Friday, May 16, 2014

Obamacare Schadenfreude Almost Rained Out

We had to leave this morning for a trip into DC, during the storm billed as a "River of Rain" from it's appearance as a wide, north/south band of intense rainfall and imbedded thunderstorm.  While it was raining pretty hard early in the morning when we left the house, and rained all the way to DC, it was pretty well past when we got out of our meeting before noon, and sunny again by the time we reached home again around 2 PM. The storm significantly underperformed expectations, leaving 1" in our rain gauge compared to the 3"+ that had been forecast. Obamacare has also significantly underperformed

Big Increases in Obamacare Premiums and Deductibles Coming in November
. . .Now that insurers have seen the composition of their new risk pools under Obamacare, they have to calculate their new pricing levels for state and federal regulators. The pricing jump for 2014 was more speculative, based on the presumed demographic composition of incoming enrollees. The pricing proposals from Virginia and Washington indicate that the new enrollments made the risk pools riskier than first thought.

Rate-proposal filings in the state of Washington show the four largest insurers proposing average increases across their plans ranging from 8.1 percent to 11.2 percent in a single year. Jonathan Wu of Value Penguin analyzed the proposals and concluded that the insurers tried betting on success, and came up short. “What is troubling about the data is that among these insurers, there is clearly an issue with the premiums offered in the first enrollment period,” Wu writes. Noting that the four companies offered the lowest prices in the market this year, their enrollment numbers are not surprising, but their consumers may get a less-pleasant surprise by the end of the year.

In Virginia, two insurers control 86 percent of the market, and both propose steep increases in 2015 premiums. Anthem, which has 113,614 of the roughly 170,000 enrollments, wants to boost prices by an average of 8.5 percent next year, while CareFirst wants a hike of 14.9 percent. All five insurers in the Virginia exchange want price hikes, with only Kaiser’s proposal falling below an 8.5 percent increase. If the Obamacare experience in these two states provides any indication, Wu writes, “then consumers might need to brace themselves for rate hikes in the coming months.”

So much for bending the cost curve downward.
Des Moines, IA NBC affiliate WHO reported on Thursday that Mercy Medical Center, a hospital in Des Moines, has had to lay off 29 people, which is attributed in part to the ObamaCare law according to Bob Ritz, president of Mercy Medical Center.

“As the federal government and state payment systems continue to ratchet down on what they pay us and our costs go up, we have to look for opportunities to create cost efficiencies,” Ritz said. “And one way you do that is you reduce your management costs. So if we have a department that has a director and a manager and two supervisors for let’s say 75 staff, we may remove one of those positions to what we say are the layers of management.”
More people getting healthcare, lower payments to Drs. and hospitals, leading to less ability to take care of more people; What (more) could go wrong?  As the airplane designers like to say: "Faster, better, cheaper; pick two." We'll be lucky to get one.

“Reference pricing” another way that ObamaCare will bite into wallets
Consumers who bought into the “ObamaCare will bend the cost curve downward” promise have had a tough year or so. First premiums shot upward, and deductibles did the same. Next, insurers sharply narrowed provider networks, forcing many consumers to pay out of pocket if they want to “keep their doctor,” as Barack Obama promised. Today, the Associated Press reports on another part of ObamaCare policy that may render insurance inadequate altogether — and consumers won’t know it until the bill hits:
You just might want to pay attention to the latest health insurance jargon. It could mean thousands of dollars out of your pocket.
The Obama administration has given the go-ahead for a new cost-control strategy called “reference pricing.” It lets insurers and employers put a dollar limit on what health plans pay for some expensive procedures, such as knee and hip replacements.
Some experts worry that patients could be surprised with big medical bills they must pay themselves, undercutting financial protections in the new health care law. That would happen if patients picked a more expensive hospital — even if it’s part of the insurer’s network.
The administration’s decision affects most job-based plans as well as the new insurance exchanges.
Other experts say reference pricing will help check rising premiums.
How does “reference pricing” work? It treats anything above the flat-rate limit covered by insurers as out-of-network costs, even if a patient is seeing a provider inside the network. Before ObamaCare, insurers would negotiate in-network prices for these procedures, and providers were forced to accept them as payment in full. Now providers will have much less incentive to agree to that kind of pricing structure, and instead go after the patients for the balance.

As if to rub salt in the wounds, the overage won’t count as out-of-pocket expenses. The Obama administration loudly insisted on such caps to protect consumers, and used those caps as proof that the ACA would keep Americans from facing bankruptcy over an illness. Reference pricing all but buries the caps, though. If a patient needed a $40,000 operation but the insurer only had a $30K reference price on it, the patient would have to cough up the other $10,000 plus all of the deductibles and out-of-pocket expenses otherwise under the cap.
OK, there is that.

VA Scandals Raise The Specter Of Healthcare Rationing
The obvious question to ask about the VA scandal is: Why? Why would a VA hospital administrator direct doctors not to perform colonoscopies until patients had three positive tests for bloody stools? Or why were VA employees ordered to “cook the books” and hide long wait times that veterans faced when seeking care from heart, cancer, or other specialists? Why did some VA administrators go so far as to create a secret waiting list to hide year-plus wait times?

There’s only one plausible answer to these questions: rationing. The VA is but a smaller version of the sort of government-run, single-payer health care with which the political left is so enamored.

When individuals receive care through the VA, it becomes the only payer and hence, the only decision-maker. The VA decides who gets care, when, and how much. Moreover, as the single payer, the VA bears the risk of loss: If tax dollars aren’t enough to pay for the care demanded, there’s only one result — rationing of care.
And, possibly more to the point, the government is not very good at admitting fault (and resents efforts by others to place blame on them) and are apt to conceal the blame in a blizzard of paperwork and obfuscation.

No, Mike Pence, Obamacare’s Medicaid Expansion Isn’t Conservative
Indiana Governor Mike Pence announced today his state is expanding its Medicaid program using the Healthy Indiana Plan, styling it an “alternative” to Medicaid expansion under Obamacare. “There are two futures in health care—government-directed health care or consumer-driven health care,” Gov. Pence said in a statement. Indiana has presumably chosen the latter, but the governor’s plan isn’t consumer-driven in any meaningful sense. It is merely the latest iteration of full Obamacare Medicaid expansion thinly disguised as a conservative entitlement reform.

Indiana joins Michigan and a handful of other Republican-controlled states that are pursuing Medicaid expansion under the guise of a negotiating a “conservative” expansion of Medicaid with the Obama administration. But there is really nothing all that conservative about the state-specific plans to capture federal dollars earmarked for Medicaid expansion. To understand why, we have to take a step back. . .
You'll have to read the rest at the link.

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