Tuesday, February 6, 2018

Rotten Potatoes

Congratulations to Idaho, now in the lead in the national race to the bottom.

Idaho Governor C. L. “Butch” Otter, his handpicked successor, Lieutenant Governor Brad Little, and Insurance Director Dean Cameron addressed the Associated Press at the annual legislative preview last month.

Congress and President Donald Trump have eliminated the individual mandate requiring all Americans to buy Obamacare plans or face financial penalties. That means we will no longer be penalized for buying coverage that doesn’t meet all of the Obamacare rules.
Modern Healthcare

According to the Associated Press report, “Cameron added that the goal is to reduce costs for essential healthcare coverage by 30% to 50%”. That’s a heck of a goal. Can it be achieved? The answer, of course, is a qualified YES.

Idaho hopes to create a two path system. The poor, the working class, and the sick would be forced down one bumpy road. The healthy and the gamblers would take the other road which could be a dead end.

Option 1

Idaho maintains its own exchange, Your Health Idaho, which offers policies compliant with the Patient Protection and Affordable Care Act (Obamacare). These policies, per the law, cover the ten Essential Health Benefits. Policies are guaranteed issue, cover pre-existing conditions, and don’t have a lifetime cap on benefits. Tax Credit Subsidies are designed to help the working class pay for the premiums.

Option 2

Rates could drop quickly if, with the state’s blessing, the insurance companies could cherry-pick the healthy and reconfigure the benefits.

  • Underwrite – Accept only the healthy or charge more for those that aren’t.
  • Pre-existing conditions – Limit or exclude ongoing health issues
  • Cap Benefits per year or lifetime - $1,000,000 will be the starting point.
  • Add co-pays to Preventive Care – Good-bye free colonoscopies and annual exams
You get the idea. It is like buying a car. That BMW would be a lot cheaper if you weren’t forced to pay for the engine and tires.

The Idaho Statesman reports that Director Cameron is adamant that the new plans will cover newborns and won’t have lifetime caps. I wonder if the regulations he is making up today will be in effect next month, much less next year or the year after.

The consequences of this move, if implemented and not blocked by the courts or the feds, are pretty easy to predict. Let’s look first at the PPACA compliant policies.

Policies on the Idaho exchange, Your Health Idaho, will increase substantially from day 1. President Trump eliminated the funding for the Cost Sharing Reduction Subsidy last fall. This will continue to impact premiums. As the healthy are siphoned off, the existing pool will simply become sicker and sicker. Each successive premium increase will force those paying the full premium to reassess their needs and risk tolerance. Those individuals and families who are eligible for the tax credit subsidy will continue to qualify for income based assistance. The premiums go up, their subsidies go up.

The non-compliant policies have a distinct price advantage. And though the initial offerings might appear to be insurance lite, it won’t take long for the benefits to devolve into a portfolio of non-coverage with plenty of Idahoans not truly understanding the limitations of their policies until the time of claim. For every 60 year old questioning the need for maternity coverage there is a 20 year old wishing to opt out of the cost of a policy covering cancer treatment. But this being the real world, we know that it will be the distraught 20 year old caught without maternity and the devastated 60 year old underinsured, or possibly uninsured, for cancer.

The good news is that Blue Cross of Idaho is really excited. According to the Idaho Statesman the insurer has been a driving force for this change. And really, it is pretty easy to understand why. The policies that Blue Cross of Idaho sells on the exchange will be allowed to rise to cover the anticipated claims while the new contracts will be specifically designed to not have long term expensive claims. Blue Cross will peel off the good risks and the exchange will be stuck with the rotten potatoes.



Photo – Idaho Potatoes – David L Cunix

Friday, February 2, 2018

What Is The Point?

I have always been a pragmatist. This has served me well in my chosen profession, insurance agent, where my main function is to solve problems. My focus is the most direct route from Point A to Point B. But what happens if the people in charge have no interest in finding Point B and are busy debating the existence of Point A? That is the reality of the current health care debate.

During Tuesday evening’s State of The Union Address, President Trump proudly noted that he had eliminated the Individual Mandate? Why? Not why was he proud? Donald trump announces his accomplishments like a 3 year old standing by a potty. No, why was he proud, specifically, of eliminating the Individual Mandate? How does that help anyone access or pay for health care?

The answer, of course, is that the President has absolutely no idea what he did or how his actions will impact the cost of health insurance. The elimination of a portion of the nuts and bolts of the Patient Protection and Affordable Care Act (Obamacare), especially one with Republican roots, does not hurt the former President’s feelings. That may be the motivation, but the elimination of the Individual Mandate can only lead to higher premiums.

We have just entered the month of February. The insurance companies are still frantically trying to finalize all of the policies and changes that were crammed into this most recent Open Enrollment. Other departments are busy planning for 2019. We are only months from the insurers’ initial filings. How in the world can any insurer plan for 2019?

Neither the White House nor the Republican controlled Congress appear to be doing anything with health care. The issue has fallen off their radar screens. Not only wasn’t there a real Republican alternative to Obamacare, there also doesn’t appear to be any interest in creating one. They have moved on. But we haven’t.

The President received tepid applause from his Congressional cheering section when he noted the high cost of prescription drugs at the SOTU. Someone forgot to tell him how much the pharmaceutical industry has invested in this Congress. But let’s pretend that he and Congress were interested in getting a handle on these out of control costs. Who amongst them would take the lead? What, if anything, would get done?

The first step is to craft a consensus defining Point A and Point B. Then we might have a chance to improve the delivery and payment of health care in this country. Until then, what’s the point?



Photo – A Couple of Dollars’ Worth - David L. Cunix

Monday, January 8, 2018

The Fantasy Of Control

The young guy was pacing the waiting room hoping for good news. The news wasn’t good. The initial diagnosis was that his eight year old Nissan truck needed a new battery. He agreed to the estimate - $264 for parts and labor. Was that a good price? Before either of us had much time to ponder the question, the repair shop’s manager returned with new and even worse information.

“We tried to jump your truck. It won’t turn over. It looks like you need a new starter.”

A new starter? What happened to the battery?

“A failing starter can weaken the battery. The starter will be $614. We may not get it done till Monday. The starter isn’t easy to access on your truck.”

It may have appeared that the young guy had to make a decision, but that really wasn’t the case. He had had a choice, where to receive (car) care. His truck was having difficulty starting and he picked this particular shop. He either trusted them or he didn’t. And if he didn’t, it was too late. His truck was on the rack.

The manager came out and mentioned that the back brakes didn’t need immediate attention, but would soon. The total cost, battery, starter, brakes, etc… was $1,544. Shocked, but now empowered with a choice, the young guy agreed to the starter and battery.

There is an illusion of choice, a fantasy of control, in health care that is no different than what the young guy experienced at the repair shop. Can we really turn down one more blood test? Is this CT Scan really necessary? Do we really need another pill? Who are we to question our doctors’ recommendations?

Some of our friends on the Right never miss the opportunity to cite what they call President Obama’s biggest lie, “If you like your doctor, you can keep your doctor”. It wasn’t a lie. It was a mistake. As many in Greater Cleveland learned this last year, your insurer can add or subtract doctors at will. You don’t have any control over the network associated with your policy. At best, you might be able to purchase a different policy that will grant you access to the hospital of your choice.

The Patient Protection and Affordable Care Act (Obamacare) was a poorly crafted law that had/has more than a few flaws, but it does contain many important consumer guarantees. The PPACA codified both guaranteed issue and the ten Essential Health Benefits. That insurance card in your wallet is your ticket into a hospital, a doctor’s office, and the maternity ward. This is particularly important when your employer, not you, gets to decide your insurer and coverage.

Those guarantees are about to be dismantled. The administration is promoting the creation of association policies. This blog, consumer groups, insurance commissioners, and almost every organization that places the importance of access to health care above the politics of health care, have noted the risks of association policies. Our concerns have fallen on deaf ears.

The American Cancer Society’s Cancer Action Network was one of the first to sound the alarm:
ACS CAN opposes any policy changes that exempt Association Health Plans from federal protections that are critical to cancer patients including prohibitions on pre-existing condition exclusions, Essential Health Benefit coverage standards, maximum out-of-pocket limits, and prohibitions on annual and lifetime limits. ACS CAN also opposes removing Association Health Plans from state regulatory authority which could severely disrupt the insurance market.
Will your employer’s new group policy cover your preexisting condition or your wife’s pregnancy? My personal claims exceeded $600,000 in 2016. Are we about to return to group health policies that max out at $250,000 or only $50,000? This is not an exaggeration. This is not fearmongering. Those policies existed just a few short years ago. The PPACA ended all of those concerns. Association plans will return us to those days.

When will you find out that you’re not really insured? When will you realize that you have coverage in name only?

The young man called his wife for a ride to work. I was at the repair shop for an oil change (preventive care). As the clerk handed me my keys, he mentioned that my tires were OK, currently at 9’s. I reminded him that I just purchased them from him last month.



Photo – Still Tired – David L Cunix



Friday, December 29, 2017

We're Tired

Can you really talk something to death? Can you stress over an issue, every day, to the point that you are just numb? Health Insurance? It appears that the new Republican goal is to do just that. In just the last week we have been told by President Trump that he has repealed Obamacare (The Patient Protection and Affordable Care Act), that he has severely damaged it, and that Congress’s next task is to fix Obamacare in a bi-partisan fashion. I’m tired and I’m not alone.

The PPACA has proven to be far more resilient than anyone imagined. Abandoned at birth by some of the very people who had created it (The Gang of Six), the law was relegated to a life with a parent (the Democrats) who didn’t always understand it and consistently failed to explain both its benefits and drawbacks to the American public. For seven years the Republican controlled Congress has proven that “sticks and stones may break my bones, but words will never hurt me”. The 60 plus faux attempts to repeal Obamacare may have riled up the base and kept the campaign funds coming, but they had little impact on the law. And in 2017, in the year of Trump, we have seen the end of the funding for the Cost Sharing Reduction, a 50% reduction in the Open Enrollment Period, and, last week, the elimination of the Individual Mandate.

So this time he succeeded? Obamacare is dead, right? Not so fast.

Cleveland area insurance agents became reacquainted with our clients in 2017’s Open Enrollment Period. There was a major change in our market. Anthem Blue Cross, a major player since 1985 when the then Community Mutual Blue Cross Blue Shield of Cincinnati invaded Cleveland, chose to stop selling individual policies until the Cost Sharing Reduction got resolved. Mr. Reliable, Medical Mutual of Ohio, found it necessary to move policies on individuals, under age 65, purchased after 2014 away from the Cleveland Clinic Foundation. And the Cleveland Clinic formed a partnership with New York based Oscar to market their own policy.

Due to the PPACA, agents no longer ask health questions or engage in medical underwriting. We used to get involved with claims issues, but HIPAA ended that. So imagine our surprise when we got calls like this:

“Dave, I really like Medical Mutual, but my cardiologist is at the Clinic”.
“Yes. I had quadruple by-pass in February”.
“Wow. I didn’t know. Didn’t I see you over the summer at an art show? You didn’t say anything about this.”

The last two months have been filled with talks about cancers, heart conditions, and expensive dermatology treatments. Who knew? More importantly, which insurance company would cover these people if there was medical underwriting and the possibility to decline a bad risk? The clients come in, concerned, sometimes crying, hoping to hear that they can still purchase health insurance for another year. AND THEY CAN.

But the stress is showing. How many times can you walk to the edge of the abyss before you fall in? If you are working your way through a major illness, facing months of treatment, and hundreds of thousands of dollars of medical expenses, you hope that this is all a bluff. You hope that the president will forget about health care and his fixation on all things Obama and move on to something less consequential. Like Korea.

But more than anything else, you’re tired.



Photo – “It’s True It’s True” – David L Cunix


Tuesday, December 19, 2017

Pacing The Hallway

We are pacing the hallways waiting for news. Our seven year old, no, nearly eight year old, is in surgery donating a major organ. Giving a part of yourself for the benefit of others is always an important life lesson to teach our youth. Sometimes it is a kidney. In this case it is the Individual Mandate. If Obamacare (Patient Protection and Affordable Care Act) can just give up the Individual Mandate, the corporations, the very rich, and certain elected officials will be able to have their taxes cut. It seems like a wonderful trade-off. Never have so many been willing to sacrifice so much for so few.

The American public has been forced to pace the hallways for most of 2017. There were the two major attempts to repeal the PPACA without a concern given to the consequences. The funding for the Cost Sharing Reduction was eliminated. Other actions, great and small, were taken to sabotage the law. And each time we found ourselves pacing the hallways left to wonder how all of this will play out once the Republicans were forced to accept that 20% of our economy and peoples’ lives hung in the balance.

Paul Ryan and the Republican House are about to pass the final version of the new tax bill. They may not know nor understand the Corker Kickback or the myriad of other favors granted by the law. Here is the link to the final version. Trust me, your Congressman and Senators haven’t bothered reading it. What they do know is that the spigots to their campaign donations have been opened and that the Individual Mandate has been repealed. What they don’t know is how much this will cost you and me.

We have covered this ground before. Millions of Americans depend on health insurance to provide access and payment for care. You cannot base our system on the sick and the responsible. To work efficiently, we all have to participate. Much as the Republicans determined when they created Medicare Part D in 2003, there must either be an incentive to get everyone to participate or a penalty if they don’t. There are some Americans who don’t qualify for enough subsidy to make insurance affordable. But the young, the healthy, and the cheap will abandon ship. Spreading the risk, the inevitable claims, across a smaller group of people leads to higher pricing. Higher pricing forces those who pay the full cost of their insurance to either bail out or choose significantly less comprehensive contracts. And for those who qualify for those subsidies? As the premiums increase the subsidies increase.

The loser is the American taxpayer, you know, those of us who don’t own a Congressman. By the time you read this the House will have passed the legislation. The Senate will vote later tonight. Still we pace…



Photo – Emergency by David L Cunix


Sunday, November 19, 2017

The Law Of Unintended Consequences

Fall 2017

There are certain things I can count on every November – Sunday afternoons in my office working on renewals and Open Enrollment, trees shedding their leaves, and the Republicans trying to screw up healthcare. Yes, just another November.

We are a little over halfway through this year’s Open Enrollment Period. Now is a good time to see how we’re doing.

Ball of Confusion – What has been the most confusing part of this year’s open Enrollment? Medical Mutual of Ohio’s network change. I’m still getting calls weekly. First and most importantly, the MMO network change ONLY APPLIES TO POLICIES SOLD TO PEOPLE UNDER AGE 65 SINCE 2014. The new network does not apply to Medicare supplements. It does not apply to group policies. When in doubt, call your agent.

Against all odds – The Patient Protection and Affordable Care Act (Obamacare) has withstood seven years of attacks and sabotage. This year, with an administration actively trying to undermine the law daily, the PPACA has proven to be remarkably resilient. The Open Enrollment has been reduced to 45 days, less than half of what it should be. The advertisement budget disappeared. The federal healthcare Exchange is closed on Sundays. Funding for the Cost Sharing Reduction was eliminated. And with all of that Enrollment is up, way up.

Skinny Networks – One of the ways the insurers have used to rein in costs has been to limit your choice of doctors. Like the original HMO’s and PPO’s of 30 years ago, the insurer can negotiate better pricing if it can drive more business to specific hospitals and providers. This gives us the new partnership between the Cleveland Clinic and NY based Oscar and the Medical Mutual network changes mentioned above. Rate increase would have been much higher in Cuyahoga County without this change. Some counties even saw a rate reduction. But limiting access has hit Northeast Ohioans hard. Many in Greater Cleveland utilize doctors and services at both University Hospital and the Clinic. Individual policyholders in Lorain County will find it difficult to access University Hospital doctors at nearby St. John West Shore. And people living in Chesterland will find it hard to purchase a policy that will cover them at Hillcrest. This trend won’t end anytime soon.

25% and Higher – Did we really see rate increases over 25%? Yes, but not across the board. As noted above, President Trump eliminated the funding for the Cost Sharing Reduction last month. Ohio insurers were prepared. The Silver Level policies purchased through the Exchange, the only contracts impacted by this decision, experienced significant price increases. All policies may have taken a bit of a hit, but the real impact was on the Silver policies. Individuals and families committed to comprehensive coverage will experience the full impact of the rate increases if they don’t qualify for a premium tax credit subsidy. If you are getting a subsidy, you might not notice a change.

A Price Decrease – Yes, lots of people are seeing no change in their premium for 2018 or even a decrease. It doesn’t appear that the President or his advisors actually understand how the PPACA works. Increasing the price of Silver Level policies increases the premium tax credit for all subsidy eligible participants. The price goes up, the subsidy goes up, and the net premium stays about the same. The insured doesn’t pay more, but we, the US Taxpayer, are covering the difference. This is the law of unintended consequences. And it gets worse. The subsidy is based on income. So if the insured purchases a Bronze Level policy, the new higher premium tax credit can result in a lower premium for 2018. I have seen reductions between 15% to as high as 20%! Lots of insureds, especially the healthier ones, are moving to the Bronze Level policies and pocketing the savings.

Up is Down - The Republicans have turned their attention to tax reform. This being Health Insurance Issues With Dave, we wouldn’t have wasted any time on the merits of the current proposals had the Senate not floated the idea of eliminating the Individual Mandate as a way to fake a balance. We have covered how you can’t build a healthcare payment system based solely on the sick and the responsible. We have noted that the Individual Mandate, strikingly similar to the plan the Republicans used when creating Medicare Part D, traces its origins to the Heritage Foundation. So why insert this in a tax bill? The concept is that more Americans, the healthy ones, would take a pass on health insurance and save the taxpayer the subsidy money. Terribly cynical, but would that work? Of course not! As with the Cost Sharing Reduction debacle, what we would see is a severe hike in the price of health insurance as we remove the best risks from the insurance pool. The premiums would spike, the subsidies would jump, and the taxpayer would, again, be on the hook for the additional cost. And if you don’t qualify for a subsidy? You get hit twice – higher premiums and higher taxes if and when Congress ever chooses to bring in enough money to pay the bills.

Just another November.



Photos – David L. Cunix

Sunday, October 15, 2017

Playing Chicken

Bruce Springsteen was right. You really could have 57 stations with nothing on. There were tons of reruns, and worse, the same shows were on multiple stations. One saga looked familiar. It was a New York production, a remake of a Hollywood classic. Only this time we didn’t get James Dean. Instead, the two ne’er-do-wells racing the stolen cars to the cliff were Donald Trump and Mitch McConnell. In this version they both jumped out in time but the American public was bound and gagged in the trunk. Dozens of stations were showing A President Without A Clue.

The Patient Protection and Affordable Care Act (Obamacare) took its first breath on March 23, 2010. It survived over sixty Congressional assaults, but died of stab wounds and blunt force trauma on October 13, 2017. We now have Trumpcare.

Obamacare was a failed attempt to make health insurance universal and affordable. It failed. Millions of Americans did acquire better, cheaper coverage, but others did not. You can trace the problems to the design, the actual language of the bill, the process (numerous Republican amendments and poison pills), or the concerted effort of the Republicans to discredit and destroy it once it became law. It doesn’t matter. We knew the goals and the PPACA came up short.

What is the goal of Trumpcare?

The last post of this blog covered Donald Trump’s Executive Order a few days before he issued it. The changes, the expansion of cherry-picking association policies and the revival of short term contracts, are not immediate. The first step is a sixty day period for the public and the stakeholders to comment. The immediate impact is Market Instability, the hallmark of Trumpcare. I talked with insurers on Friday. They will be ready to roll out alternative products by January 1st.

Trumpcare was born with the elimination of the Cost Sharing Reduction Subsidy. Trump had been threatening to do this for months even though many, including his then HHS Secretary, Tom Price, had urged him to continue the program until Congress passed an Obamacare alternative. You may remember that these threats were the reason Anthem withdrew from the individual market.

There were four steps to individual health insurance under Obamacare, all based on the personal or family income of Americans who didn’t have access to coverage at work.
  • Income below 138% of the federal poverty level – Medicaid
  • Income between 138% to 250% of the federal poverty level - A tax credit subsidy to help pay for the premium and a cost sharing reduction to reduce the deductibles and out-of-pocket costs
  • Income between 250% to 400% of the federal poverty level – A tax credit subsidy to help pay the premium
  • Income in excess of 400% of the federal poverty level – Full premium
The insurers are contractually obligated to reduce the deductibles and out-of-pocket costs for those who qualify, but due to a failure in the wording of the law, the federal responsibility to fund it became a political football. Republicans sued and the courts let the funding continue as long as the President defended it. I don’t know that anyone really believed that Trump would do more than threaten to upend the market. But which insures could take a chance?

Insurers across the country are now being forced to decide whether or not to withdraw from the individual market. At the very least premiums must be increased to cover their additional exposure. Excellent reporting by Stephen Koff in Saturday’s Plain Dealer detailed how insurers were forced through the difficult processes of preparing rates for each state and how this will impact the consumers, the insurers, and yes, the American taxpayers.

It is assumed that Trump will institute this immediately, cutting off payments due for the rest of 2017.
Medical Mutual of Ohio, based in Cleveland, says it will lose $3 million to $5 million in just those three months because of this. The company is large enough to withstand it. Smaller companies might not have the same financial fortitude.
Consumers who qualify for a tax credit subsidy will receive a higher subsidy. The Congressional Budget Office, according to the Plain Dealer, projects that this one decision will increase the “deficit by $194 billion in the next 10 years”. And those that don’t qualify for subsidies will see higher premiums as soon as January 1st.

Mitch McConnell and Paul Ryan have been playing chicken with 20% of our economy and the way Americans access and pay for healthcare for over seven years. It was cynical and unprincipled. It took Donald Trump to drive over the cliff.



Picture – Cliff Straight Ahead - David L Cunix