Consumer Power Report #395
What should Capitol Hill Republicans do about Obamacare’s failed launch? Currently, they’re backing away slowly.
Many House Republicans are replacing their push to delay or defund the 2010 federal health law with a new strategy: Hang back and see if problems with the rollout continue or get worse. It is an abrupt reversal of the activist approach of just weeks ago, when Republicans demanded changes to the law in exchange for funding the government or raising the nation’s borrowing limit. Now, they say putting the spotlight on technical flaws of the law’s health-insurance exchange may be more effective than a direct attack. … Weeks ago, Democrats had been unified against GOP efforts to delay parts of the law, particularly the requirement that people carry insurance or pay a penalty. But now, as problems in the rollout of the law prompt some Democrats to call for a delay, it is Republicans who say they are giving up on changing anything.
Shutting up and leaving town is now the order of the day, as each and every day brings more people left in the lurch by the law.
Americans who face higher insurance costs under President Obama’s health-care law are angrily complaining about “sticker shock,” threatening to become a new political force opposing the law even as the White House struggles to convince other consumers that they will benefit from it. The growing backlash involves people whose plans are being discontinued because the policies don’t meet the law’s more-stringent standards. They’re finding that many alternative policies come with higher premiums and deductibles.
After receiving a letter from her insurer that her plan was being discontinued, Deborah Persico, a 58-year-old lawyer in the District, found a comparable plan on the city’s new health insurance exchange. But her monthly premium, now $297, would be $165 higher, and her maximum out-of-pocket costs would double. That means she could end up paying at least $5,000 more a year than she does now. “That’s just not fair,” said Persico, who represents indigent criminal defendants. “This is ridiculous.”
More troublesome for the law’s supporters are cases like this, which create a whole new group of Obamacare martyrs. Edie Littlefield Sundy writes in the WSJ:
Countless hours searching for non-exchange plans have uncovered nothing that compares well with my existing coverage. But the greatest source of frustration is Covered California, the state’s Affordable Care Act health-insurance exchange and, by some reports, one of the best such exchanges in the country. After four weeks of researching plans on the website, talking directly to government exchange counselors, insurance companies and medical providers, my insurance broker and I are as confused as ever. Time is running out and we still don’t have a clue how to best proceed.
Two things have been essential in my fight to survive stage-4 cancer. The first are doctors and health teams in California and Texas: at the medical center of the University of California, San Diego, and its Moores Cancer Center; Stanford University’s Cancer Institute; and the M.D. Anderson Cancer Center in Houston. The second element essential to my fight is a United Healthcare PPO (preferred provider organization) health-insurance policy. Since March 2007 United Healthcare has paid $1.2 million to help keep me alive, and it has never once questioned any treatment or procedure recommended by my medical team. The company pays a fair price to the doctors and hospitals, on time, and is responsive to the emergency treatment requirements of late-stage cancer. Its caring people in the claims office have been readily available to talk to me and my providers.
But in January, United Healthcare sent me a letter announcing that they were pulling out of the individual California market. The company suggested I look to Covered California starting in October. You would think it would be simple to find a health-exchange plan that allows me, living in San Diego, to continue to see my primary oncologist at Stanford University and my primary care doctors at the University of California, San Diego. Not so. UCSD has agreed to accept only one Covered California plan–a very restrictive Anthem EPO Plan. EPO stands for exclusive provider organization, which means the plan has a small network of doctors and facilities and no out-of-network coverage (as in a preferred-provider organization plan) except for emergencies. Stanford accepts an Anthem PPO plan but it is not available for purchase in San Diego (only Anthem HMO and EPO plans are available in San Diego).
In perhaps an odd response to such an op-ed, the White House’s Dan Pfeiffer actually took to Twitter to criticize the author. There’s more here on insurers dropping policies.
Republicans on Capitol Hill may wish to do something to help people stuck in these tragic situations. Such stories are infuriating. But unfortunately, there’s very little they can do for these Obamacare losers. The messaging bill approach undertaken by Senators like Ron Johnson and Marco Rubio is fine as a talking point, but short of a full delay of the law, grandfathering policies is going to be a messy and politically divisive situation.
What’s more, it would represent a real “fix” in the sense of altering the law, and not in the “fixing a glitch” sense, something I think Senate Democrats don’t really understand. The reason Ms. Sundy is losing her insurance plan, the reason her provider network is restricted, and the reason the coverage in the California exchange looks the way it does is because the law is working. The only major aspects of the law that really aren’t working as intended are the employer mandate (now delayed!) and the functionality of the exchanges, which are a management failure, not a policy failure.
The Obama administration knew this, but it also always counted on having more people benefiting and fewer people suffering … not on a situation where more Americans are becoming uninsured than insured. Certainly not a situation where enrollments got off to such a slow start, and states are seeing millions of cancellations. Indeed, as Greg Scandlen writes today, a year from now Obamacare may actually lead to more people uninsured than insured.
Fixes for the real exchange management problem are moving slowly, while politically, things are moving very fast. Three weeks ago, the big problem was the Web site, then two weeks ago it was the back-end, and now the past week has focused on millions of people losing coverage … a week from now it could be something new (likely more of these tales of losing your doctors). This is moving too fast for Congress to respond, and any response would be a rush job, likely have even more negative and unexpected consequences … which those in Congress would then own.
Republicans should keep it simple: Fulfill the traditional Congressional oversight role and continue to argue for full delay, the policy position any responsible president would take in this situation.
— Benjamin Domenech
IN THIS ISSUE:
CHALLENGES DOGGED OBAMACARE’S EXCHANGES FROM BEGINNING
That spring, CMS had begun writing specifications for the IT contracts to build the federal exchange, but the White House again insisted on caution. A larger number of states than expected were signaling that, under Republican pressure, they would refuse to build their own online insurance marketplaces and would rely on the federal one. The more states in the federal exchange, the more complex the task of building it. Yet, according to several former officials, White House staff would not let this fact be included in the specifications. Their concern, one former official said, was that Republicans would seize on it as evidence of a feared federal takeover of the health-care system.
So that September, when the administration issued the “scope of work” for the largest IT contract, the specifications skirted the question – saying only that “CMS will not know for certain how many states will apply” to run their own insurance exchanges.
After the contract was awarded to CGI Federal, the administration kept giving states more and more time to decide whether to build their own exchanges; White House officials hoped that more would become willing after the 2012 election. So the technical work was held up. “The dynamic was you’d have [CMS’s leaders] going to the White House saying, ‘We’ve got to get this process going,’?” one former official recalled. “There would be pushback from the White House.”
Meanwhile, the White House also slowed down important regulations that had been drafted within CMS months earlier, appearing to wait until just after Obama’s reelection. Among the most significant were standards for insurance coverage under exchanges. The rules for these “essential health benefits” were proposed just before Thanksgiving last year and did not become final until February. Another late regulation spelled out important rules for insurance premiums.
Such delays were “a singularly bad decision,” said Foster, the former Medicare chief actuary. “It’s the president’s most significant domestic policy achievement,” he said, and the very aides who had pushed the law through Congress were risking bad implementation “for a short-term political gain.”
After the election, Cutler, the Harvard professor, renewed his warnings that the White House had not put the right people in charge. “I said, ‘You have another chance to get a team in place,’?” he recalled.
Nothing changed.
SOURCE: Washington Post
VERMONT’S FLAILING SINGLE-PAYER EXPERIMENT
In the final pages of a law enacted in 2012, the Legislature spelled out a safety valve the Shumlin administration could use if the online health insurance marketplace then under development failed to operate as intended when it opened for business in 2013.
Vermont’s new insurance marketplace, like its federal counterpart, had a rocky launch Oct. 1 and remains plagued with glitches.
After trying to remain upbeat despite a month of malfunctions, Gov. Peter Shumlin last week invoked the legal safety mechanism that will give thousands of Vermonters the option to temporarily bypass Vermont Health Connect to obtain health insurance coverage for 2014.
“The purpose of Vermont Health Connect is to simplify the process of buying insurance for Vermonters,” Shumlin said in a statement. However, the promised simplification has been illusive, because the website has yet to function fully or consistently.
“I won’t tolerate a situation where Vermonters go into the holiday season worried and confused by their health care options come Jan. 1. That is simply unacceptable,” Shumlin said. “I am taking steps to ensure that won’t happen. While thousands of Vermonters have signed up for coverage through Vermont Health Connect, many others have been frustrated by technology glitches.
“It is possible those technology errors will be fixed in a matter of weeks,” he continued, “but multiple missed deadlines and failed technology fixes in my judgment require us to implement this plan.”
Using Section 41a of the 2012 health care law, the Vermont Department of Financial Regulation will allow individuals who buy their own insurance and small employers to extend their current coverage plans until March 31, despite Dec. 31 expiration dates.
Shumlin also said his administration would allow the two health insurance companies offering coverage through Vermont Health Connect to sell those plans directly to small employers. All the shopping was supposed to take place on the exchange, with the insurance companies informed after customers selected plans.
SOURCE:Burlington Free Press
Hundreds of thousands of Californians who purchase their own health insurance are bracing to pay more for their plans, as the cost of the federal health care overhaul lands harder on middle-class customers.
Notices began arriving in recent weeks informing consumers that their plans are being phased out and replaced with policies that comply with requirements of the health care law. Many are being told to expect double-digit percentage increases in monthly costs, in part to help balance the cost of covering the underprivileged and those with pre-existing medical conditions who may not have had coverage.
The notices throw into sharp relief a … stirring reality of the law: While many will benefit, a smaller segment may not.
“There is certainly going to be heat around this, and lots of understandably unhappy people,” said Janet Coffman, a professor at the Philip R. Lee Institute for Health Policy Studies and the department of family and community medicine at the University of California, San Francisco.
“This is one important slice that is experiencing some very substantial increases in premiums,” she said. “But it’s important to understand this is one of many areas in which the impact of the health care law on individuals and families varies widely.”
Some customers with higher premiums will be shifted into more robust plans because of new requirements in the law. Others are moving into what they consider less attractive options with higher payments for care.
Jennifer Thieme lives outside San Diego and has an individual health policy for her 18-year-old son through Anthem Blue Cross. Thieme pays $72 a month with a $5,000 deductible and an annual out-of-pocket limit of $8,500. The first two visits to the doctor have a co-pay of $40, and the co-pay for generic prescription drugs is $15.
Last month, Thieme received a notice from her insurance company stating that because of the health care law, her policy will no longer be offered, effective Jan. 1. It didn’t offer specifics. Instead, the company suggested a plan for her son with a $5,550 deductible and $6,350 annual limit. It also called for a $50 co-pay for the first two office visits, and prescription drug co-pays ranging from $19 to $50.
This new plan will cost her $127 per month, an increase of about 76 percent.
SOURCE: Sacramento Bee
MAP OF OBAMACARE’S DRAMATIC PREMIUM INCREASES
The Manhattan Institute maps premium increases across the country:
Today’s release, with the third iteration of the map, contains both premium and subsidy data for every state except Hawaii. (Believe it or not, we’ve had success mining data from every exchange website but Hawaii’s.) This nearly-complete analysis finds that the average state will face underlying premium increases of 41 percent. Men will face the steepest increases: 77, 37, and 47 percent for 27-year-olds, 40-year-olds, and 64-year-olds, respectively. Women will also face increases, but to a lesser degree: 18%, 28%, and 37% for 27-, 40-, and 64-year-olds.
Eight states will enjoy average premium reductions under Obamacare: New York (-40%), Colorado (-22%), Ohio (-21%), Massachusetts (-20%), New Jersey (-19%), New Hampshire (-18%), Rhode Island (-10%), and Indiana (-3%). Most, but not all, of these states had heavily-regulated individual insurance markets prior to Obamacare, and will therefore benefit from Obamacare’s subsidies, and especially its requirement that everyone purchase health insurance or pay a fine.
The eight states that will face the biggest increases in underlying premiums are largely southern and western states: Nevada (+179%), New Mexico (+142%), Arkansas (+138%), North Carolina (+136%), Vermont (+117%), Georgia (+92%), South Dakota (+77%), and Nebraska (+74%).
If you’re interested in more details about our methodology, you can find them here. As with our past work, we calculated an average of the five least-expensive plans in every county in a state pre-Obamacare, adjusted to take into account those with pre-existing conditions and other health problems. We then did the same calculation with the five least-expensive plans in every county in the Obamacare exchanges. We then used these county-based numbers to come up with a population-weighted state average pre- and post-Obamacare.
The key thing to understand about our before-and-after comparison is that it is an average. If you’re healthy today, you will face steeper rate increases than these figures indicate. If you have a serious medical condition, however, and haven’t been able to find affordable health coverage as a result, you will do much better under Obamacare than the average person. Men will face steeper increases than women in most states, because women consume more health care than men do, and Obamacare forbids insurers to charge different prices on the basis of gender.
SOURCE: Forbes
RELATED LINKS:
Aides debated Obama health-care coverage promise.
Small Businesses race to renew policies early.
Obamacare paper, phone applications left stuck in same queue.
Obama donor’s firm hired to fix Web mess it created.
Small business’s introduction to the ACA, part 1.
Obamacare delay would send rates soaring.
Obama’s credibility is at risk.
Appeals court strikes down ACA contraceptive mandate. Why the HHS mandate goes too far.
Massive Obamacare marketing push on hold.
Sebelius gives drugmakers a win under law.
Senate Democrats supported rule that led to insurance cancellations.
Oregon Health Exchange only works in Internet Explorer.
Remember, the insurer bailout is already in the law.
Democrats in Virginia consider making Medicaid treatment mandatory for licensed doctors.
Let’s legalize compensation for organ donors and save thousands of lives.
Benjamin Domenech is the founder and publisher of The Federalist and a senior fellow at The Heartland Institute.
