The individual market under AHCA V2

This is going to be a wonky, speculative post as to what the individual insurance market could look like under the AHCA as rumored to be as of 0030, March 23, 2017. I want to speculate about how insurers would do their plan designs.

The major policy planks that would influence plan design are the following:

  • Guarantee issue at a universal price (community rating)
  • No Essential Health Benefits
  • No actuarial value requirements
  • 5:1 premium rating
  • Risk adjustment is either ineffective/easy to game or gone
  • Fixed, age based subsidies
  • No ability to transfer surplus subsidies to HSA

Smart insurers will bifurcate their product design.  They can’t underwrite their way to a healthy risk pool so they will use benefit design to segment it instead.

The first stream of product design will be aimed to cover very little.  The primary objective of these plans are to be priced at the subsidy point.  They will be very narrow networks with no major academic medical centers involved; their benefits will be designed to drive away sick people with chronic conditions.  For instance, asthma inhalers or insulin or Epi-Pens might not be covered.  Hep-C drugs would not be covered.  Maternity care would not be covered except after a $15,000 stand-alone deductible. They will use donut benefit designed principles where the first couple of PCP visits are no cost sharing but everything else comes with $300 co-pays and $20,000 deductibles.  Utilization is designed to be very low and the population that will choose these policies will have to be very healthy.

The selling point for this plan is that it is free out of pocket after the subsidy AND it is sufficient to not incur the continuous coverage 30% premium penalty.

For the 50% of the population that drives 3% of the spend, this will be sufficient for most people as long as they don’t get hit by a bus nor come down with cancer during the policy year.

The other path of coverage is a full service insurance for the sick.  It is a privatized and non-inclusive high cost risk pool.  It will offer a network with top tier hospitals, it will cover chemotherapy.  It will cover the cost of chronic disease management.  It will look a lot like the insurance people get from their jobs.  It will be massively out of reach for most people with chronic conditions as the subsidies will be grossly inadequate and the cost of care for some conditions are more than half the median income of an American family.  But “access” to a good policy will be there.

There are a lot of moving parts so this is purely speculation but if I was working for an insurer, that is the strategic choice that is clear given the rules of the AHCA.

Jimmy Breslin: RIP, Happy Warrior

Jimmy Breslin was one of my NYC role models, when I was growing up. (The others that I remember were Bella Abzug and Shirley Chisholm.) The man was a storyteller, and a fighter. He knew that every businessman and most politicians were pathological liars (at least to themselves). He knew that even the worst tragedies were threaded with a vein of humor, and that even the funniest story had an undertone of tragedy. Most of all, he never truckled.

Kevin Cullen, in the Boston Globe, remembers “the greatest newspaper columnist ever”:

Seven years ago, they had a big thing for Breslin at NYU in Greenwich Village. It was a cross between an Irish wake and “This Is Your Life” and we were all shocked that Breslin would actually venture out at night and go downtown and listen to people tell him how wonderful he is.

But Ronnie got him to go and he sat in a big puffy easy chair on a stage at NYU and rolled his eyes as everybody got up and told stories and suggested he was a nice person.

Gail Collins, the New York Times columnist, recalled the day that Breslin and his Daily News editor Sharon Rosenhause were screaming at each other in the newsroom. When Breslin won the Pulitzer Prize in 1986, he stood up in the newsroom and announced, “This award actually belongs to Sharon Rosenhause, but I’m not speaking to her.”

Michael Daly, a columnist at the Daily News, remembered how Breslin took a taxi to cover the riots in the Crown Heights section of Brooklyn in 1991. Breslin never learned to drive. “Why would I?” he used to say. “I can get a taxi anywhere.” The taxi got torched, Breslin got beat up, and he wrote columns sympathetic to the people of Crown Heights, because he knew what it was like to be poor and ignored.

Dan Barry, a columnist at The Times who grew up reading and admiring Breslin, told of how when he was diagnosed with cancer, Breslin, who barely knew him, showed up at his side and walked with him across Manhattan and into Sloan-Kettering.

“He gave me the gift of distraction,” Dan Barry said.

And that was Breslin, to his core. He distracted us, from apathy. He made us care…

From the Washington Post:

Jimmy Breslin, long the gruff and rumpled king of streetwise New York newspaper columnists, a Pulitzer Prize winner whose muscular, unadorned prose pummeled the venal, deflated the pompous and gave voice to ordinary city-dwellers for decades, died March 19 at his home in Manhattan. He was 88…

For an “unlettered bum,” as Mr. Breslin called himself, he left an estimable legacy of published work, including 16 books, seven of them novels, plus two anthologies of his columns. What set him apart as a writer was the inimitable style of his journalism across the last great decades of ink-on-paper news, in the 1960s for the old New York Herald Tribune and later for the Daily News and the city pages of Long Island-based Newsday, where his final regular column appeared in 2004…
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R.I.P.: Go Gently, At Last, John Hurt

John Hurt was an actor of such versatility — not to mention his indefatigable work ethic — that most of us must have a favorite Hurt cameo (even if it’s not among his ‘best’ performances).

A lovely memoir from Buzzfeed‘s Patrick Strudwick, “John Hurt Saved My Life”:

Dusk, in a sparse restaurant in Haraar, eastern Ethiopia. John Hurt is sitting across the table performing lines to me from The Naked Civil Servant.

His voice – that brandy and gravel baritone, the same one that in 1987 boomed out on AIDS public information adverts on TV warning people not to die from ignorance – reverberates around the restaurant…

… As the words slip from his mouth, now cradled by wrinkles, he conjures the defiance and vulnerability of Crisp so beautifully that my eyes fill. Hurt keeps going. He can see what this means to me. He has seen it a thousand times. Gay men would often approach him in the street to tell him how transformative it was for them to watch Crisp alive in Technicolor, in full, brazen mauve, sashaying down the street, all scarves and rouge, waving at sailors and giving bigots the middle finger.

The fact that most gay men are not fabulously camp was not the point. Hurt brought to life a template for defiance that saved people, including me…

To convey both the courage and vulnerabilities of outcasts takes an extraordinary person. During the week I spent with Hurt in Ethiopia I saw the extraordinary in him all day, every day. We were there because he was patron of a charity called Project Haraar, which sends doctors and surgeons to Ethiopia to perform surgery on children with severe facial disfigurements.

The head of the charity, who never forgot Hurt in The Elephant Man, approached him to become a patron, not thinking for a moment he would accept. Hurt agreed immediately.

I was sent by a newspaper to shadow Hurt and report on what we saw at the charity’s hospital in Addis Ababa, as well as at the convalescence clinic in the nearby countryside… What neither of us were expecting was what the true horror would be. Hurt, his beloved wife Anwen, and I were taken round the hospital to meet the children. Some had holes in their cheeks, destroyed by a flesh-eating infection called noma, through which they had to push their food in order to eat. Some were simply tiny, growth stunted by malnutrition not because they did not have access to food but because their disfigurements were so extreme that they physically could not eat properly. The smell from facial infections, in some of the cubicles, was almost overwhelming.

But it wasn’t any of this that hit John, Anwen, and me like a boxer’s punch. Watching Hurt meet those children, and how he interacted with them, revealed precisely what it was that knocked him back: their loneliness.

To see Hurt reach out and clasp their hands, to see their faces react with caution, bafflement, and then deep relief – the medicine of human touch – was to know that he was a great actor because his empathy ran so deep.

He did not talk much. In the entire week he did not show any signs of ego, narcissism, or histrionics – precisely what one might expect of a movie star – because he was too busy connecting with others. He watched those children with kindness. He sat and played with them. He laughed with them.
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Two great philosophers for the next four years

Okay, now it’s real so let us rely on two great philospophers for the next four years:

And it looks like America agrees with Ron Burgundy

CBS News:

It has been 10 weeks since Donald Trump was elected president, and more Americans disapprove (48 percent) than approve (37 percent) of the way he has handled his presidential transition. They are split on his cabinet picks. Views divide heavily along party lines.

Just days before his inauguration, Donald Trump’s favorable rating (32 percent) is the lowest of any president-elect in CBS News polling going back to Ronald Reagan in 1981, when CBS News began taking this measure.

Well we’ll have to survive being “governed” by the Brietbart comment section so we can either laugh or cry while we bang our heads into our desks today.

The CSR sword of Damocles

I need to start morning drinking after the following exchange this morning.

It started with Politico reviewing what some carriers are thinking about doing if the Cost Sharing Reduction subsidies are pulled if the Trump Administration drops an appeal a loss to the Court of Appeals.

That lawsuit challenged the Obama administration’s authority to fund those subsidies, and prevailed in a federal district court ruling last spring. The Obama administration appealed that decision. But if the Trump White House doesn’t continue that appeal, and Congress fails to appropriate funding, the subsidies would end.

Insurers would likely bolt from the health law’s markets if that happens because they’d still be on the hook for providing reduced costs to their customers, but with no guarantee they’d ever be reimbursed by the federal government, say experts….

Ken Janda, CEO of Community Health Choice, a Houston-based nonprofit health plan with nearly 150,000 customers, said the insurer would shift customers into less robust coverage that wouldn’t trigger the subsidies if the funding disappears. But that would mean that Obamacare customers with incomes below 150 percent of the federal poverty level — or less than $18,000 for an individual — would go from paying nothing to see a doctor or get a prescription, to having a $1,500 deductible before most of their insurance kicks in

How I read this (along with a few other tweeps) is that CHC would try to move people who had Silver 94 or Silver 87  with CSR to Gold plans after they pull their Silver plans from the market.  CMS in their 2017 QHP contracts allowed carriers to pull products from the market if the CSR subsidies disappear and it looks like that would be the plan of CHC to pull their Silvers.  My immediate thought on this is that this would be a massive adverse selection problem.  People on CSR with 94% Silver or 87% Silver make under 200% FPL.  They are getting subsidized as they are buying Silver.  If they are switched to Gold or Platinum their monthly post-subsidy premiums will dramatically increase and quite a few healthy people will drop coverage as it is no longer functionally affordable.  The only people who would stick would be the very sick and very expensive.

Wait, it gets’ worse:

Carriers have to offer Silver plans to participate on Exchange. If they yank all of their Silvers, they have to yank everything on Exchange.

And carriers will flee if CSR disappears as they will not eat a 30% revenue loss for a high cost population in a market that they don’t know if it will be around long enough to actually make money on.


Late Night Open Thread: “If You Can’t Get Rid of the Family Skeletons, Make Them Dance”

#ConfessMyUnpopularOpinions: I loathed Singin’ in the Rain so intensely it put me off movie musicals for life, so I never paid much attention to Debbie Reynolds. But after watching Carrie Fisher’s Wishful Drinking (highly recommended! — with due trigger warnings), I suspect her mother, if she had to die at all, would’ve loved the theatricality of dropping in her tracks while planning her daughter’s funeral.


While many paid tribute to Carrie Fisher’s legacy on Tuesday by sharing their favorite scenes from Star Wars or When Harry Met Sally, some fans chose to remember the actress for her work destigmatizing mental illness… Soon the hashtag #InHonorOfCarrie had over 180,000 unique visitors on Twitter with many revealing their mental-health issues…

Julie DiCaro, a Chicago journalist who also tweeted on Tuesday, told the Times that Fisher made it easier to not feel so alone in her illness: “It’s comforting that Carrie, or Princess Leia — who’s cooler than Princess Leia? — was comfortable speaking publicly about her struggles. It made me feel comfortable.” Which seems like the message Fisher would have wanted, especially as she chose to present only her true self, war wounds and all, in her later years.

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As Veterans Day Comes to an End

As Veterans Day comes to an end, here is the Old Guard with a 21 Gun Salute and Taps.

Updated at 12:25 AM EST

Per Omnes in comments the Dropkick Murphy’s The Green Fields of France:

And to Terry (my ASO) and Gregg and Mike and Nichole and Paula – rest well.