Good news everybody


Seems like the site is able to take large scale loads. The Monday after Thanksgiving is traditionally the highest volume day for Medicare Open Enrollment as mom and dad had a chance to talk to their kids over the break and have them fix the computer one last time before they make their decisions for the next year. There is a deadline in 3 weeks, so I am curious what the conversion percentage of visitors into buyers looks like yesterday and today. The numbers should start ramping up.

Also some more good news — the cost curve is bending for a variety of sustainable reasons (via Forbes, not a friend of PPACA so it is an admission against interest):

According to a New York Times report out Tuesday, the Congressional Budget Office has quietly removed hundreds of billions of dollars from the projected costs of Obamacare, primarily the result of an anticipated decrease in the federal government’s contribution to the Medicaid expansion program along with the projected cost of the subsidy payments to those buying private insurance policies on the healthcare exchanges…

Do we have Obamacare to thank for this highly successful “bending” of the cost curve?

Naturally, the answer depends upon who you ask as there simply is no definitive way of knowing—yet….

Among Obamacare inventions that do appear to be paying off in lower healthcare costs is the government’s refusal to pay hospitals more when patients are re-admitted within 30 days of their initial discharge. Additionally, new plan designs engineered to reward providers for quality of care rather than for quantity of care may well be paying off in terms of lowering the overall cost of care.

According to the Kaiser Family Foundation—widely regarded as an honest, non-partisan broker when it comes to healthcare issues and analysis—the declining increases in the cost of healthcare is 75 percent the result of economic factors and 25 percent a benefit of the cost cutting measures in the ACA that do, in fact, appear to be working. [my bold]


The COBRA Option

Commenter Satby has just been laid off and is looking forward to going on the Exchange for coverage that starts on January 1, 2014.

There is a way to game the system for effectively free coverage via COBRA if nothing goes wrong in December for Satby. The Department of Labor COBRA FAQ has some relevant details to about COBRA and how to create a COBRA option for free as a transitional bridge to Exchange policies going live on Jan. 1, 2014.

The initial premium payment must be made within 45 days after the date of the COBRA election by
the qualified beneficiary. Payment generally must cover the period of coverage from the date of COBRA election retroactive to the date of the loss of coverage due to the qualifying event.
Premiums for successive periods of coverage are due on the date stated in the plan with a minimum 30-day grace period for payments. Payment is considered to be made on the date it is sent to the plan. If premiums are not paid by the first day of the period of coverage, the plan has the option to cancel coverage until payment is received and then reinstate coverage retroactively to the beginning of the period of coverage.

Plan participants and beneficiaries generally must be sent an election notice not later than 14 days after the plan administrator receives notice that a qualifying event has occurred. The individual then has 60 days to decide whether to elect COBRA continuation coverage. The person has 45 days after electing coverage to pay the initial premium.

The clock starts no later than Dec. 15 for Satby to elect coverage under COBRA. However the election period runs to at least  Feb. 1st and no later than  Feb. 15. During that period, Satby can elect coverage effective Dec. 1 as long as the payments come in. If Satby elects COBRA, Satby is ineligible for the Exchanges until the 2014 open enrollment period. The reason to go this route would be to cover any extreme outlier situations such as Satby getting hit by a bus on Dec. 17th. It is a pure adverse selection risk play. If Satby makes it to Dec. 22nd without any major medical expenses in January, the smart play is to get subsidized Exchange insurance. It is a free option so it would be a smart one to take to get de facto coverage for the month of December for free.

The cost is a roughly one week at the end of December where Satby would have already selected Exchange Insurance.  If she had been hit by a reindeer on Christmas Eve, she would lock into COBRA for the year or at least be subsidy ineligible even after she signed up for Exchange insurance.

Exchanges over Thanksgiving dinner

I’m the family health insurance guy as I’ve worked in the industry long enough to ocassionally have a clue.  Thanksgiving is my peak family question time of the year as quite  a few group insurance plans are in their open enrollment slots right now, so Sister #1 wants to know if she do an HSA or a PPO and my brother in law wants to know why his insurance company won’t let him get his elbow fixed by the same guy who took care of his favorite team’s quarterback last off season.

This year, I figure my question load will be higher, so here are my talking points and some links:

  • Be aware that Cyber Monday will also apply to the Exchanges — be patient on Monday or let’s grab a beer and get you signed up tonight.
  • Payment needs to be received before the policy is valid
  • If you’re making less than 250% FPL and think you’ll have more than three sick PCP visits this year, go Silver with Cost Sharing instead of Bronze.  You’ll pay more after subsidy but could cut your out of pocket by 90%.
  • Medicaid is not shameful.  It is to help people who need some help right now.
  • No, this will not make America like Sweden.
  • Look at the networks, make sure either your doc is in the network or you are okay with getting a new doc.
  • Shop like you are buying porn
  • Income estimates are just that, estimates.  Good faith estimates are expected so if you’re low by a little bit, you will owe some money on the back-end on the 2015 tax filing season… If you are only a W-2 or regular check family (disability, pension, SSI, Social Security) take the gross amount and multiply it by the number of checks you get and then maybe add 2%.  For the damn freelancers, take your best guess.
  • I get a 85% subsidy via work, we just hide it better than the subsidy people get on the Exchanges.
  • This will work, you can get that mole checked out sometime this winter.

Bangor Daily News has a great column on health insurance: Health Unsurance

Health Sherpa for a good guesstimate on subsidies and policy options.

Kaiser Family Foundation calculator and consumer information….

Who files their taxes on February 7th?

I do my family’s federal taxes by Valentine’s Day as we have two kids in daycare, and the refund is a nice means of forced savings that pays for a couple of months of day care with psychologically bucketed “Extra” money. People who are anal retentive or OCD(ish) tend to file early as well as people who know they qualify for Earned Income Tax Credit and need the money immediately tend to file early. Individuals who know they have a complex tax situation may start the process early. But most people who know they have a relatively simple return and don’t need the money immediately don’t file their taxes in the first week of February. They instead wait until the Final 4 is over before filing.

This is important as Obamacare enrollment pace is picking up. The early anal retentives or known needers are filing for insurance but more and more people who are not chronically ill are beginning to get on board:

Covered California has some good data:

The rate of enrollment in Covered California health plans has also increased. As of Nov. 19, 79,891 Californians had selected a health plan. Compared with the first week of October, during which about 700 people a day selected a health plan, the enrollment rate nearly quadrupled by the second week of November, to about 2,700 plan selections per day.

It is looking like California is seeing a November activity rate that is at least three if not four times higher than October’s rates.

One big difference on the timing of filing for taxes and buying health insurance on line is that most people who file a tax refund expect either to break even or to get money back.  People looking to buy health insurance are expecting to spend some money.  Getting money for free is a motivator while spending money is a depressor of action.  Using this logic, we should expect to see more early Medicaid sign-ups as the cost to the individual is effectively nil while Exchange insurance costs money which will lead to delay and surge.

Not all dollars are equal

I saw this article in the Politico:

key player in the Obamacare website’s creation acknowledged Tuesday that up to 40 percent of IT systems supporting the exchange still need to be built.

“It’s not that it’s not working,” Chao told lawmakers at an Energy and Commerce Oversight and Investigations subcommittee hearing. “It’s still being developed and tested.”Financial management tools remain unfinished, he said, particularly the process that will deliver payments to insurers.

A Health and Human Services source said the health plans can receive the payments consumers make when they enroll. The system isn’t yet ready to deliver federal subsidies to insurers.


First, Politico undercuts its own lede.  The financial segment is not live in the production environment but it never was scheduled to be live until December.  The first subsidy was not scheduled to be sent to the insurance companies until late December if everything works correctly.  More importantly, this is not a system failure point as most insurers could get by for a while without Federal subsidy flows.

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