Thursday, October 31, 2013

Cliff Notes Version of Obamacare

My Cliff Notes Summation of Obamacare

First of all, this country is in dire need of healthcare reform.  The political party in power would favor a universal single payer system, however there is a huge question of whether this is fiscally possible considering the budget deficit and future cost projections of Medicare.  Therefore, in this poster's opinion, the only way to even consider single payer would be a combination of Medicare funding reductions and taxation, both red flag political issues that neither party wants to undertake.

Therefore, Obamacare was structured through the private sector with the objective of insuring millions of Americans and providing affordable coverage for same.  In order to accomplish this, premium subsides and a formula for calculating same was devised in order to create affordability based on income.  In order for this formula to work, it would be necessary for those who do not qualify for premium subsidies to pay more for coverage to offset the subsidized premiums.

One of the primary features of Obamacare is coverage for everyone regardless of pre-existing medical conditions.  In order for this concept to work in a private sector program, the number of medically challenged enrollees has to be offset with a like or higher number of healthy people.  Insurance companies are private entities that must make a profit to stay in business.  Their actuarial accounting component has to make the calculation as to what has to happen to create a positive bottom line.

The result of this part of the equation is that premiums have to be set to take into consideration the overall cost of providing healthcare without the ability to weed out the most costly medically challenged members.  Thus, in simple terminology the healthy and wealthy have to pay for the sick and lower income members.

The current version of Obamacare, in this poster's opinion, was rushed to market far sooner than necessary.  The result was a series of coverage mandates that made a significant number of current plans obsolete and is causing many of the current insured to lose coverage by the end of the year.  The new coverage they are facing without premium subsidies is higher priced with less benefits.  Coverage mandates, which, again in this poster's opinion, are a part of the actuarial calculation, are driving the cost up in order to create more of a balance between the cost of insuring the healthy versus the cost of insuring the sick.  Please note that if the insurers cannot make a profit, they do not have to participate; they can basically take their ball and go home.

All of the above does not even mention the total failure of the federal Obamacare website and various other issues relative to same.  To cut to the chase, as a health insurance broker, I am seeing clients who are achieving better premiums and better coverage but a larger number of clients who are hard working middle class people who face significantly higher premiums and reduced benefits.

This program was rushed into reality and, in my opinion, is too highly flawed to succeed.  The best approach today would be to put everything on hold, develop a panel of politicians, physicians, insurance company executives, and some of the top business leader in this country to take the time to fix Obamacare.  This country is in desperate need of healthcare reform, however this current version is not the answer.

Monday, October 21, 2013

Summation of Problems with Obamacare

There is no doubt that this country is in dire need of healthcare reform, However, the current program has numerous flaws and needs to be fixed. In my opinion as a health insurance broker, Obamacare needs a major overhaul.

The politicians need to use common sense and leave their egos at the door to fix this program and make it workable for all, not just a ...chosen small segment of the populace.

Before my liberal friends point to Medicare as an example of a well run government program, let me remind you that Medicare today is a huge drain on the financial stability of this country. Citizens in this country have worked hard and earned the right to government managed healthcare, however with the number of baby boomers coming into the program in the next few years, Medicare will present an even greater financial challenge to an already financially challenged government.

Therefore, it is totally out of the question that a single payer system of healthcare reform can even be discussed at a time of fiscal crisis within our nation.

The major problem with this current reform called Obamacare is that a liberal administration placed too much emphasis on the lower income uninsured and did not consider the effect on hard working middle class citizens.

For every client that I consult with that realizes a significant benefit from Obamacare, there are at least three who are seeing significant rate increases up to 300% of their current plan.

The problem is twofold in my opinion as a health insurance consultant. The program includes too many mandated health benefits which raise costs and does not allow someone to purchase a simple major medical plan that simply protects financial liability. For those who do not qualify for premium subsidies, the premium cost increases are astronomical.

In addition, the Obama administration rushed a program to market that utilized the internet as a major information and enrollment tool. They did not perform proper Beta testing of their platform nor did they wait until the proper counselors were certified to advise clients. This has resulted in mass confusion for the consumer and a general waste of everyone's time in trying to access and gain knowledge from a system that is not functional.

What needs to happen here is that a timeout needs to be taken to fix this entire flawed program. In my opinion, this is not a major undertaking. Change the law to allow people to keep their current health plans like Obama promised, allow lesser benefit, lower cost catastrophic plans to be included and fix the extremely flawed web based system that now exists.

It is also my opinion that citizens need to take more responsibility for their personal healthcare and not rely on the government to educate them as to what are good health practices. In short, everyone needs to chip in to create a healthier nation with affordable healthcare.

Wednesday, October 16, 2013

The Major Problem With Obamacare

I am a health insurance broker in California and feel qualified to speak about the reality of Obamacare in my state.  The entire success of this program is based on enough healthy young people signing up to offset the high cost of managing the health of those with diseases requiring expensive treatment.

Here are FACTS from my state.  Prior to Obamacare, the premium range for a 30 year old Californian was $75 to $150 per month for coverage geared to a healthy young person.  Even at these reasonable premiums, many of these "young invincibles" did not sign up, as they simply felt they were healthy and would rather pay this money for recreational purposes rather than health insurance.

I just ran Obamacare premium quotes for a 30 year old in Orange County earning $30,000 a year which entitles this person to a premium subsidy.  I feel this income level is average for my state.  The cost range of plans available to this 30 year old ranges from $146 to $213 per month.  The $146 plan includes a $5000 deductible, $70 doctor copays limited to 3 visits per year, $120 urgent care copay, and $19 for generic drugs, some of which can be purchased at Costco for as low as $4.

Running a quote for this same 30 year old at today's 2013 pricing, I can sign him up for a $3,500 deductible plan with $40 doctor copays, $15 generic Rx and the same no charge preventive care as with an Obamacare plan for $94 per month.  He would also have the option to go to a $6,500 deductible at $75 per month.  These plans will not be available in 2014, as they do not meet federal mandated coverage standards.  Therefore, I do not see many of the "young invincibles" rushing out to buy Obamacare.

This program is doomed to fail because a group of politicians with egos put together a flawed attempt at healthcare reform.  I am a huge advocate of healthcare reform, as the cost of healthcare in this country is waaayyyy out of control.  However, this particular plan in its current foremat has two chances, slim and none. What needs to happen here is that this fiasco needs to be delayed until the appropriate people including physicians, businessmen, insurance industry people, minority group representation, middle class representation and others can meet behind closed doors for as long as it takes to fix this.

Thursday, August 15, 2013

CA Health Care Reform Update

The new Covered California Health Insurance Exchange is on target to begin enrollment on October 1, 2013.  Insurance plans will be offered through the state exchange and outside of the exchange.  The primary reason for buying through the exchage is that income relative premium subsidies may be available to those who qualify.  Following are some important points to note about the changes forthcoming relative to healthcare reform:

  • Those who currently possess a health plan from an insurance company participating in the exchage will have to change to a health care reform compatible plan by 12/31/2013 or be moved to the closest available plan by the insurance company.  In Orange County, the companies participating in the exchange include Anthem Blue Cross, Blue Shield, Health Net and Kaiser.  For other counties, you can visit the Covered California website to determine the participants.  The exception to this is that if you have a "grandfathered" plan issued prior to 3/23/2010, you will have to do nothing.
  • Open enrollment for 2014 individual health plans runs from 10/1/2013 through 3/31/2014.  You will not be able to enroll in a new plan after 3/31/2014.
  • Covered  California will be hiring enrollers and facilitators as well as utilizing independent brokers to assist in enrollment.  However, enrollers and facilitators are non-licensed personnel and cannot assist in comparing plans and helping you decide which plan is best for you and your family.  Only licensed insurance brokers and personnel can assist in comparing plans.
  • There will be an analysis tool available for us to use in helping you determine whether you are available for a subsidy and to compare available health plans.

Brokers must beciome certified to represent the Covered California Exchange just as we are
certified and appointed to represent individual insurance companies.  This certification is set to
begin in early September.  I will be certifying myself and additional personnel to assist you in procuring the best plan value for you and your family.  We should be able to start the analysis process around October 1.  We will be reaching out to our clients, however it will be very helpful if you can contact us after mid-September to set up either a telephone or personal appointment to review options.

Small Group Health Plans and Covered California


We do not anticipate major change in the small group marketplace during the end of 2013 and
the first half of 2014.  Covered California will offer small group plans, however the only companies participating in L.A. and Orange Counties are Blue Shield, Health Net and Kaiser
Permanente.  Most companies are allowing an early renewal 12//1/2013 at current December rates to lock in the rate through 11/30/2014.  Please contact us for more information on the early renewal program.  We do not foresee much rate instability in the small group market for year 2014.



There will be much advertising and propaganda directed at consumers through the end of the
year promoting the Covered CA Health Insurance Exchange.  This source may work well for some but not so well for others.  I have taken the philosophy of trying to assist and maintain my current client base as opposed to hiring telephone solicitors to pursue new business.  I hope to work as your partner in assisting you in maneuvering through this new Health Insurance Maze and obtaining the most value and cost effectiveness in your health insurance policy.  Once we have accomplished this, I will appreciate your serving as my sales force and referring me to your friends, neighbors and business associates who need assistance. Please call or email me if you have questions.


Friday, June 14, 2013

The Politicians Versus the Health Insurance Industry

Personally, I am sick of the adversarial relationship between politicians and the health insurance industry. Everyone is promoting their own agendas. The insurance companies keep raising rates in order to make profits, and the insurance commissioner of California continues to make ludicrous politically motivated comments about the big bad health insurance companies. Would it not make sense for a coalition of these people to sit at the same table and figure out a way to offer affordable health insurance to this country instead of creating questionable programs that may continue to drive rates higher? The people I work with and talk to want one thing, and that's for their health insurance rates to be more affordable. 
Instead of striving to reach this objective, everyone is playing a game of one-upmanship, and the consumer winds up getting shafted.  The biggest challenge for the near future is separating truth from fiction, as we are about to be bombarded with a multi million dollar advertising program from the State of California regarding the new Covered CA health insurance exchange.  Whether it's me or someone else, please consider working with a knowledgeable person who can help you sift through this new health insurance maze.

Thursday, June 6, 2013

California’s Modest Rates: Behind the Numbers

by: Bruce Shutan

June 6, 2013

Anthony Wright, executive director of the advocacy group Health Access, recently told Reuters that the premium projections represent “a revolutionary improvement to move from a broken market where people are charged by how sick they are, to a competitive market where people pay what they can afford, based on a percentage of their income, on a sliding scale.”

Not exactly, according to California Republican Assemblyman Dan Logue, who compared the rates to “a shell game” and predicted that a tax hike would be needed to fund subsidies, which would trigger higher prices at the gas pump, grocery store and other venues.

Thirteen of the more than 30 health insurers that had applied to participate in the California Health Benefit Exchange will offer coverage in the HIX. Peter Lee, the exchange’s executive director, has noted that residents can expect to pay up to 29% less than current rates for small businesses.

The public exchange rates being reported in California and some other states across the U.S. do not necessarily reflect what individuals may pay once their age, location, smoking status and income are all factored into the mix, cautions Robert Zirkelbach, a spokesman for America’s Health Insurance Plans. Another consideration is the regulatory environment that’s in place in each of these states.

“Many people are going to be required to purchase coverage that’s much more comprehensive, but also more expensive than what they’re purchasing today,” he says. A recent Milliman report estimated that premiums could climb an average of 30% next year for many of the roughly 1.3 million middle- or higher-income Californians with individual-market coverage.

Conspicuously absent from the recent announced rates in California is how they compare to what people are paying today, which Zirkelbach says could vary significantly from one individual to the next. Some young people, however, are expected pay nothing at all, depending on their earnings, while others will qualify for subsidies to help finance their coverage.

One bright spot is that market forces are already shaping the HIX model. “We’re seeing plans offer a variety of innovative benefit packages in a lot of these exchanges, including a high-value provider network, as well as programs that promote prevention and wellness, and coordinate care for patients with complex medical conditions,” Zirkelbach observes. The underlining goals are to improve care, while also making coverage more affordable, he adds.

Concern has been voiced about a lack of HIX competition in some states, such as Alabama and Alaska, where certain health insurance carriers dominate those markets. But Zirkelbach explains that “just because one health plan has large market share doesn’t mean there’s not competition in the marketplace or there are not choices for consumers.”

He points to a variety of coverage options from different health plans as well as multiple policies being available within any given carrier – information that’s easily accessible at and categorized by Zip code.

Bruce Shutan is a Los Angeles freelance writer.

Some unlikely to pay for Obamacare coverage

by Grace-Marie Turner
Galen Institute
June 6, 2013

Virtually all Americans will be required to have health insurance under the Affordable Care Act starting in 2014, and President Barack Obama especially wants young, healthy people to sign up.
About two-thirds of the uninsured are younger than 40. They use fewer health services, and their premiums are needed to help keep insurance costs down for everyone else.  Yet the incentive structures in the law work at cross-purposes with this goal and could well undermine its success. It will all come down to costs.  Four out of 5 people younger than 30 will face higher premiums than without the Affordable Care Act even with the subsidies many can receive.

The law requires young people to pay more for their health coverage so older people can pay less. A study published this year by the American Academy of Actuaries’ Contingencies magazine found that because of this provision, “premiums for younger, healthier individuals could increase by more than 40 percent.” Young men will pay even more than young women.

A former director of the Congressional Budget Office, Douglas Holtz-Eakin, conducted a survey that showed fewer than half of young people will sign up for insurance if premiums rise by 30 percent.
Young people also face a daunting approval process in applying for coverage. Applicants must divulge their income, family status and information about their employers, details on any insurance offered at work and their health habits — just to find out if they are eligible for subsidies.
Ezekiel Emanuel, a key architect of the president’s health plan, says he is worried that young people will be “bewildered,” and they may “forgo purchasing health insurance and opt to pay a penalty instead.”

That certainly will be an attractive option for many since the penalty starts at just $95 the first year.
And there is yet another disincentive for young people to enroll in coverage: They can wait to sign up for coverage until after they get sick or injured. The law requires health insurance companies to sell insurance to anyone who applies.  But if young people don’t sign up, the insurance pools are likely to be composed primarily of people who have high health costs. This could cause a “death spiral” where many more older — and sicker — people are enrolled, causing health insurance premiums to rise to cover their medical costs, thereby driving even more young people out of the market.

The White House believes that it will be able to persuade young people, who overwhelmingly supported the president, to enroll out of loyalty.  “The president connects with young people, too, so he needs to use that bond and get out there to convince them to sign up for health insurance to help this central part of his legacy,” said Emanuel, a health care expert at the University of Pennsylvania.
But young people may find that zeal may be severely tested when it comes down to paying thousands of dollars for health insurance that they may not want or need.

Consider, for example, a 27-year-old earning about $34,000 a year. He now could buy health insurance for about $200 a month. However, the new rules and more generous benefits required under the health law mean he would have to pay about $300 a month instead. He could get a subsidy of about $20 a month but, even with that, he still would be paying nearly $1,000 a year more for health insurance than without the law.

The White House is expected to mount a massive advertising campaign this summer to encourage people to enroll.  This will severely test his young supporters, who are having the hardest time finding jobs in our economy. Forcing them to also purchase health insurance — and pay more for it — may cool their enthusiasm to help the president fulfill his legacy.

Thursday, May 23, 2013

CA State Insurance Exchange Covered California Announces Plans and Rates for 2014

SACRAMENTO, CA – Covered California™ today announced 13 diverse health insurance plans that will offer in 2014, affordable, quality health care coverage to millions of Californians. The plans reflect a mix of large non- profit and commercial plan leaders, along with well-known Medi-Cal and regional plans.

The tentative selection of health plans is subject to a rate review by state regulators. It is difficult to make a direct comparison of these rates to existing premiums in the commercial individual market because in 2014, there will be new standard benefit designs under the Affordable Care Act, and the actual change in an individual’s premium will depend on the person’s current insurance coverage. However, Covered California believes that a valuable frame of reference for its premiums, is comparing them to the small employer market in California. Both the small employer market and Covered California are competitive markets, and offer guaranteed issue – you cannot be denied for pre-existing condition.

The rates submitted to Covered California for the 2014 individual market ranged from two percent above to 29 percent below the 2013 average premium for small employer plans in California’s most populous regions. This is impressive since the 2014 products include doctor visits, prescriptions, hospital stays and more essential benefits; protecting consumers from the "gimmicks and gotchas" of many insurance policies.

“This is a home run for consumers in every region of California,” said Peter V. Lee, Executive Director of Covered California. “Our active negotiating will not only benefit potential enrollees to Covered California, but will benefit all Californians by making health care affordable.”

Additionally, there is financial protection like a maximum out-of-pocket cost of $6,350 which will dramatically reduce the chance of someone going bankrupt because of medical bills not covered by insurance.

“Californians should be proud of how not only health plans in this state, but doctors, medical groups and hospitals have stepped up – and creating a market that will allow millions of consumers to enroll in affordably priced products. Because of that, we will be able to deliver exceptional value, low rates, access to health care in every region of the state, and a solid platform to achieve the dream of providing quality health care for all Californians,” Lee said.

Covered California’s rigorous review and selection process resulted in a portfolio of plans that achieve three objectives: a robust choice of offerings throughout the state, affordable prices, and access to doctors and hospitals. The terms of Covered California’s relationship with its partnering health plans means they will collaboratively work to promote care improvements, foster prevention, and seek to reduce costs by promoting better care.

Once plan rates are approved by state regulators, Covered California looks forward to signing final contracts and beginning the work of enrolling millions of Californians in the following health plans:

• Alameda Alliance for Health
• Anthem Blue Cross of California
• Blue Shield of California
• Chinese Community Health Plan
• Contra Costa Health Services
• Health Net
• Kaiser Permanente
• L.A. Care Health Plan
• Molina Healthcare
• Sharp Health Plan
• Valley Health Plan
• Ventura County Health Care Plan
• Western Health Advantage

"Covered California plans include the largest current health insurers in the individual market, as well as new entrants, regional plans and local Medi-Cal plans that want to be part of making history," Lee said. On average, there will be five plans from which to choose.
Even in rural areas where choice has been historically sparse, there will be two or three health plans. Throughout the state consumers will have a choice of Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs) and Exclusive Provider Organizations (EPOs).

To get prices at such competitive points, winning health plans built their bids around the expectation of high enrollment, not high profit. Plans reduced profit margins down to two and three percent; embraced Affordable Care Act programs such as Accountable Care Organizations and Patient-Centered Medical Homes, that seek to improve care while lowering costs; found common ground with doctors, medical groups and hospitals on lower reimbursement rates to make care affordable.

Virtually every health plan designed a custom network for Covered California. Negotiations included a detailed review of each plan’s rates, their mix of hospitals, physicians and other providers, and their contingency plans for expanding networks in the event more consumers sign up than expected.

The current list of insurers is for individual policies only. Covered California will announce its options for small businesses to buy health insurance in June.

About Covered California

California was the first state to create a health benefit exchange following the passage of the federal health care law. Covered California is charged with creating a new insurance marketplace in which individuals and small businesses can get access to health insurance. With coverage starting in 2014, Covered California will help individuals compare and choose a health plan that works best for their health needs and budget. Financial help will be available from the federal government to help lower costs for people who qualify on a sliding scale. Small businesses will be able to purchase competitively priced health plans and offer their employees the ability to choose from an array of plans and may qualify for federal tax credits. Covered California is an independent part of state government whose job is to make the new market work for California’s consumers. It is overseen by a five-member board appointed by the Governor and Legislature. For more information on Covered California, please visit

Tuesday, May 7, 2013

Must Read for all Californians re State Health Insurance Exchange

San Francisco Chronicle by Patrick Johnston -

May 5, 2013:

Over the next month, Californians will begin to get a clearer picture of the historic changes the Affordable Care Act will make in the state's insurance market for individual plans as it expands coverage to millions of the state's uninsured residents.

The state is scheduled to start providing the details about the health plans that will be offered through Covered California, a new competitive marketplace for individual, families and small businesses purchasing coverage.

Through Covered California, these Californians can begin purchasing insurance plans on Oct. 1 that will more resemble employer-provided insurance than the bare-bones coverage they may have had in the past.

The plans will go into effect on Jan. 1, and will offer more comprehensive coverage and smaller out-of-pocket expenses for deductibles and co-pays. Pre-existing conditions will no longer be taken into consideration, lifetime limits are eliminated, and subsidies will be available for individuals earning up to $46,000 and for families with an income of up to $94,200.

This will mean that many individuals will pay less for coverage than they did before the new federal law, but some Californians will face higher health insurance premiums.

Those on the lowest end of the income scale could see their premiums decline by as much as 84 percent, according to a report commissioned by Covered California.

But middle- and upper-income Californians who buy their coverage in the individual market and who don't qualify for the subsidies could face premium increases of as much as 30 percent, the report said. This could be especially true in San Francisco, with its higher median income and growing ranks of self-employed entrepreneurs, who will be seeking insurance in the individual market.

Among the reasons for the higher premiums for these Californians is the shift of out-of-pocket costs into premiums - that is, Californians will have lower co-pays and deductibles because the premiums will absorb more of the underlying cost of care. This shift ultimately could save money for people who use medical services more frequently. Families earning less than $60,000 a year, for example, could save up to 76 percent on the cost of care.

Providing more comprehensive benefits also means Californians in the individual market may pay more than they have before because the plans contain additional benefits - including benefits they might never use, such as pediatric dental care for beneficiaries who have no children.
Younger people may also lose some of their price advantage because of changes in the ways health plans calculate benefits. Because they were considered to be healthier, younger beneficiaries previously paid less than older people. Under the new plan, they will still pay less than older Californians but they will pay more than before. The report estimated these changes would cause Californians under age 25 to face, on average, up to a 25 percent higher premium, while older people would see an increase of about 12 percent if they don't qualify for subsidies. The report suggested that on average, individual premiums in California would rise 9 percent.

While these subsidies will help reduce premiums for some 2.6 million Californians, they won't reduce the underlying cost of care, which continues to outpace inflation by almost 250 percent. These underlying costs often are outside health plans' control, including the rising cost of hospitalization, doctors' visits, medical tests, prescription drugs and other health care services.

Among the many reasons for the rising costs are unnecessary tests, procedures and drugs, which experts say consume about $1 of every $3 spent on health care. We are an aging population, and older people have more costly medical needs. Also, about 40 percent of adult Californians live with at least one chronic condition, and chronic conditions account for more than 75 percent of all heath care costs.

Health plans are working to reduce costs by providing wellness programs. They offer free counseling for depression, quitting smoking, losing weight, eating healthier and reducing alcohol use. They're also limiting their overhead to about 11 cents out of every $1 in premiums. Plans are also working collaboratively to more closely align quality and payment in medical treatment and to improve cost transparency for consumers.

The federal Affordable Care Act and state law place tight limits on profits by requiring health plans to spend 80 to 85 cents out of every $1 in premiums on doctors' and hospitals' bills, prescription drugs, tests and other health care services for their members.

If the plans fall short of that requirement, then they must provide a rebate. California commercial plans exceeded those requirements by spending, on average, 89 cents out of every $1 in premiums on medical care.

California health plans' net profit margins are far less than others in the industry, averaging just 3.6 percent annually. Other sectors of health care, such as the pharmaceutical industry, benefited from net profit margins of up to 16.7 percent, according to Yahoo Finance data.

While the federal health care law will expand coverage, increase benefits and make many other changes to help Californians, it does not do enough to address the rising cost of care that continues to drive up the price of premiums.

The prescription for curing our health care system calls for more cooperation among all of us - elected officials, hospitals, physicians, patients and insurers - to lower the underlying costs of care so that we can ensure coverage is affordable.

Thursday, April 18, 2013

Diverse Groups Forge Consensus on Curbing Health Care Spending While Improving Quality

Unlikely partnership releases five integrated recommendations to improve health care.

  • Published: 4/11/2013

Calling itself the Partnership for Sustainable Health Care, the group includes nationally prominent advocates for employers, insurers, consumers, health care providers and others. Participants include America’s Health Insurance Plans, Ascension Health, Families USA, National Coalition on Health Care and Pacific Business Group on Health.
“No single organization working alone, and no single policy approach, will achieve the lower-cost, higher-quality imperative. Moderating health costs while improving quality of care must be an all-hands-on-deck commitment,” said Ron Pollack, executive director of Families USA. “It is high time for us to bend the cost curve and improve patient care by fully engaging the public and private sectors, rather than perpetuating cost shifts among sectors or to consumers.”
The organizations recommend a set of integrated, system-wide approaches involving both the public and private sector that they say will significantly curb the growth in health care spending and enhance the delivery of care. The organizations met regularly for more than a year to develop proposals and were supported in their work with a grant from the Robert Wood Johnson Foundation.
“We believe our health system will generate better value when consumers and providers face aligned incentives—based on evidence of what works—that reward quality care and efficient use of resources,” said David Lansky, president and CEO of the Pacific Business Group on Health. “Our work together shows that representatives of diverse interests can work in the public interest toward a common approach to improving health care.”
The group’s recommendations are five-fold:
  1. Transform the way health care providers are paid, to emphasize value of services provided, rather than volume. Partnership members believe that private and public insurance programs must transition from the current ‘fee-for-service’ payment system to one that better rewards quality and value. They call on the public and private sectors to implement a range of alternative payment and delivery models over the next five years, in order to quantify results and spread successful models.
  2. Pay for care that is proven to work. Partnership members recommend a tiered reimbursement strategy that links payment directly to effectiveness. They recommend that both public and private insurers reduce payment for services that prove to be less effective and to have weaker value than alternative therapies.
  3. Encourage consumers to choose high-quality care. Partnership members recommend incentivizing consumers to select high-performing providers. They point to models like value-based insurance design, which offer financial incentives to consumers—such as reduced cost-sharing—when they opt for evidence-based treatments and obtain care from providers who deliver high-quality care. Traditional Medicare should be modified to allow tiered cost-sharing for beneficiaries who use high-quality providers, and drugs and services that are proven effective.  
  4. Improve the nation’s health care infrastructure. Partnership members recommend reforms aimed at strengthening the foundational infrastructure of America’s health care system so that cost- and quality-related innovations can be implemented more effectively. They call for establishing a uniform and prudent set of quality and other performance measures to be used by both the public and private sectors to support provider payment reform, consumer incentives and healthy competition in health care markets.  
  5. Incentivize states to improve care. Partnership members recommend establishing a gain-sharing program for states, which would encourage innovative approaches to controlling health care costs. States that participate would outline specific savings goals, with defined rewards for meeting them. States that slow the growth of total spending would be rewarded with a percentage of the savings. The recommendations include numerous ways to ensure that cost-reduction is accomplished responsibly and builds upon the access gains achieved through the Affordable Care Act. 
“These five ideas are game-changers that can place our health system on a sustainable path. Together, they can provide significant long-term relief for families and businesses facing rising costs and uneven quality,” said John Rother, president and CEO of the National Coalition on Health Care. “By encouraging new forms of health care delivery and spending our health care dollars more wisely, they can produce the real health-cost reform that our elected leaders in Washington have been searching for.”
Leaders of the Partnership believe their comprehensive approach to integrate public and private sector actions toward improving the health system will help stop the ‘silo effects’ of health care, including shifting costs from one partner or sector to another.
“High-value, affordable health care for individuals and families requires a sustained commitment by all stakeholders to actively engage and address the drivers of health costs throughout the system,” said Karen Ignagni, president and CEO of America’s Health Insurance Plans. “Today's report presents an actionable roadmap for reform.”
The leaders say they understand that change will not happen easily or quickly, but believe these recommendations create the opportunity for significant momentum in the immediate future, for system-wide transformation, toward which substantial progress can be achieved in just five years.
“To meet America’s health care needs, with special attention to the poor and vulnerable, we know that health care providers must fundamentally reconfigure delivery systems, care processes and cost structures. Moving to managing the health of defined populations demands recognition and acceptance of the magnitude of the transformational change required,” said Robert Henkel, FACHE, president and CEO of Ascension Health. “The consensus recommendations we present today provide a roadmap to move our country toward an achievable, high-performing, person-centered, coordinated system with lower costs.”
The Partnership organizations plan to continue their work by reaching out to and engaging many other health care stakeholder groups that are also interested in promoting health cost efficiencies while improving quality of care.
See the Partnership for Sustainable Health Care recommendations at
Media Contact:
Alexis Levy | Robert Wood Johnson Foundation | | (609) 627-5702

About the Robert Wood Johnson Foundation

The Robert Wood Johnson Foundation focuses on the pressing health and health care issues facing our country. As the nation’s largest philanthropy devoted exclusively to health and health care, the Foundation works with a diverse group of organizations and individuals to identify solutions and achieve comprehensive, measurable, and timely change. For 40 years the Foundation has brought experience, commitment, and a rigorous, balanced approach to the problems that affect the health and health care of those it serves. When it comes to helping Americans lead healthier lives and get the care they need, the Foundation expects to make a difference in your lifetime. Follow the Foundation on Twitter or Facebook

Monday, April 1, 2013

Joel Hay: We can't afford Affordable Care Act

The Orange County Register
Obamacare's biggest selling point is that beginning next year all Americans will have a path to health care coverage. In fact, as Chief Justice Roberts upheld in a 5-4 vote at the Supreme Court last summer, after 2013, it will be illegal for any of us not to carry health insurance. Obamacare's biggest flaw is how expensive and wasteful it will be in accomplishing this expanded health care access.
The Affordable Care Act will add about 27 million Americans to the insured population and will likely increase government health care spending by more than $2.5 trillion over the next decade. Even the Congressional Budget Office estimates the 10-year Obamacare costs at $1.9 trillion through 2023, and this doesn't include any of the $300 billion annual health insurance premium tax exemptions that are crucial to ensuring that most private employers don't push all of their workers into the Obamacare Health Insurance Exchanges in 2014. It also doesn't include the $716 billion that was taken out of Medicare to help fund Obamacare without raising federal deficits.
This means that each newly added Obamacare beneficiary will cost the federal government about $100,000 to insure over the next 10 years. Only in Washington, D.C. could this even begin to sound logical or financially responsible. I'll bet that at least 95 percent of those who will get Obamacare coverage would rather just take the $100,000 than the Medicaid or Health Insurance Exchange health plans that federal and state bureaucrats are busily designing for them. For $100k, they'd gladly take their chances with the free care already provided by USC medical professors and residents at L.A. County Medical Center or other similar existing facilities.
Obamacare does nothing to deal with the 800-lb. health care gorilla – government programs cost too much. Medicare already has a $60 trillion unfunded liability for promises to future retirees. Just the spending for Obamacare, Medicaid and Medicare will raise deficits for the next 60 years to a level that will absorb over 20 percent of the entire economy, as much as the federal government spends on all its programs today. Actually, Obamacare does pay lip service to cost containment with a whole slew of new gobbledy-speak acronyms like ACOs (Accountable Care Organizations), PCMHs (Patient-Centered Medical Homes), EHRs (Electronic Health Records) and PCORI (Patient-Centered Outcomes Research Institute).
The problem is, while adding substantial administrative overhead costs, there is no evidence that any of these new bureaucratic contraptions will save any money.
The Obama stimulus spending pumped $30 billion into expanding electronic health records over the past four years and the consensus is that this has increased health care costs, not reduced them. As Stephen Soumerai from Harvard Medical School and Ross Koppel from the University of Pennsylvania wrote, "... The most rigorous studies to date contradict the widely broadcast claims that the national investment in health IT – some $1 trillion will be spent, by our estimate – will pay off in reducing medical costs."
All of the Patient-Centered Medical Home demonstrations done thus far have found that they significantly increase health care costs. Accountable Care Organizations, which are supposed to give physicians financial incentives to manage their patients better, have no mechanism to keep patients returning to them for care, and are thus as loophole-free as Swiss cheese. Even ACO proponents claim that in ideal circumstances ACOs will only slow the rate of growth of health care spending, not actually reduce it. And PCORI? PCORI is now spending billions of dollars to analyze health care services. This money is provided by a new Obamacare head tax on every health plan beneficiary. But there is a slight catch. Under Obamacare, it is illegal for PCORI to actually evaluate medical costs.
It could all have been done so much more simply by guaranteeing every American a catastrophic coverage health insurance plan that kicks in once their existing health benefit costs or annual out-of-pocket medical expenditures exceeded 15 percent of family income. By using existing health insurance premium tax expenditure loopholes to pay for it, taxes increases would have been unnecessary.
The Congressional Budget Office projects that at least 30 million people will still be uninsured in 2022, more than the 27 million that Obamacare adds to the covered roles.
But by then Democrats will be looking to pass Obamacare Part Deux, which will almost surely be single-payer health care for all. And when health care is free, you'll get what you pay for.
Joel W. Hay is a professor at the USC Schaeffer Center for Health Policy and Economics.

Wednesday, March 27, 2013

Anthem Small Group Renewal Option

Early Renewal— Option for Small Groups
As 2014 approaches, we know many of you have questions about how your clients’ medical plan options will be impacted. Anthem will have great options for small group employers for 2014 and beyond, but it is clear that the Affordable Care Act will drive significant change in both the look and pricing of the products all health insurance providers offer.
With this in mind, we want to be sure our employer groups have the time they need to navigate these changes wisely and figure out what plans will best fit their needs in relation to cost and coverage. For this reason, Anthem will offer Small Groups the opportunity to purchase a new agreement and adjust their renewal cycle, allowing eligible small group employers to stay on a 2013 benefit plan design until later into 2014. Groups accepting this offer would have their medical renewal month adjusted to December 2013 and rates adjusted to correspond with the new renewal cycle.
Eligible Small group employers enjoy these advantages with Early Renewal:
  • They can maintain their current medical plans and benefits until later into 2014.
  • They can lock in new rates on those plans for a full 12-months.
  • They will have additional time to evaluate their coverage options under the new PPACA guidelines.
In weeks to come, we will provide more information on the specifics of our early renewal option, as well as tools for you to use in talking with your clients about their options. While this program may not fit the needs of all your clients, it will give you an additional tool in helping them to navigate the fundamental changes our industry is undergoing.
As one of our agents, you are the foundation and strength of our business. Thank you for all you do to improve the lives of the people we serve and the health of our communities. Together we can help guide our members through future health care changes. Contact your regional sales manager or sales account representative to learn more.

Tuesday, March 26, 2013

Effect of Obamacare on Businesses

Entrepreneur -

March 21, 2013:

If you are still fretting about how Obamacare will affect your employees and your bottom line, you are not alone.

While a small percentage of business owners who offer health insurance to employees have an improved understanding of what the “employee mandate” means, a majority of small-business owners continue to misunderstand the law, according to a survey released Thursday from the Mountain View, Calif.-based private online health-insurance exchange eHealth.

Of the 259 business owners surveyed, 56 percent misunderstand the employee mandate, an improvement from the 69 percent of survey respondents who misunderstood the mandate when eHealth conducted a parallel survey in August.

The employee mandate is a section of the Affordable Care Act that requires businesses with 50 or more full-time workers to provide health-insurance coverage for their employees. If your business has more than 50 employees and you do not provide health insurance, then you will be required to pay an annual penalty starting at $2,000 per employee after 20 employees, says Carrie McLean, the consumer health insurance expert at eHealth. If you have fewer than 50 employees, the health-insurance mandate does not apply to your business.

Another largely misunderstood component of Obamacare is the health-insurance exchanges. Almost two-thirds of respondents say they have no understanding at all of the exchanges. Twenty percent of respondents say they have a fuzzy understanding of the exchanges and only 18 percent of respondents say they can explain what an exchange is with confidence.

Health-insurance exchanges are marketplaces where businesses and individuals can shop and compare plans. The federal exchanges, which will become available in October, will make government subsidized health-insurance available for lower-income individuals who are not getting coverage through their employer. Also, the SHOP exchange – an acronym for Small-business Health Options Program exchange – will be an exchange where small-business owners can do the same thing, says McLean.

The confusion about Obamacare creates anxiety for entrepreneurs. Almost six in ten respondents say they think their costs will increase as a result of the looming reform and one third of owners expect the reform to affect their hiring plans in 2014.

The survey was conducted online between Feb. 12 and Feb. 15, by eHealth and polled small-business owners who had purchased health-insurance through and were still maintaining coverage for their employees. All respondents had fewer than 50 employees and 95 percent had between two and 10.

The survey results from eHealth likely reflect even less confusion than what is out there among small-business owners overall, since it surveys only those business owners who offer existing coverage and have therefore put some thought into the topic already, says McLean. “We actually compiled a list of calls that we were getting from customers -- small businesses -- and it was composed of 70 different questions that we are getting on a constant basis,” she says. “There is major confusion out there in the marketplace.”

Thursday, February 21, 2013

Press Release on CA Insurance Exchange

FOR IMMEDIATE RELEASE Dana Howard: February 13, 2013 Media Line: (916) 205-8403 No Gimmicks, No Surprises – Standard Benefits Covered California Announces Standard Benefit Plans for Consumers SACRAMENTO, Calif.

Californians who must pay for their own health insurance are getting their first detailed look at what health care reform will truly offer. Covered California, the state run program that oversees implementation of the Affordable Care Act, is releasing the standards for benefit plans that will be made available to California citizens who do not rely on employer provided insurance or Medi-Cal for health care coverage. “The most important aspect of these benefits is they are standardized and they are adjusted according to income to lower costs for those with lower incomes,” said Peter V. Lee, Executive Director of Covered California. “Standardization is a game changer. It lets consumers shop from one insurance provider to the next, knowing that the benefits are the same. This is about removing barriers to care; about changing the focus of health insurance on prevention and on taking care of the sick.”

“Covered California is leading the way for consumers to make apples to apples comparisons when choosing health coverage,” said James Guest, President and CEO of Consumers Union. “Not only can consumers no longer be denied due to pre-existing conditions, they know there will be no surprises or gimmicks, and the benefits are the same from one carrier to the next.” Consumers have four levels of plans from which to choose – Bronze, Silver, Gold and Platinum. Households earning less than 250 percent of the federal poverty level can receive financial help if they enroll in a Silver plan; the less income they earn, the more financial assistance they can receive. For example, individuals earning between 150 to 250 percent of the federal poverty level can expect to pay $20 to see their primary care physician, while those earning 100 to 150 percent would pay $4.

“California has clearly learned from our experience. Massachusetts launched its health insurance exchange without standardizing benefits, but changed course after recognizing that allowing consumers to make apples-to-apples comparisons among plan options is critical to their ability to make informed decisions about what health plan satisfies their needs and meets their budget.” said Jean Yang, Executive Director of Massachusetts Health Connector. To be eligible for financial support, consumers must purchase plans from Covered California’s marketplace. The State of California is leading the health care innovation process by requiring that all carriers offer these same standard designs to all individuals and small businesses – whether inside or outside of Covered California.

While higher income individuals choosing one of these plans would not be eligible for financial help, they would be assured that the plan contains the same essential health benefits offered, and the exact same benefit design so they can make true comparisons.

Covered California also announced it has launched a social media presence on Facebook, Twitter, YouTube and Google+. Critical next steps in the launch of Covered California include the selection of insurance carriers that will be allowed to participate in Covered California, and determination of the plan pricing. About Covered California California is the first state to create a health benefit exchange following the passage of federal health care reform.

Covered California is charged with creating a new insurance marketplace that allows individuals and small businesses to purchase competitively priced health plans using federal tax subsidies and credits. Coverage starts in 2014. Covered California is overseen by a five-member board appointed by the Governor and Legislature; the California Health and Human Services Secretary serves as an ex officio voting member and is its current Chair.

Thursday, February 14, 2013

Orange County Register Commentary on Effect of Obamacare

ORANGE COUNTY REGISTER During his State of the Union address, President Barack Obama contended that "already the Affordable Care Act is helping to slow the growth of health care costs." Yet the costs of health insurance continue to climb, a direct consequence of the Affordable Care Act, and many uninsured Americans are likely to remain that way. Health insurers are pushing double-digit premium increases, some as high as 26 percent. Next year, when the Affordable Care Act's requirement to have insurance takes effect, premiums are expected to rise further, and many young Americans will have to choose between buying health insurance or paying a penalty. Although proponents of the law argue that subsidies will entice younger people to buy insurance, it actually is expected to have the inverse effect. Subsidies are too small, and out-of-pocket costs for insurance are much higher. For many young Americans, it makes more sense – although it has negative impacts on the overall health care system – to wait until they are very sick to purchase insurance, since they can't be denied coverage due to a pre-existing condition – or to seek to qualify for so-called "free" insurance, such as Medicaid (called Medi-Cal in California). And the penalty alternative is so much less expensive than the cost of health insurance that the majority of people purchasing insurance figure to be older and less healthy. Younger Americans won't want – or won't be able to afford – to spend so much on health care. It will be young, healthy Americans, therefore, who will tend to become the losers. "If young adults can't afford health insurance policies available in 2014 under the health care law, state insurance officials are worried they won't buy them. And that could drive up the cost of insurance for the mostly older, sicker people who do purchase coverage," notes Kaiser Health News, published by a foundation related to the large health insurer Kaiser Permanente. Higher payroll taxes and taxes on medical devices have now been implemented – yet President Obama wants more "modest" reforms. "Obamacare distorts the marketplace," Joel Hay told us; he's a health economist at the USC Schaeffer Center for Health Policy and Economics. "It takes a broken system and pours gasoline on the fire." Health expenditures in the United States in 2010 were estimated at $2.6 trillion – more than 10 times the $256 billion spent on health care in 1980. The U.S. spends $7,000 per person, 16 percent of gross domestic product, on health care every year. Yet Americans have a life expectancy slightly below average compared with countries that make up the 30 democracies in the Organization for Economic Cooperation and Development, despite spending more than any other OECD nation. Ultimately, one of the major root causes of health care inflation is the lack of competition in medical services. Obamacare, looking like another runaway entitlement program, fails to keep those costs down while pushing Americans in the direction of a government-run system, largely due to skyrocketing premiums for private insurance. And many of those who should be buying insurance at affordable rates in the event of an emergency – young and generally healthy Americans – will be unable or unwilling to do so.