Friday, May 4, 2018

The Health 202: Leading Obamacare insurer says things are ‘materially worse’ under Trump administration


Ed. So things are “materially worse” under Trump, according to ‘Republican’ Maryland Governor Larry Hogan. Well, perhaps that’s because President Trump hasn’t illegally and unconstitutionally CHANGED the ObamaCare law to suit his critics and temporarily mask the effects of the irrevocable disaster into which ANY government controlled and manufactured healthcare plan must quickly devolve! After all, Barry just COULDN'T have his namesake effort to enslave the American people disintegrate before his terms expired.

But then, that’s just me.

The following article appeared in the Washington Post on May 1st


THE PROGNOSIS

Maryland Gov. Larry Hogan recently signed legislation to lower premiums in the state's Obamacare marketplace.
Larry Hogan

If the road was bumpy for Obamacare insurers this year, it will be full of potholes in 2019.

More rate hikes are looming large in May and June as insurers face even more potential losses under a Republican administration. 

The CEO of CareFirst Blue Cross Blue Shield, one of the insurers gearing up to release prices for next year’s plans sold on the Affordable Care Act marketplaces, has in the past has warned the marketplaces are in a “death spiral." Now Chet Burrell fears things are “materially worse.”

“You can’t run a business in the face of uncontrollable losses you can’t stem,” Burrell, who is retiring later this year, told me in an interview yesterday.

CareFirst wants to keep participating in the marketplaces, Burrell stressed, but said the company's board faces “an interesting decision” if it must keep covering an ever-sicker mix of enrollees.

“Continuing actions on the part of the administration to systematically undermine the market and make it almost impossible to carry out the mission,” Burrell said. “If continued efforts at the federal level undermine the marketplaces, I would think the board would have to examine what they would want — that’s very much on their mind.”

That’s a striking statement from the head of the largest insurer in the Mid-Atlantic region, which covers about 215,000 people without employer-sponsored plans in the Maryland, Virginia and D.C. marketplaces and is among the insurers most loyal to the exchanges.

CareFirst belongs to the family of Blue Cross plans, which have maintained a strong and steady presence there even as other insurers have dropped out over the past few years. Because these plans have traditionally served low-income and underserved populations, they see themselves as playing a vital role in the marketplaces, even though it has meant heavy losses.

Burrell said CareFirst has lost about $600 million on the marketplaces since they launched in 2014, which makes up about 6 percent of the company’s business.

There’s no expectation of making money on covering this population, Burrell said. He just hopes to break even – but says Congress and the White House are making that possibility remoter than ever.
Too Late! Barack & Co already got it done!

First, Congress repealed the penalty for lacking health-care coverage. And now the Trump administration is moving full steam ahead on new regulations allowing the expansion of more bare-boned health plans. Insurers warn those actions will draw more healthy people who want either cheap coverage or none at all out of the marketplaces, leaving an increasingly sick and expensive population behind.

This means more market segregation all around, where plans get cheaper for the healthy and more expensive for the not-as-healthy. Insurers have been warning of this situation, but it’s about to get more real as 2019 rates are released in the coming weeks.

How would it play out for CareFirst customers? Burrell said to expect steeply rising premiums for PPO (Preferred Provider Organization) plans giving many doctor and hospital options. Patients with cancer or serious chronic conditions tend to prefer these plans with more extensive networks, since they must often visit specialists or get extra tests.

“What we’re seeing is the risk pool, particularly for the PPO, is shrinking as healthier people depart and either take their chances or look for some other coverage,” Burrell said. “The PPO experience is as bad as we thought it was going to be.”

Meanwhile, rate hikes won’t be as bad for plans with fewer provider options known as HMOs, or Health Maintenance Organizations, Burrell said. That’s because they’ll continue attracting the lower-cost customers.

Interestingly, not all the actions the Trump administration has taken toward the Obamacare marketplaces are so detrimental. For example, CareFirst and other insurers were more than able to make up for the loss of extra subsidies for cost-sharing discounts by getting bigger subsidy payments for monthly premiums (through a phenomenon known as “silver-loading,” which The Health 202 has explained here).

And Burrell mostly shrugged his shoulders when I asked him about a massive marketplace regulation the Centers for Medicare and Medicaid Services released last month, which gives insurers more flexibility in designing plan benefits.

“There are some changes, but they’re relatively marginal,” Burrell said of the rule, which was widely panned by Democrats and pro-ACA activists. “So it’s not a major blow to Obamacare, nor a major help.”

There’s help coming from some alternative corners. The state of Maryland, where the most CareFirst customers live, is lending a hand to marketplace insurers. Gov. Larry Hogan (R) signed a bipartisan bill in early April creating a program where insurers with the heaviest losses can get compensated, paid for with $380 million worth of taxes.

Without the program, Maryland officials had predicted a 50 percent hike in marketplace premiums; now, Burrell predicts it will allow CareFirst to lower premiums 20 to 30 percent compared to where they would otherwise be set for 2019.

But that doesn’t erase the indignation Burrell expresses toward those leaders in the White House and Congress, who seem intent on trying the patience of the insurers still willing to undergo heavy financial losses to cover the customers Obamacare was designed to reach.

“Did Obamacare work?” he said. “Did the people who needed the coverage get it? Hell, yes.”

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