UPDATE: Can't I leave you people alone for 5 minutes???
2019 OPEN ENROLLMENT ENDS (most states)
Time: D H M S
Last Wednesday, I noted that I was taking off for a week on a family camping vacation, and that...
I'm sure nothing of any significance whatsoever will happen in healthcare news over the next 5 days, right?
I guess I should've known better. Within minutes of my posting that, I saw this...
• New data on insurers' ACA struggles
• Burwell on the law's future
• And much more in our special Obamacare issue: https://t.co/qv1H1FyK2I
— Dan Diamond (@ddiamond) July 13, 2016
...which included feature stories about:
- How the GOP went out of their way to make the ACA look more complicated than it actually was back in 2009
- How HHS Secretary Sylvia Burwell is locking down the ACA to prevent the GOP from messing with it too much
- How the ACA was structured in such a way as to not only prevent net job losses, but to actually increase employment...so much so that it may actually have worked too well
- How many insurers participating in the exchanges are losing money and jacking up premiums this year*, and...
- How Lyndon Johnson managed to push through Medicare 50 years ago
*(See important note on this below)
Then, while we were on the road to the camping site, this story broke:
Illinois Obamacare plan to fold after 3-year run
Land of Lincoln Health, an Obamacare insurer that launched three years ago to bring competition to the online exchange, is liquidating amid big financial losses.
Yes, that's right: Yet another ACA-created Co-Op has folded up shop. They lost a bunch of money, were owed a bunch of money via the sabotaged Risk Corridor program...but then discovered that they owed a bunch more via the Risk Adjustment program. As you may recall, the Illinois government tried a last-ditch Hail Mary play a couple of weeks ago by ordering Land of Lincoln not to pay out the RA payments until they received the RC payments...but that didn't last too long. Result? 49,000 people now have to scramble to find a new carrier via a Special Enrollment Period...and they're not even sure when their coverage will actually shut down or how long they have to keep paying premiums for:
I made some more calls today. Attorney General's office directed me to the Dept of Insurance (was also told I could file a complaint with the AG, but it would have to be by mail an then have to be reviewed and determined if anything would happen). Just got off the phone with DOI and was told everything is still pretty much up in the air. They said there is still some work being done trying to keep the plan for the remainder of the year. Was urged to file a complaint on their website - the more people who file it and give details of how this is impacting them, the better. Especially stress the deductible/OOP issue and a way to utilize funds to help those who have already met their maximums.
...Has everyone else seen this notice posted on LoL's website? This makes it seem like we could be eligible for our coverage to continue through the end of November if we chose the second enrollment period and our new coverage started Dec. 1st. Anyone have more info?
(etc, etc). In some ways, the Land of Lincoln mess seems remniscent of last winter's Health Republic of New York debacle, in which coverage was supposed to be good through the end of the year, but it then turned out that the books were so messed up that they had to pull the plug (literally, in some cases?) at the end of November instead of December, causing tens of thousands to have to scramble to get temporary coverage. Ugh. Land of Lincoln isn't quite that ugly, but it's definitely confusing.
Unfortunately, I'm so backed up I can't write a proper piece on it, but I wanted to at least take note of it: And then there were 7...
But wait, there's more! Only a few hours later, the HHS Dept. issued their 10 year National Health Expenditure Projection report:
Health spending growth in the United States for 2015–25 is projected to average 5.8 percent—1.3 percentage points faster than growth in the gross domestic product—and to represent 20.1 percent of the total economy by 2025. As the initial impacts associated with the Affordable Care Act’s coverage expansions fade, growth in health spending is expected to be influenced by changes in economic growth, faster growth in medical prices, and population aging. Projected national health spending growth, though faster than observed in the recent history, is slower than in the two decades before the recent Great Recession, in part because of trends such as increasing cost sharing in private health insurance plans and various Medicare payment update provisions. In addition, the share of total health expenditures paid for by federal, state, and local governments is projected to increase to 47 percent by 2025.
...and all of that happened before we even got to our camping ground!
As you can imagine, there's no way I can do any of these individual stories justice, so I'm gonna have to sort of skip over most of the "lost week", but I do want to point out one thing before moving on to today's big ACA-related news.
In Paul Demko's piece "Obamacare's Sinking Safety Net" from the POLITICO series noted above, he uses North Carolina as an example, stating:
But if you’re looking for a quintessential Obamacare failure story, you might also stick that pin directly in North Carolina. For the insurance companies doing business in the state–the ones issuing policies to those 600,000 people–Obamacare has turned into a financial sinkhole. UnitedHealth Group, the nation’s largest insurance company, is pulling out of the Obamacare business in North Carolina next year. Blue Cross Blue Shield of North Carolina, which dominated the individual market with more than a half-million customers, reported that losses on its Obamacare business in 2014 and 2015 topped $400 million. The insurer said that figure includes government payments designed to shield insurers from big losses during the early years of Obamacare. The only other current competitor, Aetna, wants to hike rates by nearly 25 percent next year.
However, in the very next paragraph, he says:
...What's happening in North Carolina is repeating itself in state after state across the country and represents the most acute structural threat to the marquee achievement of President Barack Obama's presidency. A POLITICO review of 2015 financial filings from nearly 100 health plans across a dozen geographically and politically diverse states found that less than a quarter of them hit the standard break-even point for insurers, at which payouts are kept to about 85 percent of premiums taken in. And 40 percent of them had medical costs that outright exceeded the premiums they brought in. Those numbers do not include government payments that compensate plans for particularly high-cost customers.
I'm confused by 2 things here: Does BCBSNC's "$400M loss" in 2014 and 2015 include 100% of the risk corridor money owed to them as well as whatever money may be owed to them via the risk adjustment and/or reinsurance programs, or does it only include 12.6% of the RC payments? The wording of the first paragraph ("...includes gov't payments designed to shield...during the early years of Obamacare") makes it sound like it includes all of the RC and RI funds, but not necessarily the RA funds (RC and RI are temporary, while RA is permanent, so "during the eary years" suggests that it only includes RC & RI payments), but the wording of the second paragraph makes it sound like it doesn't include the Reinsurance payments ("do not include gov't payments that compensate for particularly high-cost customers").
IF that $400M includes 100% of all 3 programs (or if BCBSNC owed money for one or more of them), then fine...but if any of the 3 are missing (or 87% of the 2014 RC reimbursements, for instance), then that "$400 million in losses" figure could be way off. I'll see whether Mr. Demko can clarify and will update this post accordingly.
UPDATE: OK, Demko has clarified: The $400M figure for BCBS does include 100% of all 3 programs (or at least estimates by the carrier for the programs which haven't paid out yet), while the "100 plans nationally" figures (25% hitting 85% MLR, 40% having MLR higher than 100%) only look at what the carriers spent in claims as a percentage of the premium totals they brought in, so there may be other financial factors to take into consideration.
Meanwhile, more stuff is happening...