Tuesday, August 22, 2017

Misbehavin' Agents and Enrollers

Sigh:

"Agents may have enrolled some consumers in health coverage through HealthCare.gov for 2016 or 2017 without the consumers' permission"

That, according to the folks at CMS.

Now, how exactly does this happen? I mean, eventually someone has to pay a premium, no?

Well, no, not precisely:

"Income information on the [victims'] applications was misstated in ways that maximized premium tax credit subsidy amounts and eliminated any need for monthly out-of-pocket premium payments."

So Uncle Sugar was just sending checks to Anthem, or Kaiser, or whomever. And they only found out, apparently, when folks started getting notices from CMS and the IRS about coverage info.

So, no harm, no foul, you say?

Au contraire:

For one thing, that's our money going to the insurers. And for another:

"[C]onsumers who reported being affected by the enrollments did not have to pay any premiums out of pocket while the coverage was in effect, [but] they may now face tax bills and tax filing problems because of the unauthorized enrollments."

So here's a question: agents are licensed by the states, but this would seem to be a Federal issue (US tax dollars). So how will the offending agents perps be held to account?

Or even will they?

Be interesting to know, no?

[Hat Tip: Co-blogger Bob V]

Monday, August 21, 2017

Speaking of Pro's

A month or so ago, we noted that "it would suck to be in Nevada;" this in light of the fact that there will be so few insurance options available there this coming plan year. Well, our friend Rich W alerts us to this (heart-)breaking story. Turns out, one demographic is particularly hard-hit:

"Nevada sex workers fear loss of Obamacare ... Her six-figure earnings mean she cannot get government insurance for the poor. Her status as an independent contractor means she does not get insurance from an employer. Her profession is another complication."

This is the sad story of Alice Little, who makes too much to qualify for a subsidy, is self-employed so no group plan or employer contribution. Oh yeah: she's a card carrying member of the world's oldest profession.

The good news is that she's founded a support group called Hookers for Healthcare. Seems like they have another natural constituency to tap, as well.

Which brings us to our old friend Herr Gruber, who got caught with his hands in the till:

"Vermont’s Attorney General has settled the state’s claims of fraud against Jonathan Gruber"

Poor Jon is out as a "taxpayer-funded economic consultant for the state’s health care system;" he's also out any balance due him by The Green Mountain state.

One's actually more sympathetic to the gals up top.

Come fly with me, ObamaCare style

Some time ago (3 or so years, to be exact). FoIB Todd made this video, comparing aviation with the still nascent ObamaCare. It's eerily prescient, and absolutely spot on:

Friday, August 18, 2017

About that Obamacare Poster Child


After two years of the media and government gushing over their success, Obamacare darling Molina is having a rough 2017. How rough? Well...

  • In February Molina announced losses from the 4th quarter of 2016 to be $110 million. They also report a profit of $52 million. This is a huge fall from their 2015 record profits of $143 million coupled with 2014 profits of $62 million.
  • On May 2nd they fired CEO J. Mario Molina and CFO John Molina. The move came as a surprise and the board claimed it was due to poor financial performance.
  • The following day they announced 1st quarter 2017 earnings that actually beat Wall Street expectations. Coupling this with the ouster of Brothers Molina and speculation began of a possible sale of the company.
  • On May 4th Mario Molina went on record suggesting that the board ousted him due to his political views. Mario Molina has been a vocal critic of President Trump and a significant supporter of the Democratic party contributing well over $70,000 to various campaigns and PAC's in 2016 alone. Shoot, he gave the Hillary Victory Fund $33,400! Talk about lighting money on fire. But, I digress.
  • On May 15th the board voted to retain Brothers Molina on their board of directors. This is an interesting twist based on their abrupt departure.
  • The latest, on August 2nd, Molina announces a 2nd quarter of 2017 loss of $230 million. They also announced that they will be leaving individual markets in two states - Wisconsin and Utah. Piling on, they stated that 2018 rates will increase on average of 30% (I'm assuimg CSR's will be funded).
The question is, why is this 180 degree turn happening?

Back in 2013 Molina insured nearly 2 million Medicaid patients in 9 states. Managing Medicaid was their core business but they saw a need within the individual market. The need was to serve the low income population that Molina felt big insurers weren't interested in. They went on a hiring frenzy to help with their enrollment efforts as they entered the new individual Obamacare market. Molina's individual market offerings included very narrow networks, limited geographic availability, low premiums, and razor thin profit margins.

Membership has grown in all of their business. Medicaid, their core business, jumped approximately 1.7 million new members from 2014 to the end of 2016. Almost half (673,000) came from Medicaid Expansion. For their new endeavor into the individual insurance market, at the end of 2014 they had 15,000 individual customers. By the end of 2015 that number had exploded to 205,000 then catapulting to 526,000 at the end of 2016.

Profitability for Molina in the early Obamacare years is likely attributed to Medicaid growth with their individual Marketplace participation being limited. This is where the tide has changed. Over the last two years Molina's growth in Medicaid has slowed while growth in their individual market has risen exponentially. This is the inverse of what is happening to overall markets. Medicaid has continued to accelerate and the individual market has flatlined.

With competition exiting the markets due to losses and uncertainty, this leaves Molina to take on the risk. It's well known that the higher risk population gravitated towards health plans that had broader networks. Molina thrived because of their limited networks where by not having major high cost specialty facilities in their network led to a healthier risk pool.

Molina's "competitive" advantage was tied to avoiding high dollar risks (adverse selection) and that advantage is now gone.




From the P&C Files: I have issues

As regular readers know, I tend to be a purist when it comes to insurance. So I've railed on medical necessity as regards health insurance; the whole point is risk management.

And specifically the concept of Frequency vs Severity.

For example, it's unlikely that any one person will contract cancer (frequency), but those who do face some pretty steep bills (severity).

Or, closer to home, what are the odds that a 9 month old puppy will need expensive (and multiple) knee surgery? Again, not often, but a true pain-in-the-checkbook.

One more thing: insurance is (or ought to be) more about covering the unexpected, which is why your auto policy doesn't pay for oil changes or new wiper blades.

On the other hand, birth control convenience items are generally bought fairly often, but at a very nominal cost, so: frequency, but not severity, so not really appropriate to insure.

But insurance has a cousin: warranties. Typically, one purchases these to cover things like dishwashers and refrigerators and the like. But again, these aren't insurance (notice they never use the words "risk" or "premium"). Nothing wrong with that, and I'm not aware of any company offering these plans that claim to be.

Wish I could say the same for the insurance industry.

Our longtime guru of all things P&C, Bill M, asked me the other day if I'd heard about the newest trend in his side of the biz: equipment breakdown and service line coverage.

The equipment breakdown rider "covers the perils of mechanical, electrical and pressure systems breakdown," such as A/C units, TV's, even kitchen appliances. And service line coverage is for coverage "provides protection against a leak, break, tear, rupture, collapse or arcing of a covered service line," such as water and sewer lines, even from ordinary wear and tear.

How in the wide world of sports are any of these insurable risks? Well, obviously, now they all are, which offends my sensibility as an insurance purist.

But now I want to add both of those to my own policy.

Go figure.

Interested for yourself? As always, ask your agent (or seek out a local, independent one).

Thursday, August 17, 2017

Health Wonk Review is up

Peggy Salvatore hosts the jam-packed Lulls of Summer edition. From the philosophical to the urgent, you'll be glad you stopped by.

Batting Averages, The Weather, Businesses & Obamacare Co-ops

In baseball being successful 3 out of 10 times at the plate will likely get you into the Hall of Fame.

A meteorologist forecast projecting out 10 days is right about 40% of the time

The Farmers Almanac claims a success rate of 80%.

Start up businesses - according to the SBA - make it beyond the first year 50% of the time

According to a Harvard study, new businesses using venture capital succeed 25% of the time.

So what about those non-profit, government funded, competition enhancing, Obamacare Co-ops? You know, the newly formed "insurance companies" that would create more competition and force the big bad insurance industry to play fair and quit price gouging with high premiums to pay fat cat CEO's and shareholders fists full of money.

Well, they are batting a whopping .174 - below the Mendoza Line. Of the 23 co-ops that actually got off the ground (there were 24 but we won't count the Vermont debacle) as of 2018 only 4 will remain. One of them, Montana, took measures last year to halt enrollment amid concerns they wouldn't be able to meet their financial obligations.

What's worse than the 17% success rate? That would be the "venture capital" we (taxpayers) gave Co-ops for start up funds. Of the $2.4 billion low/no interest loans given, the four remaining Co-ops received $402 million - a loss of close to $2 billion.

Yet government wonders why we don't trust them to be good stewards of our hard earned money.

Wednesday, August 16, 2017

Mid-Week Linkpourri

From FoIB Holly R we learn about a "start-up called Aledade [that] has figured out a way of reducing healthcare costs while improving care." Founded by the "national coordinator for health information technology at the [HHS] in the Obama administration," the firm is focused on reducing the cost of healthcare (and, hopefully, health insurance).

Promising.

A pair of items courtesy of FoIB Rich W. First up, individual plan enrollment continues to crater:



Next, Rich wonders who remembers Obama's promise that the ACA would entail no tax increases. Turns out, get this, that was a lie. He provides a link to "newly imposed Obamacare tax per person by state."

Ouch!

Tuesday, August 15, 2017

Death be not proud (But....)

I'm beginning to sense a theme from the medical front these days. If it's not ObamaCare's death toll, it's a culture that seems not just "okay" with assisted suicide but apparently insists on it.

Wow, Henry, that's quite a claim there, care to back it up?

Sure. (Literally) Ripped from the headlines:

"California Hospital Sued for Refusing to Assist Suicide"

The patient eventually died of cancer, and now her children are suing the medical facility which treated her because it "conceal[ed] its oncologists’ decision not to provide life-ending drugs to patients who ask for them."

Oy.

I'm assuming they also deny diet pills to anorexics who request them, as well.

Meantime, FoIB Holly R alerts us that the Much Vaunted National Health System© apparently has no such problem reducing its patient load:

"One-Third Of Life Support Patients Die Under British Health Care System."

#Winning!

Turns out that "free" health "care" is absolutely worth every penny, er, farthing. So, if you're on a vent or other life support system provided by the MVNHS©, best make sure your affairs are all in order.

The sooner the better, natch.

But wait, there's more good news (well, for certain values of "good"):

"CBS Reports Iceland Has 'Virtually Eliminated' Down Syndrome with Abortion"

Well first, as Patricia Heaton points out, killing unborn Downs babies isn't eliminating "Downs," it's eliminating babies:




Notice that the trend, here and abroad, is to ration care by rationing life.

Pretty rational, I guess.

Scary, too, no?

[Hat Tip for CA hospital story: The Political Hat]

Monday, August 14, 2017

Better than a crystal ball

From 5 years ago, predicting the impact of ObamaCare. Eerily prescient:



[Hat Tip: Co-blogger Bob V]