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Thursday, June 11, 2015

Health Care Reform Articles - June 11, 201

Why Are The 2016 Obamacare Rate Increases So Large?

GUEST POST WRITTEN BYRobert Laszewski
You might recall that I have said we wouldn’t see the real Obamacare rates until the 2017 prices are published in mid-2016. By then health plans will finally have had a couple of years of credible claim data and two of the three “3 Rs” reinsurance provisions subsidizing the insurance companies will have gone away.
I have also made the argument that after two years the Obamacare enrollment is coming up way short of what it needs for us to be assured that we have a sustainable risk pool—enough healthy people signed up to pay the costs for the sick.
Instead of moderate rate increases for one more year, the big rate increases have begun. They are particularly large among the health insurers with the most enrollment—the carriers with the most data.
Texas Blue Cross stands out. The health plan commented in its federal government rate filings that it covered 730,833 Obamacare individuals in 2014 with premium of $2.1 billion and claims totaling $2.5 billion––for a medical loss ratio of 119%. The plan further commented that, after the “3Rs” reinsurance adjustments, they lost 17% to 20% of premium in 2014–that would be about $400 million. And, they are only asking for a 20% rate increase.
While we won’t see all of the rates in all of the states for a few months, some state regulators have begun to make the 2016 rate actions public:
• CareFirst Blue Cross of Maryland is asking for a 34% rate increase on its PPO plan and a 26.7% rate increase for its HMO. CareFirst has an 80% market share in the Obamacare exchange and only 30% of the eligible Maryland market has signed up on the exchange.
• In Oregon, where less than 35% of the eligible have signed up on the exchange, the biggest insurer with 52% of the market, Moda, has asked for a 25.6% increase. Lifewise, with a 19% market share, has asked for a 38.5% increase.
• Blue Cross Blue Shield of Tennessee, with a 165,000 members making up 70% of the Obamacare exchange is asking for a 36.3% increase. The second biggest player, Humana HUM +0.93%, is asking for a 15.8% increase. Less than 40% of the eligible exchange market signed up in Tennessee.
• Georgia is the second biggest Obamacare market for Humana, having enrolled 254,000 people out of a total market of 479,000, and Georgia “maybe its biggest misstep”. Its CEO has said about Georgia, “We can’t have one business being subsidized by another business.” Humana is asking for 2016 individual plan rate increases from 14.8% to 19.44%.
• In Iowa, with the lowest enrollment rates in the country, and where its biggest Obamacare insurer went broke last December, Wellmark Blue Cross, which only sells off the exchange, is asking for a 43% increase on its Obamacare compliant policies. Coventry, which has 47,000 Obamacare customers, is asking for an 18% increase for its on-exchange business.
• The Kansas insurance department has not made its rate increases public yet but has said that plans will increase by as much as 38%. Less than 40% of the eligible have so far enrolled.
• Pennsylvania is not encouraging with market leader Highmark asking for increases ranging from 13.5% to 39.65% and the Geisinger HMO asking for increases from 40.6% to 58.4%. Pennsylvania enrolled 50% of the potential exchange market in 2015. 

Panel Tells F.D.A. to Back Second Drug to Help Heart 

By 
An expert committee that advises the Food and Drug Administration recommended on Wednesday that the agency approve the second in a new class of drugs that can drive cholesterol levels down to unheard-of levels.
Cardiologists hope these new medicines will help prevent heart attacks for millions of Americans, but the results of the clinical trials that will definitively settle the question of the drugs’ effectiveness will not be in until 2017.
The panel on Tuesday had advised the F.D.A. to approve the first such drug, alirocumab, made by Sanofi and Regeneron Pharmaceuticals, and on Wednesday recommended approval for the second, a similar drug, evolocumab, made by Amgen. The agency usually follows the advice of its expert committees.
Based on the drastic reductions of so-called bad LDL cholesterol levels and the lack of evidence so far of safety concerns, the panel decided that the drugs would fill a critical unmet need for people at high risk of heart attacks who are unable to get their cholesterol under sufficient control with statins, the mainstay drugs to lower cholesterol that came on the market in the late 1980s.
Studies have consistently found that elevated levels of LDL cholesterol are a major risk factor for heart disease and that risk drops in lock step with declines in LDL.
If the F.D.A. approves the drugs, they are expected to change the landscape for heart attack prevention and become blockbusters for the companies that make them.
The committee unanimously agreed that Amgen’s drug should be approved for people with a rare genetic disorder, homozygous familial hypercholesterolemia, because of their dire need for treatments. They have LDL levels that can soar as high as five times the normal level and they die young from heart attacks.
The panel voted 11 to 4 in favor of making the drug available to other groups of at-risk patients for whom statins do not work well.
Dr. Philip Sager of Stanford said he thought it was “more likely than not” that the drugs would be safe and effective.
“I do acknowledge the uncertainty,” Dr. Sager said, “I am unwilling to wait until 2017 or 2018 to get those results.”
Those who voted no stressed the paucity of safety data.
“I think we need longer exposures to this new product,” said Dr. Peter Wilson of Emory University.


On Capitol Hill, one giant Obamacare fight

Rep. Paul Ryan (R-Wis.), chairman of the House Ways and Means Committee, wanted to know whether President Obama is going to work with Congress to rewrite health-care law if the Supreme Court strikes down Obamacare — “or is he going to put concrete around his ankles and say, ‘It’s my law or nothing’?”
This gave the panel’s ranking Democrat, Rep. Sander Levin of Michigan, a toehold. “You talk about concrete, having feet in concrete,” he responded. “That’s exactly where you’ve been” on the Affordable Care Act. “Your feet have been in concrete while you have brought up bill after bill to try to destroy ACA.” 
Proposed Levin, “The shoe should really be on the other foot.”
Maybe both of them should put a sock in it. 
Wednesday’s hearing, coming as the nation awaits word on whether the Supreme Court will strike down the law that defines the Obama presidency, was less a legislative forum than a pageant of ankle-biting. 
Ryan accused the Obama administration of “acting like a purse snatcher” and rolled out an assortment of invective: “The law is on the fritz. . . . Obamacare is just flat busted. . . . The whole law is a lemon.”
Retorted Levin: “What’s busted is not ACA but your attacks on it, endless attacks, never coming up with a single comprehensive alternative all these years. . . .You’re livid because it’s getting better. . . . Your frustration is millions and millions and millions of people are benefiting.”
With that tone set, the rank and file followed. “Why does the administration choose to trample on the Constitution?” Rep. Charles Boustany (R-La.) wanted to know. 
Rep. Jim McDermott (D-Wash.) proclaimed that states such as Alabama and Georgia “clearly don’t care about the level of health care” — which prompted Rep. Tom Price, a Georgia Republican, to interrupt with a request that McDermott “take back the disparagement of the citizens of Georgia.”
Rep. Sam Johnson (R-Tex.) couldn’t even bring himself to utter the usual pleasantries to the witness, Health and Human Services Secretary Sylvia Mathews Burwell. “I guess I’m supposed to thank you for being here, but I have to tell you I’m not in agreement with much of what you’re saying,” he announced. 
If the playground taunts achieved anything, it was to demonstrate why the stakes are so high in the looming King v. Burwell decision. If the Supreme Court does invalidate key parts of Obamacare, it seems highly unlikely that this fiercely divided Congress will have the capacity to come up with anything to replace the health-care law. The alternative to Obamacare is nothing. 

In welfare reform debate, don’t forget companies with employees on Medicaid

A long time ago I asked a mentor of mine how certain “powers that be” were getting away with some pretty questionable activities at the juncture of public and private funds. He told me it was all about what part of the story gets told, what numbers get presented. It’s all about picking what gets attention.
Our current political leadership’s idea of what constitutes welfare reform is a good example of such selective perception. And I hold both parties accountable in this regard. It is so much easier to whip people into a frenzy over “Red Bull” purchases than to undo the underpinnings of these programs and critically analyze their efficacy and their interaction with our larger economy.
Rep. Jeff McCabe, D-Skowhegan, introduced a bill that sought to do just that with the MaineCare program. LD 1324 was designed to require quarterly reports from employers with more than 50 employees regarding the number of employees and/or their family members receiving MaineCare. The report was to include data regarding levels of employment and availability of health care coverage.
This bill was presented to the Labor Committee and was killed in the Senate on June 9. It received very little press coverage and was not deemed as welfare reform, but it most certainly was the most intriguing potential piece of welfare reform legislation I heard about this session. The issue of welfare programs as employment costs subsidies for large, public for-profit corporations is a big pet peeve of mine.
The Legislature needs to get a handle on how many large companies are manipulating the system this way. If employees’ wages and hourly work limitations (i.e., employers limiting hours employees can work to deem them part time) appear designed to minimize employers’ health coverage costs, the Legislature could take action on real reform.


Our View: Maine should expedite Obamacare backup plan

If ACA subsidies are found illegal, the health of thousands of Mainers – and the fiscal stability of Maine's hospitals – will depend on our being ready to set up a state-run exchange.
BY THE EDITORIAL BOARD
If the court, in the case of King v. Burwell, rules that only people covered through state-based exchanges are eligible for insurance subsidies through the Affordable Care Act, then residents of Maine and the 33 other states that chose to use the federal exchange would lose their subsidies – and likely their health care coverage.
Lawmakers could avoid all that by passing a bill that is sensible and appropriate, yet is still being delayed.
L.D. 1344 would establish a state-run exchange in Maine if – and only if – the federal exchange subsidies are struck down by the court, which is expected to rule by the end of June.
The bill passed through committee unanimously and through the Maine House of Representatives with bipartisan support. However, the Maine Senate may delay its vote on the bill until after the Supreme Court decision.
But waiting for the high court ruling would leave Maine lawmakers in a reactive mode when the Legislature is likely to be out of session. If the court rules against the federal exchange, the state – for no real reason – will have no immediate, solid answers.
That would be bad news for the estimated 60,939 Mainers who, according to the Kaiser Family Foundation, would have their insurance put at risk. Without the subsidies, they would see their monthly premiums jump from an average of $88 to an average of $425.
That would also be bad news for Maine hospitals, which would have to deal with an upswing in emergency room visits and charity care.
These effects would be echoed in each of the roughly 34 states now using the federal exchange.

Collins Introduces Fix for Marketplace Plans Should Federal Subsidies Disappear 

By  • 16 HOURS AGO
WASHINGTON - Maine Sen. Susan Collins has introduced legislation to revamp the Affordable Care Act. The proposed "Patient Freedom Act" is designed to soften the blow of an expected Supreme Court ruling that could eliminate subsidies in the federal health law.
At stake are insurance plans purchased by 6 million Americans and 60,000 Mainers. If those subsidies disappear, Collins says the Patient Freedom Act could swoop in to the rescue. But health policy leaders in Maine say the plan would be a step backward.
In the Supreme Court case known as King vs. Burwell, plaintiffs contend that insurance subsidies offered in 37 states that use federally-run marketplaces are illegal. Maine is one of them. At issue are four critical words in the law that say subsidies are for marketplace insurance plans "established by the state."
If the Supreme Court agrees, Collins says states have two options: "They could either set up a state-run exchange to ensure that their residents have access to the Affordable Care Act's subsidies, or do nothing and allow their residents to lose these Obamacare subsidies."
The Patient Freedom Act, which Collins is sponsoring with fellow Republican Sen. Bill Cassidy, of Louisiana, offers a third option. "Participating in the Patient Freedom Act would allow states to structure their health insurance market without an individual mandate or an employer mandate, or many of the other expensive mandates under Obamacare," Collins says.
In return, Collins says, states would offer insurance through Health Savings Accounts - where consumers save money - tax free, that can only be used to pay for high-deductible insurance plans and other health expenses. Federal and state governments would chip in subsidies for lower-income individuals.
But one key component that fixes what Collins sees as a major flaw in the federal health law, is that those subsidies would gradually phase out as income increases. Under current law, Collins says, subsidies disappear off a virtual cliff once an individual earns more than 400 percent of the federal poverty level. "Taxpayers who earn just $1 more than that threshold lose their entire subsidy. That makes no sense whatsoever."
But some health policy leaders in Maine don't think Collins' proposal makes much sense. "When I read the act, it really reminds me of the movie Back to the Future," says Dr. Wendy Wolf.
Wolf is president and CEO of the Maine Health Access Foundation. She says while the Patient Freedom Act retains some of the more popular reforms under the federal health law, like protecting those with pre-existing conditions and allowing children to stay on their parents' insurance plans until age 26 - it eliminates the requirement that all health plans provide certain essential health benefits. These include things like prescription drugs, maternity care, and chronic disease management.
"If you eliminate that, it means we are then in a race to whittle benefits to eventually just have bare bones policies," Wolf says, "and we know in Maine that's what the majority of individual policy holders had prior to the Affordable Care Act, which was an average of about a $15,000 deductible plan."
Emily Brostek of Consumers for Affordable Health Care says Collins' proposal to remove the individual mandate will likely lead young, healthy people to drop out of the insurance market, which will drive up premiums for everyone else. And she's skeptical that Health Savings Accounts can be an effective replacement for marketplace insurance plans.
"There's a lot of research that shows that people in HSA's are more likely to avoid, skip or delay care compared to people with more comprehensive coverage," Brostek says. "And, you know, there's also the concern about will people even be able to afford to buy the HSA-compliant plans if the insurance rates are shooting up because we've lost the insurance mandate."


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