As GOP Looks To Drag Health Care Backwards, Health Insurers Look Forward

Recently, Congressman Steve Chabot of Cincinnati, Ohio wrote on his blog, "I haven’t seen so much misinformation and hysterics about a piece of legislation in a long, long time—maybe ever" about the passage by the House of the American Health Care Act (AHCA). I guess he was asleep during the passage of the Affordable Care Act (aka Obamacare). But all kidding aside, I strongly suspect that the Senate will continue the House's work to make American health care look more like it did pre-Obamacare. They never thought health care reform was necessary in the first place.

Republicans have the numbers to pass the health care bill they want; still, I can't help but think that a return to the status quo is not in the country's future, at least not long-term. You see, Republicans may think that they are about to accomplish something that's never happened before, taking away a huge federal entitlement program, but not even health insurers are prepared to return to the bad old days. Insurers know they passed the big-changes-are-coming-moment and are in the redefining-and-refining-our-purpose-moment, and if the GOP had consulted them during the health care reform debate, they would know this also.

What Health Insurers See As Their Future

Optimizing value by providing doctors with data analysis services.
Last week Humana's CEO, Roy Beveridge, described the country's third largest health insurer as
an IT company focused on data analytics to improve health care value. According to Beveridge, the future of health care may be using data to understand risk better and sharing this data with doctors to improve patient outcomes. Doctors can use this data to determine which patient populations need what care and how often to engage with them.

Focusing in on getting a bigger piece of the (new) pie.
Also, last week, health insurer Aetna, Inc.,
announced it would pull out of the Obamacare exchanges for next year. In addition, Aetna CEO, Mark Bertolini, reportedly said, the country needs to have a conversation about single-payer health care. However, instead of health insurers competing with the government to offer health insurance, Bertolini envisions health insurers managing the single-payer program for the government, as it does with Medicare and Medicaid.

Enhancing patient access to health care services.
The Blue Cross Blue Shield Association is looking to help the very population the AHCA would possibly harm, the poor and isolated. Recognizing that not everyone has access to reliable transportation to get to non-emergency medical appoints BCBSA is
piloting a program to partner with Lyft to provide free rides to its members. Continue Reading...


Aetna Was Dumping Unprofitable Policyholders and Mismanaging Risks Long Before Obamacare

If the presidential candidacy of Donald Trump has taught us anything it is that the federal government is a good punching bag and scapegoat. Yesterday, Aetna Chief Executive Officer, Mark Bertolini, took some time on the bag. Bertolini announced that the company “decided to reduce our individual public exchange presence in 2017.” Aetna will pull out of 11 states on the public exchanges but continue to sell individual policies off of the exchanges. The reasons provided for the pull out, in insurance-speak, were an unbalanced risk pool and “inadequate risk adjustment mechanism.”

What Aetna means by “an unbalanced risk pool.” Put plainly, Aetna did not sell enough policies to healthy people with low to no health care expenses to cover the cost of care for the unhealthy people it sold policies to.

What Aetna means by “inadequate risk adjustment mechanism.” The Affordable Care Act risk adjustment programs are technical. There is a state-based risk adjustment and reinsurance program and a federal risk corridor program. Basically, these programs give money to, take it away from or share it among insurance companies to balance out their losses and gains.

Is It Really The Governments Fault…?

Aetna stated that, it might return to the exchanges in the future, “should there be meaningful exchange-related policy improvements.” This shameless blaming of a federal program to increase access to health insurance is a disguise to hide Aetna’s incompetence at predicting and managing risks.
Aetna has a history of not anticipating changes in the health care market and of dropping unprofitable policyholders. Continue Reading...


It's Ridiculous How We Let Health Insurance Companies Bully Us

Health insurance companies have a reputation for being bullies. Policyholders feel bullied when their medical claims are denied or processed incorrectly. Hospitals and doctors feel bullied when the bills they submit are refused or amended, or when procedures are not covered. Employers feel bullied when their rates go up automatically. In fact, no one is exempt from the bullying tactics of the big bad health insurance company. Their latest victim(s)—all of us!

My Way Or The Highway

Four large health insurers (Aetna and Humana and Anthem and Cigna) are trying to merge into two and the federal government has filed lawsuits to prevent that from happening. Now, the two companies that will surface if the mergers go through (Aetna and Anthem) are threatening to withdraw their plans from the public health care exchanges. It’s hard to know if Aetna and Anthem are threatening to leave the health care exchanges because they are losing money or because of the government lawsuits. But does it really matter.

Aetna and Anthem are both making moves to increase their profits and shareholder wealth. Any savings they receive by increasing their size and bargaining power with hospitals and doctors will stay with them. There will be no premium savings for policyholders, just more money for shareholders. But if these mergers do not happen, their next target is likely to be the exchanges. Because if they can’t realize increased profits by extracting bigger discounts from health care providers and hospitals, they will do it by minimizing losses on the exchanges.

Profits Without Risks

Through the individual mandate we require healthier people who need little or no health care to purchase insurance to offset the costs of care needed by the sick. Healthier people lose money by subsidizing the sick. However, health insurance companies are not willing to subsidize losses they incur on the exchanges with profits they earn from their other lines of business, like Medicare Advantage and Medicaid.
Continue Reading...