Friday, October 31, 2014

Health Insurers "Expect at Least 20% Growth" From 2015 Enrollment

That was the lead in a Reuters story this morning saying, "health plans expect at least 20% growth in customers and in some states anticipate more than a doubling in sign-ups" from the 2015 Obamacare open-enrollment.

Well they better do a hell of a lot better than that!

The CBO has estimated that 13 million people will ultimately be covered in the Obamacare insurance exchanges in 2015.

The administration recently announced they had 7.3 million covered as of mid-August.

Actually, I expect they will have closer to 6.5 million at year-end based upon the reports of monthly attrition I have had from carriers.

7.3 million or 6.5 million, the administration has to about double the current enrollment to stay on track toward getting a sustainable pool by the time the Obamacare "3Rs" insurance company reinsurance provisions expire at the end of 2016––a sustainable pool is typically considered to be about three-quarters of an eligible group.

The Reuters article goes on to talk about a number of very small insurers, some the new co-ops, that got little in the way of enrollment in 2014 and have now cut their rates in order to gain market share––not afraid to so because of the reinsurance provisions that absorb most losses. Reuters says these plans are optimistic that they could double their customer base. Well twice nothing is still very little.

Carriers increasing their Obamacare enrollment by 20%?

That is about a fifth of what they need in 2015 to get this thing to "clear the tower."

Reporters have never been very good at math.

Sunday, October 19, 2014

Figures Don't Lie But Liars Figure––Will There Be Some Obamacare Rate Shock in 2015?

Hanging around actuaries as long as I have one of the old sayings I picked up was, "Figures don't lie, but liars figure."

I have read one story after another this summer and fall about the modest Obamacare rates increases––or decreases––for 2015.

On this blog you have also seen me write about the complex way the 2015 Obamacare rates will hit people particularly because of the impact the changes in the so called second lowest cost Silver plan will have on so many people's final subsidy. You have also seen me write about the fact that we really won't know what Obamacare costs people until the now unlimited Obamacare reinsurance program stops subsidizing insurance rates in 2017.

Recently, the Kaiser Family Foundation provided a report pointing out that the cost of the benchmark Silver Plan would fall 0.8% in sixteen cities they researched:

















Kaiser also reported that the lowest cost Bronze plan after tax credits in these markets would rise an average of 5.9%

But now, Investor's Business Daily is out with another look at those sixteen cities and they found that the cost of the cheapest Bronze Plan for a 40-year-old non-smoker earning 225% of the poverty level ($26,260) will jump an average of 13.9%.






















What's the big difference between the Kaiser Family Foundation's (KFF) approach and that of Investor's Business Daily (IBD)? IBD says the difference has to do with KFF assuming a person's income hasn't changed instead of rising at least with inflation and the impact a falling Silver baseline plan's cost has on the Bronze Plan subsidy (You can read the detailed explanation in IBD's article and get a link to the KFF study here).

Who's right? Or, who is more right? Or, which assumptions are the most representative? Or, more fair? Or, would this outcome have been different if the researcher would have used 250% or 175% of the poverty level instead of 225%?

I don't think that any of that is the real point (although it would appear that the Kaiser Family Foundation failed to tell us about the whole picture when they issued their study).

I will suggest the important point here is that for people to know how Obamacare will really impact them in 2015 they need to take a look at what Obamacare is offering them for 2015.

But these consumers can't now know the real impact in the 36 federally run insurance exchanges and most states that run their own exchange

Because in the federal states the Obama administration won't open the websites or let carriers post their new rates until the Obama administration signs off on the 2015 rates.

And, the administration has said that won't happen until a few days after the upcoming November 4th election.

Monday, October 13, 2014

Wednesday, October 8, 2014

The Most Transparent Administration Puts a Gag Order on HealthCare.gov Testing

With the second Obamacare open-enrollment beginning on November 15th, the enrollment system's testing begins with insurance companies this week.

Of course, last year the enrollment system testing was a real mess resulting in a humiliating Obamacare launch for the administration.

Up until now I wasn't expecting any major problems with HealthCare.gov's consumer enrollment system given all of the lessons learned and the new people running things.

But apparently, the administration is pretty worried about what could happen.

According to this morning's Wall Street Journal the administration has emailed insurers that it will require "all testers to acknowledge the confidentiality of this process to access the testing environment." The administration reminded insurers that their confidentiality agreement with the Obama administration means that insurance executives "will not use, disclose, prescribe, post to a public forum, or in any way share Test Data with any person or entity, included but not limited to media..." This includes any "results of this testing exercise and any information describing or otherwise relating to the performance or functionality" of the Obamacare enrollment and eligibility system.

My first reaction was, What's their problem? We're going to know just how well the second version of HealthCare.gov works in just six weeks anyway.

Then it occurred to me there is this election in just four weeks.

They don't appear to have a lot of confidence in HealthCare.gov version 2.0!

Should the rest of us be worried?

Wednesday, October 1, 2014

One Year Later: The Affordable Care Act's Launch on October 1, 2013––So How Did it Go?

Here unedited is what I posted on September 29, 2013:

The Affordable Health Care Act's Launch On October 1st––So How Did it Go?

Unavoidably, that will be the big question come Tuesday.

But there will be much more to it than that.

A 180-Day Open Enrollment––Not a One-Day Open Enrollment
What happens on the first day, for good or bad, will constitute only a tiny percentage of the open enrollment period. Consumers will likely visit the new websites many times before they make any decisions, and that is exactly as it should be.

Friday, September 19, 2014

The "7.3 Million"

The administration finally released the Obamacare enrollment count this week.

Like everything else about their scorekeeping we got a number. Just one number. A number that was conveniently better than we had expected. And, we got no real context for the number or any of the back-up information.

Sunday, September 7, 2014

The Next Chapter of Obamacare

Welcome back from the summer.

It's been pretty quiet lately on the Obamcare front.

So quiet, that there has been a flurry of articles recently over how Obamacare has dropped to a second or even third tier issue and will hardly matter come election-time.

Wishful thinking.

Obamacare has largely been out of the news cycle for a couple of months but that is about to change.

A few thoughts.

The 2015 rate increases have been largely modest. Does that prove Obamacare is sustainable? No. You might recall that on this blog months ago my 2015 rate increase prediction was for increases of 9.9%.

Tuesday, July 22, 2014

Halbig Decision Puts Obamacare Back on the Front Burner and Will Give Republicans a Huge Political Headache

Today's 2-1 decision by the DC Court of Appeals striking down federal premium subsidies, in at least the 27 states that opted for the feds to run their Obamacare insurance exchanges, has the potential to strike a devastating blow to the new health law.

The law says that individuals can get subsidies to buy health insurance in the states that set up insurance exchanges. That appears to exclude the states that do not set up exchanges––at least the 27 states that completely opted out of Obamacare. Another nine states set up partnership exchanges with the feds and the impact on those states is not clear.

The response by supporters of the law, and the IRS regulation that has enabled subsidies to be paid in the states not setting up exchanges, hinges on the argument that the language is at worst ambiguous and the Congress never intended to withhold the subsidies in the federal exchange states.

But in the DC Court ruling one of the majority judges said, "The fact is that the legislative record provides little indication one way or the other of the Congressional intent, but the statutory text does. Section 36B plainly makes subsidies only available only on Exchanges established by states."

My own observation, having closely watched the original Obamacare Congressional debate, is that this issue never came up because about everybody believed about all of the states would establish their own exchange. I think it is fair to say about everyone also believed a few states would not establish their own exchanges. Smaller states, for example, might opt out because they just didn't have the scale needed to make the program work. I don't recall a single member of Congress, Republican or Democrat, who believed that if this happened those states would lose their subsidies.

Thursday, July 17, 2014

"Biggest Insurer Drops Caution, Embraces Obamacare"

Kaiser Health News is out with that headline today reporting that UnitedHealthcare is expanding its Obamacare exchange presence planning to sell polices "in nearly half the exchanges next year." The story goes on to report that United's leadership is saying the new public marketplaces look sustainable.

There may be more to it than that.

Friday, June 20, 2014

Kaiser Family Foundation Survey Finds Most People Who Bought Health Insurance on the Exchanges Are Happy With It and That 57% Were Previously Insured––No One Should Be Surprised On Either Count

Let's take a look at both of these headlines:

Most People Are Happy
But Kaiser only asked the people who bought health insurance on the exchanges if they were happy with what Obamacare offered them.

As I have said before on this blog, two out of three subsidy eligible people did not buy a health insurance plan in the first open-enrollment.

Wednesday, June 18, 2014

Obamacare: What About the Working Class and the Middle Class?

The administration issued a report yesterday that says individuals who selected plans in the federal health insurance exchanges have a post-credit premium that is on average 76% less than the full premium for the plans they selected. And, 69% are paying less than $100 after the subsidies––46% are paying $50 or less.

The administration also pointed out that 65% of individuals selecting the Silver Plan in the federal exchange chose the lowest or second-lowest cost Silver Plan.

As I have said before, only about one-in-three subsidy eligible people bought and paid for coverage during Obamacare's first open-enrollment.

It would appear from this data that it is the lowest income people who are most often signing up for coverage. They are the ones who get the biggest premium subsidies as well as the reductions in their deductibles and co-pays.

Tuesday, May 13, 2014

With the November Election Six Months Away Obamacare is Up For Grabs

House Energy and Commerce Committee Republicans seemed surprised last week when representatives of the insurance industry reported that they didn't have enough data yet to forecast prices for next year's health insurance exchanges, the market was not about to blow up, and that so far at least 80% of consumers have paid for the health insurance policies they purchased on the exchanges. The executives also reported there are still serious back-end problems with HealthCare.gov––particularly in being able to reconcile the people the carriers think are covered and the people the government thinks are covered. These are all things that you have read about a number of times on this blog.

The insurance companies are doing their best to make Obamacare work.

Why?

Tuesday, April 22, 2014

Obamacare Observations From the Marketplace

A few observations from my travels and conversations in the marketplace:

About half of the enrollments are coming from people who were previously insured and half are not. When I try to gauge this, I go to carriers who had high market share before Obamacare and have maintained that through the first open enrollment. Some carriers have said only a small percentage of their enrollments had coverage before but health plans only would know who they insured before.  By sticking to the high market share carriers who have maintained a stable market share and knowing how many of their customers are repeat buyers, it's possible to get a better sense for the overall market. Other conventional polls have suggested the repeat buyers are closer to two-thirds of the exchange enrollees.

The number of those in the key 18-34 demographic group improved only slightly during the last month of open enrollment so the average age is still high. The actuaries I talk to think this issue of average age is made to be far more important than it should be. It is better to have a young group than an old group. But remember, the youngest people pay one-third of the premium that older people pay. The real issue is are we getting a large enough group to get the proper cross section of healthy and sick?

Monday, April 14, 2014

Virginia Should Take the Obamacare Medicaid Expansion Money and So Should All Republican States

In a September 2012 post on this blog, I said that Republican governors should be expanding their Medicaid programs under Obamacare. I argued that Republicans have long called for state block grants and the flexibility to run their own Medicaid programs in what are the state "laboratories of democracy."

I made the point that, given the then recent Supreme Court decision enabling states to opt out of the expansion, the Obama administration would be hard pressed to deny any reasonable proposal from Republican governors. If Republicans really believed in state responsibility and flexibility for how they run their Medicaid programs, this was the opportunity to prove it. (See: The Medicaid Controversy––The Republican Governors Should Put Up or Shut Up)

Since then, a few Republican governors have taken that tack and the Obama administration has been very cooperative and flexible.

Tuesday, April 1, 2014

Mission Accomplished?––7.1 Million––Will the Obama Administration Come To Regret Today's Obamacare Enrollment Announcement?

Politics is about expectations.

The Obama administration blew the doors off Obamacare's enrollment expectations this week and scored big political points.

But in doing so, they may have set Obamacare's expectations going forward at a level that can only undermine their credibility and that of the new health law.

What happens when the real number––the number of people who actually completed their enrollment––comes in far below the seven million?

What happens when the hard data shows that most of these seven million were people who had coverage before?

What happens when it becomes clear that the Obamacare insurance exchanges are making hardly a dent in the number of those uninsured?

Sunday, March 30, 2014

Was Obamacare Worth It? How Many of the Previously Uninsured Have Really Signed Up?

Health insurance reform was long overdue. But did it need to be done the way the architects of the Affordable Care Act did it?

Obamacare was enacted, and the private health insurance market fundamentally changed, so that we could cover millions of people who previously couldn't get coverage.

Are enough people getting coverage who didn't have it before to justify the sacrifices the people who were already covered––in the individual, small group, and large employer market––are making or will make?

I will suggest the country will never really be able to judge how good or how bad Obamacare is until that question is answered.

Tuesday, March 25, 2014

The One Thing That Could Save Obamacare––And The Obama Administration Needs To Do It In the Next Month

To properly price the exchange health insurance business going forward the carriers have to sharply increase the rates. A senior executive for Wellpoint, which sells plans in 14 Obamacare exchanges, is quoted in a Reuters article telling Wall Street analysts there will be big rate increases in 2015, "Looking at the rate increases on a year-over-year basis on our exchanges, and it will vary by carrier, but all of them will probably be double digits."

If the health plans do issue double digit rate increases for 2015, Obamacare is finished.

There are a ton of things that need to be fixed in Obamacare. But, I will suggest there is one thing that could save it.

Monday, March 24, 2014

What Individual Mandate? It is Looking More and More Like the Obama Administration Will Not Enforce the Individual Mandate

It looks to me the Obama administration will claim at least 6 million enrollments by the end of March. But that will mean 75% of subsidy eligible people will not have bought a plan.

Will the 2014 mandate to buy health insurance be enforced come tax time?

It sure doesn't look like it.

To be sure, the administration is not making any major announcements prior to the close of open enrollment on March 31 the better to get as many people to sign-up as possible.

When asked about waiving the individual mandate at a recent Congressional hearing, HHS Secretary Sebelius said, "That's what the law says and that is what will happen."

Well sort of.

Wednesday, March 19, 2014

Republicans Considering Proposing High-Risk Pools––Health Insurance Ghettos

We are hearing that Republicans are considering proposing high-risk pools as part of an alternative health insurance reform proposal to Obamacare.

A high-risk pool proposal would likely mean the Congress giving states the flexibility, and perhaps funding, to set up these risk pools. Risk pools by definition are a place where people can go when they are not able to buy health insurance in the regular market because they have a health problem.

That means Republicans would be turning the clock back to a time when insurance companies could turn people down for health insurance because of their health status.

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