Stanley Feld M.D, FACP,MACE

The mainstream media is biased. It usually supports the Obama administration blindly. Many intelligent liberals believe everything in the New York Times and what Paul Krugman says as if both were source material.

The New York Times and the TV networks ignored the initial press release by United Healthcare potentially withdrawing from the 38 federal health insurance exchanges in 2017. Fox news was the only cable network that covered the story.

The potential withdrawal is a very big deal. It is an indication that Obamacare is failing. Paul Krugman continually declares Obamacare is a success.

In order to induce United Healthcare’s participation in Obamacare’s health insurance exchanges the Obama administration guaranteed the healthcare insurance industry stop loss protection.

Then the Obama administration only paid 12.6% of the $2.8 billion dollars due the healthcare insurance industry under the stop loss agreement.

“Health insurance stocks took a nasty tumble last week, and maybe the markets are realizing that ObamaCare isn’t performing as well as the political class pretends.”

“The immediate cause of the selloff was UnitedHealth Group ’s shock $425 million downgrade to its earnings forecast for 2015, almost entirely driven by losses on the Affordable Care Act exchanges. “

United Healthcare did not sign up to sell insurance in the federal health insurance exchanges originally because it was afraid it would suffer large losses. It signed up only after President Obama activated the stop loss provision embedded in the reinsurance program of Obamacare legislation.

The United Healthcare announcement comes only a few weeks after 12 of 23 smaller, nonprofit insurance cooperatives failed and stopped selling insurance to Obamacare subscribers. These co-ops received billions of dollars in federal loans that will never be paid back to the nations taxpayers.

These cooperatives were given federal loans by the Obama administration in order to be competitive with the big insurance companies.

The federal health insurance exchanges attracted people with pre-existing illness. President Obama’s legacy law guarantees people with pre-existing illness availability to healthcare insurance at the same price as people without pre-existing illness.

People with pre-existing illnesses cost more than people without existing illness.

The resultant premiums are high and the deductibles are higher. Consumers who qualify for subsidies do not receive subsidies for the $6000 deductibles.

Young healthy consumers are not buying insurance from the federal health exchanges. They have figured out that they are not getting insurance coverage until they spend the $6,000 deductible.

These young consumers did not earn enough money to afford the high premiums and higher deductibles. The poor cannot afford the deductibles either. No one at low risk is signing up for Obamacare.

In order to keep Obamacare going the Obama administration needs the healthcare insurance industry. The healthcare insurance industry performs all the administrative services for the government.

United Healthcare is not interested in selling insurance on the health insurance exchanges because the government has not been trustworthy and has not paid them what was promised.

The stop loss insurance should not have been promised to the healthcare insurance industry in the first place. However, President Obama jumped in and essentially gave the healthcare insurance industry the ability to sell insurance at no risk.

United healthcare did not sign up for 2013 but jumped into the Health Insurance Exchanges in 2015 because of the government’s stop loss guarantee.

Obamacare now owes the healthcare insurance industry 2.5 billion dollars. The budget contained an amendment that does not permit the government to reimburse more than it collected in premiums. Both houses of congress and President Obama signed the amendment into law.

At present President Obama has pledged to pay out the risk corridors payments despite the massive shortfall in the near term.

All President Obama has to do is ignore the law he signed in order pay the $2.5 billion dollars illegally. If he pays United Healthcare the money due it might continue to participate in Obamacare’s federal healthcare insurance exchanges.

HHS “will explore other sources of funding for risk corridors payments, subject to the availability of appropriations. This includes working with Congress on the necessary funding for outstanding risk corridors payments.”

“The risk corridors program, one of three health insurance risk programs established by the Obamacare, essentially helps mitigate insurers’ losses in the early years of the new insurance marketplaces. The risk corridors program expires after 2016.”

United Healthcare is in business to maximize profits and not to lose money on good deeds.

Obamacare’s business model is a terrible model destined to lose trillions of taxpayers’ dollars. United is not interested in losing billions of dollars doing the government a favor.

Paul Krugman continues to tell his readers Obamacare is working wonderfully despite fact that it is failing. Major media networks have hardly described the problem.

It will be worse if we go to a single party payer system. Socialism has never worked.

It should be all about consumer driven healthcare and market forces driving healthcare with consumers being responsible for their health and healthcare dollars.

Government only function should be to create simple regulations that none of the stakeholders should abuse. The government must execute the enforcement of these simple regulations.

My ideal medical savings account will work. It will permit universal healthcare coverage and eliminate the development of the massive, inefficient and dysfunctional healthcare system called Obamacare.

Obamacare is unsustainable. It is being proven every day even if it is ignored by the traditional media, President Obama and his administration and Paul Krugman.

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

Stanley Feld M.D.,FACP,MACE

These days there is very little news in the traditional mainstream media about Obamacare.

The average person thinks everything is fine. President Obama has told us over and over again that Obamacare is a great success.

Unfortunately, this is far from the truth as the Obama administration prepares for the 2016 enrollment period.

Open enrollment is supposed to start November I, 2015 and end January 15, 2016 for 2016.

In 2013 and 2014 open enrollment was extended many months because of poor enrollment. I suspect the same will happen during the 2016 enrollment period.

The disastrous web site is still not fixed.

The healthcare insurance industry has increased Obamacare insurance premiums by double digits. The Obamacare deductibles remain in the thousands.

Even with large Obamacare subsidies people making under $50,000 cannot afford the subsidized premiums or deductibles.

Some people are registered through both the health insurance exchanges and Medicaid. This has been recently discovered by the Obama administration.

These people have received the Obamacare cash subsidy and Medicaid coverage. Now the Obama administration expects to be paid by these recipients for the government’s overpayment.

The Obama administration has refused to publish the number of people affected.

None of these issues have appeared in the traditional mainstream media.

The Obama administration continues to publish conflicting figures about how many people are actually enrolled through its federal health insurance exchanges.

The administration needs the healthcare insurance industry to do the administrative services for the health insurance exchanges.

At the onset of enrollment in 2013 healthcare insurance companies did not want sign up to do the administrative services. The companies figured that high-risk people without insurance would sign up for insurance and they would lose money. Obamacare required that the premium would be equal for everyone regardless of the health risk.

Obamacare originally wrote into the law three risk corridor programs that would be activated if necessary to subsidize the healthcare insurance industry against undo risk.

As a result of the healthcare industry’s lack of participation in the federal and state insurance exchanges, the risk corridors were activated.

“The healthcare reform law established three “market stabilization” programs to help insurers weather the first few years of covering a new population with unpredictable healthcare needs. At issue is the risk corridors program.”

I was astonished when I learned of these risk corridors. The corridors encouraged the healthcare insurance industry to participate in providing administrative services for each state and federal exchange at no risk of loss.

It was amazing that the leading Republicans for repeal of Obamacare did not make this clear to the public.

The insurance industry was actually guaranteed a profit because they provided its own profit and lost data. The Obama administration simply accepted its data. The healthcare insurance industry was supposed to receive the subsidy for its loss.

The government’s hope was to provide enough insurance choices to enrollees in the health insurance exchanges so there would be competitive pricing.

Unfortunately for Obamacare it did not work out as planned.

“ The government had planned on releasing risk corridors data in August but waited until October 1, 2015 due to discrepancies in the data.”

I suspect the delay was for political reasons and to provide enough time for the government to present the data in a less negative fashion.

The data provided by the Health insurers that sold health insurance plans showed that those insurers lost a great deal of money on the Affordable Care Act‘s exchanges in 2014.

The data shows the Obama administration has short changed the healthcare insurers that participated in Obamacare $2.5 billion dollars promised to them in the safety value risk corridor subsidies.

The Obama administration now is promising those insurance companies that the $2.5 billion dollars to cover the deficiency will be covered with budgeted monies from 2015 and 2016 if possible.

President Obama is now sowing the seeds to blame the nonpayment on Republicans since Republicans control congress.

Republicans thought the health insurance risk corridors were a stupid idea to begin with and predicted failure. Now the Obama administration is trapping the Republicans for not wanting to pay bills that are owed.

Some smaller insurance companies who were seduced into participating in this no risk insurance policy folly are now worried about experiencing “solvency and liquidity problems”.

CMS would not give the number of companies affected. It said the cases are isolated.

“The insurers requested $2.87 billion in payments to cover their losses. The CMS will only reimburse 12.6% of the payment requests, meaning insurers will still be owed more than $2.5 billion.”

“ Names of companies that are owed money were not released.”

Does anyone think the insurance companies are going to sign up for the 2016 enrollment cycle?

Insurance companies do not know how much Obamacare will short- change them for the 2015 subsidies yet.

One can also begin to understand why insurance rates for both government and private insurance are increasing when physician and hospital reimbursement are falling.

The insurance industry feels it has to make up its loss.

Why are the Republicans not saying anything about this to the public?

Why aren’t Republican candidates for President not pointing out this folly?

Why are they letting themselves be set up to be blamed for not wanting to pay the government’s bill?

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

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Stanley Feld M.D.,FACP,MACE

 Obamacare has set up a system whereby if a patient is readmitted to a hospital 30 days after discharge the hospital will not be paid for the readmission and will incur a fine.

Hospitals are paid for admissions by diagnoses. The more diagnoses the more they get paid. The length of stay the government will pay for is also determined by the diagnosis.

The number of games played with the diagnosis of a patient is legendary. Hospitals are in the business of making money. The more money hospitals make the higher the administrator’s salary.

If patients have to be readmitted to the hospital within 30 days the patients are told to get readmitted to a different hospital to avoid government non-payment.

Bureaucrats who know nothing about patient care and the natural history of disease created this dumb readmission criteria.

The bureaucrats’ goal was to provide incentives by the threat of penalty for hospitals to improve quality of patient care.

I told my readers that the incentives were wrong. It would be to the disadvantage of patients. Hospitals would figure out how to get around the penalties.

Medicare does not pay for outpatient (observation) admissions. Hospitals can admit patients on observation (outpatients) for 48 hours.

I explained how hospitals could extend outpatient admissions (observations) 72 hours. Patients are responsible out of pocket for the admission bill.

Many of the readmissions are recurrent congestive heart failure. These patients can be treated and released from the hospital in less than 24 hours and at most 48 hours. Patients with congestive heart failure must become “Professors of the Treatment of Congestive Heart Failure.” Patients must be responsible for their care. They must be provided with financial incentives to become “Professors” of their disease.

Most of the time readmission is not the result of poor quality hospital care. It is the result of patients not understanding the cause of the recurrence of their congestive heart failure.

Most of the time patients do not pay attention to what they are taught to abort an episode of congestive heart failure and subsequent readmission to the hospital.

Most of the time hospital call in help desks does not improve patient compliance with treatment.

“Hospital readmissions that Medicare penalizes under the Affordable Care Act are largely driven by patient characteristics such as income and education rather than the quality of care they receive, according to a new study.”

“This finding suggests that Medicare is penalizing hospitals to a large extent based on the patients they serve,” the authors conclude.

Hospitals in poor areas and urban hospitals have been disproportionately penalized under the readmission program.

In fiscal 2016, about 1,600 hospitals will see their base operating DRG payments knocked down as much as 3%.

Medicare payments were decreased 1% in fiscal 2013 for readmission before 30 days. That number increased to 2% in fiscal 2014 and 3% in 2015.

Penalties and fines applied only for heart attack, heart failure or pneumonia until 2015. In 2015 readmission rates for chronic obstructive pulmonary disease and total hip and total knee replacements have been added to the penalty list.

The addition of these diagnoses will result in additional fines to hospitals. Additional penalties will affect hospitals’ bottom line severely and not lead to increased quality care.

Only 769 of more than 3,370 hospitals have avoided fines. Some hospital might have to close because of the penalities.

I have said many times that policy wonks do not know how to measure quality.

Hospitals that are flourishing are paying the CEO and other administrators millions of dollars a year in salaries.

Hospitals avoiding penalties and fines are not necessarily providing better quality care. These hospitals might treat less sick patients or more intelligent patients,

The Obamacare incentives are upside down. Punishment hardly ever works to improve quality healthcare.

Has anyone ever thought about providing incentives to patients to learn how to improve their own compliance to medical care?

In an entitlement society patients are taught to expect (entitled) to be cured without applying much effort on their own.

They are taught to be dependent on physicians and hospitals to cure them of their chronic disease.

Physicians should be the coaches. Patients are the players in the treatment of their diseases.

Obamacare’s readmission policy is all wrong. Its goal is to keep patients in a passive dependent role.

Only when government healthcare policy wonks understand that consumers of healthcare must be provided with incentives to be responsible for their healthcare and medical care decisions will America be on the way to Repairing the Healthcare System.

No one in Washington is thinking this way.

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