Come for the politics, stay for the snark.

Teach a man to fish, and he’ll sit in a boat all day drinking beer.

Every reporter and pundit should have to declare if they ever vacationed with a billionaire.

Republicans don’t want a speaker to lead them; they want a hostage.

This really is a full service blog.

An almost top 10,000 blog!

I really should read my own blog.

Following reporting rules is only for the little people, apparently.

Compromise? There is no middle ground between a firefighter and an arsonist.

If you’re pissed about Biden’s speech, he was talking about you.

How can republicans represent us when they don’t trust women?

Even though I know this is a bad idea, I’m off to do it anyway!

Narcissists are always shocked to discover other people have agency.

The current Supreme Court is a rogue court. Very dangerous.

Shallow, uninformed, and lacking identity

Hi god, it’s us. Thanks a heap, you’re having a great week and it’s only Thursday!

Thanks to your bullshit, we are now under siege.

In after Baud. Damn.

Nothing says ‘pro-life’ like letting children go hungry.

Red lights blinking on democracy’s dashboard

Balloon Juice has never been a refuge for the linguistically delicate.

Another missed opportunity for Jamie Dimon to just shut the fuck up.

This blog will pay for itself.

It’s pointless to bring up problems that can only be solved with a time machine.

Nikki Haley, who can’t acknowledge ‘slavery’, is a pathetic shill.

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Meet the Brady Family

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I’ve been in correspondance with a commenter for the past few weeks about a situation where someone under Obamacare may be made worse off or at least no better off and I want to highlight the story as it is intriguing, real and verifiable facts.  I’m changing some names and fudging some details to protect her family’s identity but I have high confidence in the validity of the situation.

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The Brady family has a working mother in who if Sen. Lieberman did not engage in needless hippy punching would be eligible for expanded Medicare buy-in, Carol, and four lovely girls including the commenter in question.  The commenter is out of the house and on her own and has been for a while.  In 2013, Carol has been providing health insurance coverage to the three youngest who range in age from 20 to 25.  Carol’s method is a bit unusual.  It has worked well enough for her.
 
Carol works at a barbecue restaurant chain for roughly twenty five hours per week.  At this chain, she is offered and has been using a “mini-med” plan which has cost her $50 per week ($2,600 per year) and has an annual family limit of $3,000 in benefits.  This type of plan is being phased out as the coverage does not come within 500 miles of meeting minimal acceptable coverage requirements.  Carol also works at the local school district for rougly twenty five hours a week.  The school district has been offering a family plan with no premiums but a $3,000 deductible and some co-pays and but no co-insurance.  Carol has also been using this plan.
 
In 2013 and in previous years, Carol has patched together rather comprehensive health coverage that functionally looks like a Medicare plus Medicare supplemental package where her base insurance is the school district major medical policy but the BBQ chain mini-med fills in the deductible so she effectively had a no-deductible and minimal co-pay plan for roughly $2,600 a year.  Carol is a smart and thrifty woman.
 
This system will not work in 2014.  As I mentioned before the mini-med plan offered by the restaurant is being phased out for 12/31/13.  The BBQ restaurant is offering a Bronze compliant plan that will cover a family but cost roughly $500 a month ($6,000 per year) (verified by looking at comparable Bronze plans on the relevant Exchange) and have very significant deductibles.  The school district is offering a family Silver analogue with a $3,000 deductible and 20% co-insurance with an out of pocket max of $5,000 for $40 per month ($480/year).  Given past medical history, Carol is lookling at spending $4,000 between premiums, deductibles and co-insurance if 2014 is exactly like 2013.
 
Going forward to 2014, Daughters # 2 and 3 (Marcia and Jan) are moving out of the house and off Carol’s insurance.  Marcia will be covered under an employer policy and Jan has already signed up for expanded Medicaid.  Cindy is still at the house as a 21 year old non-student. Obamacare under first blush will cost Carol an extra thousand dollars or more to cover her and Cindy for equivelent services due to the deductible.
 
Carol can not collect subsidies on the Exchange as she is already being offered an affordable coverage option that meets PPACA requirements through her employer (the school district.)  The BBQ restaurant is offering compliant coverage but it is not deemed affordable.  If the school district was not offering affordable coverage, Carol’s income would qualify her for a very substantial subsidy plus significant cost-sharing assistance.  She would have been breaking even or significantly better off.
 
I went back and forth with the commenter several times on alternatives. The first option is to speak with a navigator or an insurance broker.   A promising alternative is to move Cindy to Medicaid if she is eligible (minimal income but lives at home, so she may count as a dependent but she does not have any disability besides a proclivity to use irony as the default conversational setting).  This move would reduce Carol’s premiums to zero as the school district still offers individual coverage without premium and it would reduce her deductible slightly.  Even in this case, assuming all of the moving parts works, Carol would most likely be breaking even on just covering herself compared to covering 4 people in 2013 for the same budget.
 

This is an unusual situation but it is not a scenario where people who need help getting affordable health insurance will be getting significant help.  This is a very low probability case but it is a legitimate problem.  And as far as policy fixes, allowing Carol to go to collect subsidies on Exchanges would be facially attractive, but systemically, this is a massive swipe at the employer sponsored health care model instead of the mild tilt against employer sponsored healthcare model that the rest of PPACA so it would not fit with the the other PPACA moving parts and general operating assumptions.

Finally, the commenter made a very good point about information and choice overload for people operating from a standpoint of scarcity:

One thing this doesn’t convey is the stress this is having on the
working poor. Not every one has a kid like me who will pester someone they met on the internet until they get an answer…

It’s equally important to understand the disruption this is going to
have on the working poor. These are people who have constructed a patchwork of coverage that, while considered shitty by some, actually provides them with healthcare. Further add that these people don’t tend to have a lot of time to sort things out, may have to make elections by the end of November  — imagine having to make a decision to go with your new employer policy or something from an exchange if you lived one of the states that have essentially no access to healthcare.gov. Even with access these changes are still very confusing for people. For the working poor, this can become very stressful.

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Massachusetts Pace vs US Enrollment pace

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Just a quick note concerning Obamacare enrollment.  Compared to the comparable time point of the 2006 Massachusetts experience, Obamacare Exchange enrollment pace is matching Massachusetts’ enrollment pace  for private insurance during the Bay State’s 2006 open enrollment period.

At 16% into the open enrollment period, 2,089 Massachusetts citizens had signed up.  As a straight population adjustment (sum *48.75), that would translate into the national experience of roughly 102,000 people signing up.  106,000 people signed up via either the federal exchange or through state exchanges covering all but three Exchange jurisdictions according to the Washington Post.    Three state run Exchanges have not reported their numbers so we can assume a slightly higher number.

Being slightly less charitable if we apply an adjustment to the raw population total to account for the fact that Massachusetts had a much smaller uninsured pool, (8.4% in 2006 vs. 15.4% US nationally in 2013), expectations would have seen 186,000 Obamacare enrollments.

However there is another adjustment that would reduce 186,000 expected pace downwards.  The Massachusetts Medicaid expansion was only applicable to people up to 100% Federal Poverty Line.  For the states that are taking Medicaid enrollment, people who make between 133% and 138% are eligible, so the total US national pool eligible for the Exchanges is smaller than the 1.83 factor adjustment implies.

Even with a crappy three weeks of website work, and pointed political opposition, the pace is either concurrent with the nearest relevant example, or slightly behind depending on how you want to model expected pace.  That ain’t bad. (As a side note, I am curious as to why HHS was so optimistic about first month enrollment)

Additionally, Obamacare, even with the Supreme Court and the reactionary assholes neutering Medicaid expansion in half the country is signing people up for Medicaid expansion at a rate that surpasses Massachusetts’ experience in 2006.

 Update 1: via a commenter in the Pittsburgh region, I was directed to this story concerning Pennsylvania enrollment.

Despite the glitches, Highmark’s health plans appeared to be an early favorite among people who were able to complete the shopping process. The company picked up 827 individuals through Nov. 2, or 37 percent of enrollees in the state.

That number doubled to 1,665 by Nov. 12, a trend Ash called “encouraging.”

Pennsylvania is a Federal Exchange state.  Assuming Highmark is representative, the key is the November pace is at least 3x faster than the October pace, and that is without any time pressure to enroll yet for January 1st coverage. 

 

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Looking at Landrieu’s plan

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As a political matter, I understand the desire for Democrats to get out of the way of pissed off middle class people who actually have to pay a little more to get good health insurance that actually pays out.  As a policy matter, I really don’t care that there are some losers in a political process.  However politics creates the contours of policy and 50 Senate Democrats on Jan. 5, 2015 creates much better policy outcomes than 47 Senate Democrats.

Sen. Landrieu has an elegant work-around to the matter that individual insurance policies are getting cancelled.  Here are the major points:

  1. Date change of grandfather status from day of PPACA being signed into law to 12/31/13 for individual only plans.
  2. No new enrollment allowed into individual plans
  3. Insurance companies must continue to offer grandfathered plans until no subscribes elect to renew
  4. Currently covered individuals on newly grandfathered plans are Exchange and subsidy eligible.
  5. Annual renewal notice stating that the insurance being bought is crap insurance.
  6. Cancellation notices that require actual reasons with relevant citations for cancellation — ie not “Obamacare made us do it”

This is an elegant kludge that nicely gets around the political problem without causing long term damage to Obamacare’s risk pools.

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Whats in a number Part 2

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What’s in the enrollment numbers that are starting to circulate:

Politico has good news and bad news:

Bad news:

40,000 to 50,000 people have enrolled in private health care plans using HealthCare.gov — a range far short of White House hopes, according to new numbers reported by the Wall Street Journal Monday.

That figure does not include people who signed up using state exchanges. Avalere Healthcare, a consulting firm, estimated Monday that about 49,000 people had successful enrolled in insurance in 12 of the 15 states running their own insurance exchange. The largest state exchange, California, has not released numbers.

This is bad news.  The exchanges were projected to sign up and collect either checks or credit card information from half a million covered lives in this time span.  The reporting is a bit unclear if there are roughly 90,000 to  100,000 covered lives or 100,000 contracts between the state and federal marketplaces.  If it is 100,000 contracts that would be 200,000 or so covered lives as a rough guesstimate.  The exchanges are behind pace.  However, when compared to Massachusetts at a comparable period and then adjusting for the compressed time frame, the Exchanges are ahead of Massachusetts’s pace even with the techical problems.  The question is will the fixes that have been going into play be good enough to deal with the highly probable surge of people who are looking for January 1st coverage right and want to buy right after Thanksgiving.

Good news:

Those figures don’t include enrollments in Medicaid, which have vastly outpaced the number of sign-ups in the marketplace in states like Kentucky and Washington, which have released early figures. A separate Avalere report on 10 of the states expanding Medicaid found that 444,000 have signed up for Medicaid.

 This means people who need healthcare are getting it in some states in some situations.  Ideally it would be an all-state statement, but fuck you Chief Justice Roberts et al.

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Cost sharing subsidies and the near poor

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By now, I think most people know that the sticker price on Exchange insurance policies is not the price most people will pay for their policy.  Most people know that subsidies are available to lower the out of pocket monthly premium price for the working middle class.  However, there is another class of subsidies that I don’t think a lot of people know about.  These subsidies apply to out of pocket expenses for Exchange Silver plans that transform the Exchange Silver into better plans.

The Center for Budget and Policy Priorities  has a good one paragraph summary of these out of pocket/cost sharing subsidies:

The premium credits allow people to buy a silver plan, which has a 70 percent actuarial value.  That means that the plan will cover 70 percent of the costs for covered medical services of a typical beneficiary population, with beneficiaries, on average, paying the other 30 percent.[3]   However, people who receive cost-sharing assistance — those with incomes below 250 percent of the poverty line — will not have to pay the full remaining 30 percent of the cost of covered services.  As a result, people with incomes below 250 percent of poverty will effectively be enrolled in a plan that has a higher actuarial value than 70 percent.  For example, people with incomes below 150 percent of the poverty line will have plans that have an actuarial value of 94 percent, while plans for people with incomes between 150 percent and 200 percent of the poverty line will have an actuarial value of 87 percent.  These higher actuarial values mean that as a result of cost-sharing assistance, low-income individuals and families will be able to enroll in health plans with lower deductibles, co-payments, and/or total out-of-pocket costs.

It is a sliding scale.  People who barely breaking even get 80% off their out of pocket responsibilities.  For instance, a family on a Silver Plan with a $3000 listed deductible would only be responsible for $600 of the deductible.  I think the family is still on the hook for the $600 instead of transforming the deductible into a sliding scale co-insurance.  A family making just under 250% of federal poverty line would get a 10% discount on their out of pocket expenses.  These subsidies transform a Silver plan for a family making under 150% of FPL into a Platinum plus plan, and for families making between 150% to 200% FPL, their Silver plans get transformed into very good Gold plans to weak Platinums. 

Oh yeah, as a FYI to the Medicare for All folks, Medicare currently has an actuarially value of 82% to 83%.  That number increases with low income subsidies on Medicare Part D but the combination of premium subsidies and out of pocket subsidies gets quite a few people who making less than 250% of FPL coverage that is far better than  Medicare Part A and B combined.

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Non cost-shared services and cost shared services

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Jay Ackroyd at Eschaton is looking at an insurance grid and is trying to analyze costs for people buying a Bronze plan in New York State.  He is making a serious error in what he is analyzing.  Benefit grids are not legally binding documents; they are short hand to describe the rough characteristics of a plan.  If one wants to be able to analyze possible cost-sharing responsibilities, you have to use the schedule of benefits for a particular plan.  Cost sharing is an insurance industry term for payments of deductibles, co-pays and co-insurance by the individual member. 

This is always important, but it is more important in a PPACA world because numerous common services are considered “non-cost share” services.  This means the insurance company pays 100% of the service’s contract price if the service is performed in-network.  Secondary items that result from a non-cost shared service such as lab work from the annual PCP visit may be cost-shared which means the doctor’s visit is free but the blood work is something that you have to spend deductible dollars on is common.  If the blood work comes back with a problem that needs to be treated, the follow-up treatment is cost shared. 

PPACA mandates non-cost shared services for annual PCP and OBGYN appointments, well-child visits, preventative vaccinations, birth control and a few other things.  Additionally three sick primary care provider visits are limited cost-sharing services in that a co-pay can be charged but deductible does not have to be met.  So the first three sick PCP visits may have a $40 co-pay per visti but no additional cost while the 4th sick PCP visit may cost $107 that is applied to the deductible. 

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Network manipulations

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Networks are a key feature of all insurance plans as every provider has a network. A network is a group of providers who have contracted with an insurer to get paid a certain set of rates for a certain set of services performed on the people who are insured by the company. Networks can be manipulated for positive public gains and for evil.

Networks are regulated at the state level for most insurance products and have some federal guidance for Medicare, Medicaid and Exchange products. The regulations are rather loose. In PPPACA, the networks for the Exchange must have significant concentration of providers in a wide variety of specialties so that residents of a county where a network is sold has “reasonable” access. This is a very soft definition because assembling a rule that makes sense for Loving County, Texas and Cook County in Illinois is extremely difficult. States will define network adequacy differently. Most states will have multiple standards depending on population density as urban areas will require more providers that are closer to the average resident while rural areas will allow long drives.

When networks are working for the public good, they provide a means of cost control as an insurance company will include in a network a provider who will take 120% of Medicare while it may exclude a provider who wants 220% of Medicare.  This works because an insurance company can guarantee volume of patients at the lower rate.  Networks are also a quality control metric.  For instance, insurance companies may refuse to contract with providers who are not board certified or who have multiple large malpractice settlements against them in the past ten years.  Contracts can be terminated for the loss of licensure or large malpractice settlements as well.

However, networks can be used against the public interest as well.

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