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Obamacare Owes Insurance Companies $2.5 Billion Dollars For 2014 Health Exchange Losses

October 7, 2015

inDisinformation and the healthcare system, Medicine: Healthcare System, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust

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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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ACOs Are Failing

September 5, 2015

inConsumer Driven Health Care, Disinformation and the healthcare system

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Stanley Feld M.D.,FACP,MACE

A major component of Obamacare is the development of functioning Accountable Care Organizations (ACOs). The theoretically the ACO concept is good. The practical execution of ACOs is very difficult.

The way the bureaucrats in the government wrote the rules and regulations for executing ACOs make them almost impossible to execute.

The inevitable failure of ACOs was further guaranteed by the complicated reimbursement rules created by Medicare’s bureaucrats.

The goal was to create integrated health care systems that would efficiently deliver quality medical care at a lower cost.

“ACOs are one part of this Administration’s vision for improving the coordination and integration of care received by Medicare beneficiaries.

ACOs are groups of doctors, hospitals, and other health care providers that work together to give Medicare beneficiaries in Original Medicare (fee-for-service) high quality, coordinated care.

ACOs can share in any savings they generate for Medicare, if they meet specified quality targets.”

Defining quality care is a problem. Another problem is designing systems to execute quality care. To date no one has defined quality medical care correctly.

I said from the onset of the development of ACO’s that the project would fail. Many experts criticized me. They called me a dinosaur. They said I did not understand systems of medical care.

These people did not know that I was the guy that wrote the AACE guidelines for A System of Intensive Self-Management of Type 2 Diabetes Mellitus.

The way the Obama administration has designed ACOs, they are in reality HMOs on steroids.

They shift the responsibility of the cost of medical care to physicians and not the government.

In reality the cost of quality medical care should be the patient’s responsibility. Patients should be responsible for their care and their health care dollars.

I cannot understand why physicians do not protest.

I am a big believer in systems thinking. However, it has to be a system that is well thought out and well constructed. ACOs are neither.

It is clear to me that the bureaucrats do not know anything about medical practices or hospital politics.

The Obama administration originally picked 30 healthcare systems to be ACO Pioneers. They were called Pioneer Project Goups. Nineteen of the original Pioneer Groups remain.

The Mayo Clinic and the Cleveland Clinic were included in the original group of healthcare systems. These clinics were considered the most integrated health care clinics in the country.

The Mayo Clinic and the Cleveland Clinic turned down the Obama administration’s offer. They said they were happy with their system of care. The Mayo Clinic said they would not participate because they knew they would lose money participating in the ACO project.

I have written extensively on the reasons the ACOs would fail. I invite you to read or re-read these articles so as not to be puzzled by the upcoming outcomes of failures.

“Three out of four Medicare accountable care organizations did not slow health spending enough to earn bonuses last year.”

In 2014 there were 353 accountable care organizations approved by Obamacare. There are potentially 2700 hospital systems eligible to develop ACOs. The 353 accountable care organizations represent only 13% facilities available to participation rate.

The hospital systems not participating either fully understood why they could not form an effective or efficient ACO with the physicians on their staff or they did not have the money to execute the system and make a profit.

President Obama’s administration has bragged that the 353 participants represent a large number. The traditional mainstream media has parroted his assertion.

The mainstream media publishes this deception to the public as if It represents facts. It is just one more deception by the Obama administration.

Private health insurance companys’ subsidiaries are in the process of setting up ACOs. They are trying to recruit physicians to shift the financial liability to physicians from insurance companies the same way unsuccessful HMO companies tried to shift financial liabilities onto physicians in the late eighties and early nineties.

The 353 participants include hospitals, physicians’ groups and healthcare insurance company ACOS. These groups have agreed to meet Obama administration targets for quality care and decreased costs.
In 2014 only 97 ACOs earned bonuses. The money these 97 ACOs saved was a total of $833 million. The 97 hospitals shared $422 million dollars of that total.

Let us assume it was equally distributed among the 97 systems. Let us assume each of the 97 hospital systems has 1500 beds or 97 times 1500 for a total of 145,000 beds. Four hundred twenty two million dollars divided by 145,000 beds equals $2,910 dollars a year per bed or $7.91 dollars per bed per day.

A $7.91bonus per bed per day is an awful return on investment for the work and money necessary to develop an ACO.

What is more bizarre is there are only a few quality targets measured. Some of those measurements are not an accurate measurement of quality medical care.

It also means that the remaining 258 ACOs of the 353 ACOs either lost money because they did not reach targets or they came out even.

In 2013 hospital systems that lost money on certain targets had to pay the government back. The rule was dropped by the Obama administration after the bureaucracy figured out that this was not the way to promote the development of additional ACO’s.

I think I did the math correctly.

“Bonuses are awarded under formulas that account for hospital system performance on quality targets after the first year in the program.”

The results suggest that ACOs might not be the answers to bending the cost curve just as fudging the books is not an answer to delivering the quality healthcare improvement the Obama administration is seeking to have us believe.

The delivery of high quality coordinated care is very difficult to achieve in a government-regulated system of ACOs.

I believe the Obama administration’s plan for Obamacare has failed and has been very costly.

The government should develop a consumer driven healthcare system using my Ideal Medical Savings Account.

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

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Consumers must drive the healthcare system. Consumers have to be provided with the financial incentives to drive the system.

If America continues to go in the direction Obamacare is going, the cost will bankrupt the country.

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President Obama: “Obamacare is driving Down the Federal Budget Deficit”

August 9, 2015

inUncategorized

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Stanley Feld M.D.,FACP,MACE

In July 2015 in a speech on the economy at American University, Barack Obama made the following statements.

“The cost of “health care is now the single-biggest factor driving down” the federal budget deficit.”

The American public is tired of listening to President Obama’s lies, mostly lies and half truths.

Politifact analyzes many of President Obama’s statements of fact and grades them with Pinocchio’s and scores these statements.

President Obama’s statements by ruling

True 119 (21%) (119)
Mostly True 149 (26%) (149)
Half True 151 (27%) (151)
Mostly False 67 (12%) (67)
False 70 (12%) (70)
Pants on Fire 9 (2%) (9)

Total 100% 565

Politifact determined that President Obama was telling the whole truth only 21% of the time.

He was mostly truthful 26% of the time. We have seen these mostly true statements over and over again.

A recent example is that he has not seen the private agreements in the Iran Nuclear Deal. He has not seen the agreement in writing but he has heard about it as John Kerry heard about it.

I consider this an act of deceiving the American public.

Half true, Mostly false, False and Pants on fire classifications add up to 53% of the time President Obama has used the bully pulpit of the President Of the United States to deceive the American people.

If you add the 26% of the mostly true statements to the rest of the deceptions you get an astonishing 79% of the time an attempt has been made to deceive the American public.

This brings me to President Obama’s statement at American University. “Obamacare is driving Down the Federal Budget Deficit”

Politifact gave this statement a mostly true.

The statement is mostly false in my opinion. The devil is always in the details. President Obama has mastered the details of deceptions.

“Partly because health care prices have been growing at the slowest rate in nearly 50 years, the growth in what health care costs the government is down,” Obama said in a speech about the economy last week at the American University.

The budget deficit is a result of revenue generated as compared to expenses. If a government spends more money than it takes in it has a deficit. The size of the deficit is a function of the deficit over the revenue. A deficit reduction from one year to another is that percentage difference one year to another. It is a percent and not a real amount.

A deficit reduction can result from many factors. One very important influence on the deficit is an increase in revenue resulting from an increase in Obamacare taxes. There has been a tremendous increase in taxes resulting from Obamacare. The effective tax rate as I have shown previously as a result of Obamacare is up to 50%.

Another influence on the deficit is a decrease in spending.

Medicare spending has decreased as a result of a very clever maneuver by the Obama administration. It claims it has increased reimbursement by around 2%.

Originally Medicare would pay 80% of the allowed reimbursement and the patients would be responsible for 20% of the fee allowed. The allowed fees have decreased. Fees previously allowed have been changed to non allowed fees.

Physicians’ claims for services might be for $200. Medicare might allow $80. Medicare would pay $64 and the patient or his Medigap coverage would be responsible for $16.

This has not changed. However the percentage of the claim allowed has been reduced and patients without Medigap insurance are responsible for the difference.

This is in addition to Medicare premiums and deductibles increasing yearly. Medigap premiums have also increased yearly.

Medicare recipients are experiencing greater out of pocket costs. Many cannot afford the cost and are not going to get medical care.

This has two potential effects. Office visit claims are reduced and Medicare payments are reduced. It decreases the deficit but could result in a sicker patient. Patient cannot afford the out of pocket expenses.

The result is Medicare experiences a decrease in the percentage it affects the federal deficit.

It could result in a valid decrease in office visits or an increase in sicker patients and higher Medicare expenses.

Obamacare might have helped decrease the resulting government deficit but it could result in increased spending in the future.

It did not result in better quality care.

All of this is very difficult for a casual observer to follow. Meanwhile, President Obama has established the media message that Obamacare is working to decrease the budget deficit.

Then pundits like Paul Krugman, can ridicule opponents of Obamacare for saying Obamacare will fail.

President Obama uses an argument that is a half-truth. However, it does not represent real numbers. He uses percentages.

In addition, many of the costs of Obamacare such as the web site and the website navigators are left out of the real costs of healthcare.

Other costs are left out of deficit reduction analysis such as the direct cost to the consumers and the direct loss of revenue to providers.

“Since the Affordable Care Act was first proposed, policymakers have been debating its potential effect not just on health care but on the economy as a whole. The bill effectively increases some types of spending, reduces other types and increases some taxes.”

Growth in national health spending, which had dropped to historic lows in recent years (deficit reduction), has snapped back and is set to continue at a faster pace over the next decade, federal actuaries said last week.

Senator Ron Johnson, member of the budget committee, discusses the real present and future costs of Obamacare. He also discusses President Obama’s misleading promises about Obamacare. Senator Johnson gives us a real understanding of the Obama administration’s manipulation of the facts.

https://youtu.be/gIN50dswlL0

Obamacare is a bad deal. It is destroying the medical profession. It is destroying the economy and America’s chances for economic growth.

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

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Healthcare Insurance Industry Moves Against Obamacare

July 28, 2015

inDisinformation and the healthcare system, Medicare, Medicine: Healthcare System

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Stanley Feld M.D.,FACP,MACE

The 3 R’s are not working out well for the government, the patients or the healthcare insurance companies.

The temporary reinsurance portion of the 3R’s is about to expire. It was meant to support the healthcare insurance industry as enrollment in Health Insurance Exchanges grew.

Patient enrollment figures in State and Federal Exchanges have not grown significantly in the last two years. Enrollment ii exchanges has been from high risk and elderly patients.

High risk and comprehensive coverage has meant decreasing profit for the healthcare industry.

The numbers the Obama administration publishes are confusing and mostly false. State exchanges are failing. The State Health Insurance Exchanges are causing (in states that have State Health Insurance Exchanges) greater budget deficits.

The reinsurance program is not covering the healthcare industry’s expected profit because of the redistribution of wealth component in the 3R’s.

The significance of the redistribution of profit and wealth component of the 3R’s was not fully appreciated by the healthcare insurance industry as was the reinsurance subsidy was.

The industry’s first step to combat this barrier to profit was to increase next year’s insurance premiums by 20-30 percent in both the private sector and the State and Federal Health Insurance Exchanges.

This has created inflationary pressure on the private sector and unaffordable healthcare in both the private and public sectors for consumers and companies that provide healthcare coverage to their employees.

Its effect is the opposite of what President Obama promised. He promised to make healthcare insurance coverage affordable to all.

It is also forcing corporations to switch their healthcare coverage plans from defined benefit plans to defined contribution plans. The net effect is to increase employee out of pocket expenses.

We do not know how many more people have lost healthcare insurance because of Obamacare’s rules and regulations.

The public is also unaware of the exact number of people who have gained healthcare insurance through the Health Insurance Exchanges.

The real figures are not easily available.

The next step by the healthcare insurers is to merge. A series of merger negotiations are occurring. In the last three weeks two merger negotiations have been completed.

“Anthem Inc. agreed to buy Cigna Corp. for $48 billion, capping months of merger frenzy among top U.S. health insurers that is set to reshape the industry.”

“The merged company is projected to have around $115 billion in annual revenue and cover about 53.2 million people.

The deal, which needs regulatory approval, would help reshape health insurance industry.”

Three weeks ago Aetna agreed to buy Humana for $34 billion. The two deals accelerated the rapid-fire reconfiguration of the U.S. health-insurance industries. The two deals would decrease the industry from five major companies to only three.

The traditional media has not discussed the reasons the healthcare insurance industry is merging or the details of the mergers.

I will try to connect the dots.

The healthcare insurance industry realizes that the Obama administration is trying to play one insurance company against another. The redistribution of profit from insurance companies that profit to those that make less profit must be irritating to the healthcare insurance industry.

Perhaps they did not appreciate the intricacies of the 3 Rs. Maybe there was a small window where the temporary reinsurance was profitable.

I would guess that the healthcare insurance industry would try to stop the redistribution of profit. These mergers will increase their individual profits.

The companies will be in a position to force the government to discontinue the redistribution of profit or lose a company that is an administrative service provider.

The losers will be taxpayers and non-subsidized insurance consumers. The increases in premiums to consumers that are subsidized will be passed on to taxpayers. Non-subsidized taxpayers will also be paying increased healthcare premiums.

This will create non-affordable insurance premiums for all as a result of the Affordable Healthcare Act (Obamacare).

The healthcare system will collapse. The government will move in with a single party payer system and a bloated and wasteful government bureaucracy.

Remember Senator Kerry and Representative Barney Frank saying the ACA would not work without a Public Option? Remember President Obama saying we don’t need a Public Option?

President Obama is backing healthcare insurers into a Public Option corner and a single party payer system.

The government will be forced to limit access to care and ration care. Americans will not have freedom of choice.

The problem is the government will still have to hire one of the three healthcare insurance carriers for its administrative services instead of one of five major carriers. The price to the taxpayer will probably be high along with all of the government’s bureaucratic inefficiencies.

Remember the VA? The VA scandal is continuing without any apparent improvement in VA services or in reforming the dysfunctional VA system.

Congress is simply giving the VA more money to continue its dysfunctional ways.

The latest step in the healthcare insurance industry’s attempt to protect itself is the hiring of Marilyn Tavenner as CEO of America’s Health Insurance Plans (AHIP) the lobbying group for the healthcare insurance industry.

Marilyn Tavenner is the former head and CEO of CMS overseeing Medicare, Medicaid and ACA (Obamacare) implementation.

Marilyn Tavenner oversaw the botched rollout of the federal insurance exchange and the ACA-mandated cuts in payment rates to Medicare Advantage in additional to a myriad of new Obamacare generated Medicare and Medicaid regulations.

Some of these regulations are unconstitutional according to lawmakers. However, the legislators have done nothing about these unconstitutional regulations.

They have not even attempted to make Americans aware of them.

Health Insurance Exchange plans and Medicare Advantage plans are two areas of tremendous profit and significant growth for private insurers. The Obama administration knows this and has tried to limit or eliminate this growth. AHIP hopes Marilyn Travenner can help the industry continue this growth by pointing out the bureaucracy’s weaknesses to healthcare insurance company’s executives.

“The healthcare industry (AHIP) hired her for her political connections inside the administration, inside the CMS bureaucracy and inside the congressional committees that regulate them,” said Tim LaPira, political science professor at James Madison University.”

The mainstream media parroting the AHIP’s press release said, “that the insurance industry has accepted Obamacare (the Affordable Care Act) as the new business environment. AHIP wants a CMS insider to help during the next phase of its market development.

According to the AHIP press release, “her government experience will be invaluable to AHIP given how rapidly the public sector is dominating the financial, market and regulatory facets of health plans”

It is obvious to me that AHIP did not hired Ms. Travenner in order to understand the new business environment better for an instant.

I believe AHIP hired her as CEO for her connections in,

1. CMS,

2. The Obama administration,

3. The administration’s bureaucracy.

4. Congress

Along with her impressions of CMS’s weaknesses.

Weaknesses the AHIP can exploit.

Neither the Obama administration nor AHIP are working for the benefit of the American consumer of healthcare.

This behavior must be stopped somehow.

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The Defects In Obamacare

June 14, 2015

inMedicine: Healthcare System, Patients Problems, Physician's Problems, Stakeholder Mistrust

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Stanley Feld M.D., FACP, MACE

We live in an era of sound bites driving opinions rather than details driving opinions. The devil is always in the details.

The defects in Obamacare are too numerous to count. President Obama provides the traditional mass media with sounds bites leading to false conclusions.

The sound bites are misleading. Many of the sound bites are lies. One such sound bite is Obamacare is working and therefore does not need changing.

He and the Democrats keep the discussion on the sound bites level and do not dig into the real issue. President Obama even keeps the details away from congress the very people he is dependent on to pass the bill.

President Obama kept the facts and details about Obamacare away from the congress and the people. He is now doing it with the Trans-Pacific Partnership (TPP).

The Trans-Pacific Partnership (TPP) is a proposed regional regulatory and investment pact. Just as with Obamacare, President Obama expects congress to vote in favor of a pact they have not debated and have not had an opportunity to read the details in the final bill.

It is another one of those bills where the administration is telling the congress and the American people you have to pass the bill in order to see what is in it.

Americans are tired of his lack of transparency and lies. They do not trust President Obama anymore.

Congress should never make the same mistake they made with Obamacare. If they do all Americans should rally to throw all the bums out.

The devil is always in the details.

United States Senator Ron Wyden (D-OR) said,

“Congress is being kept in the dark as to the substance of the TPP negotiations, while representatives of U.S. corporations—like Halliburton, Chevron, PHRMA, Comcast, and the Motion Picture Association of America—are being consulted and made privy to details of the agreement. […]

" More than two months after receiving the proper security credentials, my staff is still barred from viewing the details of the proposals that USTR is advancing. We hear that the process by which TPP is being negotiated has been a model of transparency. I disagree with that statement.^[98]”

President Obama and the speaker have told us it is good pact for the country’s economy. Senator Cruz is right. “Don’t vote for something whose details you do not know.”

There are many defects in Obamacare. One major defect is that it is not affordable to consumers, the federal government or state governments. When fully implemented the cost of healthcare to the federal government will be at least 50% of our GNP not the 23% of GNP predicted. Twenty three percent is bad enough.

Federal and State taxes will have to be increased to cover all medical care entitlement costs.

President Obama keeps telling us that Obamacare is working. He says it is here to stay.

The reality is Obamacare is an unworkable and costly failure in multiple areas including the health insurance exchanges, healthcare.gov, insurance premiums and deductible costs, the development of Accountable Care Organizations, maintenance of employer insurance and more.

Americans deserve a better system than Obamacare.

It is impossible to cover all of the harmful details of every category in one blog.

It is disingenuous for President Obama to claim, in his repeated sound bites, that there is no need to change anything in Obamacare because Obamacare is working fine.

The real cost of Obamacare to consumers (especially taxpayers), the federal and state governments and the economy have not been disclosed nor are they transparent.

The real costs start to leak out with stories about how the costs affect consumers and their lifestyle.

This usually leads to the sound bites that it will be better to have a government single party payer system.

The underlying defect is that this system leads to consumers being dependent on government and not responsible for themselves. Government changes rules on a whim. Consumers do not have options. This is a road to serfdom.

“After the Affordable Care Act kicked in, a 52-year-old sales and marketing entrepreneur reported his monthly health-insurance premium to cover himself and his family grew to $848 from $513. Like others, he wasn’t happy about it. “It’s taking a lot out of pocket,” he said.”

He is one of millions of Americans who earn too much to qualify for government subsidies on policies purchased through the federal insurance exchange. He was in favor of Obamacare before he realized Obamacare’s effect on reality.

Obamacare requires insurance companies to offer insurance policies with broad coverage and greater protection against catastrophic medical costs. It also requires coverage on illnesses and conditions such as pregnancy and birth control coverage for people who do not need this coverage.

Obamacare was supposed to save every family $2,500 a year. It costs families more than $2,500 dollars a year. It was not supposed to affect anyone making less than $250,000 per year.

It is true that many of the above a not taxes. However it is a cost burden on consumers making less than $250,000 a year.

Others, making less than $50,000 a year, receive complete or partial government subsidies. This is what is meant by redistribution of wealth. It is a significant cost burden on consumers making $50,000 to $250,000 dollars a year.

Everyone remembers President Obama promising that Obamacare will not cost families making less that $250,000 one dime.

Obamacare premiums have become unaffordable to people earning less than $50,000 per year as well.

Obamacare’s goal was to cover everyone with broad insurance coverage and greater protection against catastrophic medical costs.

Yet, only 10 million out of 330 million are covered by the exchanges. Each enrollee in the exchanges also has high deductibles. These deductibles can be as high as $6,000 a year.

Many of the insurance companies claim they will be losing money after the government’s health insurance industry subsidies disappear in 2016.

These companies will leave the Obamacare federal health exchanges reducing competition. This in turn will increase premiums further and make premiums more unaffordable.

Another detail overlooked is enrollees are poorer, sicker and older. The pool is not diluted by younger, healthier and richer. The result is more expensive insurance rates.

“ HHS was saying that it needed about 40 percent of the exchange policies to be purchased by people age 18-35 to keep the exchanges financially stable. It was 28 percent in both 2014 and 2015, according to HHS data. The CBO had projected about 85 percent of exchange enrollees to be subsidized, falling toward 80 percent as enrollment grew; instead, that number is 87 percent and actually rose slightly from 2014.”

According to a study last year by the National Bureau of Economic Research, people who bought silver and bronze plans on the federal and state health insurance exchanges saw total premiums and out-of-pocket payments rise an estimated 14% to 28% higher than pre- Obamacare premiums and out of pocket expenses.

Obamacare is not fulfilling any of President Obama’s sound-bite promises.

His claim that Obamacare is working well and does not have to change makes absolutely no sense.

If one tells a lie enough times it becomes eventually becomes the truth.

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

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Double Digits Increases In Obamacare Insurance Rates Proposed

May 31, 2015

inHealthcare Insurance Industry, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Mistrust

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Stanley Feld M.D.,FACP,MACE

Thirty-seven states refused to setup Obamacare State Health Insurance Exchanges. Thirty-seven states refused because of the expected cost burden to those states and citizens. States are required to balance their state budgets. Most states have deficits and do not have balanced budgets. Obamacare’s requirements would simply add to their budget deficits. States would be forced increase state taxes.

The 37 states felt that the Obamacare State Health Insurance Exchanges were an attempt, by President Obama, to decrease the federal cost burden and shift it to the states.

It was also a states’ rights issue.

None of those states felt that Obamacare State Health Insurance Exchanges could work and not become an increased cost burden.

The Supreme Court ruled in 2012 that states have the right under the constitution to refuse to create a State Health Insurance Exchange.

In June 2015 the Supreme Court will rule on King vs. Burwell.

Can the Federal Health Insurance Exchanges subsidize applicants the same way State Health Insurance Exchanges can subsidize applicants.

The law’s language is specific. The Obamacare law specifically states that only the State Insurance Exchanges can subsidies applicants.

The Obama administration media manipulation machine is already spinning the truth in case the Supreme Court rules against the federal government.

Eight million people will lose their subsidy. There are 330 million people in America. There are as many people uninsured in 2015 as there were before the law was enacted. In five years we are no closer to the promise that Obamacare would provide universal care.

Obamacare is failing because it is a bad law in many respects.

The essence of the Obama administration’s spin is that if the Supreme Court rules against the government the cost of insurance will escalate to unaffordable levels for Federal Health Insurance Exchange purchasers.

Subsidies that made insurance plans affordable face a crucial test with decision expected in June.

The truth is the cost of healthcare premiums are going to skyrocket for Obamacare applicants because the only people who signed up have pre-existing illnesses and had to buy insurance or the very poor because their insurance was fully subsidized.

The adverse selection and the financial accounting rules for the healthcare insurance industry allow them to raise the premiums.

President Obama’s subsidies for Obamacare premiums expire in 2016.

Megan McCardle writing in Bloomberg says;

“Insurance companies have been bullied by the Obama administration into keeping rates as low as they are, even though they can't make any money.

For sheer survival, most companies will begin to charge enough so they at least don't lose any money, or leave the exchanges altogether.

For those of you who have followed my blog carefully, you know President Obama has provided the healthcare insurance industry a subsidy in order to get them to participate. It guarantees that it cannot lose more than 2% of its expected profit.

The insurance industry determines its expected profit.

The insurance company subsidy is about to expire. The guarantee in Obamacare, of not losing any money, is going to evaporate. In addition, only the sickest and poorest people have obtained insurance from the federal and state health insurance exchanges. The federal and state exchanges have lost a great deal of money.

These losses are slowly being revealed.

The State Health Insurance Exchanges are starting to publish their losses at the same time the healthcare insurance industry is reporting their potential losses for next year. Those potential losses are reflected in the proposed premium increases.

Moda of Oregon says that its claims were 139 percent of revenue.

CareFirst of Maryland says claims were 120 percent of revenue.

Tennessee told the Wall Street Journal it lost $141 million on exchange plans last year.

State of New Mexico says it lost $23 million on revenue of $121 million.

The states that signed up for the State Health Insurance Exchanges are losing money. Maybe the states that did not sign up were right. It would be a financial burden on those states.

The clause in the law permits only those states having a health insurance exchange to provide subsidies to their applicants. It excludes all others, including the federal government.

The only question the Supreme Court has to consider is, can the federal health insurance exchanges provide subsidies to applicants according to the law as written?

The law was written to encourage states to create health insurance exchanges. It did not include the provision of subsidy to applicants for federal health insurance exchanges.

If the federal exchange would be permitted to provide subsidies, the law should be amended by congress.

A Republican congress would have to amend the law.

Obamacare is an apparent disaster to consumers, insurance providers, hospitals and physicians.

The majority of Republican are calling for Obamacare’s repeal.

It is unlikely that a Republican congress will change that provision in the law.

The “States only provision” in the law has backfired on President Obama and those states creating health insurance exchanges.

The cost of setting up and administering this new bureaucracy was enormous. The healthcare insurance offered by Federal and State Health Insurance Exchanges were either too expensive for healthy or young consumers or had too many unnecessary benefits for those consumers.

The only consumers who signed up were people who were too sick to be able to buy private insurance or too poor to be able to buy insurance without being subsidized.

Those consumers comprise 85% of the applicants. The result has been an adverse selection pool.

If the Supreme Court rules against President Obama he is going to say that private insurance does not work. The federal government must create an entitlement to everyone.

The result will be socialized medicine with the federal government being the single party payer controlling rationing of care, access to care and the cost of care to consumers.

I believe it will make healthcare coverage even worse than it is now.

Why no one is considering my concept of consumer driven healthcare with my ideal medical saving account is beyond me.

Rather than making consumers actively responsible for their health, healthcare dollars and healthcare, we are on the road to making them passive recipients of their healthcare.

America is going to be further down the Road to Serfdom.

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

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Obamacare Is Not In The News

April 29, 2015

inMedicine: Healthcare System

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Stanley Feld M.D.,FACP,MACE

There has been little reporting about Obamacare in the traditional media lately. I believe it is intentional.

President Obama doesn’t want to talk about it. He has told us Obamacare is a success. The problem is he has left out the facts about its failures, costs and disruptions.

Last week a 70 plus year old woman wrote and told me that none of her brand name medicines are being covered by her high level Medicare Part D plan because of Obamacare regulations.

She said out of pocket expenses for her generic drugs have doubled in her in the past two years.

I found it hard to believe because there has been nothing reported about this in the traditional mainstream media.

Out of pocket expenses are beyond the reach of many Medicare recipients.

A big out of pocket expense for many has been the cost of signing on to a concierge medicine doctor in some cities in the country.

The most prominent city is Los Angeles. I have been told that primary care physicians will not see a patient that does not sign on to their concierge panel at a cost of $1500/year.

To my surprise Thomas B. Edsell a very liberal (progressive) United States journalist and academic, best known for his weekly opinion column for the New York Times online and for his 25 years of covering national politics for the Washington Post wrote two articles about the problems with Medicare and Obamacare.

The first article “Obamacare, Hand Off My Medicare” points out that President Obama is destroying Medicare.

The second article is entitled “Has Obamacare Turned Voters Against Sharing the Wealth?”

Both articles state, in detail, reasons and excuses for Obamacare’s failures.

Here are just a few reasons and excuses.

“A number of factors underpin the anti-redistributionist shiftin public opinion that I wrote about last week.

First, and perhaps most important, is the emergence of significant resistance to downward redistribution among the elderly, a major voting bloc.”

How come this trend is occurring? It is because seniors of modest means are threatened. They are realizing Obamacare is a bad law with many defects.

“The Obama administration has reported that the Affordable Care Act will be financed in part by $716 billion in Medicare cuts over 10 years.

Somewhat improbably, the administration also contends that cuts of this magnitude will not reduce services to Medicare beneficiaries.”

Another President Obama lie. Seniors are already feeling the Medicare cuts by a decrease in access to care and an increase in out of pocket expenses.

Seniors have learned that they cannot trust President Obama to preserve Medicare.

“Seniors have started raising concerns about the cost of these plans — higher taxes and premiums for those with coverage, more government interference in physician choices.”

These concerns are real and present.

“Further increasing anxiety among the aged in the United States is the shift from defined benefit pensions, which guarantee payments, to defined contribution pensions, which do not.”

If Medicare shifts to a defined contribution policy, seniors are afraid if they live longer they will run out of money.

Obamacare is unsustainable. Once President Obama losses public trust any idea no matter how good it was thought to be in the past will not be supported.

The reasons for Obamacare’s failures were predictable before the bill was passed. I have written many articles giving reasons for its failures.

Now President Obama is setting up the public with excuses for its failure through these New York Times articles.

The President’s next step is to declare that Americans have to live with Obamacare because the Republicans have not come up with anything better.

President Obama does not listen to Republicans even when they come up with reasonable ideas.

This predictable step is taken to brain wash the public to accept a law that empowers the government to make the public more dependent on government and less free to make their own medical choices and decisions.

Seniors are starting to act out now because Obamacare, with its redistribution of their wealth, is hurting them economically and is not in their vested interest.

Seniors should start understanding how President Obama has given favors to the healthcare insurance industry, the pharmaceutical industry and the hospital industry at seniors’ expense. Once they understand, seniors will not support President Obama.

Seniors are a big voting block. They represent a large threat to the Progressive Democratic Party and its foolish laws and tactics.

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

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Simple, Viable Republican Alternatives To Obamacare

April 12, 2015

inChronic Disese Management, Consumer Driven Health Care, Disinformation and the healthcare system, Health Savings Accounts vs Medical Savings Accounts, Healthcare Insurance Industry, Medicaid, Medicare, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Mistrust, Universal Healthcare

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Stanley Feld M.D., FACP, MACE

There are many simple and viable alternatives to Obamacare which Republicans should start considering.

Republicans should seriously consider My Ideal Medical Savings Account as an alterative to Obamacare. It is logical, simple, does not require a large complicated infrastructure and aligns all the stakeholders’ incentives.

It is easy for consumers to understand.

Consumers want to have choices. The dysfunction of our healthcare system has gotten to the point where most consumers don’t have a choice. Consumers simply do not know they lost their freedom of choice and access to care until they get sick.

Consumers think they have adequate healthcare coverage until they get sick. Only 20% of the population gets sick.

The other 80% of the population refuses to think about the problem.

When they do experience illness, the dysfunction in the healthcare system makes them furious. They want to blame someone. Physicians are usually the targets of their frustration.

Most physicians are trapped in a situation that causes them to fight for their own survival for all the reasons I have previously enumerated. This creates a more dysfunctional healthcare system.

All the stakeholders fight for their own vested interests. These vested interests have become misaligned. The vested interest of the government is to control of the system and decrease its costs.

Costs cannot be controlled by regulations without consumer involvement. Consumers of healthcare must understand the effectiveness of their care is dependent on their involvement in their own medical care.

Consumers’ adherence to treatment is a key component in the effectiveness of medical care.

Medical costs cannot be controlled by government price fixing.

Medical costs cannot be controlled by government restrictions to access of care. Consumers will become sicker resulting in a higher cost illness.

Consumers must be empowered to be intelligent, motivated and responsible consumers of medical care. Only then can healthcare costs be controlled.

A functional healthcare system must provide financial incentives to consumers in order for them to want to be empowered to control costs. Consumers should not be dependent on the government to control costs.

The government must repair the actuary and accounting rules of the healthcare insurance industry. Insurance reserves should not be scored as a loss to justify premium increases.

The healthcare insurance industry takes 40 cents off the top of every insurance dollar that is spent. Consumers with both private insurance and government insurance are only getting 60 cents value for every healthcare dollar spent. The healthcare industry is allowed to do some strange accounting with their required reserves.

If this accounting method were repaired, premium costs would decrease.

Effective malpractice reform would result in a significant decrease in healthcare costs. The Obama administration refuses to believe tort reform is needed.

Many of the rules written into Obamacare, Medicare, and Medicaid are so screwy they defy common sense and penalize consumers. One glaring rule is Medicare permitting hospitals to admit Medicare patients to the hospital for observation for 48 hours.

Medicare does not pay for Observation admissions. Patients have to pay out of pocket for these admissions.

Consumers must become aware of these screwy rules and protest them. These rules have been written by the Obama administration to save the government money. These rules penalize patients the government professes to help.

Consumers are the only stakeholders that can motivate President Obama and congress to fix the significant points of waste in the healthcare system. Consumers have the power to vote.

I do not believe that President Obama has an interest in repairing the healthcare system. All of his actions signify that he wants the healthcare system to fail. After it fails people will beg the government to completely take over and have a single party payer.

Does anyone trust the government to take over our most valuable asset, our healthcare?

The government take over will also fail because dependent consumers will figure out how to game the system just as food stamp recipient have figured out how to game that inefficient system.

The goal of a sincere administration and congress is to figure out how to motivate consumers to be “PROSUMERS” (productive consumer) with an economic interest in the healthcare system.

Airlines, banks, bookstores, entertainment venues have all figured it out. Why can’t the government help consumers figure it out?

My blog entitled “My Ideal Medical Saving Account Is Democratic” presents a consumer driven healthcare formula. It gives every socioeconomic group the opportunity to be an effective “Prosumer”.

It gives all Prosumers the incentive to be responsible for their health and healthcare dollars.

Below is the blog My Ideal Medical Savings Account Is Democratic!

My Ideal Medical Savings Account Is Democratic!

Stanley Feld M.D.,FACP,MACE

A reader sent this comment; “My Ideal Medical Savings Account (MSA) “was not democratic and leads to restriction of medical care for the less fortunate.'

This comment is totally incorrect. I suspect the comment came from a person who has “an entitlements are good mentality.”

I believe that incentives are good. They lead to innovation. Innovation leads to better ideas.

Healthcare entitlement leads to ever increasing costs, stagnation, restrict freedom of choice and decrease in access to care.

The excellent example of increasing costs, decreasing choice, and decreasing access to care is Medicaid.

The fact that someone is covered by healthcare coverage does not mean they have access to medical care.

I have written extensively about the virtues of My Ideal Medical Savings Accounts (MSAs). They are different than Health Savings Accounts (HSAs).

HSAs put money not spent in a trust for future healthcare expenses. MSAs take the money out of play for healthcare expenses. MSAs provide a trust fund for the consumer’s retirement.

MSAs provide added incentives over HSAs to obtain and maintain good health. Obesity is a major factor in the onset of chronic diseases. Consumers must be motivated to avoid obesity to maintain good health. MSAs can provide that incentive.

The MSA’s can replace every form of health insurance at a reduced cost. It limits the risk to the healthcare insurance industry while providing consumers with choice.

This would result in competition among healthcare providers. Competition would bring down the cost of healthcare.

Some people might not like MSA’s because they are liberating. They provide consumers of healthcare with freedom of choice. They also give consumers the opportunity to be responsible for their healthcare dollars while providing them with incentives to take care of their health.

MSAs could be used for private insurance purchasers, group insurance plans, employer self- insurance plans, State Funded self-insurance plans and Medicare and Medicaid.

In each case the funding source is different. The cost of the high deductible insurance is low because the risk is low.

If it were a $6,000 deductible MSA, the first $6,000 would be placed in a trust for the consumer. Whatever they did not spend would go into a retirement trust. If they spent over $6,000 they would receive first dollar healthcare insurance coverage. Their trust would obviously receive no money that year.

The incentive would be for consumers to take care of their health so they do not get sick and end up in an expensive emergency room.

If a person had a chronic illness such as asthma, Diabetes Mellitus, or heart disease with a tendency to congestive heart failure and ended up in the emergency room they would use up their $6,000.

If they took care of themselves by spending $3,000 of their $6,000 trust their funding source could afford to give their trust a $1500 reward. The benefit to the funding source is it saved money by the consumer not being admitted to the hospital. The patient stayed healthy and was more productive.

President Obama does not want to try this out. He wants consumers and businesses to be dependent of the central government for everything.

MSAs would lead to consumer independence from central government control of our healthcare. MSAs would put all consumers at whatever socioeconomic level in charge of their own destiny.

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

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Republicans who really want to repair the healthcare system should take notice of these suggestions. They should stop proposing complicated alternatives to Obamacare that will not work.

Republicans should start trying to understand the real problems in the healthcare system.

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

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The Republican Alternative to Obamacare

April 7, 2015

inHealthcare Insurance Industry, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests

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Stanley Feld M.D. FACP MACE

House Energy and Commerce Chairman Fred Upton along with Senate Finance Chairman Orin Hatch and Senator Richard Burr have outlined what is, at least for now, the Republican alternative to Obamacare.

The Obama administration insists that the Republicans do not have a viable alternative. I doubt that anyone in the administration has read the alternatives.

President Obama’s tactic is to marginalize any opposition even if he has not reviewed it.

The Republicans have some good ideas. However, they do not address the basic problems in our healthcare system.

The implementation of their ideas will not repair our healthcare system.

“Republicans have now really muddied the waters with a huge take it or leave it alternative that will have plenty of its own reasons to give voters pause.”

Obamacare has so many parts. Most of Obamacare’s parts could have been predicted to fail. It is clear that congress did not understand this destiny before passage.

Obamacare was destined to fail from the start. It is on the way toward failure today. It will also destroy the entire healthcare system.

The Republican alternative is called, "The Patient Choice, Affordability, Responsibility, and Empowerment Act."

It's key provisions include:

A Full Repeal and Replacement of Obamacare

Eliminate Individual Mandate to Buy Health Insurance or an Employer Mandate to Offer Coverage

Consumer Protections – Republicans want to retain the popular consumer protections in Obamacare including no lifetime limits, coverage for children to age 26 on their parent's plan, and guaranteed renewability of coverage.

However, they propose to decrease the costs of healthcare insurance for younger consumers but want to increase the cost of healthcare insurance for older buyers.

The Republicans would create a new set of losers (older buyers) while increasing the incentive for younger people to buy insurance.

Republicans should be providing financial incentives for consumers to be responsible for their health and their own healthcare dollars. Consumers with chronic diseases should also be responsible for the control of their chronic disease.

A Return to Pre-Existing Condition Limits. This is a ridiculous provision. It guarantees the biggest villain in the healthcare system (the healthcare insurance industry) its control of premiums and profitability.

Default Enrollments – Republicans would allow states to create a default enrollment system for those eligible for tax credits as a means to reduce the number who would otherwise remain uninsured.

A complex agency would be needed to administer a complicated process.

High Risk Pools for the Uninsured – High-risk insurance pools did not work previously because of healthcare insurance companys’ control of the premiums for the sickest people and their high risk of disease.

Affordable Insurance Policies – This is also a pipe dream. America’s population is becoming more obese. Obesity generates more illness and higher risk. As long as the healthcare insurance industry is calculating and is in control of the actuary risk, healthcare insurance will not be affordable. The problem is how the insurance industry is allowed to do its accounting.

The Republicans are proposing the elimination of benefit mandates and downsizing guaranteed insurability with their "continuous coverage" provision.

This proposal is ridiculous. As long as consumers are not responsible for their health and their healthcare dollars and the healthcare insurance industry controls price, the healthcare system will be increasingly more expensive and dysfunctional.

Tax Credits to Buy Coverage – Tax credits are an unearned entitlement. Unearned entitlements do not work. Tax credits would be available for those in the individual health insurance market, those working for businesses with fewer than 100 employees, and those working for larger employers that do not offer coverage.

Tax Credits Only Up to 300% of Poverty – A system of tax credits leads to an agency that must be connected to another government agency, which leads to a larger government bureaucracy. In turn the bureaucracy leads to fraud and abuse

Flat Amount Tax Credits By Age – The goal of this proposal is to eliminate federal and state exchanges. Obamacare’s state and federal exchanges have not worked no matter how the administration spins the truth.

It would be easy to just give everyone a tax credit by age. A new bureaucracy would not be needed.

However, control of price and actuarial risk is still determined by the healthcare insurance industry. Consumers are not empowered. The healthcare insurance industry is empowered. Only at the time consumers are stimulated to control their health and healthcare dollars will the system work. Tax credits and price controls do not work.

No Limits on the Kind of Insurance Policies That Could Be Offered – This is not a bad idea.

Capping the Tax Exclusion on Employer-Provided Health Insurance – The entire tax benefit for the employer and the individual should be equalized. Benefits should not be exclusive. Healthcare insurance premiums should be paid for with pre-tax dollars by all. The individual market should not pay for premiums with after tax dollars and the group market pay for premiums with pre-tax dollars. The present system is a hidden tax on consumers buying insurance in the individual market.

Moving Toward Defined Contribution Health Insurance – This is a stab in the dark by Republicans. It would penalize consumers and it would benefit employers. Employer want to avoid providing the same level of healthcare coverage for all their employees

Medical Malpractice Reform – This is a sensible reform. It is estimated that is would lower healthcare cost between $300 and $750 billion dollars a year if all costs were included.

If malpractice reform took the right form to protect consumers and physicians, the abuse in the malpractice system by lawyers and the insurance industry would be eliminated.

Both the Democrats and the Republican have protected the lawyers and the insurance industry in the past. Past behavior is a predictor of future behavior.

Repealing the Medicaid Expansion – Medicaid should be eliminated and replaced by an all-inclusive healthcare system.

The poor should have the same insurance coverage as the rest of society. The immediate response is the nation couldn’t afford it. Yet President Obama is expanding Medicaid as access to care is being restricted. Therefore formulas that try to control costs fail because the development of severe illness is more expensive than consumers of healthcare learning how to control their disease. A consumer having healthcare insurance coverage does not make those consumers well.

Empower Poorer Consumers by Giving Them Mainstream Health Plans –

Republicans do not offer a plan of action within this category. It sounds good but feels as if it is an empty promise. Actually it is an important factor in repairing the healthcare system. I will explain in the next blog.

The solution to the healthcare system’s dysfunction must be a simple solution.

The Republican solutions are almost as complex as Obamacare. It does not decrease governmental bureaucracy nor does it avoid the potential for fraud and abuse.

The Republican solutions promote continued control over consumers and their freedoms.

The Republican solutions do not get to the main problem in the healthcare system.

The healthcare system must be set up so consumers are motivated to have incentive to be responsible for their own health and healthcare dollars.

The alternative to Obamacare should exclude the government from making consumers dependent on the government.

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

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