Wednesday, March 14, 2018

You Can Rent Your Own Private Idaho

The Patient Protection and Affordable Care Act (Obamacare) is the law the Republican love to hate. They have spent eight years campaigning on the promise to Repeal and Replace or simply to Repeal the PPACA. The Republican controlled Congress passed over 60 meaningless bills, some just so that newly elected members could have the opportunity to cast a vote. It was only after the 2016 elections, when the R’s retained control of Congress and captured the presidency, that real action seemed unavoidable. We know how that worked out.

The strategy has shifted from repealing the PPACA to simply sabotaging the law. The recent tax law, with the elimination of the financial penalties for failing to own compliant coverage, is instructive in its construction. The Republican controlled Congress determined that it could not repeal Obamacare, nor could they remove the Individual Mandate from the law. They were forced to remove the penalty for not complying with the law. The law still stands.

And that brings us to Idaho

We have been talking about Idaho Governor C. L. “Butch” Otter (real name!) and his decision to create a whole new class of health insurance policies, one that looks suspiciously like the health insurance policies the PPACA eliminated. Governor Butch wanted to return to a time of medical underwriting, limited benefits, and policy caps. You know, the good old days. The details can be found in the blog post Rotten Potatoes. With the help of his insurance commissioner and our friends at Blue Cross of Idaho, Governor Butch was trying to leave the ultimate destruction of the individual health insurance market as his legacy.

Blue Cross of Idaho was prepared to announce plan designs for the new policies within weeks of the announcement that the walls had been breached and that the PPACA was about to fall in Idaho. And that is when the U.S. Department of Health and Human Services decided to do its job. This is the link to the letter to Idaho’s Governor.

The letter, signed by Seema Verma the current Administrator of the Centers for Medicare and Medicaid Services (CMS), echoed the Trump Administration position that the Patient Protection and Affordable Care Act is the worst thing that ever happened to Americans, “However, the PPACA remains the law and we have a duty to enforce and uphold the law”. And since the law is the law, you can cut corners but you can’t stage a blatant frontal attack.

Ms. Verma’s letter noted that the plans that Idaho wanted to create failed to comply with the law on numerous levels and that CMS, her agency, would be required to step in if Idaho chose to ignore the issues. She also detailed the fines that could be levied against any insurer who chose to participate in the Idaho scheme. Her public protection train doesn’t derail until the 4th page of her letter when she suggests that Idaho should focus on “short-term, limited duration health insurance”. You can’t own your own Private Idaho, but you can rent it.

This blog has discussed the value and problems of short term major medical policies. I normally have between 20 and 25 clients on short term policies. These contracts serve as the safety valve for

  • Individuals who accidently missed the enrollment period
  • Make too much to qualify for a subsidy but find the premiums too expensive
  • Make too little for a subsidy, don’t want to be on Medicaid, and couldn’t afford a regular policy
Short term policies ask a few underwriting questions, are for a limited number of days, and don’t cover preexisting conditions. These plans are not designed to be a permanent health insurance solution. The Idaho plans were. Idaho was trying to syphon off the healthiest risks to policies that would be useful – until they weren’t. As soon as an insured got sick, pregnant, or injured, the plan was to move them to the guaranteed issue, preexisting condition covering, safe haven policies of Obamacare. The healthy and lucky could stay on the special Blue Cross of Idaho policies forever, protected from the responsibility of being part of the general population risk pool.

There are ways to make the PPACA work better. Undermining the law, whether directly or indirectly, will not help us in the long run. Destabilizing the individual insurance market by eliminating the funding for the Cost Sharing Reduction Subsidies, defanging the Individual Mandate, or promoting short term contracts in lieu of comprehensive health insurance, hurt the American consumer. The residents of Idaho, and all of the other states, would be better served with an administration that was less focused on short cuts and work-arounds and more prepared to help the law achieve its stated goals – patient protection and affordable care.


Photo – Lost in my Private Idaho – David L Cunix


Sunday, March 4, 2018

(Un)comfortably Numb

There was quite a to-do at the Capitol last week. I happened to be walking by as the body of the late Reverend Billy Graham was being carried up the steps into the Capitol. Thousands of people waited in line over the next few days to pay their respects and celebrate his life.

I was in Washington last week for my annual meeting of the National Association of Health Underwriters and for the opportunity to talk with members of Congress and their legislative aides. The supporters of Reverend Graham seemed to be the only people celebrating anything in Washington DC. Last year’s trip was only a few weeks after the inauguration. The mood in Congress was “What are we going to accomplish FIRST?” This year the mood seemed to be closer to “What the Hell just happened?”

Over the course of four days I spoke with people from all across the political spectrum. To be clear, the federal employees (Congressmen, aides, and security personnel), the insurance agents, and the political professionals are all patriots who love our country and are trying to do what they think is best. That seems to be the first thing lost in these debates and smear campaigns. One may question whether self-interest sometimes clouds one’s judgement. We are all human. But constantly questioning someone’s patriotism gets us nowhere.

Why Bother – There were fewer people participating this year. I could be wrong, but I felt like our annual meeting of hundreds of insurance professionals from around the country was down 10% to 15%. This is understandable since most of us are paying own way and all of the instability of the last year has taken a toll on us. Still, the huge ballroom at the Hyatt is normally SRO. What really got my attention were the empty halls of Congress. Our appointments are usually shoehorned in right after one group and just before another. That was not the case this year. One Congressman might still be meeting with us had he not had to leave, well over 30 minutes into our meeting, to cast a vote. The smaller numbers of groups meeting with members of Congress speaks to the general questions of how or why anything is getting done while this administration is in the White House.

News – A Columbus area friend is running for the Ohio House of Representatives. He held a fundraiser at the Dubliner, a famous Irish pub a few blocks from the hotel. I mentioned to a woman from Middleburg Heights that the Dubliner has served as the Washington home for Morning Joe. She made a face and made clear her disdain for all things MSNBC. I thought of my westside friend while in the office of one of our Ohio Republican Congressmen. His reception area had FOX News on the wall-mounted TV. His inner office was running MSNBC. With this administration, where the position du jour may be blurted out on live TV or a tweet, you have to be open to receiving your news from all possible sources.

Why Bother 2 – We record both small victories and minor setbacks each year. This year will be no different, but I have reason to be hopeful. For one, both the Congressmen and their aides had the time to conduct meaningful policy discussions. For another, the silliness and intellectual dishonesty of Repeal and Replace may have finally been laid to rest. Here are a couple of things that we discussed last week:
  • COBRA as Medicare Credible Coverage – This is one of those down in the weeds issues that had no champions, only victims. COBRA doesn’t count as credible coverage. Senior who retain their COBRA coverage instead of enrolling in Medicare when they become eligible, are considered to be “late enrollees”, subject to a waiting period, and will pay a penalty for the rest of their lives! It is normally just a mistake. Retirees over 65 may not have access to good, free information. We can correct this. I am happy to announce that our efforts have been rewarded with the introduction this past week of H.R. 5104 - Medicare Enrollment Protection Act.
  • Transitional Relief – With all of the confusion at Health and Human Services (HHS), it is not surprising that the Grandmothered health policies have fallen through the cracks. These policies were written and issued in 2010 after the Patient Protection and Affordable Care Act (Obamacare) was passed until the end of 2013 when the law was fully implemented. Many of us are dependent on our ability to retain these policies and wait nervously for the annual announcement. There aren’t any policies sold in Ohio that can match the network access of the Anthem, Medical Mutual, and Golden Rule Grandmothered contracts. Every Congressman and legislative aide quickly grasped the importance of granting transitional relief for these policies. Some even thought that this should be simply granted permanent status. As with so many other issues, this would disappear without our constant vigilance.
  • Retain the employer tax exclusion – More than 175 million Americans get their health insurance at work. There were some proposals being floated to either cap the maximum amount of premium the employer could deduct or eliminate the deduction completely. Talk about destabilizing the market! There seemed to be little interest in overturning our markets in the offices I visited.
Politics in the Real World – The topic of Congressional Hearings came up during a conversation with a Republican Congressman. He brought it up, not me. He mentioned the lack of hearings as part of the overall failure of last year’s efforts to repeal Obamacare. He noted that “We’ve done nothing to bring the cost of health care down”. He had a real grasp of some of the nuts and bolts of the health care funding debate and expressed his regrets with the lack of tangible results. In many ways it mirrored the conversation I had with the Senior Legislative Assistant of a local Democratic member of Congress. I have met this particular aide several times and knew her to be a straight shooter. We discussed the anticipated November 2018 wave election. She expressed a sincere desire to not replicate the mistakes of this past year, to be inclusive, and to get things done. One party having significant majorities in the Senate, House, as well as the Presidency has been a shock to the system. The question is whether the ideologues will win out and the politics of Washington will careen wildly from one extreme to another or if the pragmatists from both sides of the aisle can regain control of the House and the Senate and return order, decorum, and respect to our institutions.

I was standing in a Senator’s office when President Trump announced on live TV an entirely new gun control policy. The staff didn’t even bother to look up knowing full well that he would reverse himself tomorrow. I get that. We’re all (un)comfortably numb.


Picture – There Had To Be A Moon Involved – David L Cunix

Picture – The Reverend Billy Graham – David L Cunix

Picture – Fighting The Crowd In The Hart – David L Cunix


Monday, February 19, 2018


Game Night, a new movie currently showing in local theaters, includes a scene where a couple is locked in a room. The man asks his wife for matches. “You’re going to light a fire in a windowless room that we’re trapped in”? He responds, “Why do you have to make my idea sound so stupid?”

There is an impulse to do something. Anything. Action without thought. Action without any notion of the consequences. That may be entertaining in the movies, but it has been down right depressing in government. We have endured eight years of Congress threatening to repeal Obamacare, the Patient Protection and Affordable Care Act. Eight years of our elected representatives begging for matches in a locked windowless room. Pardon me if I make their actions sound foolish and irresponsible.

Republican legislators, especially those stuck in statehouses with Washington as their goal, felt compelled to express their hatred of Obamacare whenever and wherever they could. We will ignore, for the moment, both the value and the Republican roots of the law, and focus just on the cynicism. It was important for these men and women to report to their constituents that they were doing something. Lucky for them, their base never really asked what they were doing or how these bills might impact the access and payment of health care. The U.S. House of Representative passed over 60 bills that repealed all or most of the PPACA. And those mired in the minor leagues did what they could at the state level.

And that brings us to Ohio. Thanks to term limits on the state level, our Columbus politicians rotate through the chairs at the statehouse and Washington. A defeated U.S. Senator grabbed the State Attorney General job on his way to running for Governor. By the way, I should probably mention that before DeWine was a Senator he was the Lieutenant Governor. Before that, Congress. And yes, before that, he was in the Ohio State Senate. You know, an outsider. So the meaningless law you promote today may be a major part of some future campaign.

As Stephen Koff reported in the Plain Dealer, Ohio has been looking at a Section 1332 Waiver since 2015 to eliminate the Individual and Employer Mandates. As noted in August, the state expressed a real interest in applying for a Section 1332 Waiver to stabilize our market. The stakeholders were invited to participate. Serious people, experts in the various avenues we could pursue, invested significant time to craft a proposal. One of the options, a reinsurance program, had real promise. And then the plug was unceremoniously pulled. Now? Now we are back to a request to eliminate the Individual Mandate.

It was just last August that our Governor, John Kasich (R) and Colorado’s Governor, John Hickenlooper (D), were in Washington begging Congress to act responsibly. They strongly promoted both the Individual Mandate and the funding for the Cost Sharing Reduction. The Kasich administration has now officially given up. The Republican controlled legislature has demanded the filing of the waiver on the Individual Mandate. And though no one appears to have given any thought as to the consequences of the elimination of the mandate, or created the positive alternative that warrants the change, Ohio is searching for matches…

A quick Idaho update – As noted in my last post, Rotten Potatoes, Idaho has decided to create a parallel universe for health insurance. Healthy individuals will be able to purchase underwritten policies that do not comply with the PPACA. The initial offerings will have separate deductibles for name brand drugs and exclude coverage for maternity, etc. The rates for a 45 year old may be half of a compliant contract. And, as the healthy and those wishing to gamble migrate to these policies, the exchange policies which cover preexisting conditions and qualify for a subsidy will rise exponentially. This is the very definition of adverse selection.

Blue Cross of Idaho is the driver of this program. Their new policies, with fewer protections and less coverage, are called Freedom Blue. I love naming a potentially insufficient policy that may not be fully understood until time of claim – Freedom Blue. Because, when you think about it, freedom is just another word for nothing left to lose.


Photo – David L Cunix – Stuck on the Wrong Side of Liberty

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