Daily Archives: May 6, 2013

Holding noses, insurers start hawking Obamacare

Holding noses, insurers start hawking Obamacare – Jennifer Haberkorn – POLITICO.com.

No one has a greater financial stake in the rollout of the new online markets known as exchanges than the insurers. It potentially means millions of new customers for health plans — many of whom would get tax credits to help them pay for insurance.

But if enrollment next October is difficult, or people don’t know how to do it, the very sick could be the ones who sign up. That would leave the insurers with big health bills — and few young and healthy people to spread the risk and the cost.

Then there’s this forcast….

Joel Ario, a managing director of Manatt Health Solutions and former director of the Health and Human Services Office of Insurance Exchanges, expects insurers to be aggressive, in part because of what’s known in the business as “stickiness” — the idea that people tend to stick with the same insurer year in and year out.

“Once somebody chooses an insurer, it’s not that easy to move the business,” Ario said. “That encourages the insurers to be in there from the get-go.”

I don’t agree with his logic. The insurer’s don’t know the health of the risk pool since it’s unclear how many people will sign up so they can’t predict the utilization. Why on earth would they be aggressive in their pricing? The one thing the insurance companies do know for sure is the sick people will be at the front of the line.

Prediction: Chaos


Obamacare is on the horizon, but will enough people sign up?

Obamacare is on the horizon, but will enough people sign up? – Yahoo! News.

“Why in late April can’t they show us any of what they’ve got planned? The rollout plan should already be in existence,” an exasperated Democratic Senate aide said separately.

Well, an important part of a roll out is knowing how much plans are going to cost. In most states I suspect that’s a big unknown. Here are states that have rollout plans:

Among states taking the lead, Vermont has launched radio advertising to raise public awareness. Colorado begins its public outreach this month, while California, Maryland and the District of Columbia will hold off until later in the year.

Seeing Vermont and Colorado in the loop is no surprise as they swore their allegience to Obamacare very early in the process.

Of course, the worse case is all the sick people sign up and the healthy people pay a penalty (this is called adverse selection in insurance-speak). It seems a high certainty event that the sick people will be amont the first to sign up. The issue is “the rest of us” that access the individual insurance marketplace. The most likely adverse selection scenario IS more healthy young people refusing to sign and and electing to pay the penalty which will have the effect of increasingthe cost of Obamacare.

Oh, and if the above occurs, did the insurance companies price their plans correctly? Not that many readers will have sympathy for the carriers, exactly how DO they make good predictions of the proper rates when they can’t predict the risk pool?

This could lead is to financial troubles similar to what the federal high risk pools are currently experiencing. Read about these issues here and here.

Added 5/6@11:27am:

The Denver Post picks up the story: With health care reforms 5 months away, it’s unclear how many people will sign up



Obamacare: This is going to hurt

Flash-forward to spring 2013: As we prepare for Obamacare’s primary elements to kick in on Jan. 1, the vast chasm between the president’s claims and unfolding reality produces a constant stream of ominous headlines.

via Obamacare: This is going to hurt | UTSanDiego.com. You can’t make this stuff up. The administration has had over 3 years to get the system “ready to go” and we’re ending up with broken promise after broken promise and one missed deadline follows another.

In the very best scenario the implementation of Obamacare will be painful and chaotic.


States fear losing aid for ‘uninsurables’

States fear losing aid for ‘uninsurables’ – Timesonline.com: National.

This has to do with the health insurance high risk pools that were set up under Obamacare. This program helps bridge the gap for patients who suffered from pre-existing conditions until next year, when under the new law insurance companies will be required to accept people regardless of their medical problems.Many states ran them based on funding from the government, where other states simply allowed residents to sign up for the government sponsored plans.

It appears cost overruns for the state run risk pools will become the responsibility for the states.

Delivered last Friday, the new contract stipulated that states will be reimbursed “up to a ceiling.”

“The `ceiling’ part is the issue for us,” Keough said in an interview. “They are shifting the risk from the federal government, for a program that has experienced huge cost overruns on a per-member basis, to states. And that’s a tall order.”

State officials say one likely consequence of the money crunch will be a cost shift to people in the program, resulting in sudden increases in premiums and copayments. Many might just drop out, said Keough.

Amateur hour.

We should ask these state government if they really want to partner with the government on Medicaid expansion?