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Stakeholder Abuse of the Healthcare System

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More Double Digit Obamacare Price Increases

Stanley Feld M.D., FACP,MACE

Its getting boring to hear about Obamacare’s double-digit health insurance premium increases each year. The healthcare insurance industry is now preparing the public for another round of double-digit premium increases in 2017.

It is important to remember the public experienced double-digit health insurance premium every year since 2014.

The cost of buying insurance has skyrocketed since Obamacare was enacted. The public is not forgetting this.

The table below compares health insurance premiums before and after Obamacare.

This table includes both the numbers in the federal and state exchanges and the private healthcare insurance markets.

Ost of Obamacare on individual market 2014

President Obama and his administration are bragging that the healthcare insurance markets are stabilizing.

All the federal funded state health Co-ops will be bankrupt before the 2017 enrollment period.

Updated state reports on enrollment since the close of 2016 extended enrollment period indicates that more than 1 million of the 12.7 million who were reported to enroll for 2016 have dropped their Obamacare healthcare insurance policies.

In 2015 only 1.5 million consumers out of 11.7 million enrollees dropped out the entire year.

Arielle Levin Becker of the Connecticut Mirror reported“In Connecticut of the 18,800 customers who dropped out (16%), 20% failed to provide required information; 53% didn’t pay; 10% asked to have their plans canceled; and 12% shifted to Medicaid.

Those exiting customers were partly offset by nearly 8,000 latecomers, more than one-third of whom lost Medicaid.”

The truth is the Obamacare health exchanges are not stabilizing the healthcare insurance markets. Obamacare is destabilizing the healthcare markets.

It is becoming more and more difficult to believe anything President Obama says or his administration reports.

United Healthcare declared they are dropping out of most of the exchanges they are participating in because of the toll the health exchanges have taken on their bottom line.

Aetna just announced it lost more than $100 million on its healthcare exchange business last year (2015) but hopes to break even this year (2016).

This is a pipe dream on Aetna’s part. Less people have signed up for Obamacare and the people who signed up have been sicker people with pre-existing illnesses.

Aetna chairman and CEO Mark Bertolini said Thursday, “ the nation’s third-largest health insurer still sees a good business opportunity, but Congress needs to provide leeway for companies to design lower-cost plans tailored to young, healthy people.”

President Obama is not going to let insurers design lower cost policies tailored for young, healthy people. His legacy legislation is built on equal premiums for all.

These announcements can put the healthcare debate back in the headlines for the general election. It can re-ignite consumer and voter backlash once again.

President Obama ignored the backlash before. Can Hillary Clinton ignore the upcoming price increase backlash?

“Hillary Clinton is the only one promising to build on the Affordable Care Act. She’s proposed an aggressive effort to increase enrollment along with measures to reduce consumer costs.”

Hillary Clinton is mouthing words that sound good but are impossible to fulfill. People understand these empty promises now.

“ The Republican candidates all want to repeal “Obamacare.”

No one has come up with a solid proposal. Not even Donald Trump.

“Vermont Sen. Bernie Sanders would incorporate it into a bigger government-run system covering everyone.”

 Bernie Sanders is dead wrong. America cannot afford the cost and it has been proven not to work in the healthcare systems in the rest of the world.

The health law has many problems. The problems are too numerous to list here. The biggest problem in terms of costs for next years premiums (2017) are the lower-than-hoped-for enrollment, sicker-than-expected customers, and a bloated bureaucracy that is not an efficient business model.

Obamacare has created a financial drain for many healthcare insurance companies. The increase in premiums and the government pressure to keep prices low have in turn created pressure on insurance companies to lower reimbursement to physicians and hospitals.

Hospitals have to participate in the health exchanges, Medicare and Medicaid for survival. Physicians do not. Obamacare has created a more severe physician shortage.

The healthcare insurance companies would never consider becoming more efficient and lowering their cost. Some top executives are making more than 100 million dollars a year.

The healthcare insurance industry is setting the stage for 2017 premium hikes that could reach well into the double digits.

Virginia has nine returning insurance companies participating in Obamacare in 2017. These companies have submitted premium price increases ranging from 9.4 percent to 37 percent to the state board of insurance.

I am sure the Virginia state board of insurance will start negotiating with the participating insurance companies.

Obamacare will only cover 11 million enrollees in 2016. As more enrollees drop out of Obamacare because they cannot afford the premiums the total might be closer to 8 million. Many of the enrollees are subsidized. These subsidized enrollees have dropped out because they cannot afford the remaining premiums and deductibles.

The healthcare insurance industry increases premiums in the individual and group private markets to protect its profit margin.

This is occurring on top of the destruction of Health Saving Accounts and does not speak well for a stable healthcare insurance market.

President Obama’s goal is to destroy the healthcare system and replace it with a single party payer system.

Does anyone think a government run single party payer system will be more efficient or deliver cost effective care?

If you do, please think of the efficiency and effectiveness of the VA healthcare system?

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

All Rights Reserved © 2006 – 2015 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

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We Don’t Need A Public Option

Stanley Feld M.D.,FACP.MACE

When President Obama told Barry Frank and John Kerry “We don’t need a Public Option in the Affordable Care Act legislation” he was right.

https://youtu.be/SHPsEVQ9dGQ

 

https://youtu.be/4iR_iKRKewQhttps://youtu.be/4iR_iKRKewQ

 

Senator Chuck Grassley know all along what President Obama’s scheme was. His problem was none of his Republican friend would listen to him or do anything about it.

https://youtu.be/-522hcm3woA

President Obama’s goal all along was to sneak in a Public Option in through the expansion of Medicaid. He wanted the local states to be administratively and financially responsible for Medicaid while the Federal government controlled the system through regulations.

President Obama had figured out the way to get to a single party payer without a Public Option. However, he and his advisors misjudged the defects in Medicaid.

Republicans have been opposed to a single party payer system and government control of the healthcare system. Republicans felt government control would increase the cost of healthcare, increase inefficiency in the administration of healthcare care, ration healthcare and decrease access to healthcare.

President Obama thought he could use a myriad of regulations to help Obamacare back into a single party payer system. The State and Federal Health Exchanges (“so called Obamacare competitive model”) has resulted in both the health exchange and the private insurance industry increasing the cost of healthcare to unaffordable levels, decreasing access to care, rationing of care and destroying the healthcare system.

The politicians, in a state like California, by following the federal money, ignored the will of the people. The people hate Obamacare because it is restrictive. They are angry about the lie President Obama told them to get their support. “If you like your doctor you can keep your doctor. If you like your insurance you can keep your insurance.”

President Obama has created a healthcare system infrastructure that played on states’ greed. Many states have tremendously high budget deficits. They have over taxed state residents.

State citizens and businesses are leaving for more tax friendly states. The migration has created larger state budget deficits. State politicians say a way of getting more federal money into the states and perhaps attracting people back to the state will be by expanding Medicaid. The federal government promised to pay 100% for the first three years of the Medicaid expansion program

Twenty-two states fell into President Obama’s trap. These states are on their way to a single party payer system without even knowing it.

I predict his scheme will fail.

California was the first state to jump into this pot of boiling water.

The federal government is going to pay 100% of newly qualified enrollees to Medicaid until 2017. Medicaid is under state control.

A record number of people have signed up for Medi-Cal in California. This has led to huge cost increases in Medi-Cal. Its price tag has jumped from $59 billion to $91 billion.

Where does President Obama get the money to pay for it? He increased the federal deficit. I guess $32 billion dollars would be considered a rounding error to most Democrats in congress.

States will have to start paying 5% of the bill for the newly eligible and enrolled enrollees in 2017. In 2020 the states will start paying 10% of the bill.

Medi-Cal is the state’s Medicaid plan for low-income Californians. Nearly one in three Californians now receive coverage in Medi-Cal. With its continued Medi-Cal expansion it is predicted to expand to 20 million by 2020.

Medi-Cal Explosion

Medi-Cal Growth of enrollment

The people of California are going to be the first victims of the increased costs and decreased services.

Every government program creates a complex bureaucracy along with money wasting inefficiencies and abuses.

California politicians were bragging about the great deal the government had given them.

That’s a really great deal for California,” said Scott Graves, research director at the California Budget & Policy Center. “You don’t find that anywhere else.”

Advocates say the expansion, with the huge infusion of federal money, should in fact eventually yield savings for states, possibly enough to make up for the costs.”

UC researchers calculated that each new federal dollar brought to California by Medi-Cal will generate 5.4 cents in tax revenue for the state, which would mean several billion dollars. That’s because the money creates jobs in healthcare, which creates income and sales tax.”

Over the years because of the cost overages, Medi-Cal has been forced to decrease reimbursement to physicians and ration both care and access to care. Physicians have opted out of Medi-Cal participation. As Medicaid has grown as a result of Obamacare, Medi-Cal patients cannot find a physician to care for them.

I suppose President Obama could force physicians to accept Medicaid payment in order to retain their license to practice medicine. This executive action would attack freedom of choice and propelling the United States further down the road to serfdom.

As predicted, a group of Californians filed a civil rights complaint against Medi-Cal, alleging that failures in the program have prevented Latinos from accessing their healthcare they needs.

“But the complaint filed with the U.S. Department of Health and Human Services claims that because Medi-Cal administrators don’t pay doctors enough to see patients, they “effectively deny the full benefits of the Medi-Cal program to more than seven million Latino enrollees.”

Many complain that Medi-Cal’s reimbursement rates, among the lowest in the nation, create a shortage of doctors willing to see Medi-Cal patients.

The audit confirmed our long-standing concerns about access for Medi-Cal patients,” said Anthony Wright, executive director of the advocacy group Health Access California. “The findings of the audit cry out for more oversight.”

Gov. Jerry Brown’s budget for the 2014-15 fiscal year accommodates an influx of uninsured residents into Medi-Cal.

However, at Governor Brown’s request, the Legislature left in place a 10 percent recession-era cut in reimbursement to most doctors, dentists and other health care providers who treat Medi-Cal patients.”

Health providers predicted this harmful contradiction. The contradiction is that Medi-Cal expansion will provide more of the poor with adequate healthcare coverage. It is, in fact, reducing  poor persons ability to get into clinics, practices and even hospitals.

The California HealthCare Foundation reported that 76 percent of primary physicians accept new patients through private insurance. Only 57 percent accept new Medi-Cal patients.

Medicaid and MD

The optimism of politicians for the expansion of Medi-Cal improve state revenue has vanished. California’s deficit is increasing rapidly as a result of Obamacare’s largess.

In California, state officials are discussing how they’ll afford the program next year (2017). Gov. Jerry Brown called a special legislative session this year to address funding for Medi-Cal.

“It’s a strained system,” said Hernandez, “and I really believe we need to figure out how to resolve.

The 20 states that have not accepted President Obama’s offer to expand Medicaid were correct. These states wanted to make their own decision in the name of states’ rights. Many of the states could not afford expansion in the way President Obama was dictating it. Their budget deficits and taxes would have to increase.

California has just proven these states fears. In 2017 California will start paying 5% into the Medi-Cal expansion. It will make the budget deficit worse.

California will, once again, start begging the federal government to bale it out.

President Obama’s plan was to dump the financial burden on the states while controlling the system and creating a single party payer by default.

There is a much better way to provide healthcare to all people at an affordable cost.

The better way is to put consumers in control of their healthcare dollars.

They will control their health to avoid costly complications of chronic diseases. The people will be given financial incentive to be responsible for their health to try to avoid the onset of chronic disease.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

All Rights Reserved © 2006 – 2015 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

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Keeps Making The Same Mistakes

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If Something Works, Destroy It!

Stanley Feld M.D.,FACP,MACE

If a program is working well the Obama administration starts regulating the program out of existence. In a very quiet and deceptive way the Obama administration is destroying Health Savings Accounts.

The fastest growing health insurance plan in the private healthcare market is Health Saving Accounts (HSAs). HSAs are also available in Health Insurance Exchanges.

Consumers love HSA’s because the money not spent for their yearly deductible expenses go into a personal trust fund, which goes to pay future medical expenses. Consumers, employers or government can fund the deductible. Healthcare coverage starts after the deductible is reached. The trust fund can grow tax-free until funds are withdrawn.

HSAs are not ideal but they do act to provide a mild financial incentive to consumers to be responsible for their health and healthcare dollars. Consumers decrease their overuse of the healthcare system.

Health Savings Accounts are not as powerful as my ideal Medical Savings Accounts. Medical Savings Accounts provide greater financial incentive for consumers to be responsible for their healthcare and healthcare dollars.

Consumers seem to lack the desire to prevent obesity, which is responsible for many chronic diseases and their complications. These diseases are responsible for 80% of the healthcare dollars spent.

With my ideal Medical Savings Account consumers or the consumer’s sponsors (government or employers) pay a high deductible. The sponsor then buys first dollar reinsurance for healthcare coverage. The unspent deductible goes into a Medical Saving Account tax-free retirement fund. It does not stay in the healthcare system.

The Medical Saving Account provides greater financial incentive for consumers to become more responsible for their health care and healthcare dollars.

Why and how does Obamacare want to regulate Health Savings Accounts out of existence?

In case you missed it, final regulations published on March 8 will make it impossible to offer HSA-qualified plans in the future.

 The health insurance industry has been opposed to HSAs and MSAs because the premiums the healthcare insurance industry receives is lower than regular healthcare insurance premiums.

Once the premiums are put into a trust it does not belong to the healthcare insurance industry to invest.

The healthcare industry has tried to influence HHS to dissuade consumers from buying HSAs through Health Insurance Exchanges since the exchanges began.

However HSS has done nothing (a) to help consumers identify HSA-qualified plans on the exchanges or (b) provide information to individuals that choose HSA-qualified plans about where to get more information about opening and contributing to an HSA.”

Last year’s proposed standardization of healthcare plan design rule gave no hint that the proposal would eliminate the possibility of HSAs surviving.

This year’s rule change made it clear that this was President Obama’s goal.

1)” Plans must apply specific deductibles and out-of-pocket limits that are outside the requirements for HSA-qualified plans.”

2) “Plans must cover services below the deductible that are not considered “preventive care.”

“ Regarding the deductibles and out-of-pocket limits, no Bronze, Silver, or Gold plans adhering to the standardized benefit designs will likely be HSA-qualified for 2017.”

The first step was for HHS to change the definition of a qualified plan. The next step was to force the plan design to be incompatible with HSAs.

HHS and CMS have given the healthcare insurance industry another gift. Maybe it is a payback for CMS short changing the insurance industry on its reinsurance payback promise.

In any event HSAs look doomed. The Obama administration has succeeded in destroying the development of a viable healthcare system that the free market, not the central government controls.

John Dunn M.D.,J.D. wrote a wonderful summary of Obamacare’s failed attempts to control the healthcare system to his chat group followers.

He has summarized all the policies that have failed in the Obama administration’s goal to destroy the private healthcare market and eliminate the free market system.

 “ Subject: HSAs being eliminated?

Yep, Obamacare strikes again to accomplish the real goal, elimination of private capitalist free market healthcare.

 Now let’s tally up the failures of Obamacare in its attempt to destroy the healthcare system—

  1. more expensive, less accessible,
  2. restrictions on hospitals and care givers,
  3. promotion of mid level practitioners, extraordinary inefficiencies created by computer mandates,
  4. penalties for hospitals and physicians that are created by apparatchiks,
  5. no decline in the uninsured,
  6. in fact there might be an increase in the uninsured because of the cost of premiums and deductible,
  7. more movement of people to Medicaid where coverage is free,
  8. bankruptcies of COOP insurance programs,
  9. exchanges failing with insurers leaving the market for taking big economic hits from adverse selection,
  10. and most of all—the death spiral of private market insurance—with the goal being to destroy the private market ????  
  11. Why of course, Medicaid for all. 

 The goal of government bureaucrats is control and power, achieved in this case by the growth of single payer government controlled medicine—Medicaid on steroids—

The result will be mediocrity as far as the eye can see, and destruction of innovative and creative health care,

but also the loss of the ethics and patient consideration that comes from physician guided health care,

 instead a trade for mandarins with frowns and red pencils,

 Checking the data banks that aren’t secure from hacking.

 It leaves one almost breathless, but it started a long time ago.

Good intentions and unanticipated results—Bastiat von Mises, Fredrick Hayek warned us about the fatal conceit and the problem of government actions to protect certain interests or promote a cause—ignorant of the realities of markets and the benefits of free markets. 

Socialism and statism will produce mediocre, expensive healthcare run by bureaucrats and apparatchiks who aren’t interested in good patient care,

They are only interested in control.

Looks like I am not the only one who has figured it out.

I do not understand why the political establishment cannot understand why Americans are getting ready to cast a protest vote against them.
 The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

All Rights Reserved © 2006 – 2015 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

 

 

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Obamacare Co-Op Folly

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The Obamacare Spin Goes On

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Social Engineering

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Obamacare Is Failing

Stanley Feld M.D.,FACP,MACE

The problems the Obama administration is having with Obamacare have not been in the news lately. They appear in government publications as minor policy changes or in press releases. They also appear in minor trade magazines. Little that is new has appeared in the mainstream media.

Readers of the New York Times are under the impression that Obamacare is working and is successful. The readers’ impression is that President Obama has done a great thing for the nation by getting Obamacare passed into law.

If a lie is told enough times it becomes the truth. The media is the message. All one has to do is lie to the media and the message gets through whether it is true or not.

The public’s perception of reality is not more complicated than the information fed to it whether it is true or false.

A key element in getting the message through is trust. It is my opinion, President Obama and his administration have lied to the public so much that there is a lack of trust in him and his judgment. The Republican and Democratic parties have lied to the public so much that there is a lack of trust in both parties.

It has been shown over and over again that Hillary Clinton as lied to the public. Yet, she is gathering millions of votes in her primary contests while others who have told the same lies have ended up in prison.

Black people are figuring out that the Democratic party has lied to them. The war on poverty started in 1965 and little progress has been made to eradicate poverty since then.

Why is there so much poverty and unemployment in the black community?

Why can’t black kids have a choice of public schools or charter schools in New York City? Why can’t education be a top priority?

As Leonard Cohen says, “the deck is rigged.”

I think the reason Donald Trump is running the table on votes in the Republican primaries is people do not trust politicians.

He promises to unrig the deck and make America great again. The politicians, pundits and traditional media are confused about why the public is listening to him.

The public does not trust or believe them. The public trusts Donald Trump and his promises without having objective reason.

Two significant events have occurred in the Obamacare world in recent weeks which are contributing to Obamacares further failure.

  1. President Obama caving in on the “Cadillac tax”

As part of the budget deal President Obama agreed to sign another delay in the Cadillac tax until 2020.

An Obamacare law provision levies a hefty 40 percent tax on the most expensive employer-provided insurance plans: those costing above $10,200 for individuals and $27,500 for families.

The Obama administration predicts it will generate $87 million per year in new taxes.

“If a plan cost $11,200, it would face a $400 tax — 40 percent of the amount above the threshold.”

The Cadillac insurance premium was a 100% tax-deductible expense to an employer providing a high cost healthcare insurance policy to employees.

High paid executives and some unions or union executives enjoy this high cost insurance. President Obama’s goal has been to provide a disincentive to employers from providing this type insurance.

The Kaiser Family Foundation estimates 26 percent of current plans could get hit with the tax in 2018; Towers Watson pegs it at 42 percent. This is the result of healthcare insurance rate increases.

I think it is a trick by President Obama to discourage corporation from providing healthcare insurance for their employees. The Obama administration would like to force corporate employees to buy healthcare insurance from the federal health exchanges. When the federal health exchanges fail the government could take over everyone’s healthcare insurance and dictate the terms of that insurance.

The “Cadillac tax” was suppose to go into effect in 2017 but has been previously delayed until 2018.

Lawmakers on both sides of the aisle agreed to delay Cadillac tax implementation even longer now until 2020. Some sort of political pressure has forced President Obama to sign the amendment to Obamacare. This new law will decrease the funding for Obamacare.

The traditional media has not emphasized this event leading to Obamacare’s demise.

  1. President Obama backs away from new Obamacare rules for 2017.

The execution of Obamacare by the Obama administration has not stabilized the healthcare insurance industry market as promised. In fact the federal exchange markets have become more chaotic. This is partly because of the inefficient bureaucratic structure and the lack of attraction to non-sick people, who would fund the federal health insurance plans. The healthcare insurance plans dictated by the federal government do not fit the needs of the people who would buy them. Instead, even though the health insurance plans are too expensive they attract people with pre-existing illnesses. These people have no choice.

The Obama administration’s typical response to fix unintended consequences is to create more rules and regulations. The new rules and regulations will lead to more unintended consequences.

The Obama administration just backed off of two big new. The Obama administration proposed tight physician and hospital network adequacy provisions and new standardized health plan options provisions.

The previous Obamacare rules and regulations resulted in the healthcare insurance industry’s adjusting to their loss of income by creating narrower networks of physicians and hospitals. Many of the healthcare exchange plans use HMOs only and narrow networks of hospitals and doctors as a way to keep premiums lower.

The result was a decrease patients’ access to care. CMS basically backed off of the strict network options it wanted to dictate. The Obama administration once again proved that it depends on the healthcare insurance industry to function. The healthcare industry is dictating the rules.

The goal of the Obama administration to standardize options was to make it easier for consumers to compare the various levels of healthcare plans offered in the health exchanges. The Obama administration also felt it was necessary to define the levels of basic benefits to make shopping for the most affordable plan easier.

The winner is the healthcare insurance industry. The loser is the Obama administration. The biggest losers are patients both in Obamacare and those who have private insurance.

As time goes on it is becoming clearer to everyone that Obamacare is not the success that President Obama and Paul Krugman are talking about.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

 All Rights Reserved © 2006 – 2016 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

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President Obama Somehow Finds The Money