A CAP in Illinois

What is the situation and why am I thinking it is an adverse selection event if anyone offers to write credits for the Land of Lincoln members.

Land of Lincoln was a Co-Op. It was placed under state oversight in July. It’s reserves had gotten too low due to a higher than expected risk adjustment bill and no compensating risk corridor asset. Coverage for people on the individual market will terminate on 9/30/16. That means people will be running without coverage from October 1 to December 31.

New York had a similar experience in 2015 when Health Republic was liquidated in the fall of 2015.

Normally regulators would prefer to allow an insurer under oversight to run until the next open enrollment period. That would allow their members to have continuous coverage with the least amount of disruption and added stress. However Land of Lincoln and Health Republic could not make it to the end of the current policy year. Instead, they ended mid-contract. This triggers a Special Enrollment Period as the members lost coverage due to no fault of their own.

In New York, there was an arrangement that people who were on Health Republic who signed up for a month of coverage would have their deductibles and out of pocket expenses credited to their new policies.

That is now not the case in Illinois. Blue Cross and Blue Shield is refusing to enter into a voluntary arrangement to credit deductible and out of pocket spending for any new policies it rights for any qualifying event. That is their right to do so. However, their refusal to do so pretty much forces every other Illinois insurer to also refuse to extend deductible credits.

Adverse selection is the cause of this race to mutually assured ugliness.

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Aetna, cynicism and Pennsylvania

Jonathan Cohn reports on report on Aetna’s strategy on linking Exchange participation and the rapid approval of their merger.

the move also was directly related to a Department of Justice decision to block the insurer’s potentially lucrative merger with Humana, according to a letter from Aetna’s CEO obtained by The Huffington Post.

Aetna Letter

TLDR: Nice exchanges there, be a pity if anything happened.

One of the states Aetna pulled out of is Pennsylvania. This is odd as a friend of the blog pointed out to me offline. Below Aetna’s rate application memo for the individual market in Pennsylvania. You should look closely at the highlighted segment.

Aetna

Aetna was profitable in 2015 in the individual market in Pennsylvania. It is projecting to be profitable in 2017. The filing memo was drafted in late May and submitted to the Pennsylvania regulators in early June. Conditions have not changed enough to make Pennsylvania a money loser in under two months.

My wee bit of cynicism bears fruit. Aetna is trying to logroll an anti-competetive merger with on-Exchange political consequences. If it works for Aetna/Humana it burns a bridge to get the merger, and if it fails, it puts Aetna on the shitlist of any Democratic administration. That is a very interesting strategy when it is highly likely that there will be another Democratic administration.

UPDATE 1: Here is the relevant chunk of the 2016 Aetna filing memo for Pennsylvania.

Aetna 2016 filing memo

So in all years Aetna’s individual market operations in Pennsylvania were either profitable or projected to be profitable. Something stinks worse than a wrestling team’s locker room after two-a-days.



Weirdness Open Thread: Peter ‘Bathory’ Thiel Vants to Transfuse Your Plasma

And here we all assumed Ayn Rand fanatic Thiel was just encouraging strapping young men to drop out of college and visit his palatial seasteading for the usual reasons. According to Inc:

More than anything, Peter Thiel, the billionaire technology investor and Donald Trump supporter, wants to find a way to escape death. He’s channeled millions of dollars into startups working on anti-aging medicine, spends considerable time and money researching therapies for his personal use, and believes society ought to open its mind to life-extension methods that sound weird or unsavory.

Speaking of weird and unsavory, if there’s one thing that really excites Thiel, it’s the prospect of having younger people’s blood transfused into his own veins.

That practice is known as parabiosis, and, according to Thiel, it’s a potential biological Fountain of Youth–the closest thing science has discovered to an anti-aging panacea. Research into parabiosis began in the 1950s with crude experiments that involved cutting rats open and stitching their circulatory systems together. After decades languishing on the fringes, it’s recently started getting attention from mainstream researchers, with multiple clinical trials underway in humans in the U.S. and even more advanced studies in China and Korea

In Monterey, California, about 120 miles from San Francisco, a company called Ambrosia recently commenced one of the trials. Titled “Young Donor Plasma Transfusion and Age-Related Biomarkers,” it has a simple protocol: Healthy participants aged 35 and older get a transfusion of blood plasma from donors under 25, and researchers monitor their blood over the next two years for molecular indicators of health and aging. The study is patient-funded; participants, who range in age from late 30s through 80s, must pay $8,000 to take part, and live in or travel to Monterey for treatments and follow-up assessments…

Because the RNC convention was such a multi-ring circus, I never found time to link to the NYTimes essay on Thiel’s speech endorsing Trump there. “Peter Thiel’s Heroic Political Fantasies,” frankly, presented Thiel as someone who thinks of himself along the lines of the genetic vampires in Peter Watts’ novel Blindsight — a member of a predator species only distantly related to Homo Sap.

But that’s an unduly heroic fantasy. Thiel’s just another Dives trying to avoid the final judgement — during the first Gilded Age, he’d have been visiting Switzerland to have monkey glands (or the testicles of executed criminals) sewn into his scrotum.



Entrenching Medicaid Expansion

Just a pair of notes on the political entrenching of  Medicaid Expansion into the political and policy processes of the United States.

First in Arkansas:

 

Arkansas officials should consider transferring more high-cost enrollees from the private option to the traditional, fee-for-service Medicaid program, a sponsor of the law that created the program said Monday.

At a meeting of the Health Reform Legislative Task Force, Senate President Pro Tempore Jonathan Dismang, R-Searcy, said he’s concerned that health care costs of some enrollees are increasing the cost of coverage for others in the state’s individual insurance market.

The basic mechanics of this plan would be to shift more of the expensive, high utilizing and not too healthy members from the Arkansas Private Option subsidized on-Exchange risk pool that pays providers commercial rates to the legacy Medicaid program where providers are paid (in Arkansas) about half the commercial rate. The goal is to reduce Arkansas’ state contribution to Medicaid expansion by effectively making the Expansion eligible individuals in the Legacy Medicaid pool an effective and well funded low income high risk pool while dumping all of the good risk into the private option pool to minimize nominal premium increases on Exchange.

The simpler thing to do in general would have been a general expansion with new ID cards and little else, but that will not pass in Arkansas so we get this policy tweak that actually solves a problem and probably makes everyone but the providers no worse off if not a bit better off.
 

Next, in Indiana:


 

Governor Pence pushed for the Healthy Indiana Plan v2. (HIP 2.0) to expand Medicaid. It is a convoluted bastard of conservative pet rocks and hoop jumping but it actually does cover most of the people who need to be covered by Medicaid Expansion.

It is also not an immediately disqualifying event for Governor Pence to be elevated to a national ticket.

This is how policies get entrenched even as a party bitches about them.



Late Night Open Thread: Brexit? I Hardly Even Touched It!


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KY and a dry screw

Kentucky submitted their Medicaid Expansion waiver today. and it is a doozy.  There are a couple of interesting and potentially useful nuggets ( I liked the wrap-around policies so that a family that qualifies for multiple categories of aid stay on one plan for simplicity’s sake), a couple of things that I could live with but don’t like and then work requirements tied to health insurance which CMS has always shot down.

Below is a pair of screen shots from the cost justification section of the waiver that I found utterly fascinating.  The top shot is what the state projects will be the enrollment and cost per person per month (PMPM) growth without the waiver.  The  bottom is what the state projects would happen to enrollment and costs with the waiver.  The 1115 waiver is supposed to be at least budget neutral and coverage neutral.

TLDR: Fewer people enrolled at higher costs.

Let’s look at the data below the fold:

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Opportunities for system improvement

Just a pair of tweets that if we look at them with an appropriately skewed glance, we could see a lot of hope for cost control while providing better quality in healthcare.

We all fuck up.

Well designed systems of learning and error minimization acknowledge that we fuck up and create a culture and systems to minimizing common fuck-ups. Aviation has that culture while medicine may have it in isolated pockets but it is not widespread.
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