicare fraud is back in the news and a carrier with a bulls eye on their back is Humana. A major player in
the Medicare Advantage business, Humana uniquely positions themselves in targeted markets to offer some of the most competitive plans in the area.

Are they smarter than their competitors or is something else afoot?
Humana, Inc. faces new scrutiny from the Justice Department over allegations it has overcharged the government by claiming some elderly patients enrolled in its popular Medicare plans are sicker than they actually are.
The privately run Medicare Advantage plans offer seniors an alternative to standard Medicare, which pays doctors for each service they render. By contrast, under Medicare Advantage, the health plans are paid a set fee monthly for each patient based on a complex formula known as a risk score. Essentially, the government pays higher rates for sicker patients and less for those in good health. - NPR

On the surface it may appear there is nothing wrong. The government taxpayer SHOULD pay more for sicker people.

But who defines "sicker" and how is that assessment made?

Therein lies the problem.
(Dr.) Olivia Graves alleges that a Humana medical center had diagnosed abnormally high numbers of patients with diseases such as diabetes with complications that boosted Medicare payments — diagnoses that "were not supported by medical records." Graves alleges that Humana knew about the overcharges but took no action to stop them. Humana has denied the allegations.
And in early February, a federal grand jury in West Palm Beach, Fl. indicted Dr. Isaac Kojo Anakwah Thompson on eight counts of health care fraud. He's accused of cheating Medicare out of about $2.1 million by inflating risk scores of some Humana-enrolled patients. 

Regardless of who you believe, ultimately it is the taxpayer that loses.

hat tip to Holly Robinson for this find.

Open Enrollment...yet again....

Like the Feds, Covered California has announced another special Open Enrollment period.  This one runs from today through April 30.  Eligible consumers must indicate on their application that they were unaware of the tax penalty for going without health insurance.  It doesn't appear to require that you were uninsured in 2014.  

Since the application also includes a statement about the accuracy of the submitted information, the applicant also certifies that he or she is a blithering idiot or doesn’t watch TV, listen to the radio or know how to read.

More Delays on HRAs

Technically, Health Reimbursement Arrangements (HRAs) aren't "insurance" at all, but a means to provide tax-advantaged financing of health care. Unlike Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs), HRAs are entirely employer-financed; they're like an employer-provided health care gift card.

Until the ObamaTax, HRAs were also quite flexible in how they were set up and for what they could be used. For example, pre-ACA, small employers could fund "standalone" HRAs that allowed employees to pay for privately purchased health insurance (among other things). This encouraged employees to buy the plan best suited to their needs, and employers could control costs because they weren't beholden to a group carrier's annual rate in creases.

Sadly, those days are gone.

One of the ways that these plans have been affected is increased taxation. Under the DC-enforced ObamaTax regulations, so-called "standalone" HRAs are subject to a pretty hefty excise tax. The good news (for certain values of "good") is that the IRS has graciously granted a (temporary) reprieve:

"The Treasury Department ... will delay enforcement of an Affordable Care Act prohibition relating to standalone health reimbursement arrangements until July 1"

Gee, how generous of them.

Oh, and that excise tax? $100 per employee per day (of non-compliance).


Naturally, I turned to our local Gurus of all things HRA (and FSA, and HSA), the folks at FlexBank, for their take:

"The deal is, the taxes are still coming, it’s just been delayed."

Pay me now, or pay me later. So sayeth DC.