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Humana starts bundled-payment model for maternity

April 23, 2018by Robert Whitcomb in Uncategorized tagged ,

Humana, the big insurer, is contracting with physician practices to create a bundled-payment model for maternity care.

The Louisville, Ky-based insurer  will work with five OB-GYN practices to cover beneficiaries with low-to-moderate-risk pregnancies to try to improve quality and lower costs.

The model, among other things, is meant to make available more data and analytics to improve  care, and reduce duplications and readmissions.

Interestingly, the announcement comes soon after news  that Walmart might want to buy the insurer.

The  maternity bundle  is Humana’s second  bundled-payment model. It started  its joint-replacement bundle in 2016, citing an effort to cut costly readmission rates.

To read the FierceHealthcare take on this, please hit this link.

 

Cleveland Clinic, Humana emphasize data partnerships

May 9, 2017by Robert Whitcomb in Uncategorized tagged , ,

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The main building of the Cleveland Clinic.

FierceHealthcare reports:

“During a discussion at the SAS Health Analytics Virtual Forum, leaders with the Cleveland Clinic and Humana emphasized the importance of data partnerships as the healthcare industry continues to transition toward innovative payment models. New initiatives—like bundled payments for hip and knee replacements—have forced providers to re-engineer their approach to care, a transformation that relies on the ability to analyze and interpret patient data to provide more personalized care.

“Previous payment models created ‘adversarial relationships’ between payers and providers, said Chris Donovan, executive director of enterprise information management and analytics at the Cleveland Clinic. Now, those same companies take on an equal share of risk, which has fostered new data-driven partnerships.

“I think we’re really just scratching the surface of what we can do together,” he said, adding that government can play a role in fostering those relationships by building on programs that continue to emphasize value over volume, and by establishing standards for data quality.

‘There are a lot of opportunities for government,’ he said. ‘The experiments they have done show they can move the needle.”’

“Robert Sahadevan, enterprise vice president of consumer marketing and data analytics at Humana, added that analytics has helped the payer drill down into subpopulations and demographics to better understand how patients interact with the healthcare system, and then build personalized interventions.”

To read more, please hit this link.

Julie Rovner: Replacing the ACA: Where there’s a will there’s a way

April 5, 2017by Robert Whitcomb in Uncategorized tagged , , , , , , , , , ,

 

By JULIE ROVNER

Kaiser Health News

Now that the GOP effort to repeal and replace the Affordable Care Act is in limbo, is there a way to make it work better?

Democrats and Republicans don’t agree on much when it comes to the controversial federal health law, but some party leaders from each side of the aisle agree it needs repairs.

“No one ever said the Affordable Care Act was perfect,” said Senate Minority Leader Chuck Schumer (D.-N.Y.) on the Senate floor March 27. “We have ideas to improve it. Hopefully our colleagues on the Republican side do as well.”

A day later, Speaker Paul Ryan (R-Wis.) said, “We all want a system in healthcare where everybody can have access to affordable coverage, where we have more choice and competition.” And several GOP senators have moved away from the party’s long-held call for a total repeal and are offering bills that would amend the measure.

Health-policy analysts say that some of the health law’s marketplace problems could be improved with a bipartisan spirit. Here are some of the possibilities:

Stabilize the Insurance Market

Insurance companies have only a matter of weeks before they must tell the federal government and/or individual states whether they plan to offer coverage in 2018 on the health law’s online marketplaces, which serve customers who don’t get job-based or government insurance.

As of now, many companies say the uncertainty of what the market will look like — or the rules under which they will operate — is making that decision difficult. At least one insurer, Humana, has already said it would not offer coverage.

Two key moves that insurers are looking for from the administration are a promise to continue providing certain subsidies for those with lower incomes and enforcing the requirement for most people to either have insurance or pay a tax penalty.

The subsidies — known as “cost-sharing reductions” — are different than the tax-credit subsidies that many marketplace customers get to help pay their premiums. The cost-sharing subsidies help those with incomes between the poverty line ($20,420 for a family of three) and nearly 2½ times that ($50,400 for that same family) pay their deductibles and other out-of-pocket costs. The House  sued the Obama administration in 2014 for providing the subsidies without a formal congressional appropriation for the money, and a federal judge sided with the lawmakers.

The Obama administration appealed the decision, but if the Trump administration were to drop that appeal, the subsidies would disappear. At a House hearing March 29, Health and Human Services Secretary Tom Price, M.D. would not say what the administration plans to do about the lawsuit or the subsidies.

“I’m a party to that lawsuit and I’m not able to comment,” he said. But Ryan, who is also a party to the suit, said March 30 that he believes the administration should continue paying the subsidies until the lawsuit is resolved.

The administration has been similarly quiet about how strictly it will enforce the “individual mandate” that requires most people to have health insurance or pay a fine. On his first day in office, President Donald Trump issued an executive order directing federal agencies to “minimize the unwarranted economic and regulatory burdens” of the health law. But other than the IRS backtracking on a plan to enforce the mandate more strongly, little has happened on that front.

Yet those two provisions together — the cost-sharing subsidies and the individual mandate — could result in 25 to 30 percent increases in premiums if they were to disappear, said Andy Slavitt, who oversaw the health law for the final years of the Obama administration. Assuring that the subsidies will remain and the mandate will be enforced “would send a strong signal to (insurance companies) that they should continue to participate in the market,” he added.

Some GOP health policy analysts — including economist Gail Wilensky, who previously ran the Medicare and Medicaid programs — have proposed replacing the individual mandate with penalties for signing up for insurance late, which is what Medicare does. Republicans did that in their proposed replacement bill, by adding a 30 percent premium surcharge to those with a break in coverage longer than two months. But insurance actuaries and the Congressional Budget Office said that might eventually prompt fewer people to enroll because it would encourage healthy people to remain uncovered.

Entice People to Enroll

Getting young and healthy people to sign up for coverage is not just a benefit for them. If there are not enough healthy people in the insurance pool, then premiums rise for everyone, because risk is being spread across a mostly sicker population. And someday even the healthy people will need medical care.

But it takes more than just the requirement for coverage to get people to enroll. Slavitt said it requires a real effort by both federal and state officials to reach people and help them understand that having health insurance is a good thing, even if they are healthy. “What they should be doing is increasing marketing and the outreach budget,” he said. “You’re trying to reach people who are uninsured and are unsure how it all works, and it does take a lot of hand-holding.”

So far, however, the administration’s only move on that front was to cancel ads encouraging people to sign up at the end of the enrollment period that overlapped with Trump’s first days in office. The HHS Inspector General is now investigating the results of this action. Some analysts have estimated canceling the last-minute push lowered enrollment in the exchanges by as much as a half-million people.

Help Offset Insurer Losses

Democratic lawmakers who wrote the Affordable Care Act knew that the market might be hard for insurers to navigate for the first few years, and they built in several programs to help reimburse those who lost money.

Republicans, however, blocked funding for one of the major programs, which was intended to reimburse insurance plans that enrolled sicker-than-average populations for the first three years of the marketplace operations. Republicans called the money “insurer bailouts.” The loss of that money was a major reason for the collapse of many of the nonprofit insurance co-ops created under the law and some other insurance companies said it contributed to their decisions to leave the marketplaces.

Now, however, there are indications that Republicans might support some efforts to provide more funding for insurers.

On March 13, Price sent a letter to governors encouraging them to apply for waivers of the ACA rules in order to make insurance more affordable and available in their states. Among the state innovations singled out in the letter is a “reinsurance” program in Alaska that helps insurers pay for extremely high-cost patients. That plan, said Price, “significantly” offset what was a projected 40 percent premium increase in the state, and might be an option elsewhere under the waivers, which could allow states to get federal funding for such a program.

And the GOP health bill, the American Health Care Act, included $100 billion for a “Patient and State Stability Fund” that states with limited insurer competition could use to lower costs and help encourage insurers to stay in the market.

“They have a potential fix staring them in the face,” said Larry Levitt of the Kaiser Family Foundation of the GOP proposal for a stability fund. “It was a clever mechanism because the states could use it for any of a variety of purposes.” (Kaiser Health News is an editorially independent project of the Foundation.)

Assist Patients With High Out-Of-Pocket Costs

Democrats and Republicans agree that people who buy their own insurance are paying too much out-of-pocket, in premiums as well as deductibles and cost sharing.

Democrats mostly want to increase federal subsidies to help with affordability — something Republicans are not likely to embrace.

But there are other ways to lower consumer spending.

For example, Sabrina Corlette of Georgetown University’s Center on Health Insurance Reforms, calls for “smarter, not skimpier benefit design.” One way to do that is to set federal rules to push insurers that offer coverage with high deductibles to add more benefits that would be available without paying thousands of dollars first, like a few trips to the doctor or urgent care center or a few prescriptions. She writes that could keep people from dropping coverage because they feel they are not getting any value for their premiums. And if those mostly healthy people feel they are getting benefits they might use, they are more likely to continue to purchase coverage, thus reducing premiums for everyone.

Another potential way to lower insurance costs is to lower health care costs. Even if there are multiple competing insurers in an area, if there’s one dominant hospital system, it can pretty much charge whatever it wants.

“There’s no other price in the U.S. economy that’s growing as fast as a hospital price,” said Bob Kocher, a former Obama administration health official now at the venture capital firm Venrock. And in areas with not much hospital competition, “prices are 30 to 50 percent higher for everything.”

But how to get hospital prices down is almost as hard as regulating insurance. Kocher said one way would be for federal regulators to be more discriminating about approving hospital mergers, which tend to give hospitals more negotiating power over insurers.

More controversial would be to require hospitals that dominate their markets “to just accept Medicare prices” from marketplace insurers, Kocher suggested. While that would tend to bring prices down, it’s not likely to fly with free-market Republicans.

Reaction to ruling against an Aetna-Humana merger

January 24, 2017by Robert Whitcomb in Uncategorized tagged , , , ,

 

U.S. District Judge John Bates has backed the Justice Department and blocked  Aetna’s proposed $37 billion takeover of Humana over antitrust concerns. Judge Bates ruled  that Medicare Advantage and traditional Medicare should not be considered the same market. Therefore, the deal would violate antitrust laws as Aetna and Humana would have an “unlawful” Medicare Advantage market share in 364 counties across 21 states and that the deal would be anticompetitive in 17 counties across 3 states.

Here are five reactions collected by Becker’s Hospital Review to the ruling.

1. American Medical Association President Andrew Gurman, M.D., called the “court’s ruling … a notable legal precedent by recognizing Medicare Advantage as a separate and distinct market that does not compete with traditional Medicare. This was a view advocated by the AMA, as well as leading economists. AMA also applauds the decision for protecting competition on the public exchanges.”

2. Matthew Cantor, partner at Constantine Cannon, said he thought whether Medicare Advantage and original Medicare should be considered the same market was never “a real significant dispute.” However, in Becker’s words, “he found it interesting Judge Bates gave little weight to Aetna’s argument that its exit from ACA exchanges in the 17 complaint counties was a business decision.”

Mr. Cantor said while as a matter of law the ruling will be hard to reverse, the “most important part now is how the Trump administration is going to react to this. I would think they would be receptive and listen to what the merging parties have to say, particularly if it scores them political points on the repeal and replacement of the ACA.”

3. Randal Schultz, a partner at Lathrop & Gage and chairman of the firm’s healthcare strategic business planning practice group, said the judge’s ruling was logical and an easy decision. He said should Aetna successfully appeals the deal and if the deal does go through, he hopes that the court makes insurers  “disclose financial information about the actual cost of care. By putting requirements on merged groups to release actual healthcare costs … it opens up a black box [and] people will know what it actually costs to insure a population.” Doing so would push more employers toward self-insuring their workers, he said.

Regarding the looming decision of Indianapolis-based Anthem’s proposed $54 billion acquisition of  Cigna, Mr. Schultz added, “I’ll be shocked if the other case doesn’t come down the same way.”

4. Aetna spokesperson T.J. Crawford said  “We’re reviewing the opinion now and giving serious consideration to an appeal after putting forward a compelling case.”

5. Aetna Chairman and CEO Mark Bertolini and Humana CEO Bruce Broussard said jointly:  “After putting forward a compelling case that addressed each of the Department of Justice concerns, we are disappointed with the court’s decision and will carefully consider all available options. We continue to believe a combined company will create access to higher-quality and more affordable care, and deliver a better overall experience for those we serve.”

To read more, please hit this link.

Insurers may soon lose ACA excuse for their soaring premiums

December 29, 2016by Robert Whitcomb in Uncategorized tagged , , , , , , ,

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Ana Mulero, writing in Healthcare Dive, notes that “2016 was a terrible year for insurance costs. Double-digit ACA premium increases were common. Insurance and provider monopolies and near-monopolies look likely to support future increases. But as we go into 2017, it’s reasonable to ask: How long will consumers put up with this?”

After all, “{T}his comes as some payers, including the five largest ones in the U.S., have remained highly profitable. Aetna, Anthem, Cigna, Humana, and Unitedhealth, four of which have multibillion-dollar plans to merge, have collectively profited more than $65.5 billion post-ACA, Public Citizen reported in October.”

Meanwhile salaries for insurance execs continue to surge. Consider, she writes:

”{S}alaries for C-suite executives were raised by 57% last year at Health Care Service Corp. (HCSC), which operates Blue Cross and Blue Shield plans in Illinois, Montana, New Mexico, Oklahoma, and Texas, according to a recent analysis by Modern Healthcare. The top ten company executives saw their combined earnings increase from a total of $36.1 million in 2014 to $56.7 million in 2015.”

And,  “Hospitals and health systems may actually be the ones that have felt the squeeze the most, and they have acted in ways that are {also} pushing up costs.

“Health systems are consolidating at a rapid pace, and many of them say they have done so to have more leverage with insurance companies. This activity has in turn led to monopolies and duopolies on the provider side as well, which results in not only increased prices to consumers, but also a decrease in quality care as competition is significantly reduced.”

“Hospital prices in monopoly markets are more than 15% higher” than in non-monopoly markets,  says Deborah Feinstein, the Federal Trade Commission’s director of the Bureau of Competition.

“Requiring more transparency around payers’ operating costs and salaries of their C-suite execs could help address these issues. But with Republicans promising a repeal, the ACA may not be available as cover for high costs much longer.

“Thus, insurance companies looking for whom, or what, to blame for the increases may face an uncomfortable reality soon: For every finger they point, three fingers might point back at them.” And, we might add, at some monopolistic hospital systems, too.

To read her whole article, please hit this link.

Confused, irritated patients caught in insurance revolving doors

October 18, 2016by Robert Whitcomb in Uncategorized tagged , , , , , , , , , , ,

 

 

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“The Scream,” by Edvard Munch.

By JORDAN RAU

For Kaiser Health News

Andrea Schankman’s three-year relationship with her insurer, Coventry Health Care of Missouri, has been contentious, with disputes over what treatments it would pay for. Nonetheless, like other Missourians, Schankman was unnerved to receive a notice from Coventry last month informing her that her policy was not being offered in 2017.

With her specialists spread across different health systems in St. Louis, Schankman, a 64-year-old art consultant and interior designer, said she fears  that she may not be able to keep them all, given the shrinking offerings on Missouri’s health-insurance marketplace. In addition to Aetna, which owns Coventry, paring back its policies, UnitedHealthcare is abandoning the market. The doctor and hospital networks for the remaining insurers will not be revealed until the enrollment period for people buying individual insurance begins Nov. 1.

“We’re all sitting waiting to see what they’re going to offer,” said Schankman, who lives in the village of Westwood. “A lot of [insurance] companies are just gone. It’s such a rush-rush-rush no one can possibly know they’re getting the right policy for themselves.”

Doctor and hospital switching has become a recurring scramble as consumers on the individual market find it difficult or impossible to stay on their same plans amid rising premiums and a revolving door of carriers willing to sell policies. The instability, which preceded the health law, is intensifying in the fourth year of the Affordable Care Act’s marketplaces for people buying insurance directly instead of through an employer.

“In 2017, just because of all the carrier exits, there are going to be more people making involuntary changes,” said Katherine Hempstead, a senior adviser at the Robert Wood Johnson Foundation, a New Jersey philanthropy. “I would imagine all things being equal, more people are going to be disappointed this year versus last year.”

Forty-three percent of returning consumers to the federal government’s online exchange, healthcare.gov, switched policies last year. Some were forced to when insurers stopped offering their plans while others sought out cheaper policies. In doing so, consumers saved an average of $42 a month on premiums, according to the government’s analysis. But avoiding higher premiums has cost many patients their choice of doctors.

Jim Berry, who runs an Internet directory of accountants with his wife, switched last year from Blue Cross Blue Shield of Georgia to Humana after Blue Cross proposed a 16 percent premium hike.

Despite paying Humana $1,141 in premiums for the couple, Berry, who lives in Marietta, a suburb of Atlanta, said they were unable to find a doctor in the network taking new patients. They ended up signing up with a concierge practice that accepts their insurance but also charges them a $2,700 annual membership, a fee he pays out of pocket. Nonetheless, he said he has been satisfied with the policy.

But last month Humana, which is withdrawing from 88 percent of the counties it sold plans in this year, told Berry his policy was not continuing, and he is unsure what choices he will have and how much more they will cost.

“It’s not like if I don’t want to buy Humana or Blue Cross, I have five other people competing for my business,” Berry said. “It just seems like it’s a lot of money every year for what is just basic insurance, basic health care. I understand what you’re paying for is the unknown — that heart attack or stroke — but I don’t know where the break point is.”

To be sure, the same economic forces — cancelled policies, higher premiums and restrictive networks — have been agitating the markets for employer-provided insurance for years. But there is more scrutiny on the individual market, born of the turmoil of the Affordable Care Act.

Dr. Patrick Romano, a professor of medicine at the University of California at Davis Health System in Sacramento, Calif., said the topic has been coming up in focus groups he has been convening about the state insurance marketplace, Covered California. Switching doctors, he said, “is a disruption and can lead to interruptions in medications.”

“Some of it is unintentional because people can have delays getting in” to see their new doctor, he said. “Some of it may be because the new physician isn’t comfortable with the medication the previous physician prescribed.”

Dr. John Meigs, an Alabama physician and president of the American Academy of Family Physicians, said that whatever the source of insurance, changing doctors disrupts the trust a patient has built with a physician and the knowledge a doctor has about how each patient responds to illnesses. “Not everything is captured in a health record” that can be passed to the next doctor, Meigs said.

There is little research about whether switching doctors leads to worse outcomes, said Dr. Thomas Yackel, a professor of medicine at Oregon Health & Science University in Portland. In some cases, he said, it can offer unexpected benefits: “Having a fresh set of eyes on you as a patient, is that really always a bad thing?”

With the shake-up in the insurance market, access to some top medical systems may be further limited. Blue Cross Blue Shield of Tennessee, which has included the elite Vanderbilt University Medical Center in its network, is pulling out of the individual marketplace in the state’s three largest metro areas: Nashville, Memphis and Knoxville. Bobby Huffaker, CEO of American Exchange, an insurance firm in Tennessee, said so far, no other carrier includes Vanderbilt in its network in the individual market.

In St. Louis, Emily Bremer, an insurance broker, said only two insurers will be offering plans next year through healthcare.gov. Cigna’s network includes BJC HealthCare and an affiliated physicians’ group, while Anthem provides access to other major hospital systems, including Mercy, but excludes BJC and its preeminent academic medical center Barnes-Jewish Hospital.

“These networks have little or no overlap,” she said. “It means severing a lot of old relationships. I have clients who have doctors across multiple networks who are freaking out.”

Aetna said it will still offer policies off the healthcare.gov exchange. Those are harder to afford as the federal government does not provide subsidies, and Aetna has not revealed what its networks will be. In an e-mail message, an Aetna spokesman said the insurer was offering those policies to preserve its option to return to the exchanges in future years; if Aetna had completely stopped selling individual policies, it would be banned from the market for five years under federal rules.

Even before St. Louis’ insurance options shrunk, Bremer said she had to put members of some families on separate policies in order for everyone to keep their physicians. That can cost the families more, because their combined deductibles and maximum out-of-pocket payments can be higher than for a single policy, she said.

“Every year our plan disappears,” said Kurt Whaley, a 49-year-old draftsman in O’Fallon, Mo., near St. Louis. After one change, he said, “I got to keep my primary-care physician, but my kids lost their doctors. I had to change doctors for my wife. It took away some of the hospitals we could get into.”

Brad Morrison, a retired warehouse manager in Quincy, Ill., said he has stuck with Coventry despite premium increases — he now pays $709 a month, up from $474 — because the policy has been the cheapest that would let him keep his doctor. “That’s the one thing I insisted on,” he said. “I love the guy.”

With Coventry leaving the Illinois exchanges, Morrison is unsure whether his alternatives will include his physician. His bright spot is that he turns 65 next spring. “I’m trying to hold out until I get to Medicare,” he said.

Humana using using more behavioral economics

September 30, 2016by Robert Whitcomb in Uncategorized tagged ,

 

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Humana, the big insurance company, is using lessons of behavioral economics to improve the wellness of its covered population in the hope of reducing claims and raising its profit margin.

As FierceHealthcare noted, citing an article in Insider Louisville: “Equipped with the knowledge that, in general, people make bad decisions even when they know those decisions are harmful, Humana is testing out new ways to change patient behavior when it comes to health habits…..”

For example, “Recently the company discovered that customers responded better to calls from their pharmacist and celebrities like The Brady Bunch actress Florence Henderson reminding them to take medication as prescribed. In another experiment, Humana discovered that synchronizing prescription refills led to improved adherence for patients taking multiple medications.

“Previously, insurers have used financial incentives as a primary motivator for improving wellness, but studies show that approach doesn’t always work. By using behavioral economics, Humana accounts for other psychological and emotional factors that could be more effective in steering patients in the right direction.”

To read a FierceHealthcare piece on  this, please hit this link.

To read the Insider Louisville story on this, please hit this link.

Hysteria over Aetna’s partial ACA evacuation needs to be cooled

August 26, 2016by Robert Whitcomb in Uncategorized tagged , , , , , , , , , ,

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Jon Kingsdale argues in Health Affairs that news coverage of Aetna’s plan to exit from 11 of the 15 states where it now offers insurance on Affordable Care Act insurance exchanges, and similar actions by some other big insurers, such as Humana and United Healthcare, has contained much hyperbole and that in fact the exits are no big deal.

He writes:

Critics of the ACA are citing these departures as evidence of the law’s fatally flawed design. Even supporters worry about how to staunch the outflow. And the news reverberated in presidential politics, on both sides. What’s really going on here? Are these big insurers bailing because Obamacare is just too risky? Will more such desertions cripple the marketplaces?”

He answers himself: “Not all health insurance companies are the same, nor do they necessarily serve the same customer segments. In fact, most medical insurance companies, unlike Aetna and United, are regional non-profits, such as the state (or smaller) Blue Cross Blue Shield plans, Kaiser Permanente and HIP. These ‘regional’ plans and Medicaid managed care organizations (MCOs) are generally better positioned to compete on the new marketplaces than ‘national’ insurers.”

“By contrast, national firms such as Aetna, United and CIGNA are far better positioned to serve national employers and other large, self-insured groups than to compete for individual households.”

“The vast majority of purchasers on the ACA marketplace are low-to-moderate income households, who are searching for low-priced health plans. As extremely ‘price-sensitive’ buyers, most seem willing to trade access to a broader network in return for lower premiums. Regional health plans and Medicaid MCOs are generally more successful than national ones in negotiating the lowest payment rates with local doctors and hospitals. As a result, the Blue Cross Blue Shield and other regional plans generally—not always—enjoy a cost and premium advantage over national plans and tend to dominate their marketplaces.”

“In fact, United and Aetna, despite their deep penetration of the large-group insurance market, together serve only 15 percent of marketplace enrollees, and their retrenchment will impact only about 10 percent.

“They are leaving many marketplaces, but staying in those where they think they can compete. This is clearly not the same as rejecting ACA marketplaces wholesale because of some fundamental flaw in the law. Presumably, they are being selective about their participation as they see how price-disciplined the marketplaces are and where they enjoy a competitive advantage.”

To read Mr. Kingsdale’s Health Affairs article, please hit this link.

 

 

Reality check for innovative Oscar Insurance Corp.

August 24, 2016by Robert Whitcomb in Uncategorized tagged , , , , ,

 

Oscar Insurance Corp., the startup that has  touted itself  as a consumer- and technology-focused new  healthcare approach, has had to turn to the same strategy as many traditional insurers by reducing  Affordable Care Act insurance-marketplace participation for 2017.

It will stop offering plans in the Dallas–Fort Worth, Texas market and in New Jersey  starting Jan. 1. It will continue to sell plans in New York; San Antonio, Texas; Los Angeles and Orange County, Calif.; and it will expand to San Francisco.

The company blamed the ACA’s individual market, saying that  it “isn’t working as intended and there are weaknesses in the way it’s been set up,” CEO Mario Schlosser told Bloomberg.

HealthcareDive reported that the announcement is part of the company’s efforts to “re-strategize after suffering continued marketplace losses, including its recently announced losses from the first half of 2017 which included $52.2 million in New York state, $17.9 million in Texas and $12.9 million in California.”

The news service added: “Oscar has also followed industry trends in narrowing its networks and in seeking a major rate increase in New York of 26.8 percent, which was reduced by regulators to 11.5 percent.”

Mr. Schlosser said Oscar is leaving New Jersey because it didn’t have a narrow network there to contain costs, and Dallas-Fort Worth because its market  there has been too unpredictable.

“One major difference currently between Oscar and its mainstream competitors such as UnitedHealth, Humana, and Aetna, which are also pulling back for 2017, is that it doesn’t have other business beyond its individual policies to fall back on — but it plans to change that by offering small group insurance across most of its 2017 markets,” Healthcare Dive reported.

To read the news service’s full article, please hit this link.

 

 

Study asserts insurance marketplaces are healthy

August 12, 2016by Robert Whitcomb in Uncategorized tagged , , , , , , , , , , , ,

By PHIL GALEWITZ

For Kaiser Health News

Despite dire warnings from Republicans and some large insurers about the stability of the Affordable Care Act exchanges, an Obama administration report released Aug. 11 indicated that the individual health insurance market has steadily added healthier and lower-risk consumers.

Medical costs per enrollee in the exchanges in 2015 were unchanged compared with 2014, according to the Centers for Medicare & Medicaid Services. In contrast, per-member health costs rose between 3 percent and 6 percent in the broader U.S. insurance market, which includes 154 million people who get coverage through their employer and the 55 million people on Medicare, the report said.

Aviva Aron-Dine, senior counselor to U.S. Health and Human Services Secretary Sylvia Burwell, said the data was encouraging when many insurers have announced double-digit rate increases for 2017 and others have pulled back in some states to curtail financial losses.

“What we take from this is that the marketplace is on sound footing,” she said in a phone briefing with reporters. She also said the sharp 2017 rate increases could be intended to help insurers compensate for underpricing their premiums in 2014 and 2015 and not the first in a series of large annual rate hikes. Next year’s phase-out of the Affordable Care Act’s reinsurance programs — which helped insurers cover losses on higher-cost enrollees the past two years — is another reason why some insurers want higher rates for 2017.

Nearly 13 million Americans bought coverage for 2016 on the Obamacare marketplaces. More than 80 percent received federal subsidies that help them afford policies and insulate them from effects of premium increases.

Several insurers, including UnitedHealth Group and Humana, have said they will not sell 2017 individual plans on many state exchanges because they absorbed heavier-than-expected losses in part due to higher medical claims.

Aron-Dine said the administration always expected that rising enrollments would attract younger and healthier enrollees to balance the risk of insuring the older and sicker people who signed up initially. In 10 states with the highest enrollment growth from 2014 to 2015, the government reported, per-member per-month claims costs fell by an average of 5 percent.

Its study was based on claims data collected by CMS to administer the health law’s reinsurance and risk adjustment programs. Insurers submitted their 2015 data earlier this year.

What explains insurers’ losses from Obamacare if health costs have held steady?

Sabrina Corlette, research professor at the Center on Health Insurance Reforms at Georgetown University’s Health Policy Institute, said some insurers priced their coverage too low in 2014 and 2015 — in part to grab market share — and are now trying to make up for it. She said insurers have based most of their 2017 rate increases on their 2015 results.

“This should reassure people that despite the narrative that these markets are going down the toilet, in fact the report shows the opposite … that these markets are generally performing pretty well,” Corlette said.

Cynthia Cox, associate director for the Kaiser Family Foundation Program for the Study of Health Reform and Private Insurance, said the CMS report is good news for consumers. “This suggests the premium increases that we are seeing going into 2017 is likely to be a one-time adjustment … for pricing too low in the first few years,” she said. (Kaiser Health News is an editorially independent program of the foundation.)

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