Anderson On Health Insurance

Meet the Brady Family

by David Anderson| November 15, 20131:04 pm| 96 Comments

This post is in: Anderson On Health Insurance, Politics, World's Best Healthcare (If You Can Afford It), All we want is life beyond the thunderdome, Nobody could have predicted

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 …

Meet the Brady FamilyPost + Comments (96)

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.

Massachusetts Pace vs US Enrollment pace

by David Anderson| November 13, 201311:10 pm| 48 Comments

This post is in: Anderson On Health Insurance

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 …

Massachusetts Pace vs US Enrollment pacePost + Comments (48)

Looking at Landrieu’s plan

by David Anderson| November 13, 20133:52 pm| 109 Comments

This post is in: Anderson On Health Insurance, Election 2014, Free Markets Solve Everything, All we want is life beyond the thunderdome

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 …

Looking at Landrieu’s planPost + Comments (109)

The key item as to why this is not serious damage to the risk pooling mechanism is point #2. The individual insurance market is a high churn market. People get on it for short time periods until something better comes along through either group policies or government programs in most cases. With the introduction of Exchanges and subsidies, the universe of “something” better has gotten larger and more accessible to more people. As long as the newly exempted risk pool are only current enrollees in non-compliant policies, natural churn will quickly make these plans uneconomical. For instance, the work that I do for my company is scale invariant — the same task that impacts eleven members takes the same time as an identical task that impacts fourteen thousand members, but my costs are spread out to either several dollars per member or fractions of a penny. And at that point, point #6 comes into play and the health plans will have to either say the plans are uneconomical at which point the remaining young and healthy people move to Exchange risk pools or explain in a seven step process how the Landrieu Amendment forces cost amortization over decreasing population bases and thus blame Obamacare. If that is the case, the Exchange risk pool does not improve as numerous previously young invincibles keeled over from boredom.

If this passes, the risk pool is a little bit older, and a little bit sicker than it would otherwise be in the Exchanges. That is okay, there are numerous risk and cost transfer mechanisms built int the law. A slightly sicker and more expensive risk pool in 2014 that normalizes as the grandfathered individual plans lose members in 2015 and 2016 would work out fine. The subsidy costs would still come in massively below initial CBO estimates.

The key is to the policy change is whether or not the grandfather plans are allowed to enroll new individuals. If they are not, it is a tweak to provide political cover without damaging the underlying law. If new enrollees are allowed, it is a full fledged flanking attack on the law.

Whats in a number Part 2

by David Anderson| November 12, 20131:12 pm| 90 Comments

This post is in: Anderson On Health Insurance

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 …

Whats in a number Part 2Post + Comments (90)

Cost sharing subsidies and the near poor

by David Anderson| November 8, 20139:12 am| 34 Comments

This post is in: Anderson On Health Insurance

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 …

Cost sharing subsidies and the near poorPost + Comments (34)

Non cost-shared services and cost shared services

by David Anderson| November 7, 20137:51 am| 37 Comments

This post is in: Anderson On Health Insurance, Women's Rights Are Human Rights

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 …

Non cost-shared services and cost shared servicesPost + Comments (37)

Network manipulations

by David Anderson| November 6, 20136:42 am| 52 Comments

This post is in: Anderson On Health Insurance, C.R.E.A.M.

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 …

Network manipulationsPost + Comments (52)

In a world where medical underwriting is no longer directly allowed, insurance companies will still want to find a way to avoid taking on risk or even worse, guaranteed high cost individuals. Network manipulation is one of the few viable ways of doing this that does not guarantee a very nasty series of investigative reports from the local television station and a seven part series in the daily news paper.

How does it work?

Let’s work through an example of a plan that is trying to minimize the number of Type 2 diabetics it is covering on the individual or Exchange risk pools. Type 2 diabetics tend to use a disproportionate number of endocrinologist, primary care provider, dietitian, ophthalmologist and podiatrist appointments. Manipulating primary care provider locations and access does not help out much as primary care providers are relatively cheap and are too useful for the rest of the risk pool. Futzing around with dietitians and ophthalmologists are an option, but again, they are reasonably cheap and unlike PCPs, they are reasonable low usage services.

The network manipulation to make a plan less attractive to Type 2 diabetics is two fold. The first is to recruit and maintain a large number of endocrinologists, but have a focus on reproductive endocrinologists or adrenal endocrinologists or whatever subspecialty of endocrinology that can treat diabetes does not have diabetes as a primary disease of concern. The more subtle manipulation would be to maintain a minimal number of podiatrists in the network, and keep the podiatrists that have nasty offices, rude receptionists and shitty hours in a bad neighborhood. This type of network design will make the insurance product less attractive to a person with Type 2 diabetes than a product with a broad, unstructured network.

Conversely, network and benefit design can be used to build a slightly healthier risk pool than the general population. Benefit design can be used to build a healthier network by offering to cover the health club dues of members. Adding the regional sports medicine center is also a network decision that will attract younger and more active members than the general population.

Member	Type of Visit	Cost Share?
Kid #1	Annual PCP	no
Kid #1	Flu shot	no
Kid #1	Vaccines that are required for Kindergarten	no
kid #1	PCP – sick visit – pink eye	small co-pay
Kid #1	PCP – sick visit – itchy elbowitis	small co-pay
Kid #1	PCP – sick visit – pink dot fever	small co-pay
Kid #2	Well-baby PCP plus several vaccines	no
Kid #2	Well-baby PCP round 2 plus several vaccines	no
Kid #2	Flu shot	no
Kid #2	PCP – sick visit -day care crud	small co-pay
Kid #2	PCP – sick visit -day care crud	small co-pay
Kid #2	PCP – sick visit -day care crud	small co-pay
Kid #2	PCP – sick visit -itchy elbowitis	yes
Kid #2	PCP – sick visit -day care crud	yes
Kid #2	PCP – sick visit -day care crud	yes
Me	Annual PCP	no
Me	Flu shot	no
Me	PCP – sick visit – pneumonia	small co-pay
Me	Orthopedic surgeon for busted knee	yes
Me	Physical therapy for busted knee	yes
Wife	Annual Obgyn	no
Wife	Annual PCP	no
Wife	Long term birth control option (listening to Kid #2 crying does not count)	no
Wife	Flu shot	no

with the Kraken taking a plea, the Cheese stands alone.

Fight them, without becoming them!

You can’t attract Republican voters. You can only out organize them.

There’s always a light at the end of the frog.

Quote tweet friends, screenshot enemies.

Ron DeSantis, the grand wizard, oops, governor of FL.

Speaker Mike Johnson is a vile traitor to the House and the Constitution.

The Supreme Court cannot be allowed to become the ultimate, unaccountable arbiter of everything.

Republicans do not pay their debts.

Republicans: slavery is when you own me. freedom is when I own you.

Trump makes a mockery of the legal system and cowardly judges just sit back and let him.

It’s a doggy dog world.

Republicans got rid of McCarthy. Democrats chose not to save him.

The frogs are rarely mistaken.

Sadly, there is no cure for stupid.

We’ll be taking my thoughts and prayers to the ballot box.

The revolution will be supervised.

The willow is too close to the house.

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

Maybe you would prefer that we take Joelle’s side in ALL CAPS?

And we’re all out of bubblegum.

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

Fani Willis claps back at Trump chihuahua, Jim Jordan.

The truth is, these are not very bright guys, and things got out of hand.

Meet the Brady Family